energy in australia 2006data.daff.gov.au/brs/data/warehouse/pe_abarebrs99001324/...energy in australia 2006 [ v ] glossary, units and conversion factors vi overview 1 resources 3 export

energy in australia

2006

abare

Australian Government Department ofIndustry, Tourism and Resources

© Commonwealth of Australia 2007

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth, available from AusInfo. Requests and inquiries concerning reproduction and rights should be addressed to the Manager, Legislative Services, AusInfo, GPO Box 1920, Canberra ACT 2601.

ISSN 1833-038X

Produced and compiled by Kim Donaldson, ABARE.Published in March 2007.

The author appreciates the contribution of ABARE colleagues Damien Riwoe, Kelly Driscoll and other Energy and Minerals Branch staff, also Gail Condy, Julie Easton, Chris Lancaster and Andrew Wright for their input to the content and the design and formatting of the report.

Published by: Produced for:ABARE Department of Industry,GPO Box 1563 Tourism and ResourcesCanberra ACT 2601 GPO Box 9839www.abareconomics.com Canberra ACT 2601 www.industry.gov.au

energy in australia 2006 [ iii ]

heading

Energy is fundamental to Australia’s economy and to our modern lifestyle. The reliable supply of liquid fuels, electricity and natural gas at competitive prices is crucial to our prosperity.

The Australian energy sector is responding to reform of domestic markets, increasing international demand for our energy exports and the emergence of new energy sources and technologies. Improvements in energy effi ciency and the development of new technologies will be increasingly important for Australia’s international competitiveness.

The year 2006 saw renewed interest in energy issues. The Australian Government recognises the critical importance of energy and has established a comprehensive policy framework to ensure the future competitiveness of the Australian energy sector. The Government’s 2004 energy white paper, Securing Australia’s Energy Future, continues to provide the foundation for the nation’s energy policy, as well as detailing the initiatives being implemented by the Government to help ensure Australia’s long term prosperity.

Energy in Australia 2006 is an essential reference for anyone with an interest in Australia’s energy sector. It covers all aspects of energy production and use, from natural resources through to fi nal consumption. I commend Energy in Australia 2006 to everyone in Australia with an interest in energy issues.

foreword

The Hon Ian Macfarlane MPMinister for Industry, Tourism and Resources

[ iv ] energy in australia 2006

abbrevations and principal sources of energy information

ABARE Australian Bureau of Agricultural and Resource EconomicsDITR Department of Industry, Tourism and ResourcesDOE Department of Energy (United States)EIA Energy Information Administration (US DOE)IEA International Energy Agency (within the OECD)LNG liquefi ed natural gas (principally methane)LPG liquefi ed petroleum gas (principally propane and butane)NGL natural gas liquid hydrocarbons, other than methane, derived from the natural gas stream in separation and/or liquefaction facilitiesOECD Organisation for Economic Cooperation and DevelopmentORF other refi nery feedstock

Apelbaum Consulting Group www.apelbaumconsulting.com.au Association of Australian Ports and Marine Authorities Inc. www.aapma.org.auABARE www.abareconomics.comAustralian Bureau of Statistics www.abs.gov.auAustralian Business Council for Sustainable Energy www.bcse.org.auAustralian Financial Markets Association www.afma.com.auAustralian Greenhouse Offi ce www.greenhouse.gov.auAustralian Institute of Petroleum www.aip.com.auAustralian Wind Energy Association www.auswea.com.auBP Statistical Review of World Energy www.bp.comDepartment of Industry, Tourism and Resources www.industry.gov.auEnergy Information Administration www.eia.doe.govEnergy Networks Association www.ena.asn.auEnergy Supply Association of Australia www.esaa.com.auGeoscience Australia www.ga.gov.auHart Downstream Energy Group www.hartenergy.comInternational Energy Agency www.iea.orgKorea Energy Economics Institute www.keei.re.krNational Electricity Market Management Co. www.nemmco.com.auGlobal-roam Pty Ltd www.nem-review.infoOffi ce of the Renewable Energy Regulator www.rec-registry.gov.auOzmine www.intierra.comUranium Information Centre www.uic.com.au

energy in australia 2006 [ v ]

glossary, units and conversion factors vi

overview 1resources 3export market drivers and prices 7coal production and trade 11liquid fuels – production and trade 21liquid fuels – domestic refi ning 29gas production and trade 35electricity 41energy consumption 55transport and infrastructure 65renewable energy 69

energy content conversions 77

contents

[ vi ] energy in australia 2006

bagasse The fi brous residue of the sugar cane milling process that is used as a fuel (to raise steam) in sugar mills.biogas Landfi ll (garbage tips) gas and sewage gas. Also referred to as biomass gas.coal Byproducts such as blast furnace gas (from iron andbyproduct steel processing), coal tar and benzene/toluene/xylene (BTX) feedstock and coke oven gas (from the coke making process).conversion The process of transforming one form of energy into another (derived) form before fi nal end use. Energy used in conversion is the energy content of fuels consumed as well as transformed by energy producing industries. Examples are natural gas and liquefi ed petroleum gas used in town gas manufacturing, all hydrocarbons used as feedstocks in oil refi neries, and all fuels (including electricity) used in powerstations — therefore, energy used in conversion also includes energy lost in the production, conversion and transport of fuels (such as energy lost in coke production) plus net energy consumed by pumped storage after allowance for the energy produced.crude oil Naturally occurring mixture of liquid hydrocarbons under normal temperature and pressure.condensate Hydrocarbons recovered from the natural gas stream that are liquid under normal temperature and pressure.derived or Fuels produced or derived by conversion processes secondary to provide the energy forms commonly consumed. fuels They include petroleum products, thermal electricity, town gas, coke, coke oven gas, blast furnace gas and briquettes.liquid fuels All liquid hydrocarbons including crude oil, condensate, liquifi ed petroleum gas and other refi ned petroleum products.natural gas Gases that include commercial quality sales gas in the form of liquefi ed natural gas, ethane and methane

glossary, units and conversion factorsglossary, units and conversion fa

(including coal seam and colliery gas) as well as plant and fi eld use of noncommercial quality gas. In this report, natural gas also includes town gas and gas from garbage tips and sewage plants.petajoule The joule is the standard unit of energy in general scientifi c applications. One joule is the equivalent of one watt of power radiated or dissipated for one second. One petajoule, or 280 terawatt hours,is the heat energy content of about 43 000 tonnes of black coal or 29 million litres of petrol.petroleum Generic term for all hydrocarbon oils and gases, including refi ned petroleum products.petroleum All hydrocarbons used directly as fuel. These products include liquefi ed petroleum gas, refi ned products used as fuels (aviation gasoline, automotive gasoline, power kerosene, aviation turbine fuel, lighting kerosene, heating oil, automotive diesel oil, industrial diesel fuel, fuel oil, refi nery fuel and naphtha) and refi ned products used in nonfuel applications (solvents, lubricants, bitumen, waxes, petroleum coke for anode production and specialised feedstocks).primary The forms of energy obtained directly from nature. fuels They include nonrenewable fuels such as black coal, brown coal, uranium, crude oil and condensate, naturally occurring liquid petroleum gas, ethane and natural gas, and renewable fuels such as wood, bagasse, hydroelectricity, wind and solar energy.total fi nal The total amount of energy consumed in the fi nal energy or ‘end use’ sector. It is equal to total primary consumption consump- energy less energy consumed or lost in conversion, tion transmission and distribution.

total Also referred to as total domestic availability.primary The total of the consumption of each primaryenergy fuel (in energy units) in both the conversion and consump- end use sectors. It includes the use of primary fuels in tion conversion activities — notably the consumption of fuels

glossary

energy in australia 2006 [ vii ]

[ viii ] energy in australia 2006

used to produce petroleum products and electricity. It also includes own use and losses in the conversion sector.town gas All manufactured gases that are typically reticulated to consumers. These include synthetic natural gas, reformed gas, tempered liquid petroleum gas and tempered natural gas. In this report, town gas is included with natural gas.

unitsJ joule

L litre

t tonne

g gram

Wh watt-hour

b billion (109)

conversion factors1 barrel = 158.987 L1 kWh = 3600 kJ1 MBTU = 1055 MJ (BTU = British Thermal Unit)1 m3 = 35.515 cubic feet1 L propane liquid = 0.272m3 gas1 L butane liquid = 0.235 m3 gas1 L LNG = 0.625 m3 natural gasIndicative energy contents of fuels are listed at the end of the publication.

conventions used in tables and fi gures 0.0 is used to denote a negligible amount. Small discrepancies in totals are generally the result of the rounding of components.All graphs and fi gures are sourced from ABARE unless otherwise stated.Care should be taken in comparing data across tables as sources and time periods may vary.

metric prefi xesk kilo 103 (thousand)

M mega 106 (million)

G giga 109 (1000 million)

T tera 1012

P peta 1015

E exa 1018

other abbreviationsbcm billion cubic metres m3 cubic metre

bbl barrel

Mtoe million tonnes

of oil equivalent

na not available

pa per annum

heading

Heading

Australia is a resource rich country with signifi cant resources of liquid petroleum, natural gas, coal and uranium. It is one of the few OECD countries that is a signifi cant net energy exporter.

Since 1986, Australia has been the world’s largest exporter of coal, and since 1989 has emerged as one of the largest exporters of liquefi ed natural gas (LNG) and uranium.

Energy commodity exports are an important part of the economy.

overview

Australia is overwhelmingly a net energy exporter, with trade in energy dominated by coal, LNG and uranium. However, Australia is a net importer of liquid fuels, including crude oil and other refi nery feedstocks and refi ned petroleum products, such as gasoline, diesel and fuel oil.

The value of most energy commodity exports is forecast

Australian energy exports

2010-11

2005-06

2000-01

1980-81

1985-86

1990-91

1995-96

$b

Metallurgical coalThermal coalUraniumLPGLNGCrude and ORF

10

20

30

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Value of major Australian commodity exports, 2005-06

A$b 5 10 15 20 25

CoalIron ore, pellets

GoldCrude oil

CopperWine

AluminaAluminium

LNGBeef, veal

NickelWheat

WoolDairy

Iron, steel

energy in australia 2006 [ 1 ]

[ 2 ] energy in australia 2006

to rise over the medium term as prices remain relatively high in historical real terms.

The value of Australia’s energy imports has grown in real terms by an average 8.8 per cent a year over the past twenty years, and increased by 40 per cent in 2005-06 to reach $21 billion.

Total domestic consumption of energy in Australia in 2004-05 was around 5525 petajoules, an increase of 1.9 per cent from 2003-04. Australia’s incremental rate of growth in energy consumption has fallen over time. Domestic energy consumption is dominated by coal, which is used mainly to generate electricity.

The mining, petrochemical and utilities sectors — of which energy extraction, petroleum processing, electricity and gas are a large part — account for nearly 17 per cent of Australia’s total capital stock. Five per cent of Australian industry gross value added is derived from the energy sector alone but the sector employs less than 2 per cent of the Australian labour force.

1 ] Energy related industries in Australia, 2004-05

Gross capital Industry Employ- End year expenditure value added ment capital stock b A$b A$b ‘000 A$b

Petroleum and coal mining 8.6 24 29 159Petroleum processing 1.2 6.5 49 105 Electricity and gas 7.4 15 41 134 Total 17 46 119 398

Australia 189 a 897 9 536 2 407 a Total private gross fi xed capital formation. b Capital stock data cover broader industry sectors, including mining, all petrochemical industries, water and sewerage. Sources: Australian Bureau of Statistics, Australian System of National Accounts, cat. no. 5204, Manufacturing Industry cat. no. 8221, Australian Industry cat. no. 8155.

1

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Annual growth in energy consumption

%

Australia

1998-99

2001-01

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1995-96

2004-05

real GDP

total energy consumption


At current levels of production, Australia’s energy resources are expected to last for many decades to come.

Australian resources of uranium and coal account for a signifi cant proportion of total world resources of these commodities. In addition, a large proportion of Australian black coal resources are high quality bituminous coals with low sulphur and low ash content. Australian crude oil and natural gas liquids are typically of the light variety and relatively low in sulphur.

resources

2 ] Australia’s petroleum resources, by state, at 1 January 2005 a

Crude oil Condensate LPG Natural gas GL GL GL bcm

Victoria 35 18 27 181Queensland 5 0 0 3South Australia 1 3 5 35Western Australia 104 193 119 2 046Northern Territory 12 84 61 313Tasmania 1 2 2 8a Economic demonstrated resources only. Coal seam gas resources data unavailable.Source: Geoscience Australia.

The importance of continued petroleum exploration in Australia is highlighted by the relatively low resources to production ratio for crude oil. By contrast, the resources to production ratios for both condensate and LPG are relatively high.

Australia’s identifi ed natural gas resources have increased fourfold over the past two decades, particularly in the western and north central areas of Australia. Today, around 90 per cent of estimated recoverable


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resources

reserves of natural gas are located off the west and north west coast of Australia.

In addition to natural gas resources, there is growing commercial utilisation of Australia’s resources of coal seam gas. The majority of these resources are located in the black coal deposits of Queensland and New South Wales, close to the Sydney and Brisbane gas markets.

Black coal resources are located in most states, with signifi cant quantities of high quality black coal in New South Wales and Queensland. These two states have 40 per cent and 56 per cent of Australia’s economic demonstrated resources (EDR) respectively (Geoscience Australia 2006).

Black coal resources in Western Australia, South Australia and Tasmania are small, but locally signifi cant.

Australia’s lignite resources are substantial, with 24 per cent of the world’s EDR located in Australia. Lignite deposits occur in South Australia, Western Australia and Tasmania, as well as in Victoria where all of Australia’s EDR of brown coal is located.

Australia’s identifi ed uranium resources have more than doubled over the past two decades, with the majority of

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[ 6 ] energy in australia 2006[ 6 ] energy in australia 2006

these resources located in South Australia, the Northern Territory and Western Australia.

Mineral and petroleum exploration expenditure

2005-06

2000-01

1980-81

1975-76

1985-86

1990-91

1995-96

A$m

500

1000

1500

2000 Othermineralresources

Private petroleum

resources

The Olympic Dam uranium deposit in South Australia — one of only three producing uranium mines in Australia — is the world’s largest deposit.

Around 97 per cent of Australia’s current economic resources of uranium are located at Olympic Dam along with the deposits at the Beverley and Ranger mines and several as yet unexploited resources. Principal locations with potential for new mines are Honeymoon in South Australia (expected startup 2008), Jabiluka and Koongarra in the Northern Territory and Kintyre and Yeelirie in Western Australia.

