The bust side of the coal seam gas boom  

The Business Spectator has a column on some of the problems facing the coal seam gas boom in Queensland - The bust side of the gas boom.

Totally overrun by media attention on the federal election, one of the last gasps of Kevin Rudd’s administration nonetheless deserves attention because it underlines the importance of the mining and energy industries and highlights a key factor that could trip up the renewed boom in the next few years.

Spurred by the demands of the massive Gorgon LNG development in the west, Rudd set up a taskforce under Gary Gray, Parliamentary Secretary for Western and Northern Australia, to look at skills issues for the resources sector. It reported just before Julia Gillard motored off to Yarralumla.

Gray’s committee received 97 submissions in March and April and held talks in all mainland capitals, Karratha, Gladstone, Cairns and Mackay. The resulting report is a serious piece of work that shouldn’t be overlooked.

Its bottom line is that “there is significant potential for skills gaps to emerge between 2011 and 2013”.

Taking in to account 75 resource projects under advanced planning, with a combined value of $110 billion, the taskforce predicts that construction job demand in the sector could peak at 45,000 in 2012 and 2013. Mining operations, it says, could require 61,500 new workers by 2015. LNG developments could require another 3200.

The big issues are where to find them and how to meet the pay and conditions required to attract and retain them – as well as the implications for the rest of the economy.

The taskforce foresees a shortage of 35,800 tradespeople over the next five years and problems for the industry in finding about 1700 mining engineers and 3000 geoscientists.

As it points out, the broad recovery of the Australian economy will add to the skills shortage facing the resources sector and, in the competition for workers, become a wider problem for business managers. It estimates that about $70 billion worth of non-resources infrastructure projects (development of rail, road, port and hospital infrastructure as well as sports complexes) will be in the mix over the next two years, chasing many of the same people.