tag:theconversation.com,2011:/africa/topics/resources-boom-5880/articlesresources boom – The Conversation2017-04-25T19:54:49Ztag:theconversation.com,2011:article/763982017-04-25T19:54:49Z2017-04-25T19:54:49ZFive things the east coast can learn from WA about energy<p>It’s an interesting time to be involved in energy policy. Thanks to the east coast <a href="https://theconversation.com/gas-crisis-energy-crisis-the-real-problem-is-lack-of-long-term-planning-74705">energy crisis</a>, the <a href="https://theconversation.com/hazelwoods-closure-wont-affect-power-prices-as-much-as-you-might-think-67773">closure of Hazelwood power station</a> and <a href="https://theconversation.com/why-did-energy-regulators-deliberately-turn-out-the-lights-in-south-australia-72729">South Australia’s blackouts</a>, the broadsheet-reading public suddenly finds itself conversant with all sorts of esoteric concepts, from <a href="http://www.theage.com.au/business/the-real-reason-our-power-companies-block-battery-systems-20170329-gv8ybe.html">gas peaking to five-minute price settlements</a>.</p>
<p>Amid all the disruption, it’s perhaps not surprising that a long-term, coherent national energy policy remains as elusive as ever. Instead we see piecemeal announcements like <a>pumped hydro</a> and <a href="http://www.joshfrydenberg.com.au/siteData/uploadedData/Minister%20Frydenberg%20-%20Media%20Release-%20CEFC%20and%20ARENA%20Storage%20(1%20February%202017)_d030bb5e-5e01-41e5-b8bd-89cd05aaa58b.pdf">battery storage</a>, none of which is itself a panacea. Some innovations can <a href="http://www.abc.net.au/news/2017-03-13/tesla-power-fix-unlikely-despite-elon-musk-pitch/8350026">hinge on a single tweet</a> which, while exciting, hardly gives the impression of joined-up policymaking.</p>
<p>Despite its name, the much-maligned <a href="https://theconversation.com/au/topics/national-electricity-market-2810">National Electricity Market</a> doesn’t extend to Western Australia, which means that federal energy policy discussions don’t always reach across the Nullarbor.</p>
<p>But we suggest looking west for inspiration. In our view, WA is well placed to research, develop and deploy the energy solutions that the whole country could ultimately use. Here are five reasons why.</p>
<p><strong>1. An appetite for change</strong> </p>
<p>WA electricity customers have long recognised the advantages that energy innovations provide. More than 200,000 homes have solar panels (rapidly closing in on the <a href="http://reneweconomy.com.au/wp-content/uploads/2016/05/state2.png">penetration levels of Queensland and South Australia</a>), and the appetite for residential battery storage is steadily growing.</p>
<p>This is due to a combination of factors. First, there’s the consistently sunny weather. Then there’s the fact that WA customers cannot yet choose their electricity retailer, meaning that households are more motivated to shop for solar panels to gain independence from government owned monopoly utilities, and can’t simply rely on the innovative price deals of the more nimble retailers found over east. </p>
<p>The vast distance and separation from the rest of Australia’s network means the WA grid won’t be joined to the NEM any time soon, meaning it will need to address the issues for itself, hopefully aided by a <a href="https://thewest.com.au/news/wa/wyatt-faces-energy-price-gap-dilemma-ng-b88424404z">newly elected state government</a> with the political capital to reform energy markets.</p>
<p><strong>2. Micro grids, maximum resilience</strong></p>
<p>To move successfully away from the traditional, centralised model of electricity generation, you need to maintain one of its cornerstone qualities: resilience. Being so far from literally everywhere else on the planet has embedded these traits into WA’s energy network, but has also reinforced the need to incorporate “microgrids” into network planning.</p>
<p>Microgrids are best thought of as small electricity sub-grids, able to function in concert with the main grid or in isolation if necessary. This increases the entire network’s resilience – you can’t have a state-wide blackout if you have plenty of microgrids. </p>
<p>WA currently has <a href="https://horizonpower.com.au/news-events/news/wa-leads-the-way-in-energy-transformation">over 30 isolated microgrids</a>, and is in prime position to be a test bed for more complex systems of network control, which will become necessary as these grids attempt to incorporate ever higher levels of distributed renewable energy from solar panels and other sources. </p>
<p><strong>3. Trials and tests beat reviews and reports</strong></p>
<p>The forthcoming <a href="https://theconversation.com/chief-scientists-report-lays-a-solid-foundation-for-reforming-australias-electricity-network-70268">Finkel Review</a> of the National Electricity Market is clearly necessary and welcome. But while the media and political circus focuses on it, the utilities in WA are already out there testing the solutions.</p>
<p>The government-owned retailer <a href="https://www.synergy.net.au/">Synergy</a> and network operators <a href="https://www.westernpower.com.au/">Western Power</a>have helped to investigate a range of innovations, such as <a href="https://www.landcorp.com.au/genyhouse/">strata peer-to-peer electricity trading</a>, <a href="https://arena.gov.au/project/garden-island-microgrid-project/">microgrids</a>, <a href="https://www.westernpower.com.au/about/media/western-power-to-install-first-utility-scale-battery-in-mid-west/">utility-scale battery storage</a>, <a href="https://www.westernpower.com.au/about/media/submissions-sought-on-new-approach-to-power-planning/">demand-management</a>, and <a href="https://www.westernpower.com.au/about/electricity-innovation/stand-alone-power-systems/">standalone power systems for fringe-of-grid areas</a>.</p>
<p>Meanwhile, the state-owned regional provider <a href="https://horizonpower.com.au/">Horizon Power</a> provides several <a href="http://reneweconomy.com.au/how-horizon-power-plans-to-remove-worlds-biggest-fossil-fuel-subsidy-58724/">valuable test case opportunities</a> to understand how future grids and networks will need to operate in more remote areas. For example, it has successfully installed advanced metering infrastructure (‘smart meters’) for every one of its 47,000 customers, spread over 2.3 million square kilometres, no less.</p>