3 ] Australia’s economic demonstrated resources, January 2005

Share of Resources to ` Australia world production a % yrsCoal b Black coal Gt 40 5.4 >100Brown coal Gt 38 23.7 >500

Petroleum c Oil GL 158 0.3 d 21 dCondensate GL 301 na naLPG GL 214 na naNatural (sales) gas bcm 2 587 1.4 63

Uranium e kt 701 26.5 63a 2005 rates of Australian production. b Recoverable resources. c McKelvey classifi cation esti-mate. d Numbers for oil denote naturally occuring crude oil, condensate and LPG combined. e Reasonably assured resources recoverable at costs of less than US$80/kg U. na Not available. Sources: Geoscience Australia, Australia’s Identifi ed Mineral Resources; Oil and Gas Resources of Australia; BP, Statistical Review of World Energy.

Source: Australian Bureau of Statistics


Prices for most energy commodities were high in 2006 and are expected to remain robust in 2007 as a result of continued strong global demand. Escalating costs in the mining

export market drivers and prices

4 ] World price indicators in 2005-06 dollars

2001-02 2002-03 2003-04 2004-05 2005-06

Coal prices Hard coking coal US$/t 47.85 49.22 48.95 74.36 117.39Semisoft coking coal US$/t 38.92 35.92 37.40 54.16 83.22Thermal coal US$/t 33.65 28.42 31.22 46.47 48.48

Oil and petroleum prices Crude oil – world trade weighted average a US$/bbl 24.11 28.69 31.19 42.92 57.25

Gasoline Singapore spot price b US$/L 0.19 0.22 0.27 0.35 0.45

Gas prices Natural gas – domestic spot price c A$/GJ 3.27 3.14 3.18 3.13 3.16Liquefi ed natural gas d– export unit value s A$/t 383 360 290 312 357

Uranium price US$/lb 10.71 11.16 15.94 23.05 36.79a International prices. b Financial year averages of weekly rates; average contract selling prices fob of internationally traded crude oils only, weighted by estimated export volume. c Financial year averages of daily spot prices in the Victorian gas market. d Calculated from LNG export values and volumes. s ABARE estimate. Sources: ABARE, Australian Commodity Statistics; Energy Information Administration; VENCorp Gas Market, Victoria.

sector in recent years have affected new ventures, thereby reducing opportunities for greater production.

The United States, the Republic of Korea and Japan


5 ] World non-renewable primary energy consumption, 2005 a

Oil Coal Natural Nuclear gas energy b Total Mtoe Mtoe Mtoe Mtoe Mtoe

Australia 39.7 52.2 23.1 0.0 115.0Canada 100.1 32.5 82.3 20.8 235.7France 93.1 13.3 40.5 102.4 249.3Germany 121.5 82.1 77.3 36.9 317.8Italy 86.3 16.9 71.1 0.0 174.3Spain 78.8 21.4 29.1 13.0 142.3Japan 244.2 121.3 73.0 66.3 504.8Korea, Rep. of 105.5 54.8 30.0 33.2 223.5United Kingdom 82.9 39.1 85.1 18.5 225.6United States 944.6 575.4 570.1 185.9 2 276.0Other OECD 374.0 159.5 193.5 54.3 781.3Brazil 93.6 13.5 18.2 2.2 127.5Iran 78.4 1.1 79.6 0.0 159.1China 327.3 1 081.9 42.3 11.8 1 463.3India 115.7 212.9 33.0 4.0 365.6Russian Federation 130.0 111.6 364.6 33.9 640.1Other 821.1 340.3 661.9 44.0 1 867.3

World 3 836.8 2 929.8 2 474.7 627.2 9 868.5a Excludes hydropower and other renewables. b Representing uranium consumption. Sources: BP, Statistical Review of World Energy.

Average growth in major energy markets, 1995 – 2005

Chinaenergy

consumptiongrowth

China GDP growth

OECD energy

consumptiongrowth

OECDGDP

growth

2

%

4

6

8

are heavily dependent on imported energy. Australia, as a major energy exporter, is well positioned to supply these markets. China, although not yet a major energy importer, has experienced strong economic growth over the past decade and its energy consumption has grown more rapidly than in the rest of the world. While it has signifi cant fossil fuel resources, China currently consumes slightly more energy than it produces, with the shortfall principally in oil and gas.


export market

Oil price

200620032000199719881985 1991 1994198219731971 1976 1979

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World average trade weighted prices, quarterly, ended June 2006

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6 ] Macroeconomic indicators in key Australian energy export markets percentage change from previous year

2001 2002 2003 2004 2005 2006 % % % % % %

Economic growth a Australia b 2.0 3.9 3.2 4.1 2.7 2.9United States 0.8 1.6 2.7 4.2 3.5 3.3European Union 3.3 0.8 0.6 1.7 1.6 naJapan 0.2 –0.3 1.4 2.3 2.8 2.8OECD c 0.7 1.6 1.7 3.1 2.7 3.0China d 7.5 8.3 9.3 10.1 10.2 10.4Korea, Rep. of 3.8 7.0 3.1 4.6 4.0 5.0

Industrial production Australia –3.6 –0.3 0.0 4.2 3.7 naUnited States –3.6 –0.3 0.0 4.2 3.7 naJapan –6.3 –1.1 3.0 5.3 1.2 3.5Germany 0.2 –1.0 0.4 3.0 3.4 3.8United Kingdom –1.5 –2.0 –0.3 0.8 –1.8 naOECD –2.6 –0.4 0.7 3.6 2.4 3.0China 9.9 12.6 17.0 16.7 16.4 16.5Korea, Rep. of 0.4 8.2 5.2 10.0 5.9 naa Growth of real gross domestic product. b Financial years: 2001 = 2000-01. c Regarded as nineteen countries for all years. d Gross national product. na Not available.Source: ABARE, Australian Commodity Statistics; Australian Commodities.

Source: US EIA.


7 ] World non-renewable primary energy production, 2005 a

Natural Oil Coal gas Uranium Total b Mtoe Mtoe Mtoe Mtoe Mtoe

Australia 23 199 32 125 381Canada 148 35 164 153 502Mexico 191 4 33 0 228Norway 150 0 71 0 221United Kingdom 95 15 86 0 197United States 330 567 489 14 1 399Other OECD 41 186 114 6 347China 174 990 37 10 1 211Indonesia 55 81 66 0 203India 38 189 27 3 256Iran 203 0 77 0 280Saudi Arabia 506 0 58 0 564United Arab Emirates 126 0 41 0 167Other Middle East 352 1 76 0 429Russian Federation 459 128 530 45 1 163Nigeria 122 0 19 0 141South Africa 0 137 2 9 148Venezuela 154 7 25 0 185Other 728 348 540 182 1 803

World 3 895 2 887 2 487 547 9 825a Excludes hydropower and other renewables. b Rows may not add due to rounding. Sources: BP, Statistical Review of World Energy; Uranium Information Centre.


coal production and trade

Australia is a secure, reliable and competitive supplier of high quality metallurgical and thermal coal.

Australia accounts for around 7 per cent of world black coal production, three-quarters of which is sourced from opencut mines. Lignite is mined principally in Victoria and in South Australia, where it is used for electricity generation.

Australia accounts for a third of world hard coal trade and almost two thirds of world metallurgical coal trade. More than three-quarters of Australia’s black coal production is destined for export. New South Wales is the major supplier of thermal coal exports, while Queensland is the major supplier of metallurgical coal exports.

Most of the coal produced from the Bowen Basin in Queensland is destined for export from ports near Mackay and Gladstone, including the

large ports at Dalrymple Bay, Hay Point and Gladstone.

In New South Wales, coal is exported from Newcastle and Port Kembla. The port of Newcastle has two coal loading terminals and is the largest coal exporting port in the world.

Extensive rail networks in New South Wales and Queensland connect the coal ports with the major coal producing areas in each state.

With increased production, world prices for coal have

Australian black coal industry

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coal

8 ] Australian salable coal production, by state

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Mt Mt Mt Mt Mt Mt Mt

Lignite Victoria 67.4 65.0 68.7 68.8 70.0 70.6 71.2South Australia 2.9 3.2 3.1 3.2 3.2 3.6 3.6

Black coal New South Wales 105.2 110.2 114.3 111.5 114.2 122.1 123.2Queensland 124.3 138.3 148.6 153.6 162.2 172.5 171.4Tasmania 0.4 0.3 0.4 0.3 0.4 0.4 0.4Western Australia 6.6 6.2 6.2 6.1 6.0 6.2 6.2

Total coal 306.8 323.2 341.3 343.5 356.0 375.4 376.0

Sources: Coal Services Pty Ltd; Queensland Department of Mines and Energy; Victorian Department of Primary Industries; ABARE, Australian Commodities.

eased slightly from the peak levels of 2003-04 but have remained strong with continued growth in world demand for both thermal and metallurgical coal. In response to this, Australian black coal producers are continuing with investments in new mining

capacity. Signifi cant new investment in port capacity both in Queensland and New South Wales means that Australian coal exports are forecast to increase steadily over the next several years to meet increased world demand.


9 ] Major coal producers in Australia

SaleableOwner Mine State Production Mt

Coal and Allied Industries Bengalla NSW 6.0Coal and Allied Industries Hunter Valley Operations NSW 12.6Coal and Allied Industries Mount Thorley NSW 10.2Hunter Valley Coal Corp PL Mount Owen NSW 6.0Mt Arthur Coal PL Mount Arthur Operations NSW 10.0Oakbridge PL Bulga NSW 5.4Oakbridge PL Beltana NSW 4.9Xstrata Aust PL Ulan NSW 5.6Anglo Coal Australia PL Drayton NSW 4.6CLP Power Asia Yallourn (brown coal) Vic 17.7Hazelwood Hazelwood (brown coal) Vic 18.7Loy Yang Loy Yang (brown coal) Vic 29.8Anglo Coal Australia PL Callide and Boundary Hill Qld 9.5Anglo Coal Australia PL Moura Qld 6.2BHP Billiton Mitsubishi Alliance Blackwater Qld 12.0BHP Billiton Mitsubishi Alliance Goonyella/Riverside Qld 13.2BHP Billiton Mitsubishi Alliance Norwich Park Qld 5.8BHP Billiton Mitsubishi Alliance Peak Downs Qld 9.1BHP Billiton Mitsubishi Alliance Saraji Qld 5.5Burton Coal PL Burton Qld 4.3Collinsville Coal Collinsville mine Qld 4.9Curragh Queensland Mining PL Curragh Qld 8.5Ensham Resources PL Ensham Qld 8.4Hail Creek Coal PL Hail Creek Qld 5.9NCA Joint Venture Newlands Qld 8.2Oaky Creek Coal Oaky North Qld 3.8RioTinto Coal Australia Blair Athol Qld 10.6RioTinto Coal Australia Meandu Qld 6.5BHP Billiton Mitsubishi Alliance Crinum Qld 3.7RioTinto Coal Australia Kestrel Qld 3.7Macarthur Coal Coppabella Qld 4.4BHP Billiton Mitsui Alliance South Walker Creek Qld 3.0Qld Coal Mine Management Jellinbah East Qld 3.5Anglo Coal Australia PL German Creek Qld 4.7Anglo Coal Australia PL Moranbah North Qld 3.9South Australian Government Leigh Creek (brown coal) SA 3.6Griffi n Coal Muja and Ewington WA 3.0Sources: Australian Black Coal Statistics; Victorian Department of Primary Industries.

coal

10 ] Major new Australian coal projects

Target Coal Project (region) Operator capacity type Capex Startup Mtpa A$m

Black coal mines – committedAshton longwall Felix Resources (JV) 3 M/T 150 2007 (Singleton NSW) Boggabri opencut Idemitsu Kosan 5 T 35 2007 (Boggabri NSW) Glendell opencut Xstrata 2 M/T 123 2007 (Singleton NSW) Mount Owen expansion Xstrata 2 T 100 2008 (Singleton NSW) Newpac longwall Resource Pacifi c 4 M 75 2007 longwall expansion Holdings (Hunter Valley NSW) Ulan longwall Xstrata/Mitsubishi 3.5 T 140 2007 (Mudgee NSW) Tarawonga opencut Whitehaven Coal 1.3 M/T 38 2007 (Boggabri NSW) Wambo longwall Peabody 3 M/T 101 2007 (Singleton NSW) Wilpinjong opencut Peabody 7 T 123 2007 (Mudgee NSW) Clermont opencut Rio Tinto 12 T 440 2008 (Clermont Qld) Curragh North Wesfarmers Ltd 2.4 M 360 2007 (Emerald Qld) Dawson Project Anglo Coal/ Mitsui 5.7 M/T 1120 2007 (Gladstone Qld) Ensham Central Ensham Resources 3 T 100 2007 (Emerald Qld) Isaac Plains Aquila/AMCI Coal 1.6 M/T 66 2007 (Moranbah Qld) / PCI Kogan Creek C S Energy 2.8 T 80 2007 (Chinchilla Qld) Lake Lindsay Anglo Coal/ Mitsui 1.9 M 690 2008 (German Ck Qld) 2.1 PCI/T New Acland New Hope Corp. 1.5 T 60 2007 (Oakey Qld) Poitrel BHP Billiton/ Mitsui 3 M/PCI 330 2007 (Moranbah Qld) continued...

[ 15 ]

10 ] Major new Australian coal projects continued

Target Coal Project (region) Operator capacity type Capex Startup Mtpa A$m

Black coal mines – proposedAbel underground Donaldson Coal 4.5 M/T 84 na (Newcastle NSW) Anvil Hill Centennial Coal 10 T na 2008 (Muswellbrook NSW) Belmont opencut Whitehaven 1.5 T 35 2007 (Gunnedah NSW) Bickham opencut Bloomfi eld Collieries 2.5 T na 2008 (Scone NSW) (JV) Maules Creek Coal and Allied 6.5 T 450 na (Boggabri NSW) Moolarben Felix Resources 9+4 T 220 2008 (Mudgee NSW) (opencut+underground) Mount Arthur North BHP Billiton 8 T 300 na (Muswellbrook NSW) Saddler’s Creek Anglo Coal Aust. 2 T 128 na (Muswellbrook NSW) 2 M Wyong longwall Korea Resources (Wyong NSW) Corp/Sojitz 5 T 500 naBelvedere underground Aquila Resources (JV) (Gladstone Qld) 12 M na naEnsham Central Ensham Resources 8 T 450 2010 (Emerald Qld) Goonyella BMA JV 7 M na na (Moranbah Qld) Grosvenor Anglo Coal 6 M 700 2010 (Moranbah Qld) Australia Moranbah South Anglo Coal Aust./ 3.5 M 800 2011 (Moranbah Qld) Kumba Australia Peak Downs BMA JV 6 M na na (Moranbah Qld) Sonoma Qcoal 1.8 M 160 2007 Collinsville Qld 0.2 T Togara North Xstrata 2 T 70 2010 Blackwater Qld Vermont Coal Bowen Basin Coal 2.5 M 70 na Dysart Qld Wandoan opencut Qld Xstrata 10 T 700 2012

continued...[ 16 ]

coal

10 ] Major new Australian coal projects continued

Target Project Project (region) Operator capacity type Capex Startup Mtpa A$m

Black coal infrastructure - committed Kooragang Island Port Waratah up from expansion 170 2007 Coal Terminal Coal Services 64 to 80 Newcastle NSW Abbot Point Terminal Ports Corporation up from expansion 116 2007 Bowen Qld Queensland 15 to 21 Stage 2 Dalrymple Bay Babcock & up from expansion 530 2007 Coal Terminal Qld Brown 60 to 68 Phase 1 Dalrymple Bay Babcock & up from expansion 640 2008 Coal Terminal Qld Brown 68 to 85 Phases 2/3 Hay Point Terminal BMA JV up from Phase 2 70 2007 Mackay Qld 40 to 44 RG Tanna Terminal Central Qld up from expansion 698 2007 Gladstone Qld Ports Authority 40 to 68

Black coal infrastructure - proposed Kooragang Island Port Waratah capacity expansion 78 2009 coal terminal Coal Services up 30 Newcastle NSW NCIG export terminal Newcastle Coal initially new 800 2009 Newcastle NSW Infrastructure Group 30 Abbot Point Ports Corporation up from expansion Coal Terminal of Queensland 21 to 25 Stage 2A/2B 70 2010 Bowen Qld 25 to 50 Stage 3 450 naHay Point Terminal BMA JV up from Mackay Qld 44 to 55 Phase 3 500 naNorthern Missing Queensland Rail Link (rail) 7 Mtpa haulage new 350 2009 Goonyella-Newlands capacity (stage 1) Southern Missing Queensland Rail JV Link (rail) Up to 30 new 1000 2011 Wandoan-Theodore haulage Wiggins Is. Terminal Central Qld capacity 20 new na 2010 Gladstone Qld Ports Authority (stage 1)

Coal type: M = metallurgical; T = thermal; PCI = pulverised coal injection. Capex = capital expendi-ture. BMA BHPBilliton Mitsubishi Alliance. JV Joint Venture. Mtpa = million tonnes per annum. na Not available. Some proposed projects have been omitted from the list where the startup date is unknown. Refer to the source for a complete listing of projects. Source: ABARE, Minerals and energy: major development projects, Australian Commodities.

