Australia is set to become the world's largest producer of liquified natural gas, but don't expect to see many benefits - the industry is mostly foreign-owned and won't create many jobs.
The Reserve Bank says LNG exports should start ramping up in 2015 and if all proceeds as planned, Australia is expected to be the largest global producer by 2018, with capacity to produce around 85 million tonnes per year.
Most of it is destined for Asia, mainly Japan, the largest global importer of LNG, with demand for natural gas there increasing since the Fukushima nuclear disaster in March 2011, the RBA said.
That'll provide a significant contribution to Australia's economic output and national income, but the benefit to the average Australian won't be so significant, the RBA's quarterly bulletin reveals.
"The effect on Australia's living standards will be lessened to some extent by the high level of foreign ownership and the relatively low labour intensity of LNG production," RBA analysts Natasha Cassidy and Mitch Kosev said on Thursday.
While it's difficult to gauge the share of foreign ownership in the LNG industry, it's estimated to be substantial, the analysts said, suggesting a "sizeable" portion of the profits will flow to foreign investors.
Those employed in the industry would see a boost in income but liaison and company reports suggested the production phase of LNG would require less workers than the investment phase, the analysts said.
And while the increase in LNG production should give government revenues a boost, the tax deductions were assumed to be "fairly large".
Households could see a benefit if those government revenues are passed on, but that would be offset by changes to domestic gas prices as more LNG is produced for export, the analysts said.
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