<p><strong>4. Skilled labour is plentiful</strong></p>
<p>During WA’s decade-long mining boom, technical skills were in high demand and short supply. It’s fair to say the opposite is now the case. Meanwhile, the state government has <a href="Www.mediastatememts.wa.gov.au/pages/Barnett/2016/04/electricity-reforms-ensure-fairer-system-for-all.aspx">committed to removing 380 megawatts of fossil-fuel generation capacity from the WA energy market</a>, most of which is situated around Collie, south of Perth. </p>
<p>If this pledge leads to greater opportunities for new renewable energy infrastructure it would provide welcome relief for a job market awash with underemployed technical experts, still reeling from the mining downturn. </p>
<p>WA’s <a href="http://www.afr.com/business/mining/china-to-build-400m-lithium-plant-in-wa-expand-major-mine-20160906-gr9lsq">world-leading reserves of lithium ore</a> also offer a significance chance to join in the burgeoning battery storage industry. </p>
<p>With the recent closure of Hazelwood’s ancient coal-fired power station, Victoria’s Latrobe valley will no doubt be investigating similar opportunities, and the coal regions of Queensland and New South Wales should not be too far behind.</p>
<p><strong>5. Strong links between government and experts</strong></p>
<p>For WA, the disruptive transition in the energy sector is more acute, partly because its market is dominated by government-owned monopoly utilities that rely heavily on subsidies to ensure consistent power prices. But mostly because in WA there is a very direct link between power prices and politics, and electricity is always a hot topic at state elections. </p>
<p>Because of its physical isolation, WA’s energy policies are also largely independent from the rest of the <a href="http://www.coagenergycouncil.gov.au/">COAG Energy Council</a>.</p>
<p>As described in point 3 above, utilities will need to be prepared to spend significantly on research and development if they want to survive. WA’s utilities already rely heavily on state government support for technology innovation, but also have strong networks of local experts that are able to bridge the silos across academia, industry and government and keep the momentum going in WA’s smaller markets and grids.</p>
<p>So that was five reasons, among many more, why we think WA has a chance for not just Australian, but global leadership in the renewable power transition. As the rest of the country grapples with its energy headaches, it should consider looking west once in a while.</p><img src="https://counter.theconversation.com/content/76398/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Despite its name, the National Electricity Market doesn’t reach WA. But those charged with guiding the eastern states’ energy transition should look west once in a while.Dev Tayal, Policy Adviser and Researcher, Curtin UniversityPeter Newman, Professor of Sustainability, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/679422016-11-01T00:15:10Z2016-11-01T00:15:10ZWestern Australia provides a masterclass in what not to do with a resources boom<p>It wouldn’t be too unkind to suggest that Western Australia is not considered as the national benchmark of sophisticated public policy. Indeed, the state has recently attracted much attention – and derision – for the way its policy making elite squandered the wealth generated by the resources boom.</p>
<p>True, we now have more sports facilities than you can poke a stick at, not to mention a major makeover of the city foreshore – albeit noticeably empty of the promised high profile developments that were supposed to succumb to its irresistible allure. But you can’t accuse the Barnett government of not having big ideas. </p>
<p>Funding them has been another issue. Quite how WA managed to emerge from the once in a lifetime mining boom with an estimated debt burden of $40 billion by 2020 and a projected budget deficit of $4 billion is one of the West’s great mysteries. Or not, if you bother to look at what happened to all the <a href="https://www.academia.edu/27612380/Booms_busts_and_parochialism_Western_Australias_implacable_political_geography">riches the boom generated</a>.</p>
<p>WA Nationals leader Brendon Grylls certainly has, and that’s why he’s launched a rather lonely campaign to make the miners pay more tax. Even though this fiscal horse has long since bolted, he’s got a point. Not only did the big miners pay a measly 25 cents per tonne lease rental* to the WA government – a rate fixed in the early 1960s – but the WA government actually subsidised the miners throughout the boom.</p>
<p>According to the Australia Institute, taxation revenue across Australia in 2013-14 (before the collapse in prices) only accounted for about 5% of government revenues. In WA this situation was made worse by a subsidy regime that gifted the big miners some $6 billion at the height of the boom. No surprise that Grylls is on the warpath given his signature ‘Royalties for Regions’ program has been an early casualty of a more austere era.</p>
<p>Was this wasted opportunity and fiscal failure inevitable? Absolutely not. Not only have we been here before and should have learned similar lessons from the boom and inevitable bust of the 1970s, but other countries have been much cleverer in the way they have handled their good fortune.</p>
<p>Every policymaker in Australia should be made to read Paul Cleary’s excellent analysis of the way Norway handled its boom: <a href="http://www.theaustralian.com.au/arts/review/norway-resources-the-good-oil-on-a-trillion-dollar-miracle/news-story/02c157d020b2e26aa506323ae07803d4">Trillion Dollar Baby</a>. The experience could hardly be more different and the comparison would be laughable were it not for the fact that future generations will come to rue the folly and myopia of our current leaders.</p>