[ 17 ]


11 ] Australian exports of coal value in 2005-06 dollars

2001-02 2002-03 2003-04 2004-05 2005-06

Metallurgical coal, high quality

Volume Mt 65.5 66.5 67.5 80.7 77.5Value A$m 5 974 5 545 4 591 7 946 12 203Export unit value A$/t 91.2 83.4 68.0 98.5 157.5

Metallurgical coal, excluding high quality


Total metallurgical coal


Thermal coal Volume Mt 92.0 99.9 106.7 106.4 110.8Value A$m 5 909 4 815 4 625 6 545 7 206Export unit value A$/t 64.2 48.2 43.3 61.5 65.0Source: ABARE, Australian Commodity Statistics; Australian Commodities.

World seaborne coal trade, 2005

United States 13.4%RussianFederation 4.9%

China 2.7%

Canada 14.4%

Australia 64.6% other 16.9%

South Africa 13.1%

Russian Federation 12.1%

Indonesia 16.3%

Colombia 10.1%

China 11.9%

Australia 19.6%

Metallurgical Thermal

Sources: IEA, ABARE.


coal

12 ] Australian coal exports, by type, by destination

2001-02 2002-03 2003-04 2004-05 2005-06

Metallurgical coalBrazil Mt 4.22 4.46 3.85 3.09 3.17China a Mt 0.12 0.77 3.56 4.19 2.86Chinese Taipei Mt 4.01 3.82 5.31 7.09 7.71France Mt 4.45 4.42 4.11 3.89 3.33Italy Mt 2.34 1.63 1.93 2.53 2.26United Kingdom Mt 4.39 4.09 4.06 4.45 3.93Other EU Mt 11.49 9.88 11.65 13.37 14.51India Mt 11.94 14.11 13.58 17.44 16.39Japan Mt 40.39 41.32 41.38 44.96 44.25Korea, Rep. of Mt 6.63 7.44 10.14 12.46 7.70South Africa Mt 1.63 1.36 1.28 1.88 1.53Rest of world Mt 14.22 14.49 10.88 9.57 12.83

Total Mt 105.83 107.79 111.73 124.92 120.47

Thermal coalChile Mt 0.57 0.71 1.12 0.41 0.83China a Mt 2.95 3.99 2.45 1.75 4.00Chinese Taipei Mt 10.24 10.82 9.89 14.33 13.21France Mt 0.31 0.40 0.58 0.47 0.74Other EU Mt 5.95 6.97 7.16 2.85 1.50India Mt 1.27 1.45 1.74 1.21 1.23Japan Mt 49.62 52.44 58.78 57.28 59.33Korea, Rep. of Mt 13.40 14.20 16.22 17.95 20.24Malaysia Mt 1.31 2.49 2.53 3.37 2.77Other ASEAN b Mt 1.17 0.14 0.07 0.42 1.34Mexico Mt 1.91 3.26 2.29 4.24 4.75Rest of world Mt 3.33 3.09 3.85 2.12 0.87

Total Mt 92.04 99.95 106.69 106.40 110.81a Includes Hong Kong. b The Philippines, Thailand and Vietnam. na Not available. Sources: Australian Bureau of Statistics, International Trade, cat. no. 5464.0; Department of Foreign Affairs and Trade.


13 ] Australian coal export outlook value in 2005-06 dollars

2006-07 2007-08 2008-09 2009-10 2010-11

Thermal coal exports Volume Mt 114.7 121.1 127.7 134.7 141.5Value A$m 7 092 7 913 7 833 8 118 8 266Export unit value A$/t 61.8 65.3 61.3 60.3 58.4

Metallurgical coal exports Volume Mt 126.6 135.6 139.4 145.1 150.1Value A$m 14 576 14 181 13 004 12 972 13 127Export unit value A$/t 115.1 104.6 93.3 89.4 87.5Source: ABARE, Australian Commodities.

14 ] Export loadings and capacity for major coal ports

Loadings Capacity Short term Medium term 2004-05 2005-06 capacity capacity Mt Mtpa Mtpa Mtpa

New South Wales Newcastle a 78 89 102 160Port Kembla 10 16 16 16

Queensland Abbot Point 13 15 21 25Brisbane 3 5 5 5Dalrymple Bay 48 60 68 85Gladstone a 34 45 73 93Hay Point 34 40 44 55a Ports with two or more coal loading terminals. Source: ABARE, Minerals and energy: major development projects.


liquid fuels – production and trade

Australia is around 60 per cent self suffi cient in the primary production of crude oil and natural gas liquids on an energy content basis.

The Carnarvon Basin is currently Australia’s most prolifi c region for the production of crude oil, condensate and LPG, accounting for 63 per cent of total Australian production. The more mature oil fi elds situated in the Gippsland Basin in Bass Strait have been producing since the late 1960s; however, production from that basin peaked in the mid-1980s and has declined steadily since. The Gippsland Basin now constitutes 23 per cent of Australia’s total production of naturally occurring petroleum liquids.

While production from the Carnarvon Basin in the north west of Australia is mostly exported, production from the Gippsland Basin in south eastern Australia is predominantly

used to feed local refi neries. Increasing production in the north west and decreasing production in the south east have resulted in an increase in Australian trade in crude oil, both imports and exports.

Crude oil and condensate is also produced from the onshore Cooper–Eromanga Basin, which straddles the border between South Australia and Queensland. Small quantities of crude oil are produced from several other onshore basins, including the

Australian crude oil and NGL production and net imports

2029-30

2019-20

2009-10

1979-80

1989-90

1999-2000

PJ

1969-70

Net imports

Production500

1000

2000

2500

1500


15 ] Australian liquid fuel production, by basin

2001-02 2002-03 2003-04 2004-05 2005-06 ML ML ML ML ML

Crude oil and condensate Adavale 3 Amadeus 72 59 136 132 53Bonaparte 5 987 4 923 3 083 2 175 1 797Bowen–Surat 53 39 44 47 43Canning 4 4 3 2 2Carnarvon Barrow Island 947 896 705 568 390 North West Shelf 15 184 15 711 14 404 12 900 9 789 Other 4 965 4 385 3 830 4 081 6 056Cooper–Eromanga Queensland 648 690 632 799 637 South Australia 868 762 623 622 696Gippsland 9 062 7 708 6 855 5 460 4 456Otway 23 23 13 7 3Perth 7 121 388 518 398

Total 37 820 35 324 30 716 27 311 24 320

LPG a 4 612 4 682 4 639 4 628 4 722a Naturally occurring liquifi ed petroleum gas.Sources: DITR, Australian Petroleum Statistics.

Australian liquid petroleum products flows, 2005-06

ConversionImports

Exports

292Industrial

Transport

Units: Petajoules

Electricity

Commercial

Residential

Other

38

21

14

69

Production

Domestic consumptionNaturally occurring LPG

10911192 1759726 a

–101Own use

125

–482–85

628

1325

Cru

de o

il a

nd

OR

F

948

ExportsImports

Petroleum products(including LPG)a Production plus stocks change


liquid fuels

Perth and Canning Basins in Western Australia, the Amadeus Basin in the Northern Territory and the Bowen–Surat Basin in Queensland. The Bowen–Surat Basin and the Otway Basin straddling South Australia and Victoria also produce condensate. The other major liquids producing region is the Bonaparte Basin off the northern coast of Australia, some of which is shared with Timor Leste.

Australia is a net importer of crude oil and refi ned products, but a net exporter of LPG, mainly in the form of butane.

More than half of Australia’s crude oil and condensate exports were shipped to the Asian region in 2005-06, with Korea, Japan and Singapore being large markets for Australian crude oil feedstock. Japan is Australia’s largest market for LPG, accounting for three-quarters of the export volume. Singapore and New Zealand are Australia’s largest market for refi ned products, taking 37 per cent and 34 per cent respectively in 2005-06.

Since the mid-1990s, Australia’s imports of Middle Eastern crude oil have gradually fallen and been partially replaced by crude oil from the south east Asian region.

Although much of Australia’s current oil production is sourced from mature oil and gas provinces, many prospective areas offshore are yet to be fully explored. There is a possibility of signifi cant undiscovered oil and gas resources in Australia’s four major offshore regions, the Gippsland Basin in Victoria, the Bonaparte Basin in the Northern Territory and the Browse and Carnarvon Basins in Western Australia (Geoscience Australia, 2000).

The continued development of technology is also bringing the economic production of oil from gas and coal (gas to liquids and coal to liquids) closer to economic reality.

However, despite the expected continuation of strong world demand for crude oil, Australian crude oil and condensate production is projected to remain fl at over the longer term, while domestic consumption is projected to grow by 1.4 per cent a year (see chapters on energy consumption and transport).

Largely on the basis of increasing production of natural gas, Australian LPG production (principally propane and butane) is expected to rise in the long term. Australia produces signifi cantly more LPG in total


Australian liquid fuels exports and imports, 2005-06

Refined productsCrude oil

North Asia

ImportExport

Oceania

ImportExport

South East Asia

ImportExportML

MLNorth America

ImportExport

Middle East

ImportExport

Exports = Australian exports to regionImports = Australian imports from region

20004000

% = region as percentage of total

ML20004000

9%

0%

2000400060008000

10000120001400016000180002000022000240002600028000

40%

70%

12%

46%

11%

9%

2% 1%ML

20004000

ML200040006000

16 ] Major Australian listed oil and gas companies and their resources a

Resources

ASX Market Proved plusCompany code capitalisation a Proved probable 2005-06A$ mboe mboe

Woodside WPL 27.7 900.0 1244.0Santos STO 6.1 414.0 774.0BHP Billiton BHP na 275.4 551.0Origin (upstream ORG 5.2 na 413.0 and downstream)Oil Search OSH 3.3 84.7 111.3Hardman HDR 0.9 na 123.0Australian Worldwide AWE 1.2 na 41.4 Exploration ARC Energy ARQ 0.4 5.4 9.0ROC Oil ROC 0.8 13.0 33.0Tap Oil TAP 0.3 na 10.0Beach Petroleum BPT 0.9 na 36.2Cue Energy Resources CUE 0.1 5.1 10.1Petsec Energy PSA 0.3 na 7.5.

a Includes overseas gas and oil holdings. na Not available. mboe = million barrels oil equivalent. Sources: Annual reports of listed companies.


liquid fuels

17 ] Australian petroleum exports, by destination

2001-02 2002-03 2003-04 2004-05 2005-06 ML ML ML ML ML

Crude oil and other refi nery feedstock aChina 1 160 1 699 2 389 732 404Chinese Taipei 1 920 580 125 916 346Japan 3 168 3 402 2 079 1 927 2 201Korea, Rep. of 5 521 4 012 3 778 2 787 2 725New Zealand 1 426 784 722 1 425 465Singapore 6 215 6 567 3 948 2 861 3 161United States 2 674 2 944 1 808 1 154 297Other 1 852 962 2 677 3 929 3 427

Total 23 936 20 950 17 526 15 731 13 026

Liquefi ed petroleum gas China 441 154 696 598 393Japan 2 575 2 783 2 109 2 081 2 142Korea, Rep. of 127 234 0 81 0Other 68 23 111 84 265

Total b 3 211 3 194 2 916 2 844 2 800

Refi ned products Fiji 473 384 122 7 62Japan 71 26 29 53 74New Zealand 1 247 1 250 828 1 113 716Singapore 367 246 127 471 771Other Pacifi c 921 861 818 37 135United States 153 99 123 0 37Other 177 274 427 166 287

Total 3 409 3 140 2 474 1 847 2 082

Mt Mt Mt Mt MtLiquefi ed natural gas c,s 7.60 7.83 7.91 10.59 12.50a Does not include ships’ and aircraft stores. b Includes confi dential exports. c 1 tonne of LNG is approximately equal to 2174 litres of LNG. s ABARE estimate. Sources: Australian Bureau of Statistics; ABARE.


19 ] Australian petroleum imports, by source

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 ML ML ML ML ML ML

Crude oil and other refi nery feedstock Indonesia 3 788 6 795 5 380 4 012 3 328 3 929Malaysia 2 249 2 290 2 299 4 073 4 761 3 976New Zealand 1 104 1 089 990 708 663 638Other Middle East 453 42 334 42 158 199Papua New Guinea 2 772 2 208 1 683 1 189 1 717 2 386Qatar 439 646 191 0 77 0Saudi Arabia 4 016 3 004 3 680 1 517 3 101 1 602Singapore 287 554 719 596 652 829United Arab Emirates 3 170 2 305 2 294 2 207 1 917 863Vietnam 6 282 5 652 6 699 5 778 6 560 6 708Other 1 929 2 723 3 689 3 376 3 120 3 286

Total 26 489 27 308 27 958 23 498 26 054 24 416

Refi ned productsIndonesia 121 80 57 281 162 100Korea, Rep. of 144 289 144 280 237 1 002Malaysia 8 27 45 97 93 221Middle East 846 474 140 1 036 588 689New Zealand 20 42 17 3 4 84Singapore 1 692 2 110 2 832 5 904 7 395 8 463United States 401 462 407 434 423 455Other a 1 549 1 171 1 855 3 370 2 286 4 110

Total 4 781 4 655 5 497 11 405 11 188 15 124a Includes confi dential imports of refi ned products. Sources: Australian Bureau of Statistics; ABARE.

