Fuelling regional development or exporting value? The role of the gas industry on the Limestone Coast, South Australia

Highlights

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  The degree to which host regions benefit from resource extraction is a major issue for research and policy, with a large proportion of benefits exported from host regions.

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  Scenario processes are a useful way of helping stakeholders to navigate better outcomes in regional economies.

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  The qualitative results show that workshop participants sought an increased role for the gas industry in the region, but not at the expense of a diverse economy.

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  Quantitative results showed that increased local use of gas in the regional economy would provide more benefits in the form of jobs and growth.

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  To realise the stakeholders’ preferred scenario, additional infrastructure would be required.

Abstract

The degree to which host regions benefit from resource extraction is a major issue for research and policy. In Australia and Canada, the dominant narrative of resource extraction is that most of the benefits flow away from host regions. This paper draws on evolutionary economic geography, presenting a case study of the Limestone Coast in South Australia, which previously extracted and distributed gas locally to food and fibre manufacturing industries. New policies seeking to renew the gas industry in the region, provide subsidies for exploration. Scenarios were developed to help inform decisions about the role of gas within this region. Qualitative analysis of the scenarios emphasised that gas needs to be affordable and locally accessible. Quantitative modelling showed that using the gas locally by manufacturing industries as part of broader industrial expansion would lead to greater benefits compared with exporting all gas outside the region. We conclude that policy settings have gone some way towards realising increased benefits for the region. Regional stakeholders clearly favoured the local use scenario but saw it as unlikely in the context of current infrastructure limitations. Stakeholders sought policy support for infrastructure to enable the preferred scenario to be realised.