<p>The key lesson that emerges from Cleary’s analysis is that even small states can have a big say in determining what happens to the windfall revenues booms generate - but only if they understand what is happening at present and have a plan for the long term future of the country.</p>
<p>Norway had both. First, they had a capable government and skilled bureaucrats (yes, they are valuable and important) who quickly realised that Norway’s oil boom had to be managed for the benefit of Norway, not the multinational oil companies. This meant not being intimidated by powerful multinational corporations and recognising the inherent bargaining strength of national governments. You can only exploit resources where they are. Host governments can - and should - determine how they are developed.</p>
<p>In contrast to successive state and federal governments in Australia, this is precisely what the Norwegians did. First, they compelled the oil majors to build their required oil platforms in Norway, developing a world class manufacturing capability in the process. Secondly, and in another unflattering and revealing contrast to Australia, they ensured 90% of the windfall revenues derived from the oil boom in Norway remained there. </p>
<p>Norway’s “problem”, unlike ours, has been what to do with the astounding amounts of wealth generated as a direct consequence of its activist and enlightened policies. A third critical innovation was establishing a sovereign wealth fund.</p>
<p>Sovereign wealth funds serve two purposes. First, they put aside the windfall revenues of today for future generations – a possibility our own leaders seem incapable of contemplating given their truncated political horizons. Second, by investing most of the wealth overseas, they put downward pressure on the domestic currency, allowing other domestic industries to survive.</p>
<p>At a time when we are collectively waving farewell to much of the manufacturing sector, this is another sobering lesson – especially for the young who will not benefit from all that squandered wealth and may wonder where they will actually work. </p>
<p>The current debate – such as it is – in the West will likely go nowhere. Kevin Rudd’s demise is a reminder of what happens to politicians in this country who dare to take on the miners. The WA Labor Party is unlikely to be any braver or far-sighted on these issues than its federal counterparts. In short, don’t look to the West for a revolution in public policy. But if you want somewhere spacious and well equipped to kick a footie around…</p>
<p><em>Correction: An earlier version of this story referred to a 25 cent per tonne “royalty” paid by the big miners. In fact the 25 cent charge is a “lease rental” and is paid on top of royalties which are a fixed percentage of the sale price of iron ore.</em></p><img src="https://counter.theconversation.com/content/67942/count.gif" alt="The Conversation" width="1" height="1" />
How WA managed to emerge from the mining boom with an estimated debt burden of $40 billion is one of the West’s great mysteries. Or not, if you bother to look more closely.Mark Beeson, Professor of International Politics, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/631802016-07-28T05:40:16Z2016-07-28T05:40:16ZFour qualities that helped small businesses survive the end of the resources boom<p>The “once in a lifetime” mining boom is officially behind us. Anaemic economic growth and unemployment have already beset the predominately resource-based economies of Western Australia and Queensland. </p>
<p>Recent reports out of <a href="http://www.watoday.com.au/wa-news/mining-boom-hangover-bites-as-wa-leads-country-in-insolvency-increases-20160726-gqe82z.html">Western Australia</a> reveal companies are racking up debt to stay in business and many more are becoming insolvent. </p>
<p>But new research indicates the small to medium enterprises which survived the pivot away from resources shared four qualities, irrespective of which sector they operated in.</p>
<h2>Boom to bust</h2>
<p>Our <a href="http://www.ccsg.uq.edu.au/Research/SocialPerformance/SMEStudyEconomictrendsbenefits.aspx">recent study</a> of the resilience capabilities of 400 small businesses in regional Queensland towns affected by the recent $60 billion plus investment in the coal seam gas to liquefied natural gas sheds some light on the subject. </p>
<p>These businesses have seen the dramatic rise in economic activity during the construction phase of these projects and then a reversion to more normal levels as the construction was completed. Many businesses were unprepared for the end of the cycle and experienced a bust in business conditions.</p>
<h2>Four qualities key to survival</h2>
<p>The study identifies several key capabilities that supported success in the bust period and beyond. These are proactiveness, connectedness, adaptation, and access to “slack” (or readily available) resources.</p>
<p>Proactive small firms that grow in the post-boom era are those that actively seek new product and service niches and reorient aspects of their business accordingly. They tend to be the first to initiate competitive actions such as introducing innovative products that are new to the industries they serve. They are quick to recognise new business opportunities based on rigorous marketplace analysis. They fully support new forays by reorganising business structures and investing in new capabilities. </p>
<p>Connected small firms actively cultivate and maintain business network partnerships. They are more likely to see their income increase during lean economic times because they curate and maintain diverse networks to mitigate against market demand fluctuations. By directly engaging with customers and suppliers, well-connected firms actively plan for potential market disruptions, proactively monitor the overall health of industry, and even conduct scenario planning exercises to test their assumptions in each of these areas. </p>
<p>Essentially, it appears that robust external network connections provide the basis from which firms can see, anticipate, and exploit market trends.</p>
<p>Adaptive businesses find workable solutions to new challenges and accommodate market disruptions by using existing resources in new ways and by quickly shifting things around to ensure that customers are never let down – no matter what.</p>