18 ] Rates of return on assets in Australia’s petroleum industry

2000-01 2001-02 2002-03 2003-04 2004-05 % % % % %

Downstream a 1.1 –4.1 9.5 2.7 8.5Upstream 11.4 12.6 10.8 12.4 12.5a Numbers are for calendar years: 2004-05 = 2004. Sources: Australian Institute of Petroleum; Australian Petroleum Production and Exploration Association Limited.


liquid fuels

than is consumed and while the domestic market for propane is likely to tighten, due to its specialised use in household and recreational applications, domestic availability and exports of liquefi ed petroleum gases in general are expected to increase.

20 ] Australian petroleum medium term outlook values in 2005-06 A$

2006 2007 2008 2009 2010 -07 -08 -09 -10 -11

Crude oil and condensate Production ML 27 988 29 190 34 074 31 550 29 213Export volume ML 15 589 16 675 18 850 17 352 16 067Export value A$m 7 533 7 448 8 326 7 481 6 754Imports ML 23 688 22 235 18 633 20 178 21 562

Natural gas Production Gm3 45 50 56 60 63LNG export volume Mt 15 15 17 19 19Export value A$m 5 231 5 269 6 066 6 414 6 507

LPG Production ML 4 997 5 180 5 450 5 550 5 670Export volume ML 3 063 3 150 3 266 3 033 2 914Export value A$m 1 016 973 960 886 846

Petroleum products Refi nery production ML 36 876 35 200 33 375 32 707 32 053Other ML 2 844 3 315 5 220 5 464 5 925Exports (excl. LPG) ML 2 067 2 125 2 241 2 013 1 896Imports (incl. LPG) ML 18 827 21 200 22 370 23 491 24 739Net consumption ML 56 510 57 590 58 724 59 650 60 821

Gm3 = million ML or 1 TL.Source: ABARE, Australian Commodities.

In 2005-06, in energy terms LPG represented 8.7 per cent of fuel used in spark ignition automobile engines in Australia. With higher petrol prices and government incentives for LPG use, automotive LPG demand is projected to grow by almost 3 per cent a year.


21 ] Value of Australian trade in petroleum products in 2005-06 dollars

2001-02 2002-03 2003-04 2004-05 2005-06 A$m A$m A$m A$m A$m

Exports Automotive gasoline 435 397 296 350 419Diesel fuel 343 397 309 171 238Aviation turbine fuel 206 246 182 112 80Fuel oil 78 31 22 53 215Aviation gasoline 37 31 22 27 54Kerosene 1 0 0 0 0Lubricants 183 152 105 115 139Other products 94 43 35 42 50

Total refi ned products 1 377 1 297 971 870 1 195

Liquefi ed petroleum gas 805 926 684 830 1 002Bunkers a 849 838 735 981 1 322

Crude oil and other refi nery feedstock 7 132 6 929 5 344 6 532 6 638Liquefi ed natural gas 2 916 2 822 2 298 3 301 4 416

Imports Automotive gasoline 500 616 1 235 1 510 2 342Diesel fuel 462 607 1 199 1 995 4 071Aviation turbine fuel 76 158 233 498 527Fuel oil 160 195 331 376 569Lubricants 141 206 218 297 418Liquefi ed petroleum gas 129 83 175 148 198Other products 346 354 410 462 636

Total refi ned products 1 814 2 219 3 801 5 286 8 761

Crude oil and other refi nery feedstock 8 323 9 319 6 971 10 315 12 820a Ships’ and aircraft stores. Sources: Australian Bureau of Statistics; ABARE, Australian Mineral Statistics.


The petroleum refi ning industry in Australia produces a wide range of petroleum products derived from crude oil and condensate feedstock.

In 2005-06, automotive gasoline, diesel fuel and aviation turbine fuel accounted for 88 per cent of the total production of refi ned products in Australia. The ratio of domestic production to gross sales in Australia for gasoline and turbine fuel is relatively high — 87 per cent and 97 per cent respectively. Australia is less self suffi cient

liquid fuels – domestic refi ning

in the heavier products such as kerosene, diesel, fuel oil and lubricants. Most of the export of propane and butane comes from naturally occurring fi eld production. However, residential, commercial and recreational consumption of LPG in Australia is predominantly of propane, so the net availability of propane for export is only half that of butane.

Australia’s downstream petroleum industry includes eight major oil refi neries operated by four companies — BP, Caltex, Mobil and Shell.

Australian refinery input and production, 2005-06

ML

Feedstock

RefineryPetroleum productsLPG 1 125

Automotive gasoline 16 528

Aviation turbine fuel 5 216

Automotive diesel oil 10 154

Fuel oil 1 048

Other products a 2 204

a Includes aviation gasoline, kerosene, industrial and marine diesel, lubricating oils, greases and basestocks, bitumen and other products. Source: DITR, Australian Petroleum Statistics.

36 895 ML


22 ] Australia’s refi nery capacity

Capacity Operator Year a Capacity utilisation s MLpa MLpaNew South WalesClyde Shell 1928 4 980 4 382 Kurnell Caltex 1956 7 210 6 345

QueenslandBulwer Island BP 1965 5 100 4 488 Eromanga (minirefi nery) IOR 1985 87 50 Lytton Caltex 1965 6 110 5 284

South AustraliaPort Stanvac b Mobil 1963 (4 525) –

VictoriaAltona Mobil 1949 4 640 4 083 Geelong Shell 1954 6 900 6 072

Western AustraliaKwinana BP 1955 8 030 7 650

Total c 43 057 38 354a Year refi nery was commissioned. b Ceased production in July 2003; current status care and maintenance. c Total of current operating refi neries. s ABARE estimate.MLpa = megalitres per annum. Source: Australian Institute of Petroleum.

In order to achieve higher fuel quality standards effective from 2006, all the major oil refi nery companies operating in Australia have undertaken refi nery upgrades. The only exception is the Port Stanvac refi nery in South Australia, which ceased operating in 2003 and is currently under care and maintenance.

Over the longer term, refi ning capacity as well as refi nery output in Australia is assumed to increase by around 1.3 per cent a

year. At the same time, however, the consumption of petroleum products in Australia is projected to increase by around 1.4 per cent a year. As a result, the share of petroleum products sourced from local refi neries (as opposed to being imported) is projected to fall from the current level of 78 per cent to around 70 per cent by 2029-30.

Meeting the cost of 2006 standards for fuel quality in Australia has been diffi cult for the


liquid fuels

local refi ning industries following several years of low profi ts as a result of competition from newly built refi neries in the Asian region. Between 1997 and 2003, underlying profi t for the local industry averaged $277 million a year, while new investment, largely directed at meeting the new fuel standards, has averaged almost $500 million.

However, in the Asia Pacifi c region, gasoline and diesel consumption have grown rapidly and many countries have been implementing stricter fuel standards for these fuels. The effect of these developments has been a signifi cant reduction in spare refi nery capacity in the region and in the past four years industry profi ts in Australia have improved as a result of increased refi ning margins.

The pretax component of Australian gasoline prices remains among the lowest in the OECD and the total gasoline price is the fourth lowest.

Some proposed coal or gas to liquid fuel projects are projected to come on line over the medium to long term to augment established biofuels projects in the production of nonconventional liquid fuels.

There are three main producers of fuel grade ethanol

International gasoline pricesJune quarter 2006

Tax component

Turkey

Norway

Netherlands

Belgium

United Kingdom

Germany

Korea

Denmark

Italy

Finland

France

Portugal

Sweden

Ireland

Austria

Hungary

Luxembourg

Slovak Rep.

Switzerland

Spain

Czech Rep.

Poland

Japan

Greece

New Zealand

Australia

Canada

United States

Mexico

Ac/litreSource: DITR500 100 150 200 250


23 ] Major new Australian petroleum liquids projects

NewProject (region) Operator capacity Type Capex Startup A$mCommittedWestern AustraliaStybarrow oil fi eld BHP Billiton 80 kbd oil/NGL 803 2008 (Exmouth) Vincent oil fi eld Woodside Energy 100 kbd oil 1000 2008 (stage 1, Exmouth) Angel gas/ condensate Woodside 310 PJ pa gas 1 600 2008 fi eld (Carnarvon Basin) Energy 50 kbd NGL

Northern Territory Puffi n oil fi eld AED Oil 18–30 kbd oil 71 2007

ProposedCondensate processing Darwin 60 kbd gasoline/ 450 2008 facility (Darwin) Clean Fuels diesel/LPG/ jet fuel Montara/Skua Oilfi eld Coogee Resources na oil 450 2008

VictoriaMonash Energy Project Australian Power 60 kbd liquid 5 000 2010 (Latrobe Valley) and Energy Ltd fuelsCapex = capital expenditure. kbd = thousand barrels a day. Source: ABARE, Minerals and energy: major development projects.

in Australia, principally using wheat starch and C grade molasses. In 2003, the Australian Government announced the Biofuels Capital Grants Program, which provided incentives of 16 cents a litre for new or expanded projects producing a minimum of 5 million litres of biofuel a year. The Fuel Tax Act 2006 ensures a more consistent and neutral tax regime for fuels used in vehicles through the

Australian self sufficiency in refined products (excluding LPG)

PJ

1000

1500

2000

2500

2029-30

2019-20

2009-10

1979-80

1989-90

1999-2000

Consumption

Production


liquid fuels

24 ] Australian production of refi ned petroleum products

2001-02 2002-03 2003-04 2004-05 2005-06 ML ML ML ML ML

Automotive gasoline 17 999 17 984 17 375 17 913 16 528Automotive diesel oil 13 064 13 335 12 544 12 822 10 154Aviation turbine fuel 5 390 5 149 4 964 5 325 5 216Fuel oil 1 684 1 441 1 105 1 092 1 048Liquefi ed petroleum gas a 1 718 1 657 1 062 995 1 125Industrial and marine diesel fuel 105 117 84 22 31Bitumen 725 751 678 1 091 831Lubricants 564 521 259 202 163Aviation gasoline 147 134 114 144 119Heating oil 192 195 118 106 102Other a 5 090 5 439 5 183 4 856 6 784

Total 46 677 46 723 43 486 44 568 42 101a Includes byproducts of petrochemical and downstream processing. Sources: DITR, Australian Petroleum Statistics; ABARE, Australian Mineral Statistics.

25 ] International fuel standards

Aus- United Indo- Europe tralia a States b Japan b China b nesia bGasolineSulphur ppm 50 150 80 100 800 2000MTBE % 15 0Olefi ns c % 18 18 10 20 35Aromatics c % 35 42 25 42 40 0Benzene % 1 1 1 1 3 0

DieselSulphur ppm 50 50 15 50 2000 5000a 2006 standards. b 2004 standards. c US number is average across states but excludes California. Source: HARTS APEC Downstream Energy Services.


setting of excise rates based on the energy content of the fuel. However, a 50 per cent discount will still be applied to alternative fuels entering the excise net from 2015, including LPG, LNG, ethanol and biodiesel. These fuels will remain excise free until 2011 when phasing in of excise begins.

Liquid biofuels production in Australia is estimated to have been 57 ML in 2005-06 (41 ML of ethanol and 16 ML of biodiesel). Signifi cant expansion occurred in biodiesel production capacity in 2006 and output is expected to increase in 2006-07 as the new capacity reaches full production.

26] Liquid biofuel production in Australia

Location Startup date Principal feedstock

Fuel ethanol Manildra Group (pre-existing waste wheat starch (Nowra NSW) ethanolCSR Distilleries industries) molasses (Sarina Qld) Rocky Point Mill molasses (Woongoolba Qld)

Biodiesel Australian Biodiesel Group 2002 used cooking oil (Berkeley Vale NSW)Biodiesel Industries Australia Mar 2003 used cooking oil (Rutherford NSW)Australian Renewable Fuels Mar 2006 tallow, vegetable oil (Largs Bay SA)Eco-Tech Biodiesel Feb 2006 tallow (Narangba Qld)Australian Biodiesel Group July 2006 tallow (Narangba Qld) Australian Renewable Fuels July 2006 tallow, vegetable oil (Picton WA)


gas production and trade

Increasingly, the majority of Australia’s natural gas production has come from gas fi elds located off the west coast of Australia. This refl ects the growing share of Australia’s known natural gas resources in the west and north west of the country.

In 2005-06, 66 per cent of Australia’s natural gas was produced in the Carnarvon Basin off the coast of Western Australia.

At the same time, natural gas production in South Australia accounted for about 13 per cent of Australia’s total production,

the majority of which was from the onshore Cooper–Eromanga Basin.

Victoria accounted for a further 19 per cent, the majority of which came from the offshore Gippsland Basin. The onshore Otway Basin in south western Victoria has also contributed small volumes to the Victorian market for many years. Several gas fi elds off the southern coast of Victoria in the Bass and Otway Basins are currently being developed.

Natural gas, including coal seam gas, produced in

27 ] Asia Pacifi c LNG and natural gas prices 2005

average US$/t

Australia exports all destinations 240Japan imports from Australia 230 all origins 245Korea imports all origins 397United States imports all origins 389United States pipeline imports all origins 381Sources: International Energy Agency; US Energy Information Administration; Korea Energy Economics Institute.


28] Australian sales gas production, by state

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 GL GL GL GL GL GL

Naturally occurring ethane and natural gas a Northern Territory 459 471 452 423 479 494Queensland (Bowen–Surat) 632 533 650 640 706 653South Australia 5 765 6 308 5 754 4 288 4 149 4 004Victoria 6 507 6 671 6 533 7 747 7 758 7 435Western Australia 18 641 18 560 20 179 20 561 24 582 25 887

Total 32 004 32 543 33 568 33 659 37 674 38 473

Coal seam gas b New South Wales 217 223 211 213 210 260Queensland 276 429 711 895 1 005 1 540

Total 493 652 922 1108 1 215 1 800a Includes only methane or ethane produced from natural gas fi elds. b Calendar year estimates for 2001 and 2002. Sources: DITR; Geoscience Australia; ABARE.

Queensland and the Northern Territory accounts for 5 per cent and 1.2 per cent respectively of total Australian production. Queensland natural gas production is sourced from the Adavale and Bowen–Surat Basins and the Queensland sector of the Cooper–Eromanga Basin.

Gas production in the Northern Territory is sourced primarily from the onshore Amadeus Basin in central Australia. Gas from the Bayu–Undan fi eld in the Bonaparte

Basin of the Timor Sea is subject to a production sharing contract between the producers and the Timor Sea Designated Authority for the Joint Petroleum Development Area. The designated authority’s share of the revenue is apportioned 90 per cent to Timor Leste and 10 per cent to Australia.

