INTRODUCTION AND MAIN FINDINGS
There has been considerable interest in recent years, both in Australia and internationally, in the supply and use of energy products such as oil, gas, coal, uranium and electricity. Energy products are of vital importance and interest to policy makers in both the economic and environmental spheres. Energy is used either directly or indirectly in virtually all economic production and it is therefore a key factor in determining levels of economic production and the price of produced output.
In recent years, global demand for energy products has been rising strongly, at least partly driven by the strong growth in energy use within the emerging economies in our region and elsewhere. Increases in energy prices over the past few years have caused concern for many economies, while energy security is an increasing concern for many countries.
Energy use gives rise to a range of environmental concerns, including those related to the emission of greenhouse gases and other pollutants. As is the case in many other countries, most energy consumed in Australia is derived from non-renewable energy products, which raises questions about the sustainability of current production methods. Thus, there is increasing concern related to energy products from both economic and environmental perspectives and there is a clear need for consolidated statistics on energy in order to better monitor and respond to changes in monetary and physical supply and demand for energy within Australia.
The outputs contained in this publication fall under the heading of integrated environmental and economic accounts and follow general principles outlined within the Handbook of National Accounting: Integrated Environmental and Economic Accounting 2003 (SEEA) - a satellite system of the International System of National Accounts 1993 (SNA93). Satellite accounts, as articulated in the SNA93, allow for an expansion of the national accounts for selected areas of interest while maintaining links to the basic concepts and structures of the core national accounts. Integrated environmental and economic accounts have an important feature distinguishing them from other information systems related to energy and the environment. The integrated accounts are able to directly link data on natural resources, environment, energy and emissions, to the economic accounts through a shared structure, set of definitions and classifications. This serves to integrate environmental-economic analyses and to overcome the tendency to divide issues along disciplinary lines, in which analyses of economic, energy and environmental issues are carried out independently of each other.
Satellite accounts typically use a set of recommended classifications and frameworks developed from international research and discussion over a number of years, with international agencies usually taking the lead. The United Nations Statistical Division is in the process of coordinating an energy-specific module of SEEA, called SEEA-Energy (or SEEA-E). Consequently, guidelines for producing an energy account are continuing to develop; and work in this publication has proceeded without comprehensive guidance from international standards or guidelines. Appendix 1 describes the range of products in scope of this energy account, and the industry and product classifications used.
This publication utilises a number of data sources, both ABS and non-ABS. Data on the physical supply and use of energy products are derived from table A1 of the Australian Bureau of Agricultural and Resource Economics' (ABARE) Australian Energy Statistics. Geoscience Australia has provided information on physical stocks of energy assets. The Australian System of National Accounts (ASNA), including Input Output tables, is the principal source of economic information. A range of other ABS data have been used including: the business Economic Activity Survey (EAS); the Household Expenditure Survey (HES); the Survey of Motor Vehicle Use (SMVU); and the Balance of Payments and International Trade systems. A fuller description of data sources used in this publication is contained in Appendix 2.
The fundamental compilation framework for the energy account is the national accounts 'supply and use' system, which, in this case, has been adapted to focus on energy products. This framework allows various data to be brought together and integrated for the entire economy. In essence, the system consists of a table of supply estimates, representing the supply of energy products from imports and from Australian producers, and a use table that shows the use of those products by industries, households, government and for export. It aims to be comprehensive in its coverage, and as noted above, a range of statistical data sources are used to populate the supply and use tables.
In order to satisfy the identity that supply and use of products must be equal, discrepancies due to deficiencies in the source data must be identified and resolved. A great strength of this framework is that it facilitates this confrontation process and provides a basis for optimising the quality of the overall estimates in the face of data deficiencies and gaps in data coverage. Appendix 3 provides a more complete description of the frameworks and concepts used in producing the energy account.