<p>Perhaps most important, businesses with slack resources are more hopeful to survive into the future. Active investment in good times in spare equipment, facilities and other production capacity, accruing finances and building and maintaining new staff that are not tied to the existing business, but rather are looking for new opportunities, is therefore crucial. </p>
<h2>Do different firms respond differently?</h2>
<p>We compared how firms from four major industrial groupings respond to booms, including retail, accommodation and food (16%), professional services (30%), industrial firms like manufacturing and construction (30%), and public related like health and recreation (24%). While no differences were visible in terms of intended business exit in the next two years, they did display differences across several resilience factors that relate to post-boom performance. This has several implications.</p>
<p>Professional service sector firms are likely to have trouble sustaining growth in the downturn. They tend to be less proactive and have below average slack resources. </p>
<p>Professional service firms were 2.3 times more likely to be below average in slack. Financial firms were 2.3 times more likely to have below average adaptiveness. </p>
<p>In contrast, retail firms appear to be more resilient. They were more likely to accrue slack resources, to anticipate changes in the marketplace, and to improvise in new circumstances. </p>
<p>The jury is out for the industrial group that, as a whole, did not lack in any of the major aspects of resilience. However, trouble might be in store for the transportation and storage firm subset that was 3.5 times more likely to be below average in pro-active seeking of new business opportunities. </p>
<p>But the very rural firms, furthest away from major town centres, may struggle the most because they lack in key resilience areas. They are 1.6 times more likely to be below average in connectedness - important for turnover - and 1.8 times more likely to be below average in adaptiveness - important to future performance expectations. </p>
<p>This group also struggles with innovative problem-solving skills, implying these firms have difficulty solving unexpected problems that require counterintuitive thinking that diverges far from existing product and service offerings.</p><img src="https://counter.theconversation.com/content/63180/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jerad A. Ford receives funding from the UQ Centre for Coal Seam Gas Research which is an independent research institution but receives funding from the CSG industry.</span></em></p><p class="fine-print"><em><span>John Steen receives funding from the UQ Centre for Coal Seam Gas Research which is an independent research institution but receives funding from the CSG industry.. </span></em></p><p class="fine-print"><em><span>Martie-Louise Verreynne works the University of Queensland. She receives funding from the ARC and UQ Centre for Coal Seam Gas Research which is an independent research institution but receives funding from the CSG industry. </span></em></p>While insolvencies are climbing in some of the resources states, other small businesses have found ways to survive.Jerad A. Ford, Research Fellow in Innovation and Strategy, The University of QueenslandJohn Steen, Associate Professor of Strategic Analysis, The University of QueenslandMartie-Louise Verreynne, Associate Professor in Innovation, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/473592015-09-13T20:16:46Z2015-09-13T20:16:46ZHashtags v bashtags: a brief history of mining advertisements (and their backlashes)<figure><img src="https://images.theconversation.com/files/94462/original/image-20150911-27082-1a1r5cl.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The world of coal: a still from the new Minerals Council advertisement.</span> <span class="attribution"><span class="source">YouTube</span></span></figcaption></figure><p>The Minerals Council of Australia’s <a href="https://www.youtube.com/watch?v=IKp8W1jBuHw">recent coal adverts</a>, extolling <a href="http://www.minerals.org.au/news/launch_of_new_coal_campaign">the virtues of the “little black rock”</a>, have provoked an inevitable Twitter backlash. Industry is clearly still learning how to cope in the “web 2.0” world of social media and instant snark. But perhaps the campaign is addressing other audiences beyond the twittersphere, and a bit of sarcasm may well be seen as a small price to pay.</p>
<p>The advertisement, if you’ve been living under a rock and haven’t seen it, shows extreme close-ups of what seems to be an asteroid but (spoiler alert) turns out to be a lump of coal. A voice-over explains that “this can provide endless possibilities. It can create light and jobs”, before giving some statistics about wages, jobs and carbon emissions.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/IKp8W1jBuHw?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Unless you’ve been living under a rock, you’ll have heard about this rock by now.</span></figcaption>
</figure>
<p>Comments are disabled on the YouTube video, but elsewhere the response has been predictable, with some commentators pointing out that the image of a barren and unhospitable rock is a pretty apt metaphor for a world in which all the fossil fuels have been burned. </p>
<p>Everything happens very fast on the internet, so the inevitable spoof videos (one of the highest-profile of which has since been removed) emerged within hours of the campaign’s release.</p>
<p>The turbocharged speed of internet culture also means there’s already a historical context in which advertisements (and their inevitable backlashes) can be viewed.</p>
<h2>Web 1.0: birth of the spoof video</h2>
<p>In 2007 (an age ago in internet years), the <a href="http://www.nswmining.com.au/">New South Wales Minerals Council</a> ran adverts with the tagline “Life: Brought to you by mining”. In response, the activist group <a href="http://www.risingtide.org.au/">Rising Tide</a> set up a spoof website called “Rising sea levels: Brought to you by mining”, explaining that the science they were reading came to somewhat different conclusions. </p>