Adding to Australia’s natural gas production is the growing contribution from coal seam gas. Coal seam gas production in Australia was around 1800


gas

Australian LNG exports

2005-06A$b

2

4

6Volume

Value

1990-91

2010-11

2005-06

2000-01

1995-96

Mt

5

10

15

supplies for the Western Australian natural gas market, and there are several producers supplying natural gas to the domestic market from this region.

Australia exports natural gas in the form of liquefi ed natural gas (LNG), most of which is currently sourced from the Carnarvon Basin on the north west shelf off Western Australia. The North West Shelf Joint Venture is in the process of expanding this operation, with a fi fth train due to be completed by 2008. From the start of 2006, natural gas has also been supplied from the Conoco–Phillips Bayu–Undan gas fi eld in the Timor Sea, for the production of LNG onshore near Darwin. Around 50 petajoules of gas were brought ashore from the Joint Petroleum Development Area in 2005-06, representing Australia’s fi rst large scale gas import.

Projected LNG demand by importing country

50

100

150

75

125

25

201520102004

OtherCalifornia/BajaChinaIndiaChinese TaipeiKoreaJapan

Mt

gigalitres in 2005-06, of which 86 per cent came from the Bowen–Surat Basin in Queensland and the remainder from the Sydney Basin in New South Wales.

The domestic market for natural gas in Australia is presently characterised by a small number of producers, a small number of large consumers and limited depth in consumption, as refl ected in the current limited range of alternative end uses.

Historically, two major gas producers have supplied most of the eastern Australian natural gas market (South Australia, Victoria, New South Wales and Queensland). Almost 90 per cent of natural gas supplied to this market is from the Esso/BHP Gippsland Basin joint venture and the Santos led operations in the Cooper–Eromanga Basin. The Carnarvon Basin dominates


continued...

29 ] Major new Australian gas projects

New capacity EstimatedProject Operator and type Capex startup A$m

Committed gas projects

Angel gas and Woodside 310 PJpa gas 1600 late 2008 condensate fi eld 50 kbd NGL Carnarvon Basin, WA

Argyle (coal seam Queensland 7.4 PJpa 28 mid-2007 gas) near Gas Company Roma, Qld

Camden gas Sydney Gas/ 14.5 PJpa 150 2008 project (coal seam) AGL

Goodwyn A Woodside na na late 2006 Low pressure Energy train (NWS)

Karratha LNG Energy 73 ktpa LNG 210 early 2007 plant, WA Developments Ltd

North West Shelf Woodside 4.2 Mtpa LNG 2425 late 2008 project extension Energy (fi fth train)

Otway Gas Woodside 60 PJpa gas 1100 early 2007 project, Vic Energy 950 kbpa NGL 125 ktpa LPGPerseus-over- Woodside na na mid-2007 Goodwyn project Energy Carnarvon Basin

Blacktip ENI Australia 650 Mcm 620 2009 gas discovery Bonaparte Basin, WA

Kwinana Wesfarmers 64 ktpa LNG 138 early 2008 LNG plant (incl power infrastructure)

Tipton West coal Arrow Energy 10 PJpa 50 early 2007 seam methane project Dalby, Qld


gas

continued...

29 ] Major new Australian gas projects continued


Proposed gas projects

Browse LNG Woodside 7–14 Mtpa LNG 10 000 2011–2014 development Energy offshore WA

Gorgon LNG Chevron 10 Mtpa LNG 15 000 2010 Barrow Island, WA 300 TJ/day natural gasIchthys gasfi eld Inpex Holdings/ 6 Mtpa LNG 8000 2012 Browse Basin, WA Total SA 100 kbd NGL

Kipper gas project Esso Aust. P/L na 300 2009 Gippsland, Vic

Longtom gas Nexus Energy na na mid-2008 project Bass St, Vic

Pilbara LNG BHP Billiton 6 Mtpa LNG 5000 late 2011 plant, WA

Pluto gas Woodside 5–6 Mtpa LNG 5000 late 2010 discovery Energy Browse Basin, WA

Sunrise gas Woodside 5.3 Mtpa LNG 5000 na project, Energy Timor Sea

Timor Sea Methanol 3 Mtpa LNG 1000 2011 LNG project Australia

Tassie Shoal Methanol Ph 1: 1.75 Mtpa 926 Ph 1: 2010 methanol Australia Ph 2: 1.75 Mtpa project, methanol 837 Ph 2: 2013 Timor Sea


Capex = capital expenditure. PJpa = petajoules per annum; TJ = terajoule; kbd = thousand barrels a day; kbpa = thousand barrels per annum; ktpa = thousand tonnes per annum; Mcm = million cubic metres; Mtpa = million tonnes per annum. na Not available.Source: ABARE, Minerals and energy: major development projects.

29 ] Major new Australian gas projects continued


Committed energy infrastructure projects

Bonaparte gas Australian 30 PJpa 130 2009 pipeline (to carry Pipeline Blacktip gas) TrustBrooklyn–Corio GasNet na 62 mid-2008 Loop pipeline Australia projectDampier–Bunbury DBP 100 TJ/day 433 early 2007 gas pipeline (DBNGP) expansion (stage 4)Dampier–Bunbury DBP 100 TJ/day 700 early 2008 gas pipeline (DBNGP) expansion (stage 5A)South Gippsland Multinet Gas na 50 2009 natural gas pipeline

Proposed energy infrastructure projects

Ballera to Moomba Epic Energy 20–90 PJpa 60–120 2008 Interconnect pipelineCentral Queensland Enertrade 20–50 PJpa 220 2008 Gas Pipeline Moranbah to Gladstone, QldDampier–Bunbury DBP 275 TJ/day 800 na gas pipeline (DBNGP) expansion (stage 5B and 5C) Queensland–Hunter Hunter Energy 100 PJpa 700 na gas pipeline Wallumbilla (Qld) to Hexham (NSW) Townsville to AGL/Petronas na 1000 2010 Ballera pipeline


electricity

With over $98 billion in assets, the electricity industry ranks as one of Australia’s largest industries, making a direct contribution of 1.5 per cent to Australia’s gross domestic product.

Australia generated around 244 TWh of electricity in 2004-05 from an estimated maximum capacity of 50 gigawatts. Over the fi fteen years to 2004-05, the industry increased delivery of electricity by over 50 per cent

to 30 per cent more customers (ESAA).

Final consumption of electricity in Australia (excluding electricity used in the conversion sector) has increased almost fourfold since 1973-74, from 59 TWh to 216 TWh in 2004-05.

Over the longer term, demand for electricity is expected to continue to grow strongly, with gross electricity consumption projected to reach 386 TWh by 2029-30. Black coal is

Electricity spot market prices in Australia’s eastern statesNEMMCO average wholesale

VictoriaQueenslandNew South Wales

$/MWh

20

40

60

80

100

120

200420032002200120001999

monthly, ended june 2006Dec

2005 2006DecDecDecDecDecDec

TasmaniaSnowy Region

averagetrend

South Australia


31 ] Key performance indicators for the Australian electricity industry a

2000-01 2001-02 2002-03 2003-04 2004-05

Generation capacity GW 42 44 44 45 45 Asset value A$b 86 93 98 na na Capacity utilisation % 56 53 58 60 60 Electricity generation TWh 199 201 206 213 217 Employment ‘000 33 30 32 34 33 Labour productivity GWh/ employee 6.0 6.7 6.4 6.2 6.5 Number of customers ‘000 8 825 8 969 9 093 9 268 9 426 Retail price b – nominal c/kWh 9.46 10.05 9.61 na na – real c c/kWh 10.52 10.98 10.08 na na Wholesale price d – nominal c/kWh 4.76 3.39 3.36 3.21 3.47 – real c c/kWh 5.29 3.66 3.53 3.28 3.47 System minutes not supplied e mins 13.53 5.11 8.04 4.58 4.43 System energy not supplied GWh 3.66 1.44 3.44 1.49 1.57 Distribution losses % 5.8 5.8 5.9 5.7 5.9

a Grid connected generation only. b Average price. c 2004-05 A$ value. d Volume weighted average price (national electricity market). e Average minutes – excludes Northern Territory. na Not available. Sources: Energy Supply Association of Australia, Electricity Gas Australia; Australian Bureau of Statistics.

30 ] Rates of return for government run electricity companiesin Australia, by state, 2003-04

Generation Transmission Distribution and retail % % %

New South Wales 8.7 6.6 8.6Queensland 5.3 6.9 7.2Western Australia 10.9 10.9 10.9Tasmania 4 5.5 8.2Snowy 14.9 na naFinancial information is not available for privately owned companies. There are no government owned electricity companies in Victoria or South Australia. Western Australia and Northern Terri-tory electricity generators are integrated with other operations that cannot be readily separated. Source: Energy Supply Association of Australia, Electricity Australia.


electricity

expected to remain the most commonly used fuel in electricity generation, although the share of natural gas is projected to rise by around 25 per cent. While there is currently underutilised capacity, servicing these

levels of demand in the future will require signifi cant new investment, in the order of 25 additional gigawatts of gas and coal fi red capacity by 2029-30.

In the early 1900s, the electricity supply industry

International electricity prices, 2004

Ac/kWh 10 20 30

Slovak Rep.Hungary

PolandDenmarkPortugal

NetherlandsItaly

GermanyCzech Rep.

SpainAustriaJapan

MexicoIreland

LuxembourgFrance

New ZealandGreece

KoreaSwitzerland

FinlandRomaniaAustralia

ChileTaiwanCanadaNorway

Argentina

Residential Industrial

Ac/kWh 5 10 15 20

ArgentinaNorway

FranceCanada

New ZealandUnited States

KoreaTaiwan

ChileSpain

PolandAustralia

GreeceCzech Republic

United KingdomRomania

FinlandMexico

GermanySlovak Republic

SwitzerlandHungaryPortugal

IrelandDenmark

AustriaTurkeyJapan

Italy

Source: IEA Energy prices & taxes


32 ] Australian major network capacity, 2006 a

Forward ReverseInterconnector Location capacity capacity MW MW

New South Wales to Armidale to Braemar 621 1 078 Queensland (QNI) New South Wales to Terrinora to Mullumbimby 180 195 Queensland (Directlink) Snowy to New Murray to Dederang winter 3 465 1 150 South Wales summer 3 127Victoria to Snowy Buronga to Red Cliffs 1 235 1 863Victoria to South Heywood to Tailem Bend 460 300 Australia (Heywood) Victoria to South Red Cliffs to Berri 220 135 Australia (Murraylink) Victoria to Tasmania Seaspray to 630 480 (Basslink) Georgetown

Under-Transmission Overhead ground

Length (km) 764 607 88 004a Notional interregional capabilities. MW = megawatts. Sources: NEMMCO, Statement of Opportunities; Energy Supply Association of Australia, Electricity Gas Australia.


electricity

consisted of a mixture of both private and public enterprises. By the late 1940s, however, the industry was predominantly government owned. Successive state governments chose to treat the electricity market as a natural monopoly, with the delivery of electricity to consumers organised via state owned, vertically integrated utilities with limited interconnection between the various state markets.

Restructuring of the Australian electricity industry occured in the early 1990s. It has resulted in vertical disaggregation of state owned utilities into separate generation, transmission, distribution and retail supply components, with corporatisation and, in some cases, privatisation of the electricity businesses.

The generation sector is now horizontally separated into many competing businesses. The transmission and distribution functions have also been separated and re-regulated. Distribution and retail businesses, where these activities are undertaken by one company, have been ring fenced and retail competition is now widespread.

The central element of the reforms was the establishment in December 1998 of the ‘national electricity market’,

which links the Australian Capital Territory, New South Wales, Victoria, South Australia, Queensland and Tasmania.

Shares in Australian electricity generation, by fuel

2029-30

2019-20

2004-05Oil 1.4%

Gas 14.3%

Hydro 6.4%

Other

Other

Other

Black coal 56.0%

Browncoal 20.9%

Oil 0.9%

Gas22.6%

Hydro 4.5%

Black coal 50.8%

Browncoal 17.7%

Oil 1.1%

Gas 19.4%

Hydro 5.2%

Black coal 52.7%

Browncoal 18.6%

biogas 0.1%biomass 0.4%wind/solar 0.5%

biogas 0.6%biomass 1.2%wind/solar 1.2%

biogas 0.5 %biomass 1.3%wind/solar 1.7%


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electricity

The competitive national electricity market consists of a wholesale market, together with a competitive retail sector for the supply and purchase of electricity. The principal aims are to promote competition and effi ciency in the production and consumption of electricity and associated services, and to allow customers fl exibility and choice of supplier. In 2006, there were 50 different companies that bid their generation output into the national electricity market, and eight main retailers (with a number of generators and traders also targeting specifi c retail customers).

33 ] Projected Australian electricity generation, by fuel

2009-10 2014-15 2019-20 2024-25 2029-30 PJ PJ PJ PJ PJThermalBlack coal 545 602 649 701 745Brown coal 200 215 229 245 260Oil 13 14 14 14 14Gas 168 199 238 280 331

Total 926 1 030 1 130 1 350 1 350

RenewablesHydro 61 62 64 65 66Wind/solar 13 14 14 18 24Biomass 6 9 15 16 20Biogas 6 7 7 7 8

Total 86 92 100 106 118Source: ABARE.

The National Electricity Market Management Company (NEMMCO) is responsible for managing both the spot market and the central coordination of the dispatch of electricity from all generators to ensure that there is suffi cient supply to meet demand. NEMMCO also has responsibility for maintaining power system security.

Average wholesale prices have remained relatively constant since the introduction of the national electricity market, with occasional price spikes caused by such factors as widespread heat waves, industrial disputes and generator malfunctions.


Snapshot of Australia’s national electricity market, 2005-06

Outside the national electricity market

$43/MWh

$36/MWh

50.6 TWh 8 577 MW

Victoria

New South Wales

76.5 TWh 12 229 MW

na

1.7 TWh s 482 MW

Northern Territory

14.0 TWh s 3 473 MW

Western Australia na

na

9.2 TWh s 2 570 MW

Tasmania a

$44/MWh

12.5 TWh 3 471 MW

South Australia

$29/MWh

0.5 TWh 3 676 MW

Snowy

$31/MWh

51.0 TWh 10 412 MW

Queensland

369

166

State

Volume weighted average annual price ($/MWh)

Total annual demand (TWh)

Capacity availability (MW)

Average half hourly flow (MW)

615

51

QNI

Directlink

267

27

Heywood

Murraylink

BassLink(operational in 2005)

Snowy–NSW

Vic–Snowy

a Officially connected to the national electricity market in May 2006. s ABARE estimate. na Not available. Sources: HydroTasmania, Annual Report; Tasmania Power and Water Corporation, Annual Report; Western Power Corporation, 2005 Generation Status Review;Global-roam, NEM-Review.