The supply and use framework can be used to develop greater coherence in monetary measures of energy supply and use. It can similarly be used for corresponding physical measures. However, by juxtaposing monetary and physical measures of supply and use of energy products, a further degree of data confrontation is created, potentially leading to greater levels of data coherence. This desire to establish coherence between economic (monetary) and environmental (physical) data has required efforts to further integrate existing monetary and physical measures of supply and use of energy products. Note, that in order to ensure comparability with monetary data, the physical supply and use tables in this publication have been developed under a gross basis. See Appendix 3 for further discussion on gross energy flow accounts.
In this publication considerable effort has been devoted to reconfiguring data from ABARE's Australian Energy Statistics to ensure use of consistent classifications, concepts and scope between these data and data from the ASNA and other economic collections. The type of adjustments made to data contained in Australian Energy Statistics include: attributing unallocated energy conversions to energy products and using industries, as appropriate, to create a full picture of gross supply and use of energy products in Australia; developing a fuller articulation of service industries using various energy products; and converting certain data on industry use from an 'activity' basis to an industry of ownership basis, consistent with classification principles outlined in the Australian and New Zealand Standard Industrial Classification (ANZSIC). Appendix 4 describes the range of methodological issues addressed in producing this publication.
As noted earlier, this publication derives estimates of physical supply and use of energy products from the energy balances in table A1 of ABARE’s Australian Energy Statistics. Unlike other tables within Australian Energy Statistics, table A1 is only presented for the latest year. While table A1 does not constitute a consistent time series, it provides information on conversions that is critical in compiling physical supply and use tables that are capable of being confronted with monetary data (refer to 'gross'/'net' discussion in Appendix 3 for further information). Therefore, estimates based on table A1 will not necessarily remain completely consistent with estimates based on other tables from Australian Energy Statistics which have also been used in this publication (notably table F: Australian energy consumption by industry and fuel type, used in the energy intensity chapter).
This edition of Energy Account, Australia introduces experimental monetary estimates of use of various energy products, alongside the corresponding estimates of physical use. Monetary data in this publication are produced in respect of 2004-05, while physical estimates relate to the period 2001-02 to 2006-07. The full analytical utility of monetary data is realised when a time series is achieved. These estimates provide a sample of the type of integrated environmental-economic information achievable from available data.
The economic value of energy products is already included in the ASNA in key economic aggregates such as Gross Domestic Product (GDP), industry gross value added (IGVA) and household final consumption expenditure (HFCE). However, the classifications and data sources used in the national accounts are generally not designed to systematically isolate energy products, or the industries that produce or distribute these products. Similarly, the national accounts do not systematically isolate the use of energy products by industries, government and households, although some important aggregates such as household final expenditure on electricity, gas and other fuels are already available.
Monetary data contained in this publication are largely coherent with the corresponding series published in ABS Input-Output tables (cat. no. 5209.0.55.001). However, in some instances, estimates differ between the two publications. Monetary data contained in this publication are considered experimental and data contained in the Input-Output tables remain the official estimates.
Data contained in this publication have utilised different estimation methodologies to those used in the ABS Input-Output tables. In particular, this publication has taken a closer consideration of relevant physical use of energy products by industries and by households.
Within the ABS, environmental-economic accountants are continuing to work closely with national accountants to improve estimates in both systems. In this respect, the upcoming ABS Energy, Water and Environment Survey, to be conducted in respect of 2008-09, is expected to deliver a rich vein of information to carry these initial investigations forward. It is anticipated that surveys of this type will in future deliver improved and consistent estimates within the energy account and the ASNA for these important data series.
Australian energy supply
In 2006-07, Australia's total supply of energy products was 21,359 PJ, a 15% increase from 2001-02 (18,536 PJ). The largest contributors to this increase were black coal (7,282 PJ to 8,650 PJ, or 19%), uranium concentrates (3,782 PJ to 4,509 PJ, or 19%), natural gas (1,394 PJ to 2,007 PJ, or 44%) and refined products (1,618 PJ to 1,923 PJ, or 19%). While the supply of most energy products increased over this period, there was a decline of 14% in the supply of crude oil (from 2,393 PJ to 2,050 PJ) and 10% for hydro electricity (from 58 PJ to 52 PJ).
