GAS IRC

SKILLS FORECAST KEY FINDINGS DISCUSSION PAPER 2017

Gas IRC Key Findings Paper | March 2017 | © Australian Industry Standards Ltd. 1

The purpose of the paper is to provide industry stakeholders with a summary of the key findings from the recent industry intelligence gathering activities overseen by the Gas Industry Reference Committee (IRC). The key findings will be used by the IRC in the development of the Gas IRC Skills Forecast and Proposed Schedule of Work for the UEG11 Gas Industry Training Package. Once approved by the Australian Industry and Skills Committee (AISC) the Skills Forecast will replace the 2016 Gas IRC Workplan.

Several targeted strategies were employed to collect industry intelligence about the opportunities and challenges for the Gas workforce and any Training Package review work necessary to meet these industry needs. These included:

• A Call for Submissions process inviting stakeholder responses about key issues affecting skills and workforce development;

• An IRC Skills Forecast Survey seeking information on priority skill needs, skill shortages and issues relating to workforce training and;

• A comprehensive review of Data and Research Sources nominated by the Gas IRC Australian Industry Standards has been tasked by the IRC to collect feedback from interested stakeholders about these issues on its behalf.

HOW TO PROVIDE FEEDBACK Stakeholders are invited to submit their comments on the findings outlined in this paper by close of business on March 17th 2017.

It is acknowledged that the information provided about issues in this paper is deliberately brief. The purpose of this paper is to validate and confirm the findings, which will inform the advice the Gas IRC will provide to the AISC.

In considering the key issues and themes identified in this paper, we are keen to have any feedback that either confirms your issue has been covered, or else raises an issue you feel should be addressed in the Proposed Schedule of Work (FY17/18–FY20/21) for the UEG11 Gas Industry Training Package to be submitted to the AISC on April 28th 2017.

Responses can be emailed to enquiries@australianindustrystandards.org.au

For further information please contact:

Jason Lazar Industry Manager M 0417 903 566 

KEY FINDINGS DISCUSSION PAPER MARCH 2017

Gas IRC Key Findings Paper | March 2017 | © Australian Industry Standards Ltd. 2

The Gas Supply, Transmission, Distribution and Gaseous Fuels industry is divided into two sectors: Retailers that buy and sell gas, and distributors that operate the networks that carry gas to the end user. The industry is forecast to generate $2.13 billion for the Australian economy through FY2016-17 and employs almost 16,000 people with forecasted employment growth at 3.6 per cent over the next five years, resulting in steady demand for a skilled workforce. Future workforce requirements include the need to upskill the existing workforce to keep up with the demands of changing technology entering the market. The Gas Supply, Transmission, Distribution and Gaseous Fuels industry will be referenced throughout the document as the Gas Supply and Distribution industry.

GAS SUPPLY AND DISTRIBUTION INDUSTRY METRICSRevenue ($b) 10.9Profit ($m) 1,504Average Wage ($ per year) 98,766.30No of Businesses 235Employment Growth (% to 2022) 3.6

Scope: Gas Supply1

KEY FACTS:

• More than 47,000km of gas transmission pipelines in Australia2 • 48.2 Petajoules of additional gas demand will be added by new connections3 • 1 per cent growth in gas use nationally during 2014-154 • 24 per cent of energy consumption in 2014–15 was natural gas4

• Over $850 million spent expanding gas infrastructure since 20105 • Over $2 billion value added to the Australian economy by gas supply industry in 2014-156

GAS SUPPLY, TRANSMISSION, DISTRIBUTION AND GASEOUS FUELS INDUSTRY OVERVIEW

1 IBISWorld Industry Reports. Retrieved from http://www.ibisworld.com2 Australian Pipelines & Gas Association. 18 January 2017. Facts and figures about pipelines and gas.3 Australian Energy Market Operator (AEMO). December 2016. National gas forecasting report: For Eastern and South-Eastern Australia.4 Australian Government, Department of Industry, Innovation and Science, Office of Chief Economist. October 2016. Australian energy update 2016.5 Gas Today. 2015. Chapter three: Transport and transmission.6 Australian Bureau of Statistics. 2014-15. 8155.0 Australian industry, 2014-15.