<p>The Minerals Council was not amused and <a href="http://www.smh.com.au/news/national/industry-closes-anticoal-website/2007/03/04/1172943275688.html">threatened legal action</a>. Rising Tide moved the hosting of the site offshore and the Minerals Council <a href="https://www.greenleft.org.au/node/37336">backed away from the fight</a>, perhaps wary of looking a tad humourless. </p>
<p>Subsequent industry public relations campaigns received mixed responses. The Australian Coal Association’s 2009 advertisement “<a href="https://www.qrc.org.au/01_cms/details.asp?ID=1950">Let’s cut emissions not jobs</a>”, in response to Kevin Rudd’s doomed Carbon Pollution Reduction Scheme, prompted a <a href="https://www.youtube.com/watch?v=2HCL4eH7yAc">parody video</a> extolling “iCoal 2.0”. But the A$22 million “<a href="http://alexwhite.org/2011/02/mining-industry-campaign-cost-22million/">Keep Mining Strong</a>” campaign blitz (and accompanying <a href="https://twitter.com/miningstrong">Twitter feed</a>) that defeated Rudd’s proposed mining tax did not draw similar spoof responses. </p>
<p>However, the 2011 “<a href="http://www.thisisourstory.com.au/">Australian mining: This is our story</a>” advertisement, launched during Julia Gillard’s campaign to get the Clean Energy Future Package through parliament, did draw a response. The Australian Manufacturing Workers Union set up <a href="http://thisistherealstory.com.au">a spoof website</a>, with a robustly scripted (that is, not safe for work) <a href="https://www.youtube.com/watch?v=_hk77koHdtQ">video</a> titled “Australian Mining: This is the real story”. The coal company Xstrata (since bought by Glencore) <a href="http://storyful.com/stories/26692">tried to have it removed</a>.</p>
<h2>Web 2.0: hashtags, hijinks and hijacks</h2>
<p>What’s changed since then is the rise and rise of Twitter, with its capacity for swarming behaviour. Various organisations (for example, the <a href="http://www.huffingtonpost.com/2014/04/22/mynypd-nypd-twitter_n_5193523.html">New York Police Department</a> and <a href="http://www.forbes.com/sites/caroltice/2014/10/30/why-ronald-mcdonald-failed-on-twitter-branding-lessons/">McDonald’s</a>) have learned the hard way that trying to burnish your reputation and start “conversations” with the public can easily come unstuck, with hashtags becoming “bashtags”. The City of Toronto recently found itself on the <a href="http://www.washingtonpost.com/news/morning-mix/wp/2015/07/10/how-a-dead-raccoon-got-a-sidewalk-memorial-and-became-a-hashtag">receiving end of ironic Twitter activism</a>, merely for failing to collect a raccoon’s corpse for 12 hours.</p>
<p>It’s still unclear, of course, whether this “clicktivism” encourages people to <a href="http://www.channel4.com/news/change-org-online-activism-case-clicktivism">take more action in the real world</a>, or acts as a “release valve” so that the mockery actually diverts people from taking other action against organisations they dislike. The debate <a href="https://www.prote.in/en/briefings/can-clicktivism-ever-replace-activism">is still going</a> over whether clicktivism <a href="https://meco6936.wordpress.com/2015/05/29/online-activism-from-clicktivism-to-activism/">is really just “slacktivism”</a>.</p>
<p>Early last year, the Minerals Council launched its “<a href="http://www.australiansforcoal.com.au/">Australians for Coal</a>” campaign. A predictable battle of wits ensued over its #australiansforcoal hashtag.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"455554743301976065"}"></div></p>
<p>.</p>
<p>Even a <a href="http://www.businessspectator.com.au/article/2015/9/7/resources-and-energy/getting-fired-about-coals-image-problem">pro-coal commentator had to admit</a> that it couldn’t “be claimed to be a success, not least because the anti-fossil fuel brigade has upped its efforts in the past 2-3 years to a much greater extent too”.</p>
<h2>Playing to the crowd</h2>
<p>The Minerals Council and its PR strategists are presumably streetwise enough to realise that their #coalisamazing campaign would draw a similarly sarcastic response. It may even be the case that they are relishing the battle.</p>
<p>For decades the coal industry <a href="https://theconversation.com/recycling-rules-carnival-of-coal-is-a-blast-from-the-pr-past-45819">has fought a successful campaign</a> that framed it as a crucial provider of energy and jobs, not to mention a responsible corporate citizen committed to environmental technologies. Even now, amid <a href="http://ieefa.org/thermal-coal-hits-a-new-low-where-does-the-market-go-from-here">evidence that the tide is turning against coal</a>, these “<a href="https://en.wikipedia.org/wiki/Frame_analysis">framing battles</a>” still need to be fought. </p>
<p>Since the peak of the boom, in 2011, coal prices have <a href="http://www.bloomberg.com/news/articles/2015-01-30/coal-keeps-dropping-as-opec-like-tactic-stymied-by-dollar">collapsed</a> and profits have been squeezed. In 2014, a long-lived industry publication, the <a href="http://www.theajmonline.com.au/">Australian Journal of Mining</a>, published its last issue. In September 2013, the Australian Coal Association <a href="http://www.austmine.com.au/News/articleType/ArticleView/articleId/1761/Australian-Coal-Association--cessation-of-operations-as-at-27-September-2013">was subsumed within the Minerals Council</a>. </p>