There was an increase in the supply of refined products despite a decline in Australian production, and this was driven by increased imports (from 150 PJ in 2001-02 to 642 PJ in 2006-07).
The mining industry dominates energy supply in Australia (86% of total supply), followed by manufacturing (8%) and the electricity supply industry (5%) (see graph 1.1).
1.1 PHYSICAL ENERGY SUPPLY,
By industry, 2006-07
Coal comprised 44% of energy supply in 2006-07 with uranium contributing a further 21%. Other important contributors were refined products and LPG (combined) which comprised 10%, crude oil (10%) and natural gas (9%) (see graph 1.2).
1.2 DISTRIBUTION OF ENERGY SUPPLY,
By type of energy, 2006-07
For all years between 2001-02 and 2006-07 over half of Australia's supply of energy products was exported. In 2006-07, out of a total 21,359 PJ of Australian energy supply, 13,055 PJ (or 61%) was exported.
Australian energy use
In 2006-07 domestic energy users consumed 8,308 PJ of energy products. The largest domestic users of energy products were: manufacturing (36%); electricity supply (31%); households (12%); transport (6%) and mining (5%).
In Manufacturing, around half of energy use is the input of crude oil and other refinery feedstock to produce refined energy products (1,516 PJ out of the 2,990 PJ in 2006-07). Coal products made up 78% of energy products used by electricity producers in 2006-07. Household use of energy in 2006-07 was dominated by refined products (57%), while electricity (23%) and natural gas (13%) were also important.
Hybrid energy use
Hybrid energy use tables juxtapose monetary and physical measures, allowing direct comparison of these measures and, therefore, provide an indicator of relative implied prices paid by different energy users for various energy products. For domestic users of coal, crude oil and natural gas, refined products and electricity, graphs 1.3 to 1.6 show the distribution of energy use by key industries and households in both monetary and physical terms. Note that the monetary estimates presented here are considered experimental.
In most instances, proportional physical consumption of energy and the associated monetary expenditure are very closely related, indicating relatively uniform prices paid by consumers (whether industries or households). There are some exceptions to this, with some large industries paying lower unit prices than smaller industries or households. Examples include, coal used by the electricity industry (graph 1.3) and electricity used by non-ferrous metal manufacturers (graph 1.6). Reasons for these differences are discussed in Chapter 3.
1.3 Distribution of coal use (a),
Monetary & physical, 2004-05
1.4 Distribution of oil and gas use(a),
Monetary & physical, 2004-05
1.5 DISTRIBUTION OF PETROLEUM AND COAL PRODUCTS USE(a),
Monetary & physical, 2004-05
1.6 DISTRIBUTION OF ELECTRICITY USE(a),
Monetary & physical use, 2004-05
In this publication, energy intensity refers to the relationship between energy use and economic activity. Common measures of energy supply (consumption) versus economic activity include Total Primary Energy Supply per unit of GDP (TPES/GDP) or Total Final Energy Consumption per unit of GDP (TFC/GDP). Population based ratios are expressed in terms of energy supply (consumption) per capita, for example TPES/capita or TFC/capita.
In this publication, energy intensity for major industries has been calculated and expressed in gigajoules of energy consumed per million dollars of Industry Gross Value Added (GJ/$m IGVA), where IGVA is expressed in chain volume measures with reference year 2006-07. Australia’s energy intensity fell 36% over the 30 years from 1976-77 to 2006-07, from 4,880 to 3,100 GJ/$m IGVA (see graph 1.7).