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GAS SKILL SHORTAGES90.9 per cent of employers reported experiencing a skills shortage in the last 12 months7. The occupations reported as being in shortage were:

1. IE Technician2. Educators3. Gas Fitters4. LPG Terminal Managers5. LPG Tanker Operators

Employers identified the following reasons for the shortage with the most frequent response listed first.

Reasons for shortageShortage of skilled/qualified personnelAgeing workforce/current staff retiringRemuneration/employment conditionsCompetition from other organisationsHigh staff turnover

GAS WORKFORCE

Source: ABS Labour Force, Australia, Detailed, Quarterly, Nov 2016

GAS

100100325

7252,400

3,2754,150

4,475

0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000

ACTTASNTSA

NSWVICQLDWA

GAS WORKFORCE

7 Australian Industry Standards. February 2017. IRC Skills Forecast Survey.

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INCREASING REGULATORY BURDENThe National Gas Law and the National Gas Rules provide the legal framework for the economic regulation of gas distribution, and provide a framework for pricing. The industry also faces overlapping state regulations relating to every aspect of the industry from handling and distribution to installation8. Industry reports describe this regulatory burden as heavy and steadily increasing9.

As one of the main factors cited by industry10 as a barrier to general business activities, it should come as no surprise that higher rates of Government regulation are resulting in significant growth in the compliance workforce11.

Awareness of this issue has risen among policy makers as recently released reforms show; where the Gas Market Reform Package12 (August 2016) explicitly examines the need for increased regulation, and a subsequent report13 (December 2016) recommends transparency and arbitration in place of increased regulations.

AGEING WORKFORCEThe percentage of utilities workers aged 45 and older has grown considerably in recent decades from just under 30 per cent of the workforce 30 years ago to 46 per cent today – a full seven percentage points higher than average14.

Though projected employment growth for the next five years is expected to be flat15, more than 8 per cent of the workforce will need to be replaced in that period to account for workers over 60 today.

Cost cutting by asset owners, particularly in the gas supply chain16, will require increased Government support to meet future training requirements.

KEY GAS SKILL ISSUES

8 Gas Technical Regulators Committee. Gas Regulations and Standards. 9 IBISWorld. October 2016. D2700 Gas Supply in Australia Industry Report.10 Australian Bureau of Statistics. 2015. Business Characteristics Survey.11 Deloitte. 29 October 2014. Rules eat up $250 billion a year in profit and productivity. http://www2.deloitte.com/au/en/pages/media-releases/articles/rules-eat-up-250-billion-a-year-271014.html 12 COAG Energy Council. 19 August 2016. COAG Energy Council Gas Market Reform Package. http://www.coagenergycouncil.gov.au/publications/coag-energy-coun-cil-gas-market-reform-package 13 M. Vertigan. 14 December 2016. Examination of the current test for the regulation of gas pipelines: report. 14 Australian Bureau of Statistics. February 2016. Labour Force, Australia, Detailed, Quarterly, Feb 2016 – Employed persons by Age and Industry division of main job (ANZSIC).15 Department of Employment. 2016. Industry projections – five years to November 2020.16 Chartered Institute of Procurement & Supply. 16 February 2016. Cost cutting ‘top priority’ for oil and gas sector. http://www.cips.org/supply-management/news/2016/february/cost-cutting-top-priority-for-oil-and-gas-sector

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KEY GAS SKILL ISSUES

TECHNOLOGY ADOPTIONAn ageing workforce profile is not ideal when adopting new technology. While many new sophisticated technologies are entering the market, such as gas leakage survey detection drones17 and Directional Drilling18, new types of equipment are also replacing standardised equipment which has been in place for decades (e.g. Gas Valve Technology)19. New technologies are also becoming available that can aid reporting, analysis and fault detection with configurable user dashboards20.

As new technologies demand entirely new skills from the workforce, industry will need to overcome any reluctance it might have against adopting new technologies. Smart gas meters, for example, can offer gas retailers and their customers many of the benefits advanced meters have already provided to the electricity sector.

The technology provides more accurate information about daily consumption and also allows remote disconnection and meter reading, saving gas retailers time and money21.

