FEATURE ARTICLE: EXTENDING THE ENERGY ACCOUNT TIME SERIES STAGE 1

INTRODUCTION

This article describes the project undertaken by the ABS to extend the Energy Account, Australia (EAA) time series to include years from 2002-03 to 2007-08. This is in addition to the existing 2008-09 to 2013-14 time series.

The EAA is one of a set of environmental-economic accounts produced by the ABS based on the System of Environmental-Economic Accounting (SEEA). The SEEA is linked to the System of National Accounting (SNA) (see: United Nations Statistical Division, 2008, System of National Accounting), allowing for integration of the environmental and economic information systems.

The EAA presents information on the supply and use of energy products in the Australian economy. It records, in physical units, energy ‘entering’ the economy (via imports and extraction) and ‘leaving’ the economy (exports, energy used for final purposes and energy losses in conversion processes), within a supply-use framework. This methodology is based on the fundamental economic identity that supply of products equals use of products.


METHODOLOGY AND DATA SOURCES

The methodology used for this project was essentially the same as that used for the existing EAA time series (see: Explanatory notes for more detail). There are five stages in this process:

• Collect raw data;
• Map data inputs to energy accounts concepts to form gross supply-use tables;
• Reallocate energy data to a National Accounts (industry) basis in order to produce a supply-use matrix that aligns with EAA standards;
• Deduct energy used to produce another energy product from total final energy consumption to avoid double counting that energy, producing a final net supply-use matrix;
• Derive energy indicators from the Energy Accounts and from complementary ABS data such as the Australian National Accounts.

The EAA’s primary data source is the annual ‘Australian Energy Statistics’ (AES) publication, compiled by the Department of Industry, Innovation and Science. The AES provides detailed historical data on the production, consumption and trade of energy in Australia. The compilation also involves the use of ABS survey data from the ‘Household Energy Consumption Survey’ and the ‘Survey of Motor Vehicle Use (SMVU). These are primarily used to reallocate energy use values to create industry-based accounts from the activity-based AES data. Data from these sources were available for the years from 2002-03 to 2007-08, allowing for the extension of the time series.

Administrative data from the Australian Government’s National Greenhouse Emissions Reporting (NGER) Scheme is used to reallocate energy use values. Because the NGER scheme was introduced for the 2008-09 financial year, this was a potential issue for extending the EAA. There was a similar issue with ABS ‘Energy, Water and Environment Survey’ (EWES) data, as this was first conducted in 2008-09. These issues were resolved by treating 2008-09 NGER and 2008-09 EWES ratios as constant and applying these ratios to AES data for reallocation to the back years. If the series is to be extended further, new data sources will be required.


RESULTS

Mining Boom

A benefit of the extended EAA time series is that it allows analysis of the full period known in Australia as the ‘mining boom’. This boom started around 2005 and involved significant price increases in the value of Australia’s mining commodities. (footnote 1) Energy commodities like black coal and, to a lesser extent, natural gas have been central to this period. The extended time series shows that from 2002-03 to 2013-14 Australia’s black coal exports grew by 79%, while natural gas exports grew by 198%. This growth is directly attributable to the investment and activity associated with the mining boom.





Global Financial Crisis (GFC)

Using the extended time series it is possible to trace the impact of the 2008-09 GFC on energy supply and use in Australia. According to the International Energy Agency, the supply and use of energy in the global economy dropped dramatically following the GFC as a result of reduced financing and lower levels of economic activity. (footnote 2). Australia’s energy-related industries were affected through their exposure to export markets and this is shown in the extended EAA time series. After trending upwards for a number years, Australia’s total net energy supply and energy export volumes declined following 2008-09. Total supply and exports remained at lower levels than 2008-90 until 2012-13 when the global economic recovery was underway.





Petroleum products

One of the key findings from the extension of the EAA time series was the changes in the use of refined petroleum products in Australia. From 2002-03 to 2013-14 the importance of diesel to the Australian market increased, while petrol became relatively less important. Given that a majority of heavy industry vehicles use diesel fuel, industrial growth can be attributed to a general growth in heavy industrial activity. For households, it can be attributed to the growth in supply of diesel-powered passenger vehicles to consumers. These findings are supported by ABS ‘Motor Vehicle Census’ (cat. no. 9309.0) results that indicate Australia’s diesel fleet increased during the 2000s, both for industry and households. (footnote 3)





Another notable energy trend from 2002-03 to 2013-14 is the lack of growth in liquefied petroleum gas (LPG) use by Australian households. Household LPG was the focus of a subsidy program by the Australian Government between 2006 and 2014 designed to increase the use of LPG in household vehicles. (footnote 4). Given that the stated aim of this program was to increase LPG use as a fuel for private vehicles, growth in household LPG use was expected after 2006. However, the extended EAA time series does not show this growth. While there was a 16% spike in 2005-06 with the introduction of the scheme, use has declined 8% from 2006-07 to 2013-14.





Footnotes:
1. Ric Battellino. 2010. Mining Booms and the Australian Economy.<http://www.rba.gov.au/publications/bulletin/2010/mar/pdf/bu-0310-10.pdf>. <back
2. International Energy Agency. 2009. The Impact of the Financial and Economic Crisis of Global Energy Investment <http://www.iea.org/ebc/files/impact.pdf> <back
3. Australian Bureau of Statistics. 2014. Motor Vehicle Census, Australia, Mar 2010 (cat. no. 9309.0) <> <back
4.Australian National Audit Office, 2010. “LPG Vehicle Scheme”, Audit Report No 18. Pp 13; Department of Industry, LPG Vehicle Scheme Statistics. <http://www.business.gov.au/grants-and-assistance/closed-programs/lpgvs/Documents/LPGVS-Statistics.pdf> <back