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4604.0 - Energy Account, Australia, 2009-10 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/07/2012   
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EXPLANATORY NOTES


INTRODUCTION

1 The ABS Energy Account, Australia (EAA) is one of the set of environmental-economic accounts produced by the ABS based on the System of Environmental-Economic Accounting (SEEA). It consists of supply and use tables that identify physical volumes by industry and energy product. In addition, a Hybrid Energy Use table provides a combined presentation of physical and monetary use of energy products between industry and by households.

2 The aim of the EAA is to integrate data from different sources into a consolidated information set, making it possible to link physical data on energy to economic data, such as that in Australia's National Accounts.

3 Environmental-Economic accounts can provide information and improved understanding on a range of issues including:

  • broader assessment of the consequences of economic growth;
  • the contribution of sectors to particular environmental problems; and
  • implications of environmental policy measures across sectors (for example, taxes, regulations, charges and incentives).


ENVIRONMENTAL ACCOUNTING FRAMEWORK

4 The EAA was developed using the SEEA which was accepted in 2012 by the United Nations as an international statistical standard. SEEA is largely consistent with the System of National Accounts (SNA), though it extends beyond the SNA to include, for example, physical measures of environmental assets.


RELATIONSHIP BETWEEN ENERGY ACCOUNT, AUSTRALIA AND THE AUSTRALIAN SYSTEM OF NATIONAL ACCOUNTS

5 Energy supply and use tables provide a framework to link physical information to core components of the Australian System of National Accounts (ASNA). Physical data are presented in supply and use tables and monetary energy use is juxtaposed with physical energy use in the Hybrid Energy Use table. For more detail regarding the Hybrid Energy Use table and its alignment with Input-Output data from National Accounts, see the Quality Declaration.


SUPPLY AND USE

6 The supply table records the total supply of energy products within the economy, including imports.The use table records the total use of energy products within the economy and for export. The supply and use tables can be compiled in both physical and monetary terms.

7 The supply and use methodology is based on the fundamental economic identity that supply of products equals use of products.


Scope

8 This edition of EAA presents information on the net supply and use of energy in physical terms for the Australian economy. A 'hybrid' (physical and monetary) table of gross energy use is also presented.

9 Data on the physical supply and use of energy products are primarily derived from the Australian Bureau of Agricultural and Resource Economics and Sciences’ (ABARES') Australian Energy Statistics - Energy Update 2011 (AES). The ABS transforms AES into the SEEA framework to enable linkages between energy supply, energy use and the Australian System of National Accounts.

10 To estimate monetary use of energy, the ABS used implicit unit prices and expenditure data drawn from a number of sources, including ABS surveys .

Net Energy Flow Accounts

11 Net energy flow accounts record only energy 'entering' the economy (imports and extraction) and energy 'leaving' the economy (exports, energy used for final purposes and energy losses in conversion processes), within a supply-use framework.

12 The supply table of the net energy flow accounts shows the different energy products extracted within a country and supplied from the rest of the world (imports).

13 The use table shows the different energy products consumed for final purposes (final use of energy plus energy losses due to conversions) and supplied to the rest of the world (exports), along with inventory changes. The main accounting identity underlying the net flow accounts for energy is:
      Supply (Imports + Direct extraction) = Use (Exports + Final use of energy + Energy losses due to conversions + Inventory changes)

14 This accounting identity is only valid for the sum of all energy products in the economy and not for individual energy products. This is because the net supply table balances all energy use, whereas supply of an individual product will generally not equal use of that product due to losses and transformations.

15 Data contained in the net supply and use tables of this publication are used to compile the energy intensity time series estimates.

Gross Energy Flow Accounts and the Hybrid (physical-monetary) Energy Use Table

16 Gross energy flow accounts record total energy products extracted from nature and energy products processed from that energy. For example, a gross energy account includes electricity, in addition to fuels (eg. coal) combusted to generate that electricity. The total gross energy use by industry is, therefore, not equal to total 'net' energy consumption, which is energy consumed for 'final purposes'. In our electricity generation example, only the electricity is considered as 'net' use by the industry, as it can no longer be used for any other energy purpose. The fuels used to generate electricity are treated separately as conversions and losses.

