If the energy resources sector is unable to revitalise its productivity and competitiveness - and governments fail to set nationally coherent and stable policy - Australia will lose out to international competitors, according to a new report.
NERA (National Energy Resources Australia) today released its Sector Competitiveness Plan – a 10 year roadmap for the future of the industry. Releasing the report, NERA chief executive Miranda Taylor said the country and industry needed to think outside the box to achieve generational, transformational change. If it did not do this, Australia would fail to realise the substantial social and economic benefits from the huge investment in resource projects over the last decade.
Ms Taylor said export opportunities would also be lost if industry leaders, researchers, SMEs (small to medium enterprises) and governments did not reset their thinking and find new connections and new business models, as would opportunities to commercialise new home grown technologies.
She said the report aimed to assist local industry do two things: transition from a decade of massive project construction and expansion activity to operating and maintaining those resource projects; and to address the perfect storm of challenge facing the industry today from increasing global competition, volatile commodity prices, a changing energy market and pace of technology.
“After decades of sustained economic growth, Australia is now experiencing a serious decline in productivity while technological change and disruption is accelerating. As a country, we cannot keep doing what we have always done or we will stagnate – we need to urgently find different ways to do things,” Ms Taylor said.
“The local energy resources marketplace is far too small for us to be internally focused. We must create global connections and access the global marketplace if Australia is to be competitive and productive.”
NERA was established in 2016 as an independent, not for profit company for the energy resources sector, specifically oil and gas, uranium and coal. Its role is to maximise value to the Australian economy by having a globally competitive energy resources industry that is sustainable, innovative and diverse.
Ms Taylor said the Sector Competitiveness Plan showed new business models were needed, based on collaboration and innovation so the sector could facilitate the commercialisation of disruptive technologies and rapidly adopt them, and secure a sustainable and competitive future.
“Whilst Australian research is recognised as world-class, our small marketplace, poor industry-research linkages and reluctance to be early adopters of new technology has driven many Australian entrepreneurs and innovators to move overseas to commercialise their ideas, with little or no benefits flowing back to Australia,” Ms Taylor said.
“Today, the very technology that is being used to disrupt markets, such as Uber and Airbnb, is also creating new pathways and platforms for Australian industry and innovators to connect into a global marketplace. It will also allow advanced technology such as 3D printing, machine learning and automation to be developed and commercialised here in Australia, creating local jobs and exports.”
Recent global competitive benchmarking of the Australian energy resources sector, undertaken on behalf of NERA, indicates there is much room for improving the sector’s efficiency and productivity when compared to global peers. NERA’s sector plan outlines more than $10 billion of value that could be added to the Australian economy through achieving improvements across four key priority areas – supply chain, research and innovation, workforce and regulatory reform.
The benchmarking work also examined the role of governments and regulation and found Australia’s reputation as a safe haven for energy resources investment was at threat because of a lack of collaboration between the states and Commonwealth governments.
“Companies operating in the sector don’t have any level of policy and regulatory consistency or stability across Australia – either in energy policy or industry regulation more broadly. We desperately need an integrated approach to energy policy across Australia that maps a clear pathway on how we move to a low emissions future without irretrievably damaging our economy,” Ms Taylor said.
“Further, the investment and innovation so urgently needed to support businesses and create jobs requires a harmonised, streamlined, science based and consistent regulatory environment based on trusted global standards.”
The NERA Sector Competitiveness Plan also found the regulatory environment must provide transparency to the community on the independent science and confidence industry was being held to account for its performance.
“The size of the prize is significant for everyone in Australia,” Ms Taylor said.
“This is a sector which remains vitally important to the future growth of the Australian economy. Policy and regulation needs to provide industry with the confidence and ability to invest and innovate, and the community with confidence in the sector‘s performance.”
The full version of the NERA Sector Competitiveness Plan, or a summary version, can be accessed here.