HI5003: Evaluating Demand and Supply of Resources in Australia

This report examines the dynamics of demand and supply of resources in Australia, focusing on the east coast gas market and the impact of liquefied natural gas (LNG) on domestic supply. It identifies key players, including the Australian government, tenement holders, LNG industry, and consumers, and analyzes the economic implications of expanding the LNG market, particularly its effect on domestic gas prices and human resources. The report recommends that the Australian government consult with oil and gas organizations to establish regulations, encourage workforce development, and consider international standards. It also suggests addressing illegal flaring and incentivizing local gas supply, emphasizing the importance of balancing international demand with the sustainability of local gas industries. Desklib offers a wealth of similar reports and study tools to help students excel in their academic pursuits.

HI5003
Demand and supply of Any resources in
Australia which includes human resource also
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Table of Contents
Introduction about the issue.............................................................................................................3
People involved in issue of supply and demand..............................................................................3
Economic Analysis..........................................................................................................................4
Recommendation for key players and policy holders......................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8
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Introduction to the issue
The demand is supply is considered as a most important aspect of economics. In other words,
these are the most significant aspects of microeconomic analysis. The demand concept helps in
determining the need and quantity of a particular product also, helps in evaluating that how much
quantity of product is brought by customers at a particular price and time. On the other side,
supply refers to the quantity of product which is brought in the market for sale at a particular
price and time. In recent days, news has been published by financial review segment which was
composed by Mark Abernethy. The news article will focus on the supply issue in the east coast
gas market of Australia (Macdonald, 2017).
The major objective of that article was to determine the changes in the eastern gas market and
transition from local market to export market. The gas market of Australia requires a huge
amount of human resources so that it can operate its daily activities as well as practices. After
the introduction of liquefied natural gas, the domestic gas market is continuously increasing.
Also, the demand and supply of gas are continuously increasing in east coats and its nearby
markets. Even though the effort of LNG industry is increasing gas supply but there is no
certainty about the expenses or cost of domestic gas as well as its accessibility.
People involved in the issue of supply and demand
The Eastern Australia gas market is highly affected by the issue of domestic supply of gas. It is
the huge responsibility of Australian government to decide that how it will manage their natural
resources so that it can develop the local as well as LNG market. The tenement holders, upstream
LNG industry, local gas suppliers, customers, pipelines managers and legal authorities are the
major person who is involved in the issue (Aguilera, et. al., 2014).
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Economic Analysis
The LNG plants of Australia gives core attention on that how they can expand their gas market
and how they can introduce effective infrastructure for gas suppliers and pipelines. This action of
LNG plants will influence negative impact on cost as well as the availability of gas markets.
Apart from this, the gas user industries have a problem regarding securing their prices because
their customers have an issue in purchasing gas at high prices. The demand for Australian gas
plays an essential role in the eastern market (Bowen and Sosa, 2014). There are huge numbers of
customers of gas also this industry provide many employment opportunities to people and
requires a huge amount of human resources. From 2012, there has occurred a drastic change in
the prices of gas and oil. The price of gas and oil fluctuates when price elasticity decreases.
(Figure 1: Gas production and consumption)
(Source: Davis, 2016)
The LNG market wants to expand their business in international market so that they can enhance
the Australian gas industry. But this plan of expansion will influence negative impact on the
domestic market. The expansion plan would require a huge amount of gas and oil which
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definitely increase their prices. If the prices of gas and oil will increase then its industrial users
will also have to raise their price.
The LNG market of Australia will export their gas and oil to foreign countries so that it can
flourish its gas industry in all over the world. In other words, the expansion plan of LNG market
will decrease the domestic supply and demand of gas which will influence negative impact on
the economic condition of the country (Hahn, et. al., 2014). This statement can be evaluated by
taking help of supply and demand theory which describes that when the availability of product
decreases then the price of the product also gets affected and goes higher.
Moreover, the changes in price also will affect the human resources and overall gas sector of
Australia. There will be the availability of human resources but their cost will get low because of
the high cost of gas production and availability. Furthermore, the expansion program will force
gas customers and producers to abide by consumer and competition act 2010. The Australian
government and industrial user of gas have to give core attention that how they can set legal
policies to control the gas prices so that they can comply with the international demand. They
have to set regulations while sustaining the overall gas industries of the local market (Ruttan and
Thirtle, 2014).
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Recommendation for key players and policyholders
For marinating the supply and demand of gas, the government of Australia should consult with
oil and gas organisation regarding regulations for securing their independence. Moreover, they
can encourage the workforce to improve and construct their capacity. The international bodies
should consider the international standards so that they can manage the global supply and
demand of gas. The gas which is found is oil is not used by any industry because it requires
flaring which is quite an expensive process and results in environmental damage.
Also, it minimises the chances of appropriate utilisation of natural gases. The government should
set some terms, conditions and penalties for illegal flaring. Also, the government should provide
incentives to Queensland LNG manufactures for providing and supplying gas in the local market.
By spending more on discovery process, gas industries can bring various random resources of
gas. The adoption of energy security obligation will maintain the proper level of inertia for each
and every region of Australia.
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Conclusion
Thus, it has concluded that the continuous growth of LNG market has created various
uncertainties which relate to local supply, the growth of production and performance of CSG.
With the help of good knowledge about CSG development procedure, legal authorities can
decrease the level of uncertainties. The increment of gas supply totally depends upon Australian
government. For safeguarding supply, the supplier should adopt most effective and systematic
plans. In the present time, there are more than 144 trillion cubic feet of natural gas in Australia,
which is high as compare to present annual local consumption. The consumption of natural gas is
less polluting as compared to oil and coal consumption also, it covers fewer atoms as well as
soils as compared to oil and coal.
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References
 Aguilera, R.F., Inchauspe, J. and Ripple, R.D., 2014. The Asia Pacific natural gas market:
Large enough for all?. Energy Policy, Vol. 65, pp.1-6.
 Bowen, W.G. and Sosa, J.A., 2014. Prospects for faculty in the arts and sciences: A study
of factors affecting demand and supply, 1987 to 2012. Princeton University Press.
 Davis, C., 2016. Chevron Nabs Gorgon LNG Supply Contract with China's ENN.
[Online] natural gas intel. Available at: http://www.naturalgasintel.com/articles/105050-
chevron-nabs-gorgon-lng-supply-contract-with-chinas-enn. [Accessed 9 April 2018]
 Hahn, H., Krautkremer, B., Hartmann, K. and Wachendorf, M., 2014. Review of
concepts for a demand-driven biogas supply for flexible power generation. Renewable
and Sustainable Energy Reviews, Vol. 29, pp.383-393.
 Macdonald, A., 2017. Government 'underwhelmed' on LNG response to east coast gas
squeeze. [Online] Financial review. Available at:
http://www.afr.com/business/energy/gas/govt-underwhelmed-on-lng-response-to-east-
coast-gas-squeeze-20170723-gxh76d. [Accessed: 9 April 2018]
 Ruttan, V. and Thirtle, C., 2014. The role of demand and supply in the generation and
diffusion of technical change (Vol. 21). Routledge.
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