17 Therefore, in any aggregation of gross data by industry, totals are subject to double counting of energy flows.

18 Gross energy flows are used in the Hybrid Energy Use Account (Hybrid table). This table combines valuations of various energy products with the associated physical use from which implicit energy prices can be derived. This allows analysis of differentials in unit prices paid by industry for various energy products. Gross energy accounts are consistent with national accounting principles and, therefore, with relevant monetary measures from the Australian System of National Accounts. While the monetary valuations of energy products can be summed to calculate the total monetary value of energy use, physical use should not be summed. Summing physical use in a gross energy use table results in an invalid total, due to double-counting of repeated use of the same energy in different forms.

Monetary valuations and non-market use

19 Significant use of many energy products occurs without an explicit monetary transaction. This includes, for example, the use of own energy production and energy losses which are recorded as physical use by an energy-producing industry. In keeping with SEEA and SNA principles, the monetary valuations presented in the Hybrid Energy Use table represent all use of energy, including non-purchased energy, rather than showing only explicit expenditure on energy. Nevertheless, some relatively minor energy products have been excluded from the Hybrid Energy Use table due to lack of data on unit prices.

Territory principle

20 Information contained in this publication is based on data collected on a 'territory basis', rather than on the SNA's 'residency basis'. While some adjustments have been made to exports to move closer to the preferred residency basis, insufficient data are currently available to make comprehensive adjustments to the supply and use of all products affected. The ABS will continue to review data availability to improve the compliance with the residency principle.


Coverage

21 Coverage for physical supply and use tables includes the following energy products:
  • Black coal;
  • Brown coal;
  • Brown coal briquettes;
  • Metallurgical coke;
  • Coal by-products (including blast furnace gas, coal tar, benzene/toluene/xylene feedstock and coke oven gas);
  • Natural gas;
  • Crude oil and other refinery feedstock;
  • Propane, butane, LPG;
  • Refined products (including petrol, diesel, aviation turbine fuel, kerosene, heating oil, fuel oil, refinery fuel and naphtha);
  • Liquid/gas biofuels;
  • Biomass wood;
  • Biomass bagasse;
  • Electricity;
      • solar electricity
      • wind electricity
      • hydro-electricity
      • other (i.e. that generated from fossil fuels)
  • Solar hot water; and
  • Uranium

22 Wherever possible, data related to the refined petroleum products (petrol and diesel), have been shown separately.

23 The Hybrid Energy Use table also separates liquefied natural gas (LNG) from natural gas. At present, this separation is not made in the net physical supply and use tables.

24 Industry classifications used in this publication follow the 2006 edition of the Australian and New Zealand Standard Industry Classification (ANZSIC).
  • Agriculture, Forestry and Fishing;
  • Mining;
  • Manufacturing;
  • Construction;
  • Transport;
  • Electricity, Gas, Water Supply and Waste Services; and
  • Commercial and Services (see below).

25 Commercial and Services covers a broad grouping of thirteen ANZSIC division level service industries. These industries have been grouped together because the energy consumption of each individually is relatively small and the Australian Bureau of Agricultural and Resource Economics' (ABARES') statistical coverage of such industries is, consequently, not as detailed as for other industries. Commercial and Services corresponds to the grouping of the same name used in ABARES' AES and consists of the following ANZSIC divisions:
  • Wholesale Trade;
  • Retail Trade;
  • Accommodation and Food Services;
  • Information Media and Telecommunications;
  • Financial and Insurance Services;
  • Rental, Hiring and Real Estate Services;
  • Professional, Scientific and Technical Services;
  • Administrative and Support Services;
  • Public Administration and Safety;
  • Education and Training;
  • Health Care and Social Assistance;
  • Arts and Recreation Services; and
  • Other Services


Data Sources

26 The estimates contained in this publication are drawn from a wide range of ABS and non-ABS data sources, including:

ABS sources:

Non ABS sources:

27 A range of other data sources were used in EAA for validation, or as an input to developing estimation methodologies.

ABS data sources:

Non-ABS sources:


Methods for Calculating Energy Supply and Use

28 These notes are intended as a general guide to the method of calculating estimates of energy supply and use. For more detail on the methods please contact the Director, Environmental Accounts Section, Australian Bureau of Statistics (email address: mark.lound@abs.gov.au).