19


electricity

34 ] Major interconnector projects for Australia’s national electricity market, 2006

Capacityinterconnector Project Forward Reverse Status Startup MW MW

Central to northern HVAC augmen- 290 committed 4 years Queensland tation South west to HVAC augmen- 700 committed 1 year south east Queensland tation South west to T/R augmen- 400 committed 3–4 years south east Queensland tation South west to DCL 1000 potential 5 years south east Queensland Northern NSW to T/R augmen- 250 400 prefeasibility na south west Queensland tation Northern NSW to BTBC station 1000 1500 concept na south west Queensland Northern NSW to HVAC augmen- 1000 1000 concept na south west Queensland tation Victoria to Tasmania Basslink dupli- 500 500 concept na cation Northern South Australia HVAC augmen- 1100 committed 2 years to Adelaide tation

HVAC = high voltage AC interconnection; T/R = transformer and/or reactor; DCL = double circuit line; BTBC = back to back converter. na Not available. Source: NEMMCO, Statement of Opportunities.

operating with responsibility for transmission assets and market monitoring. By 2010, it is expected that the AER’s responsibilities will have grown such that it becomes the sole regulator for the electricity industry nationally.

The transmission and distribution elements of the industry are made up of a network of service providers that, until recently, were superintended through various federal and state regulatory bodies. In 2005, a single national body, the Australian Energy Regulator (AER), began


35 ] Australian thermal electricity generation capacity, by plant and fuel type, 2004-05 a

New South Queens- South Wales b Victoria land b Australia MW MW MW MW

Steam – black coal 11 670 0 8 055 0Steam – brown coal 0 6 555 0 770Steam – natural gas 0 510 132 1280Steam – multifuel 0 0 0 0Reciprocating engine 0 0 0 40Gas turbine – natural gas 0 1 001 403 605Gas turbine – oil product 50 0 338 113Gas turbine – multifuel 0 0 0 0Combined cycle – natural gas 160 0 215 663Combined cycle – coal seam methane 0 0 625 0

Western Northern Australia c Tasmania Territory Australia

Steam – black coal 1 370 0 0 21 095Steam – brown coal 0 240 0 7 565Steam – natural gas 0 0 0 1 922Steam – multifuel 880 0 0 880Reciprocating engine 0 0 74 114Gas turbine – natural gas 372 0 247 2 628Gas turbine – oil product 0 0 30 531Gas turbine – multifuel 586 0 0 586Combined cycle – natural gas 240 0 131 1 409Combined cycle – coal seam methane 0 0 0 625a Nonrenewable thermal electricity generation, grid connected only. b Includes generating ca-pacity at Mt Isa. c Includes plants owned by Western Power Corporation (now Verve Energy) in the South West Interconnected System, and excludes plants operated under power purchase agreements. MW = megawatts. Source: Energy Supply Association of Australia, Electricity Gas Australia.


electricity

36 ] Principal generation businesses in Australia, 2005-06

Share of Share of mainland mainland Generation generation Revenue revenue GWh % A$m %

New South Wales a Macquarie Generation 28 030 14.56 867 13.24Delta Electricity 23 286 12.10 876 13.37Sithe Energies 1 016 0.53 44 0.68National Power 1 064 0.55 38 0.57Eraring Energy 14 456 7.51 792 12.09Snowy (for NSW) 198 0.10 8 0.13Snowy Hydro Limited 5 167 2.68 323 4.94

Victoria AGL 296 0.15 51 0.77Alinta 66 0.03 8 0.12Energy Brix 1064 0.55 31 0.48Hazelwood Power Partnership 11 330 5.89 339 5.17Loy Yang Power 17 086 8.88 494 7.54IPM Eagle 8 772 4.56 254 3.88TRUenergy 11 276 5.86 318 4.86Ecogen Energy 484 0.25 48 0.74Alcoa 1 355 0.70 41 0.63Others 197 0.10 24 0.37

Queensland Stanwell Corporation 10 703 5.56 279 4.26Enertrade 142 0.07 5 0.08CS Energy 14 599 7.59 399 6.10Intergen 6 236 3.24 153 2.33Tarong Energy 14 964 7.77 395 6.03Transfi eld Holdings 2 205 1.15 70 1.06Comalco/NRG 8 110 4.21 245 3.74Others 75 0.04 9 0.14

continued...


36 ] Principal generation businesses in Australia, 2005-06 continued

Share of Share of mainland mainland Generation generation Revenue revenue GWh % A$m %South Australia International Power (Synergen) 1 622 0.84 69 1.06Origin Energy 477 0.25 24 0.37NRG Flinders 4 521 2.35 158 2.41TRUenergy 2 502 1.30 142 2.17ATCO Power 1 167 0.61 44 0.68

Tasmania Tasmanian Hydro 9 213 4.19 na naOthers 609 0.28 na na

Western Australia b Western Power Corporation 13 875 6.32 na naOthers 1 783 0.81 na na

Northern Territory b Power and Water Corporation 1 366 0.62 na naOthers 395 0.18 na naa Including the Australian Capital Territory. b Not part of the ‘national electricity market’ at this time; market share percentages referenced to fi gures in the ‘national electricity market’. na Not available.Source: Global-roam, NEM-Review.


electricity

37 ] Proposed new major power stations and expansions in Australia

Power station Developer Capacity Plant type Location Year MWNew South Wales Bamarang Delta Electricity 400 gas turbine Bamarang 2008–09Bega Wambo Power 120 CCGt Bega 2008–09 Ventures Cobar Wambo Power 114 gas turbine Cobar 2008–09 VenturesLeafs Gully AGL 800 gas turbine Appin, stages 1, 2 near Camden 2009Marulan stage I Delta Electricity 250–320 gas turbine Marulan 2009–10Marulan stage II Delta Electricity 400–450 CCGt Marulan 2010–11Munmorah Delta Electricity 300 gas turbine Doyalson 2009–10Mt Piper upgrade Delta Electricity 1 680 steam Mt Piper 2008–13 & extensionNowra Delta Electricity 400 CCGt Nowra 2010Tallawarra TRUenergy 400 gas turbine Tallawarra 2008Tomago Macquarie 360 gas turbine Tomago 2007 stages 1, 2 GenerationTomago stage 3 Macquarie 270 steam Tomago – GenerationWagga Wagga Wambo Power 450 gas turbine Wagga Wagga 2007–08 VenturesVictoria Bogong AGL 130 hydro Bogong 2009Laverton North Snowy Hydro 320 gas turbine Laverton North 2006Loy Yang A Loy Yang Power 236 steam Latrobe Valley 2008 upgrade Macarthur AGL 330 wind Macarthur –Maryvale Paperlinx/Alinta 200 cogen Maryvale –Mortlake Origin Energy 1 000 CCGt W. Victoria 2009Portland (incl. Pacifi c Hydro 195 wind Portland 2007–08 Yambuk) Yaloak Pacifi c Hydro 116 wind Ballan 2008

Queensland BHP BHP (Peak Downs) 230 steam Bowen Basin – (Peak Downs) Braemar NewGen Power 450 gas turbine Braemar 2006–07Kogan Creek CS Energy 750 steam Kogan North 2007–08

continued...


37 ] Proposed new major power stations and expansions in Australia continued

Power station Developer Capacity Plant type Location Year MW MIM/Entergy MIM/Entergy 700 steam W. Surat Fields – (Wandoan Energy) Spring Gully Origin Energy 1 000 CCGt Durham Downs 2008–09Stanwell Stanwell Corp 300 gas turbine Rockhampton 2007Stanwell Stanwell/ 350 steam Rockhampton – Macarthur Coal Surat Surat Dawson 470 steam Surat Coal fi eld – Development Townsville AGL 370 CCGt Townsville 2009Townsville Stanwell 766 CCGt Townsville –South Australia Lake Bonney Babcock & Brown 159.5 wind turbine Lake Bonney – stage II Hallett expansion AGL 250 gas turbine Hallett –Pelican Point International 250/300 gas turbine Pelican Point – expansion Power expansionPort Pirie International Power 230 gas turbine Port Pirie –Quarantine Origin Energy 70/200 CCGt Torrens Island 2009 expansion

Western Australia Bluewaters 1,2,3 Griffi n Group 600 steam Collie 2008–12Centauri 1 Eneabba Gas 168 gas turbine Dongara –DESTEC Energy DESTEC Energy 660 gas turbine Dampier –Kwinana NewGen Power 320 gas turbine Kwinana 2008Perth Energy Plant Perth Energy Ltd 120 CCGt Kwinana 2006–07Pinjarra Unit 2 Alinta 140 cogen Pinjarra 2006–07Siemens AG Siemens AG 400 CCGt Pilbara –Telfer Gold Mine Newcrest Mining 135 gas turbine Telfer Mine –TransAlta TransAlta 470 CCGt Oakajee –Wagerup Alinta Alinta 280 cogen Wagerup 2007–09 stages 1,2Western Power Western Power 350/400 steam Collie 2006 CorporationWestern Power Western Power 120 gas turbine Perth 2006 peaking plant

Tasmania Musselroe Roaring 40s 129 wind N/E Tasmania 2009

Source: ESAA, Electricity Gas Australia 2006.


heading

energy consumption

38 ] Gross energy consumption, by state, by fuel, 2004-05

Renew- Petroleum Natural Black coal Brown coal ables products gas PJ PJ PJ PJ PJ

New South Wales 788 0 42 551 145Victoria 0 693 35 464 267Queensland 625 0 107 462 113Western Australia 129 0 13 276 377South Australia 70 0 9 119 137Tasmania 13 0 48 42 9Northern Territory 0 0 0 57 25Source: ABARE.

Australia is the world’s eighteenth largest primary energy consumer, ranking ninth on a per person basis.

During the 1960s, energy use in Australia grew by 5.0 per cent a year. This fell to 3.8 per cent a year during the 1970s, largely as a result of the two major oil price shocks. During the 1980s, economic recession and sharply rising energy prices resulted in growth falling to 2.6 per cent a year.

During the 1990s, the rate of growth of energy consumption fell to 2.3 per cent, despite falling

real energy prices and robust economic growth.

Australian primary energy consumption is predominantly of petroleum and coal. However, the share of natural gas in Australian energy consumption has increased in the past thirty years and this trend is projected to continue in the longer term.

Growth in Australian energy consumption is projected to continue to moderate, with growth averaging 1.7 per cent a year until 2030, including medium term growth of

39 ] Australian energy consumption, by fuel

2000-01 2001-02 2002-03 2003-04 2004-05 PJ PJ PJ PJ PJGross consumption of fuelsBlack coal 1 419 1 457 1 518 1 566 1 625Brown coal 666 673 674 679 693Coke 84 82 75 80 77Coal byproducts 68 69 70 75 72Brown coal briquettes 10 8 8 8 8Wood, woodwaste 109 95 99 97 92Bagasse 99 92 95 101 101Refi nery input 1 702 1 675 1 632 1 497 1 535Petroleum products 1 741 1 760 1 781 1 882 1 971Natural gas 962 976 1 024 1 059 1 074Town gas 3.0 3.4 5.1 5.1 6.1Solar energy 2.6 2.7 2.8 2.6 2.6Synthetics – biofuels 1.6 2.1 2.3 1.4 1.4Total electricity 799 809 837 866 901of which hydroelectricity 61 58 59 58 57

Production of derived fuelsCoke 95 93 97 103 103Coal byproducts 62 62 61 64 62Brown coal briquettes 7.5 6.6 5.4 3.8 3.0Petroleum products a 1 722 1 668 1 617 1 511 1 616Town gas 5.4 5.1 5.0 5.3 5.0Thermal electricity 740 750 781 810 845

Net energy consumption b 5 034 5 120 5 257 5 422 5 525 % % % % %Energy consumption growth 1.3 1.7 2.7 3.2 1.9GDP growth 1.9 3.8 3.2 4.1 2.7a Production may exceed refi nery input as some petroleum products are produced from other petroleum products. b Net energy consumption is the total quantity (in energy units) of primary and derived fuels consumed less the quantity of derived fuels produced. Totals may not add due to rounding. Source: ABARE.

2.2 per cent a year to 2010. This refl ects structural changes in the economy and rising oil prices, as well as the implementation of a range of energy effi ciency and conservation measures.

Coal, oil and gas are projected to continue to meet the bulk of Australia’s energy needs, accounting for around 94 per cent of primary energy consumption in 2029-30.

[ 56 ]


energy consumption

40 ] Projected fi nal energy consumption in Australia, by industry

2009-10 2014-15 2019-20 2024-25 2029-30 PJ PJ PJ PJ PJ

Agriculture 106 112 118 124 130Mining 229 285 348 425 514Manufacturing and construction 1 239 1 353 1 425 1 499 1 572Transport and storage 1 462 1 554 1 655 1 764 1 883Commercial and services 284 322 362 405 450Residential 476 514 552 591 631Non energy fuel uses 72 75 77 79 81

Total 3 868 4 215 4 537 4 887 5 261Source: ABARE.

Energy intensity trendsbase year 1989-90

2029-30

1989-90

1999-2000

2009-10

2019-20

index

50

75

100

125

Victoria

Northern Territory

Australia

The aggregate energy intensity of the Australian economy, measured as total primary energy consumption per dollar of gross domestic product, is projected to decline by around 1.1 per cent a year until 2029-30.

Australian industry, therefore, is expected to be less reliant on the consumption of energy to fuel economic growth.

Primary energy consumption in Australia, by fuel

2029-30

2019-20

2009-10

1979-80

1989-90

1999-2000

PJ

RenewablesGasOilBrown coalBlack coal

2000

4000

6000

Consumption of energy in Australia is dominated by three sectors — electricity generation, transport and manufacturing. Combined, these sectors have accounted for almost 80 per cent of total energy consumption in Australia throughout the past 25 years, albeit with their relative shares changing signifi cantly over time.


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energy consumption

41 ] Carbon dioxide equivalent emissions from the energy sector, 2004

Share of total Total CO2-e net national emissions a emissions Gg %

Energy industries 216 705 40.6Manufacturing and construction 42 452 8.0Transport 76 205 14.3Other sectors 19 432 3.6Other 1 357 0.3Total fuel combustion activities 356 151 66.8

Fugitive emissions from fuels 31 049 5.8

Total energy sector 387 200 72.6

Total net national emissions 533 500 100.0a Includes CO2 (carbon dioxide), CH4 (methane), and N2O (nitrous oxide). Gg = gigagrams (109 grams). Source: Australian Greenhouse Offi ce, National Greenhouse Gas Inventory.