1.7 ENERGY INTENSITY,
All industries, 1976-77 to 2006-07
Energy intensity levels and trends vary considerably across the major industries. Graphs 1.8 and 1.9 show the energy intensity for the major industry divisions over the last three decades. Graph 1.8 shows Agriculture, Mining, and Manufacturing and graph 1.9 shows Construction, Transport, and Other Services. Energy intensity is greatest for Manufacturing and Transport while Other Services is very low. Whilst most industries’ energy intensity levels fell over the 30 year period, Mining and Agriculture increased. Transport and Construction experienced large reductions in energy intensity (49% and 74%, respectively), while Other Services fell only 13%. Other Services includes the following industries: Wholesale Trade; Retail Trade; Accommodation, Cafes and Restaurants; Communication Services; Finance and Insurance; Property and Business Services; Government Administration and Defence; Education; Health and Community Services; Cultural and Recreational Services; and Personal and Other Services.
1.8 ENERGY INTENSITY,
Agriculture, Mining & Manufacturing, 1976-77 to 2006-07
1.9 ENERGY INTENSITY,
Construction, Transport & Other Services, 1976-77 to 2006-07
Stock data on available mineral resources are derived from the publication Australia's Identified Mineral Resources
, while oil and gas resources are derived from Oil and Gas Resources, Australia
, both of which are produced by Geoscience Australia. Economic demonstrated resources (EDR) are those resources that are established, analytically demonstrated, or assumed with reasonable certainty, to be profitable for extraction under defined investment assumptions. As at December 2007, Australia's EDR of energy was dominated by black coal (52%), uranium (26%) and brown coal (17%). In comparison, Australia's oil and condensate resources are relatively small (1% of total EDR) (see graph 1.10 ). Over the period 2002 to 2007, Australia's EDR of energy resources increased from 2,007,115 PJ to 2,134,401 PJ. This change reflects a rise in uranium reserves due to geological reassessments and economic reclassifications of previously sub-economic reserves. EDR of all other categories of energy reserves fell during this period.
1.10 ECONOMIC DEMONSTRATED ENERGY RESOURCES -
as at 31 December 2007
Subeconomic demonstrated resources (SDR) are similar to EDR in terms of certainty of occurrence but are not considered to be economic at present. In Australia, SDR of energy resources is dominated by coal, in particular brown coal (60% of all SDR in 2007) (see graph 1.11). Total Australian SDR of energy resources decreased from 1,027,683 PJ in 2002 to 900,943 PJ in 2007. This fall is mainly attributable to a fall in black coal SDR (from 396,150 PJ in 2002 to 253,650 PJ in 2007), though a sharp decline in SDR of uranium (from 25,760 PJ in 2002 to 5,600 PJ in 2007) was also significant. SDR of natural gas increased from 60,720 PJ in 2002 to 92,560 PJ in 2007.
1.11 SUBECONOMIC DEMONSTRATED ENERGY RESOURCES -
as at 31 December 2007
The ABS includes estimates of the monetary value of economic demonstrated energy assets in the balance sheet of the Australian National Accounts
(cat. no. 5204.0). Australia's energy assets were valued at $204.2 billion at 30 June 2007; or 2.7% of the value of all assets on the national balance sheet. At 30 June 2007 the energy assets of highest monetary value were: black coal ($70.7 billion); natural gas ($64.7 billion); and crude oil and condensate ($55.5 billion; see graph 1.12). Crude oil and condensate, though making up just over 1% of Australia's economically demonstrated physical reserves of energy assets, amount to 27% of the monetary value of energy assets in 2007. This reflects both the higher price of crude oil and condensate per unit of contained energy (especially in comparison to coal) and the shorter expected asset life of crude oil and condensate reserves. Shorter expected asset lives tend to raise derived net present values (NPVs) in comparison to assets with lengthy expected extraction lives.
The value of energy assets rose 57% over the period 2000 to 2007 (from $129.7 billion to $204.2 billion) which coincides with increases in energy prices. Graph 1.12 shows that the energy assets contributing most to the rise in values were: black coal (from $36.3 billion to $70.7 billion); and crude oil and condensate (from $25.4 billion to $55.5 billion).
1.12 NET PRESENT VALUE OF ENERGY ASSETS -
as at 30 June