29 Data on the physical supply and use of energy products are primarily derived from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Australian Energy Statistics (AES) - Energy Update 2011.

30 ABS domestic net energy consumption figures do not align with ABARES' Total Final Energy Consumption (TFEC) due to differing treatments of distribution losses and own use of energy within industries. TFEC excludes losses and own use while EAA treat them as intermediate consumption.

31 While the EAA draws on data from ABARES' AES, data from the ABS Energy, Water and Environment Management Survey (EWES) 2008-09 were used to reallocate the supply and use of energy products between industries.

32 The following changes have been applied to allow linkages between energy supply, energy use and the Australian System of National Accounts:

Reallocation of Petrol, Diesel and LPG use by Industry and Households

33 In ABARES' AES, physical use of land transport fuels (petrol, diesel and LPG) is assigned on the basis of activity type, rather than according to 'industry of ownership'. For example, fuel used by a truck owned by a mining company and operating between mining sites would likely be treated as transport activity in AES but an industry-based view would assign this use to the mining industry. In practice, application of the fuel use re-allocation methodology impacts significantly on derived estimates of fuel use.

34 EAA uses the ABS EWES and Survey of Motor Vehicle Use data to reallocate land transport fuels, to align with SEEA and SNA industry recording principles.

35 The reallocation methodology impacts significantly on AES fuel use figures. For example, the proportion of refined fuel use attributed to households ('residential') in AES is negligible. However, when usage is recorded on the basis of ownership, households are the most significant single user of refined fuels. The implications are also significant for industry-based measures of energy intensity.

Treatment of Bitumen, Solvents, Lubricants and Greases

36 Bitumen, solvents, lubricants and greases are classified by ABARES as derived energy within petroleum refining. These products, while containing energy, are not consumed for energy purposes. Their production is classified as final use within Petroleum and chemical products manufacturing.

Netting Out Secondary Fuels

37 Secondary fuels (which are then re-consumed) are netted out when producing net flow accounts.

38 The following sources were used to assist in the process of netting out secondary fuels:
  • ABARES Australian Energy Statistics -Table F Australian energy consumption by industry and fuel type;
  • ABS, 2008-09, Energy, Water and Environment Management survey; and
  • Department of Climate Change and Energy Efficiency, National Greenhouse and Energy Reporting (NGER).

Adjustment to exports and production to better adhere to the "residency" view of the boundaries of the Australian economy


Data Quality and Reliability

39 Due to recent revisions in AES methodology, data for 2008-09 supply and use figures have been adjusted. Information about the 2008-09 revisions and methodology changes are available in ABARES' Australian Energy Statistics - Energy Update 2011.


ENERGY INTENSITY

Scope

40 Energy intensity is a ratio of energy consumed per unit of economic output (GJ/$m IGVA).The energy intensity analysis is based on the ratios of physical energy consumption statistics to industry gross value added (IGVA) data.

41 Energy consumption figures are based on Table F of ABARES' AES, with adjustments for land transport fuels to their industry of ownership (see above paragraphs on Reallocation of Petrol, Diesel and LPG use by Industry and Household). ABS industry gross value added is from the ASNA and is based on the Australian and New Zealand Standard Industrial Classification (ANZSIC 2006).


Coverage

42 Refer to earlier paragraphs on Coverage.


Data Sources

ABS sources:

Non ABS Sources:

Other data sources

43 The following data sources were used to adjust ABARES' physical consumption by industry data to align with 'industry of ownership' and for data validation;

Methods for Calculating Energy Intensity

44 Energy intensity is a ratio of energy consumed per unit of economic output (GJ/$m IGVA). ABARES' AES presents comprehensive data on energy consumption by industry. This data has been applied to ABS IGVA data, after reallocation of road transport fuel consumption, as described earlier.


Data Quality and Reliability

45 Due to recent revisions in AES methodology, data for 2008-09 energy intensity have been adjusted. Further detail highlighting 2008-09 revisions and methodology changes are available in ABARES' Australian Energy Statistics (AES) - Energy Update 2011.


NEXT EDITION

46 The next release of the EAA, 2010-11 is scheduled for November 2012.


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