<p>So while coal’s critics have had their fun on Twitter, it is unlikely that they were the true target of the advertisement anyway. The real goal is likely to have been to shore up the Minerals Council’s membership, and the industry may well view spoof videos and some inevitable leg-pulling as collateral damage.</p><img src="https://counter.theconversation.com/content/47359/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marc Hudson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Minerals Council’s new coal ad is the latest to attract derision online. But for the resources industry, the mockery may just be collateral damage in the wider mission to reach out to its supporters.Marc Hudson, PhD candidate at Sustainable Consumption Institute , University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/378362015-03-01T19:28:57Z2015-03-01T19:28:57ZMoving from resources to tourism is a bigger leap than we think<p>Australia is in the midst of a structural economic change with the mining boom coming to an end as <a href="http://www.macrobusiness.com.au/2015/02/australian-investment-pipeline-falls/">investment in the sector falls</a>. Tourism has been <a href="http://www.budget.gov.au/2011-12/content/bp1/html/bp1_bst4-03.htm">promoted by government</a> as a key source of future economic growth, with some <a href="http://www.professionalplanner.com.au/featured-posts/2015/02/08/winners-and-losers-as-economy-changes-gears-34162/">media reports</a> already stating that tourism has started to recover. But will it really be that easy to shift back from a resource-dependent to a tourism-led economy? </p>
<p>Tourism and the resources sector have cyclically been key exports and drivers of economic growth in Australia. However, the last decade’s mining boom has <a href="http://www.tra.gov.au/documents/Economic-Industry/Economic_Impact_of_the_Current_Mining_Boom_on_the_Australian_Tourism_Industry_FINAL.pdf">negatively impacted</a> on the sector by inflating the exchange rate, increasing competition for labour and delivering a <a href="http://www.sciencedirect.com/science/article/pii/S016073831300159X">‘two-speed’ economy</a>. </p>
<p>During this boom, Australia’s resources sector has encroached on protected areas with iconic tourism attractions and protected areas, such as the <a href="http://www.griffith.edu.au/__data/assets/pdf_file/0004/614596/Report-2-World-Heritage-Area-at-Risk-GBR.pdf">Great Barrier Reef</a>, increasing the risk of the region losing key assets that attract visitation. Importantly, the mining boom has heralded significant structural change in Australia’s economy, with little to no long-term planning for growth once it comes to an end. </p>
<p>A report by the <a href="http://www.griffith.edu.au/__data/assets/pdf_file/0005/689054/GIFT-Report-4-Feb-2015-Overcoming-structural-lock-in.pdf">Griffith Institute for Tourism</a> has found that the transition back to tourism - particularly in regions that have become resource dependent - may be very difficult. Investigating two resource dependent regions in Queensland (Gladstone and Roma), the research found that the regions have become dependent on the resources sector and this has impacted tourism in many ways. </p>
<p>The key impacts of the boom in these regions include: reducing the tourism industry’s ability to attract and retain staff; increasing costs of accommodation, food and fuel for visitors and tourism employees; influencing tourism businesses to adapt to cater for the more lucrative resources sector workers (that is, installing dongas (portable buildings), building up-market motels, offering fine dining); reducing traditional tourism businesses profitability leading to their closure; and straining local infrastructure and support services upon which tourism depends.</p>
<p>The regions have reportedly suffered a decline in their aesthetics, reducing their appeal as tourism destinations. Combined with the busyness and limited amount of affordable accommodation, the traditional leisure markets now avoid or pass through the towns. In Gladstone the resources sector activity has also restricted visitor access to certain areas of the region and impacted on key natural assets that attract tourists, including the harbour and the Great Barrier Reef. </p>
<p>But probably the most concerning impact occurred in Roma, where there was a change in the strategic direction of the local council following the regional council amalgamations in 2008. Prior to the amalgamation, Roma was an example of regional tourism best practice, with a local tourism development officer working with the industry to develop products and market the region. Following the amalgamation, the council decided to grow the resources sector, which strengthened the sector’s capacity to do business in the region. </p>
<p>At the same time, the council struggled to understand and quantify the benefits of tourism, resulting in the revenue generated by tourism being viewed as inferior to the resources sector. The council’s shift in focus away from tourism led to a loss of tourism skills, advocacy and policy from the region. Since then, been very few new tourism developments and the existing tourism products have declined, deteriorated or adapted to service the resources sector.</p>
<p>Fortunately, the Council in Roma is now anticipating the end of the mining boom and have commenced efforts to rejuvenate tourism. However, this rejuvenation process might not be so simple or easy. <a href="http://www.sciencedirect.com/science/article/pii/0261517794900892">Prior research </a> considering the rejuvenation of tourism following an oil and gas boom indicates that it can take a decade of significant product development and extensive marketing to attract the leisure tourist back to a region. </p>
<p>Another issue is that previously resource-dependent regions commonly attempt to attract high-yield tourists and <a href="http://www.sciencedirect.com/science/article/pii/0160738395000615">re-image the region</a> by marketing the destination as dynamic and multi-cultural. This can reduce differentiation between destinations and undermine competitiveness. </p>
<p>This regional picture gives a glimpse to the challenges facing tourism nationally. Shifting the economy back towards tourism may be more difficult than expected. It’s not enough to just market Australia – significant reimaging will need to occur to change the perceptions tourists now have of Australia and its resource-dependent regions. </p>
<p>In addition, without good products and services, which have declined during the mining boom, the tourism industry will not be able to adequately service growing demand and there will be low levels of satisfaction. </p>