Despite the obvious benefits and widespread implementation elsewhere22, there are no plans for major smart gas meter installations in Australia.

STRONG COMPETITION FOR SKILLED WORKERSEmployment in the Oil and Gas Extraction industry increased more than doubled in the last decade23, drawing many skilled Gas Supply and Distribution workers into the mining industry. Employment in Extraction is expected to grow further by 12 per cent in the coming five years to more than 30,000 when it will be double the size of the Gas Supply and Distribution industry. The age profile contrasts markedly against the Gas Supply and Distribution industry with more than 30 per cent of the workforce under 3524.

The comparative size and growth of the industry and the ability to offer high wages is likely to put downward pressure on the Gas Supply and Distribution workforce where it’s needed most – among young entrants.

17 Heath Pipeline Services Pty Ltd. Monitoring Fugitive Methane Emissions Utilizing Advanced, Small Unmanned, Aerial Sensor, Technology – Drone. http://gasandoil.com.au/methane-gas-monitoring-drone 18 Utility Magazine. 10 February 2016. What is the current capability of the HDD industry, and where is it heading in the future? http://www.utilitymagazine.com.au/what-is-the-current-capability-of-the-hdd-industry-and-where-is-it-heading-in-the-future 19 Valve Magazine. 29 May 2013. Modular Gas Valves: An Insiders’ Guide to Technology Breakthroughs. www.valvemagazine.com/webonly/categories/technical-top-ics/5162-modular-gas-valves-an-insiders-guide-to-technology-breakthroughs.html 20 NHP. 15 December 2016. NHP partner with Switch Automation to deliver InfoSyte - an exclusive intelligent energy management software system. http://www.nhp.com.au/Media/News/Article/Latest-News/NHP-partner-with-Switch-Automation-to-deliver-InfoSyte---an-exclusive-intelligent-energy-management-software-system 21 Australian Energy Regulator. March 2012. Multinet Gas Network Asset Management Plan 2012/13 to 2017/18. 22 Department of Energy and Climate Change UK. 30 June 30 2016. Smart Meters Quarterly Report to end March 2016: Great Britain. 23 IBISWorld. B0700 Oil and Gas Extraction in Australia Industry Report; OD5529 Coal Seam Gas Extraction in Australia Industry Report24 Australian Bureau of Statistics. 2011. Census 2011: Employment Income and Unpaid Work. Oil and Gas Extraction. http://www.abs.gov.au/websitedbs/censushome.nsf/home/data?opendocument&navpos=200

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Projected domestic and international demand for gas25 and a tightening of visa requirements for the offshore Oil and Gas Supply and Distribution industry26 is likely to contribute to further pressures on the Gas Supply and Distribution workforce.

INTERNATIONAL/NATIONAL WORKPLACE TRENDSThe Gas Supply and Distribution industry is responding to sophisticated technologies such as gas leakage survey detection drones and directional drilling. Further to this are the new types of equipment replacing standardised equipment which has been in place for decades, for example Gas Valve Technology.

As new technologies demand entirely new skills from the workforce, industry will need to overcome any reluctance in adopting new technologies. With an ageing workforce, both job and workplace redesigning will require concurrent strategies to retrain and introduce new approaches to information management as delivered through these technologies.

Annual consumption of gas is expected to effectively triple compared to the period before Queensland LNG exports began. This growth is projected to transform Australia into the world’s second largest LNG exporter and the major supplier for East Asian gas markets27.

Projected international demand and increased gas-powered generation is likely to change the workforce outlook in the medium term as price rises will put downward pressure on domestic gas consumption.

KEY GAS SKILL ISSUES

25 Australian Energy Market Operator. December 2016. National Gas Forecasting Report. https://www.aemo.com.au/-/media/Files/Gas/National_Plan-ning_and_Forecasting/NGFR/2016/2016-National-Gas-Forecasting-Report-NGFR-Final.pdf 26 Department of Immigration and Border Protection. August 2016. Working in Australia’s offshore oil and gas industry. https://www.border.gov.au/Trav/Work/Visa 27 Australian Energy Market Operator. December 2016. National Gas Forecasting Report. https://www.aemo.com.au/-/media/Files/Gas/National_Plan-ning_and_Forecasting/NGFR/2016/2016-National-Gas-Forecasting-Report-NGFR-Final.pdf

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PRIORITY SKILLS

The priority skills results are drawn from Gas stakeholder responses to the IRC Skills Forecast survey conducted in February 2017. In order of priority to the industry, the following skills were identified as the most important for the Gas workforce within the next three to five years.