42 ] Major users of energy in Australia’s nonconversion sectors

Company Operation State

Alcan Gove Gove aluminium refi ning NTALCOA - World Alumina Australia Kwinana refi nery WAALCOA - World Alumina Australia Portland aluminium smelting VicALCOA - World Alumina Australia Wangerup refi nery WABlueScope Steel Port Kembla steel products NSWComalco Boyne Island aluminium smelters QldFlinders Mining Operations Leigh Creek coalfi eld SAOneSteel Whyalla blast furnace operations SAOrica NSW Botany petrochemicals NSWQueensland Alumina Alumina production (Gladstone) QldPechiney Pacifi c Tomago aluminium smelter NSWWoodside Petroleum Group North West Shelf joint venture WAWorsley Alumina Alumina production (Boddington) WA


43 ] Australia’s energy supply and disposal, 2004-05

Black Brown Coal by- coal coal Coke products Briquettes Wood PJ PJ PJ PJ PJ PJSupplyPrimary indigenous 8 073.7 691.2 91.5plus all imports less all exports 6 594.6 less stock changes and discrepancies –117.2 –2.0 25.5 –10.2 –5.0

Total domestic availability 1 596.2 693.2 –25.5 10.2 5.0 91.5less Coke ovens 132.4 –102.8 –19.1 Briquetting 8.8 –3.0 Petroleum refi ningGas manufacturingPublic elec. generation 1 308.0 684.4 5.1 2.9 4.6Other conversion a 67.9 –18.0 Fuel use in conversion

Final domestic availability b 155.8 9.4 42.2 5.1 87.0

DisposalAgriculture Mining 7.4 0.3 1.4 Iron and steel 24.3 1.4 31.2 Chemical 2.3 0.9 8.6 1.7 Other industry 114.8 6.8 1.0 0.7 26.4Construction Road transport Rail transport Air transport Water transport 5.6 Commercial 1.3 2.7 0.4Residential 0.1 0.1 60.2Lubricants, greases, bitumen and solvents

Total fi nal energy consumption 155.8 9.4 42.2 5.1 87.0

continued...


energy consumption

43 ] Australia’s energy supply and disposal, 2004-05 continued

Crude oil LPG Refi ned Biofuels Natural Bagasse and ORF products c gas PJ PJ PJ PJ PJ PJSupply Primary indigenous 101.1 1 039.2 122.6 9.1 1 650.4plus all imports 1 042.2 13.9 394.8 less all exports 555.3 73.1 149.3 576.0less stock changes and discrepancies –9.0 –11.3 –55.4

Total domestic availability 101.1 1 535.1 74.7 300.9 9.1 1 074.4less Coke ovens 0.9 Briquetting Petroleum refi ning 1 539.3 -25.7 -1 513.7 24.5Gas manufacturing 1.4 2.9Public elec. generation 0.8 0.1 24.6 6.7 276.5Other conversion a –5.7 5.7 Fuel use in conversion 0.2 70.0 32.7

Final domestic availability b 100.3 1.4 98.7 1713.3 2.5 737.8

DisposalAgriculture 1.4 91.8 0.1Mining 1.4 1.2 115.8 154.5Iron and steel 0.4 1.6 25.3Chemical 11.7 60.2 99.5Other industry 100.3 8.5 85.9 2.0 274.4Construction 0.2 24.2 3.1Road transport 60.1 982.4 0.5 1.3Rail transport 30.5 Air transport 178.4 Water transport 52.5 0.1Commercial 4.0 18.2 44.0Residential 11.1 2.8 135.4Lubricants, greases, bitumen and solvents 69.0

Total fi nal energy consumption 100.3 1.4 98.7 1 713.3 2.5 737.8

continued...

43 ] Australia’s energy supply and disposal, 2004-05 continued

Town Hydro- Solar hot gas electricity Electricity water Uranium Total

Supply Primary indigenous 56.2 2.6 5 206.6 17 044.4plus all imports 1 450.9less all exports 5 287.0 13 235.4less stock changes and discrepancies –0.6 –80.4 –265.6

Total domestic availability 0.6 56.2 2.6 5 525.4less Coke ovens 0.1 11.5Briquetting 0.4 6.2Petroleum refi ning 6.6 31.1Gas manufacturing –1.4 2.9Public electricity generation 56.2 –878.3 1 491.5Other conversion –4.0 –23.0 22.9Fuel use in conversion 123.2 226.2

Final domestic availability b 6.0 770.9 2.6 3 733.1

DisposalAgriculture 6.4 99.6Mining 69.6 351.6Iron and steel 23.8 108.0Chemical 4.9 14.9 202.4Other industry 259.9 880.7Construction 0.3 27.8Road transport 1 044.4Rail transport 7.8 38.4Air transport 178.4Water transport 58.2Commercial 0.3 168.7 0.2 239.9Residential 0.8 219.3 2.5 432.3Lubricants, greases, bitumen and solvents 69.0Total fi nal energy consumption 6.0 770.9 2.6 3 733.1

a Includes return streams to refi neries from the petrochemical industry, consumption of coke in blast furnaces, blast furnace gas manufacture, electricity produced through cogeneration and brown coal tar produced in char manufacture. Because it is not possible to separate the fuels used to produce cogenerated electricity, they are included in the industry in which production occurs. b After conversion sector use and losses. Equals total fi nal energy consumption. The end use sector totals may differ from other published tables due to some conversion activities occurring in those sectors. c Excludes wood and bagasse and includes recyclables. [ 62 ]


energy consumption

44 ] Australian consumption of petroleum products

2001-02 2002-03 2003-04 2004-05 2005-06 ML ML ML ML ML

LPG a 4 009 4 204 4 168 3 936 4 167Leaded 2 360Unleaded 16 309 18 874 19 962 19 876 19 018Avgas 97 90 90 91 86Turbine fuel 4 603 4 250 4 329 4 730 5 359Lighting kerosene 75 24 22 12 27Power kerosene 0 0Heating oil 50 48 46 34 26ADO 14 188 13 888 14 461 15 185 15 804IDF 18 17 15 19 Fuel oil 1 777 1 423 1 466 1 595 1 586Lubes and greases 555 569 618 470 451Bitumen 755 671 742 812 805Other products b 2 436 4 186 5 012 5 031 5 213

Total marketable products c 47 150 48 020 50 630 51 787 52 563Refi nery fuel (foe) d 2 221 2 180 1 828 1 716 1 695

Total 49 371 50 200 52 458 53 503 54 258a Includes LPG used as petrochemical feedstock. b Includes other refi ned products, bitumen, crude oil used as fuel and speciality feedstocks. c Some petroleum products are produced from the conversion of other petroleum products. This element of double counting has been netted off total marketable petroleum products. d Fuel oil equivalent. Sources: ABARE; DITR.

45 ] Final energy consumption in Australia, by fuel

2009-10 2014-15 2019-20 2024-25 2029-30 PJ PJ PJ PJ PJ

Black coal 182 188 189 189 189LPG 113 123 137 155 175Oil 1 774 1 880 2 010 2 156 2 318Gas 754 875 948 1 024 1 101Biomass 169 179 189 199 209Electricity 872 967 1 060 1 159 1 265Solar hot water 3 3 4 4 5

Total 3 868 4 215 4 537 4 887 5 261Source: ABARE, Australian Energy: National and State Projections.


Australia’s oil and gas distribution facilities

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46 ] Projected energy consumption in the transport sector a

2009-10 2014-15 2019-20 2024-25 2029-30 PJ PJ PJ PJ PJ

Road transport 1 103 1 152 1 204 1 259 1 319Railway transport 40 41 41 42 43Water transport 60 62 64 66 66Air transport 219 261 306 356 412Other 38 38 41 41 42

Total 1 462 1 554 1 655 1 764 1 882a Net energy consumption (defi ned as total fuel input less energy produced). Source: ABARE.

The transport sector accounts for 35 per cent of fi nal energy use and 72 per cent of liquid fuels used (including LPG) in Australia. Refl ecting strong growth in road and air transport, energy use in the transport sector is projected to grow by around 1.5 per cent a year over the long term.

The fastest growing transport mode in Australia is air transport. During the 1990s, growth in average annual consumption of aviation fuels doubled to almost 6 per cent, following an average of 3 per cent in the 1980s. Much of this growth was driven by international travel. However, the

current growth rate in average fuel consumption has declined to 1 per cent a year, with air travel affected by high fuel prices and strong competition from foreign carriers. Over the next 25 years, fuel prices are assumed to stabilise and air travel is projected to grow moderately strongly.

Road transport is the largest user of energy in the transport sector. Fuel consumption growth in road transport has eased steadily over the past thirty years, from almost 5 per cent to less than 2 per cent a year. Assuming average long term fuel prices remain around


47 ] Energy use in Australian transport sectors, by fuel type, 2004-05

Sea Air Pipe- domestic international domestic international Road Rail lines PJ PJ PJ PJ PJ PJ PJ

Black coal 5.6Aviation – gasoline 3.0 – turbine fuel 77.2 98.2LPG 60.1ADO 3.3 6.6 309.9 30.5 4.7Fuel oil 7.8 34.8Natural gas 0.1 1.3 15.1Electricity 7.8 1.2Auto gasoline – leaded 16.9 – unleaded 656.1

Total 16.8 41.4 80.2 98.2 1 044.4 38.3 21.0Source: ABARE.

Passenger vehicle fuel efficiency in Australia, 2003-04passenger kilometres travelled using 1 GJ of energy

1000 200 300 400 500 700600passenger km/GJ

Inland ferries

Light railPassenger cars

General domestic aviation

International aviationMotorcycles

Heavy rail

Buses

220

300

348437

685465

629725

Source: Apelbaum Consulting Group.

2005-06 levels, road transport fuel consumption is projected to increase by an average 1.2 per cent a year over the next 25 years. Passenger cars and wagons have dominated road fuel consumption over the past 30 years, consistently

using around 60 per cent of the sector’s total.

The phasing out of leaded automotive gasoline, begun in 1986 using pricing differential incentives, was effectively completed in 2001. Over the same period, the consumption

transport

48 ] Loadings for major petroleum ports, 2004-05

Mt

Crude oil and condensate Westernport, Vic 2.45Dampier, WA a 3.60

Refi ned oil products Sydney, NSW 0.71Brisbane, Qld 2.28Geelong, Vic 1.90Melbourne, Vic 0.25Fremantle, WA 2.46

Refi ned petroleum gases b Sydney, NSW 0.07

Liquefi ed petroleum gas c Dampier, WA 1.34Port Bonython, SA 0.50Westernport, Vic 0.51Fremantle, WA 0.20

Liquefi ed natural gas Dampier, WA 11.28a Condensate only. b Includes refi ned LPG, butane and other refi ned gases. c Naturally occurring LPG.Sources: Association of Australian Ports and Marine Authorities; Dampier Port Authority; Santos.

There are around 21 000 kilometres of high pressure transmission pipelines used in long distance transporting of natural gas plus around 75 000 kilometres of low pressure pipelines distributing gas at the retail level. Natural gas is used by around 3.4 million households and 105 000 commercial and industrial enterprises in Australia.

of automotive LPG, free of fuel excise tax, grew by an average of 13 per cent a year. LPG suffered a temporary decline in demand when a phasing in of taxes on excise exempt fuels was announced but demand recovered with the reintroduction of subsidies on LPG conversions in the Australian Government’s LPG Vehicle Scheme to promote the use of cleaner burning fuels.

Australia has eleven major deepwater ports that have facilities to export petroleum liquids. Dampier in Western Australia is by far Australia’s largest crude oil and condensate exporting centre, accounting for 32 per cent of all Australian liquid petroleum exports (excluding LNG) in 2004-05. Australian exports of crude oil and condensate are increasingly sourced from the west coast, while exports of refi ned product are largely sourced from the east coast.

Australian road fuel consumption, by type of vehicle, 2004-05

Rigid trucks 7.3%Articulated trucks 12%

Other trucks 0.2%

Light commercial vehicles 17%

Motorcycle 0.3%Buses 2.2%

Passenger vehicles 61%

Source: Apelbaum Consulting Group, Australian Transport Facts, 2005.



49 ] Major gas transport pipelines in Australia

Location Year built Owner Length Diameter km mm

Ballera to Mount Isa 1998 Australian Pipeline Trust 840 324Ballera to Wallumbilla 1996 Epic Energy 756 406Bell Bay to Hobart 2002 Duke Energy 226 200Brooklyn to Ballarat/Bendigo 1972 GasNet 309 324Dampier to Bunbury 1984 Epic Energy 1 547 660Dongarra to Perth/Pinjarra 1971 CMS Gas 415 356Horsley Park to Newcastle 1982 AGL Gas Networks 214 508Inoa Field to Geelong 1999 GasNet 144 500Karratha to Port Hedland 1995 Epic Energy 213 457Longford to Bell Bay 2002 Duke Energy 345 350Longford to Dandenong 1969 GasNet 173 762Longford to Horsley Park 2000 Duke Energy 765 450Marsden to Dubbo 1998 APT 255 219Moomba to Adelaide 1969 Epic energy 781 559Moomba to Wilton 1976 Australian Pipeline Trust 1 300 864Morwell to Dandenong 1956 GasNet 135 457Palm Valley to Mataranka/ Darwin 1997 Australian Pipeline Trust 1 512 356Port Hedland to Burrup 1998 Epic Energy 24 600Roma to Brisbane 1969 Australian Pipeline Trust 440 406Roma to Gladstone 1989 Duke Energy 532 324Wodonga to Wagga Wagga 1998 APT/GasNet 151 457Wollert to Wodonga 1977 GasNet 269 324Yarraloola to Newman/ 1996 Goldfi elds Kalgoorlie Gas Transmission 1 378 406Source: www.esaa.com.au

Freight fuel efficiency in Australiakilometres travelled per thousand tonnes of cargo using 1 GJ of energy

Light commercial vehicles

Rigid trucks

Articulated trucks

Non-urban gas and oil pipelines

H&R freight rail

Domestic shipping

10 2 3 4 5 6kilotonne kilometres per GJSource: Apelbaum Consulting Group.


renewable energy

Renewable energy in Australia accounts for less than 5 per cent of total energy consumption at present.

The production of renewable energy is dominated by wood and woodwaste, bagasse (a waste product from sugar refi ning) and hydroelectricity (predominantly from Tasmania and the Snowy Mountains), which together accounted for 94 per cent of renewable energy production in 2004-05.

Biofuels (which include landfi ll and sewage gas) as well as solar and wind energy, accounted for the remainder of renewable energy production. Most solar energy is used for residential water heating and this represents less than 1 per cent of fi nal energy consumption in the residential sector.

Over the next 25 years, total hydroelectricity generation is projected to grow by only 0.5 per cent a year, reaching around 18 TWh by 2029-30.

This is a refl ection of the limited availability of suitable locations for the expansion of large grid based hydroelectricity generation.

The generation of electricity from all renewable sources is projected to grow by 2.3

50 ] Increase in renewable generation under MRET 2005 relative to 1997 a

Share GWh %

Bagasse cogeneration 418 10.47Black liquor 41 1.03Hydro 1 263 31.67Landfi ll gas 404 10.12Sewage gas 31 0.79Photovoltaic 1 0.03Solar water heaters 812 20.36Wind 957 23.99Wood waste 35 0.88Other b 26 0.66

Total 3 988 100.00

a Reported generation in 2005 under the Manda-tory Renewable Energy Target scheme, above indi-vidual baseline levels in 1997. b Includes municipal solid waste combustion and food and agricultural wet waste. Source: Offi ce of the Renewable Energy Regulator.