<p>Perhaps the most effective policy for ensuring tourism rejuvenation would have been to take a long-term perspective to development that recognised the value of tourism and developed strategies at the start of the mining boom to avoid the loss of valuable products, policy, expertise and skills. As it is, Australian tourism now faces an uphill battle.</p><img src="https://counter.theconversation.com/content/37836/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Char-lee Moyle does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Tourism is one of the sectors expected to take up the slack of the waning resources boom, but new research suggests the transition won’t be easy.Char-lee Moyle, Research Fellow, Sustainable Tourism, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/150882013-06-12T20:31:17Z2013-06-12T20:31:17ZRevisiting the banana republic and other familiar destinations<figure><img src="https://images.theconversation.com/files/25377/original/dtdn62bx-1371009509.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">With the end of the boom looming, Australia is set to revisit some old economic concerns.</span> </figcaption></figure><blockquote>
<p>We took the view in the 1970s – it’s the old cargo cult mentality of Australia that she’ll be right. This is the lucky country, we can dig up another mound of rock and someone will buy it from us, or we can sell a bit of wheat and bit of wool and we will just sort of muddle through … In the 1970s … we became a third world economy selling raw materials and food and we let the sophisticated industrial side fall apart … If in the final analysis Australia is so undisciplined, so disinterested in its salvation and its economic well being, that it doesn’t deal with these fundamental problems … … Then you are gone. You are a banana republic. </p>
</blockquote>
<p>Revisiting then-Labor Prime Minister Paul Keating’s infamous 1986 warning should remind us how economic conditions change and how they keep changing: how new “realities” are quickly replaced by even newer “realities” masquerading as permanent changes.</p>
<p>Resources have been good for Australia, unlike for some other countries where there really has been a <a href="https://en.wikipedia.org/wiki/Resource_curse">resource curse</a>. However, with the end of the boom it is likely that we will revisit some earlier concerns about Australia’s over-reliance on resources.</p>
<p>Another quote from Bob Hawke, Paul Keating and John Button in 1991, taken from <a href="http://trove.nla.gov.au/work/7302672?q&sort=holdings+desc&_=1371008855926&versionId=10240183"><em>Building a Competitive Australia</em></a> also seems particularly relevant at the moment.</p>
<blockquote>
<p>This tough, increasingly competitive world of five and a half billion people does not owe, and will not give, seventeen million Australians an easy prosperity. The days of our being able to hitch a free ride in a world clamouring, and prepared to pay high prices, for our rural and mineral products, are behind us. From this fact flows everything else.</p>
</blockquote>
<p>This sentiment was true for the 1980s and early 1990s, but less so for the 2000s where rising prices for resources and increases in national income provided an easier prosperity than Hawke could have imagined.</p>
<p>In 2000, Keating was still arguing against the resources as saviour view of long-term Australian prosperity:</p>
<blockquote>
<p>The global terms of trade will not suddenly flow back in the direction of commodity producers. So even if we wanted to, we can never again rely on export wealth generated by Australian farmers and miners to pay for the preservation of tariff walls to protect our manufacturing and services sectors from competition.</p>
</blockquote>
<p>China changed everything. Its voracious appetite for resources pumped up the prices Australia received for its exports – particularly coal and iron ore. Australians promptly forgot the warnings of the past, as resource wealth became the new reality masquerading as a permanent change.</p>
<p>Increased prices then led to a huge investment boom, with gas the major recipient in recent years. The scale has been remarkable, as a recent report from <a href="http://www.bree.gov.au/documents/publications/remp/REMP-2013-04.pdf">Australia’s Bureau of Resources and Energy Economics</a> (BREE) shows.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/25380/original/bsxyqkfh-1371010439.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/25380/original/bsxyqkfh-1371010439.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=297&fit=crop&dpr=1 600w, https://images.theconversation.com/files/25380/original/bsxyqkfh-1371010439.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=297&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/25380/original/bsxyqkfh-1371010439.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=297&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/25380/original/bsxyqkfh-1371010439.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=373&fit=crop&dpr=1 754w, https://images.theconversation.com/files/25380/original/bsxyqkfh-1371010439.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=373&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/25380/original/bsxyqkfh-1371010439.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=373&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Projects at the committed stage, by commodity.</span>
<span class="attribution"><span class="source">Australian Bureau of Resources and Energy Economics </span></span>
</figcaption>
</figure>
<p>This boom has now peaked and Australia must now find new sources of growth. According to BREE, the “likely scenario” is that </p>
<blockquote>
<p>the value of projects currently at the Committed Stage is scheduled to moderate after 2013 as a result of the completion of mega projects currently under construction. In 2014 the stock of committed investment is expected to decrease by $8 billion, and then by a further $63 billion in 2015. From 2017 onwards, the stock of committed investment in the mining sector is projected to revert back to levels comparable to 2007.</p>
</blockquote>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/25381/original/pk23hwsg-1371010581.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/25381/original/pk23hwsg-1371010581.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=296&fit=crop&dpr=1 600w, https://images.theconversation.com/files/25381/original/pk23hwsg-1371010581.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=296&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/25381/original/pk23hwsg-1371010581.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=296&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/25381/original/pk23hwsg-1371010581.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=373&fit=crop&dpr=1 754w, https://images.theconversation.com/files/25381/original/pk23hwsg-1371010581.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=373&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/25381/original/pk23hwsg-1371010581.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=373&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Outlook for committed project investment - “likely” scenario.</span>
<span class="attribution"><span class="source">Bureau of Resources and Energy Economics </span></span>
</figcaption>
</figure>
<p>While some <a href="http://theconversation.com/the-anatomy-of-the-resource-boom-tells-us-its-only-going-to-get-better-for-taxpayers-10314">commentators</a>, including the Reserve Bank Governor <a href="http://www.rba.gov.au/speeches/2012/sp-gov-201112.html">Glenn Stevens</a>, argue that we are now entering the third – export – stage of the boom, it is likely that just as the boom surprised us on the way up, so will the crash on the way down. Australia will no doubt export more for at least a few years, as recent <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyReleaseDate/A5FB33BD2E3CC68FCA257496001547A1?OpenDocument">data</a> shows, but with increased global supply and lower prices, it is likely that we’ll start worrying about our dependence on resources once again.</p>
<p>Recent <a href="http://www.rba.gov.au/publications/bulletin/2013/mar/pdf/bu-0313-3.pdf">data</a> clearly shows that commodity prices are on the decline, with iron ore and coal prices substantially lower. According to the <a href="http://www.rba.gov.au/statistics/frequency/commodity-prices.html">RBA</a>:</p>
<blockquote>
<p>Over the past year, the index has fallen by 8.6% in SDR terms. Much of this fall has been due to declines in the prices of coking coal, iron ore and thermal coal. The index has fallen by 9.9% in Australian dollar terms over the past year.</p>
</blockquote>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/25391/original/mdq25cbw-1371015176.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/25391/original/mdq25cbw-1371015176.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=447&fit=crop&dpr=1 600w, https://images.theconversation.com/files/25391/original/mdq25cbw-1371015176.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=447&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/25391/original/mdq25cbw-1371015176.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=447&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/25391/original/mdq25cbw-1371015176.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=561&fit=crop&dpr=1 754w, https://images.theconversation.com/files/25391/original/mdq25cbw-1371015176.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=561&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/25391/original/mdq25cbw-1371015176.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=561&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Reserve Bank of Australia</span></span>
</figcaption>
</figure>
<p>Australia is a lucky country, but it is also vulnerable. Australia’s historical vulnerability to declines in international resources demand is about to re-emerge, which will make economic management a difficult task after the September election. </p>
<p>Things have been tough for the Rudd and Gillard governments, but they will be even tougher for an Abbott government constrained by their rhetoric of the dangers of public debt. Labor was helped by the investment revitalisation of the Chinese economy, but should they win the election, the Coalition will come into office at a time of Chinese economic consolidation and rebalancing.</p>
<p>In the late 1980s, when some commentators were eulogising about the end of the industrial revolution and touting the beginning of the information age, Australia appeared to be doomed unless it weaned itself off a reliance on resources. This new reality was superseded by an even newer one – the remarkable rise of the Chinese economy. Not only did Chinese demand increase the price of Australian exports, but it also decreased the price of Australian imports. The terms of trade – the average price level of exports in relation to the average price level of imports – is a ratio (or fraction) and so can be affected by both the numerator and the denominator. Rising costs in China are likely to constrain further reductions in the price of manufactured goods.</p>
<p>The terms of trade improved remarkably from the early 2000s, it then declined as commodity prices fell in the immediate aftermath of the global economic crisis. To the surprise of many, including myself, it then ascended again to new heights as China embarked on one of the biggest investment booms in history, a boom that required many of the things that Australia exports to support it.</p>
<p>There can be no denying that Australia has been lucky to be in a position to take advantage of China’s industrialisation and recent Asian economic exceptionalism in the face of a slow American recovery and continuing European crisis. Similarly, however, any downturn in China and other Asian economies will now negatively affect Australia.</p><img src="https://counter.theconversation.com/content/15088/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tom Conley does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>We took the view in the 1970s – it’s the old cargo cult mentality of Australia that she’ll be right. This is the lucky country, we can dig up another mound of rock and someone will buy it from us, or we…Tom Conley, Senior Lecturer, School of Government and International Relations, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.