53 ] Projected Australian renewable electricity generation, by fuel

2009-10 2014-15 2019-20 2024-25 2029-30 GWh GWh GWh GWh GWh

Hydroelectricity 17 031 17 363 17 748 18 133 18 328Wind and solar PV a 3 553 3 770 4 041 5 022 6 781 Biomass 1 683 2 603 4 065 4 340 5 469 Biogas 1 714 1 880 1 941 2 003 2 109Total 23 981 25 616 27 794 29 498 32 687a Solar photovoltaic not identifi ed separately. Source: ABARE.

51 ] Capacity of renewable electricity generation in Australia, 2005

Wood Other Biogas Bagasse waste biofuels a Hydro Wind Solar Other b MW MW MW MW MW MW kW kW

NSW 42 16 45 4 3 957 16 839 500Vic 24 0 34 649 104 214 Qld 15 394 17 2 666 12 10 80SA 26 4 2 318 100 20WA 22 6 5 0 32 119 20 Tas 0 2 265 68 NT 1 0 825 Aust 130 416 71 40 7 571 637 2 008 600a Black liquor, plant and animal waste. b Ocean wave (NSW) and geothermal (Qld and SA). Sources: Geoscience Australia; Australian Greenhouse Offi ce; Australian Business Council for Sustainable Energy; Offi ce of the Renewable Energy Regulator; Australian Wind Energy Association.

52 ] Australian production of renewable energy a

2000-01 2001-02 2002-03 2003-04 2004-05 PJ PJ PJ PJ PJ

Bagasse 98.5 91.7 95.1 96.8 101.0Other biofuels b 8.8 10.1 10.7 10.6 9.1Hydroelectricity 60.9 57.5 58.7 58.0 56.2Solar hot water 2.6 2.7 2.8 2.6 2.6Wind and solar PV 0.2 0.6 1.0 1.6 4.5Wood and woodwaste 109.4 95.0 99.2 96.9 91.5

Total 280.4 257.6 267.5 266.5 264.9a Electricity and heat. b Includes biogas, black liquor, plant and animal waste. Source: ABARE; Offi ce of the Renewable Energy Regulator.


renewables

per cent a year to 2030. Most of this increase is expected to be from wind, biogas and biomass (mainly bagasse and woodwaste). Growth in combined wind power and solar PV is forecast to be 7.0 per cent and biogas 8.2 per cent a year, but all are from a small base.

A recent addition to renewable energy prospects in Australia is the development of ‘hot dry rock’ technology. This technology is being employed by Petratherm, Green Rock and Geodynamics Limited, particularly in the Cooper Basin of South Australia.

Hot dry rock technology is similar to conventional geo-thermal energy in that it uses the heat emanating from inside the earth. However, where conventional geothermal energy relies on steam that is vented naturally near volcanic centres, the hot dry rock process requires water to be pumped deep below the earth’s surface (see map p. 79).

One of the signifi cant features of hot dry rock generation technologies is that it has the potential to provide base load power unrestrained by the environmental conditions that inhibit renewable energy technologies at the surface. One drawback is that geologically suitable areas are not common, although Australia’s resources

are unique. The technology requires large volumes of relatively homogeneous, high heat production granite with potential for enhanced permeability and with an overlying layer of sediment of optimal thickness for insulation but without making the deep well drilling excessively costly.

A range of policy measures has been introduced in Australia to support the uptake and development of all renewable energy. These measures include the Australian Government’s Mandatory Renewable Energy Target (MRET) in which electricity retailers and other large buyers are required to purchase renewable energy certifi cates (RECs) from accredited renewable energy suppliers. This is designed to create a guaranteed market for renewable energy products.

Energy suppliers are able to create certifi cates based on their renewable energy contribution. Liable retailers and other buyers must purchase enough of these certifi cates to meet their individual liability, either directly from accredited suppliers or by trading certifi cates with other parties. RECs are traded separately from the physical energy markets to ensure there is no interference with those markets.


The number of RECs that liable parties must accumulate is based on their rank in the national electricity market and these are surrendered on 14 February each year. These certifi cates, therefore, are a form of ‘currency’ used to demonstrate compliance with the requirements of the MRET scheme.

The limiting factors in generating renewable energy are geography and climate. Hydroelectricity, in particular, is restricted in Australia because of the limitations of hydrology and environmental conservation. Adequate rainfall is restricted to a narrow coastal band in Australia, where conservation restrictions often apply (see rainfall map p. 80).

continued...

54 ] Renewable power generators in Australia, 2005

State Owner Capacity kW

Bagasse Pioneer 2 Qld CSR Sugar Mills 68 000 Invicta Qld Haughton Sugar Company 50 500 Rocky Point Qld National Power and Babcock and Brown JV 30 000 Tully Qld Independent Sugar North Ltd 21 400 Proserpine Qld Independent Sugar North Ltd 20 000 South Johnstone Qld Bundaberg Sugar Ltd 19 300 Marian Qld Mackay Sugar Mills 18 000 Plane Creek Qld CSR Sugar Mills 14 000 Racecourse Qld Mackay Sugar Mills 13 800 Farleigh Qld Mackay Sugar Mills 13 000 Inkerman Qld CSR Sugar Mills 12 000 Mossman Qld Mossman Central Mill Co Ltd 11 900 Vic Qld CSR Sugar Mills 11 800 Isis Qld Isis Central Sugar Mill Co Ltd 11 500 Mulgrave Qld Independent Sugar North Ltd 10 500 Pleystowe Qld Mackay Sugar Mills 10 500 Kalamia Qld CSR Sugar Mills 9 000 Broadwater NSW NSW Sugar Mills Co-op 8 000Other operators (12) 62 450

Total 415 650


54 ] Renewable power generators in Australia, 2005 continued


Hydroelectricity Tumut 3 NSW Snowy Hydro Ltd 1 500 000 Murray 1 NSW Snowy Hydro Ltd 950 000 Murray 2 NSW Snowy Hydro Ltd 550 000 Wivenhoe Dam Qld Tarong Energy 500 000 Gordon Tas Hydro Tas 432 000 Tumut 1 NSW Snowy Hydro Ltd 330 000 Poatina Tas Hydro Tas 300 000 Tumut 2 NSW Snowy Hydro Ltd 286 000 Reece Tas Hydro Tas 231 200 Dartmouth Vic Southern Hydro (owned by AGL) 180 000 McKay Creek Vic Southern Hydro (owned by AGL) 150 000 John Butters Tas Hydro Tas 144 000 Eildon Vic Southern Hydro (owned by AGL) 135 000 Tungatinah Tas Hydro Tas 125 000 Tarraleah Tas Hydro Tas 90 000 Kareeya Qld Stanwell Corp (33% NRG) 88 500 Cethana Tas Hydro Tas 85 000 Liapootah Tas Hydro Tas 83 700 Tribute/Newton Tas Hydro Tas 82 800 Trevallyn Tas Hydro Tas 80 000 Bastyan Tas Hydro Tas 79 900 Mackintosh Tas Hydro Tas 79 900 Other operators (72) 1 088 499

Total 7 571 499

Solar photovoltaicSingleton NSW Energy Australia 400 Lajamanu NT Solar Systems 288 Kings Canyon NT NT PowerWater 241 Yuendumu NT Solar Systems 240 Queen Vic Market Vic Melbourne City Council 190 Kogarah NSW Kogarah Council 160 Homebush NSW Stadium Australia 140Other operators (12) 349

Total 2 008

continued...

renewables


continued...



Ocean (wave) Port Kembla NSW Energetech Australia 500

BiogasLucas Heights II NSW Energy Developments Ltd 12 700 Clayton Vic Energy Developments Ltd 10 700Wingfi eld III SA Energy Developments Ltd 7 800 Broadmeadows Vic Energy Development Ltd 6 100 Lucas Heights I NSW Energy Developments Ltd 5 200 Eastern Creek NSW Global Renewables 4 910 Springvale Vic Energy Developments Ltd 4 800 Berwick Vic Energy Developments Ltd 4 200 Lucas Heights III NSW Energy Developments Ltd 4 100 Wingfi eld I SA Energy Developments Ltd 4 100 Wingfi eld II SA Energy Developments Ltd 4 100 Canningvale WA Landfi ll Gas and Power Pty Ltd 4 000Other operators (42) 57 058

Total 129 768

Geothermal Birdsville Qld Ergon Energy 80 Mulka Station SA Mulka Station 20

Total 100

Woodwaste Tumut NSW Visy Paper 20 000 Gladstone A&B Qld Comalco/NRG 10 000 Bayswater NSW Macquarie Generation 5 000 Liddell NSW Macquarie Generation 5 000 Mount Piper NSW Delta Electricity 5 000 Vales Point B NSW Delta Electricity 5 000 Wallerawang C NSW Delta Electricity 5 000 Stapylton Qld Green Pacifi c Energy 5 000 Muja WA Verve Energy 5 000 Mount Gambier SA Carter Holt Harvey 3 500 Brisbane Qld Visy Paper 2 000

Total 70 500


renewables



Wind Wattle Point SA Southern Hydro/ 90 750 Wind Farm Developments Walkaway WA Alinta 89 100 Lake Bonney SA Babcock and Brown Wind Partners 80 500 Cathedral Rocks SA Hydro Tas & EHN (Spain) 66 000 Woolnorth Tas Hydro Tas 64 750 Challicum Hills Vic Pacifi c Hydro 52 500 Canunda SA International Power Aust. Pty Ltd 46 000 Wind Prospect Pty Ltd Starfi sh Hill SA Tarong Energy 34 500 Albany WA Verve Energy 21 600 Toora Vic Stanwell Corporation 21 000 Codrington Vic Pacifi c Hydro 18 200 Wonthaggi Vic Wind Power Pty Ltd 12 000 Windy Hill Qld Stanwell Corporation 12 000 Blayney NSW Eraring Energy 9 900 Crookwell NSW Eraring Energy 4 800 9 Mile Beach WA Verve Energy 3 600 King Island Tas Hydro Tas 2 450 10 Mile Lagoon WA Verve Energy 2 025 Hampton NSW Hickory Hill Wind Energy Pty Ltd 1 200 Other operators (12) 4 550

Total 637 425

a Black liquor, plant and animal waste.Sources: Geoscience Australia; Australian Greenhouse Offi ce; Australian Business Council for Sustainable Energy; Offi ce of the Renewable Energy Regulator; Australian Wind Energy Association.

Other biofuels aMaryvale Vic Australian Paper 24 000 Hazelwood Vic International Power Hazelwood 10 000 Camellia NSW EarthPower Technologies 3 900 Gympie Macadamias Qld Ergon Energy 1 500 Ballarat Vic Charles IFE Pty Ltd 220 Upper Chittering WA Rufftuff 10

Total 39 630

[ 76 ] energy in australia 2006[ 76 ] energy in australia 2006

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Australian renewable power stations


energy content conversions

The factors listed in the following tables are to be used when converting individual types of fuel from volume or weight to energy equivalence, or vice versa. The values are indicative only because the quality of any fuel varies with such factors as location and air pressure. Values given here apply at a temperature of 15º Celsius and pressure of 1 atmosphere (101.3

kilopascals). The values are the gross energy content of the fuel — that is, the total amount of heat that will be released by combustion.

The usable energy content of uranium metal (U) is 0.56 petajoules per tonne, and that of uranium oxide (U3O8 ) is 0.47 petajoules per tonne. The oxide contains 84.8 per cent of the metal by weight.

Energy content MJ/m3

Natural gas (sales quality)Victoria 38.8Queensland 39.5 Western Australia 41.5 South Australia, New South Wales 38.3Northern Territory 40.53

Ethane (average) 57.5 Town gas – synthetic natural gas 39.0– other town gas 25.0

Coke oven gas 18.1Blast furnace gas 4.0Sources: DITR; BHP Billiton.

55 ] Energy content of gaseous fuels in Australia


Specifi c Volume volume Weight MJ/L L/t GJ/t

LPG– propane 25.5 1 960 49.6– butane 28.1 1 760 49.1– mixture 25.7 1 890 49.6– naturally occuring (average) 26.5 1 866 49.4Aviation gasoline 33.1 1 412 46.8Automotive gasoline 34.2 1 360 46.4Power kerosene 37.5 1 230 46.1Aviation turbine fuel 36.8 1 261 46.4Lighting kerosene 36.6 1 270 46.5Heating oil 37.3 1 238 46.2Automotive diesel oil 38.6 1 182 45.6Industrial diesel fuel 39.6 1 135 44.9Fuel oil – low sulfur 39.7 1 110 44.1– high sulfur 40.8 1 050 42.9Refi nery fuel (fuel oil equivalent) 40.8 1 050 42.9Naphtha 31.4 1 534 48.1Lubricants and greases 38.8 1 120 43.4Bitumen 44.0 981 42.7Solvents 34.4 1 229 44.0Waxes 38.8 1 180 45.8Crude oil and other refi nery feedstocks– indigenous (average) 37.0 1 250 46.3– imports (average) 38.7 1 160 44.9Orimulsion 28.0Ethanol 23.4 1 266 29.6Methanol 15.6 1 263 19.7Tallow 35.0Liquefi ed natural gas (north west shelf) 25 2 174 54.4

56 ] Energy content of liquid fuels in Australia


energy content

Geothermal potential in Australia

277

242

206

ºC

171

135

100

Source: Earth Energy Australia Pty Ltd.

Energy content GJ/tBlack coalNew South WalesExports– metallurgical coal 29.0– thermal coal 27.0Electricity generation 23.4Steelworks 30.0Washed thermal coal 27.0Unwashed thermal coal 23.9

QueenslandExports– metallurgical coal 30.0– thermal coal 27.0Electricity generation 23.4Other 23.0

Energy content GJ/tBlack coalWestern AustraliaThermal coal 19.7

TasmaniaThermal coal 22.8

LigniteVictorian brown coal 9.8South Australia 15.2Brown coal briquettes 22.1

OtherCoke 27.0Wood (dry) 16.2Bagasse 9.6

57 ] Energy content of solid fuels in Australia


Based on a 30-year climatology (1961 to 1990)Average annual daily maximum temperature in Australia

21

24

27

30

3333

33

33

33

33

30

27

2421

33

30

27

2421

21

21

24

27

18

15

1215

18

18

15

27

30

30

27

18

24

Degrees celsius

30

–3

69

181512

21242730333639

200 0 200 400 600 800 km

200

300 400500

600

800

1000

1200

1600

200024003200

200

300

400500

600

800

1000

1200

320024002000160012001000800600500400300200

200 0 200 400 600 800 km

Millimetres

Based on a 30-year climatology (1961 to 1990)Annual rainfall in Australia

Source: Bureau of Meteorology.

Documents

energy in australia 2006data.daff.gov.au/brs/data/warehouse/pe_abarebrs99001324/...energy in australia 2006 [ v ] glossary, units and conversion factors vi overview 1 resources 3 export