SKILL CATEGORYTechnicalProfessionalismComputer skillsAdaptabilityOrganisational/Planning

Ranking of the 12 generic workforce skills in order of importance to the Gas Supply and Distribution industry.

GENERIC SKILLTechnologyManagerial/LeadershipCustomer service/MarketingLanguage, Literacy and Numeracy (LLN)Science, Technology, Engineering, Mathematics (STEM)Learning agility/Information literacy/Intellectual autonomy and self-managementDesign mindset/Thinking critically/System thinking/Solving problemsCommunication/Virtual collaboration/Social intelligenceEnvironmental and SustainabilityData analysisFinancialEntrepreneurial

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INDUSTRY REFERENCE COMMITTEES New arrangements for training product development commenced in January 2016. These arrangements consider the needs of employers of all sizes, across all industry sectors, and ensure the delivery of high quality Training Packages that are nationally endorsed and internationally regarded.

Industry References Committees (IRCs):

• Provide a forum for industry engagement.• Direct the review, development and implementation of training package content relevant to

the industry sectors they cover.• Act as a conduit for industry feedback to the Australian Industry and Skills Committee (AISC)

and governments on industry trends. IRCs are composed of individuals and industry members with the experience, skills and knowledge of their particular industry sector. IRCs are supported by independent and professional Skills Service Organisations (SSO) to develop and review Training Packages, and to inform Training Package development priorities.

IRCs have a direct relationship with the AISC, and are charged with identifying industry’s skills needs, developing business cases setting out the case for change, and providing the sign off on training products before they go to the AISC for consideration.

Each IRC will perform the following functions;

• Gather intelligence for their industry sectors to inform advice on Training Package development and review.

• Direct the work of its SSO in the development of industry proposals, cases for change and cases for endorsement.

• Oversight the development and review of Training Packages in line with the requirements of the AISC.

• Provide sign off for industry proposals, cases for change, cases for endorsement and other submissions for consideration by the AISC.

• Direct the work of the SSO in preparing the support materials where funding for additional activities is provided.

• Report to the AISC on progress of its work.• Promote the use of Vocational Education and Training (VET) in the sectors they represent.

BACKGROUND INFORMATION

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GAS INDUSTRY REFERENCE COMMITTEEThe Gas Industry Reference Committee (IRC) has been assigned responsibility for the UEG11 Gas Industry Training Package.

Chair (Interim): Joe Calabrese, UtiliTrain Pty Ltd

http://www.australianindustrystandards.org.au/committee/gas-industry-reference-committee/

The UEG11 Gas Industry Training Package provides the only nationally recognised Vocational Education and Training (VET) qualifications for occupations involved in the manufacture and distribution of town gas through a system of mains and pipelines.

The UEG11 Gas Industry Training Package comprises five qualifications, six Skill Sets, 111 units of competency and associated assessment requirements and covers gas supply operations.

The UEG11 Gas Industry Training Package is in the Scope of Registration of 14 Registered Training Organisations.

IRC SKILLS FORECAST & PROPOSED SCHEDULE OF WORKThe IRC Skills Forecasts focus on the prioritisation of the skill needs of the industry sectors each IRC has responsibility for. They are developed and reviewed annually in consultation with industry stakeholders, and submitted on behalf of the IRC to the Australian Industry and Skills Committee (AISC) for approval.

IRCs are required to consult broadly with stakeholders to ensure a whole-of-industry view about the opportunities and challenges for the workforce and the Training Package review work necessary to meet industry needs.

The IRC Skills Forecast is submitted to the AISC to inform the development of a four-year rolling National Schedule for Training Package development and review work. More information on the National Schedule can be found at: www.aisc.net.au/content/national-schedule

BACKGROUND INFORMATION

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AUSTRALIAN INDUSTRY STANDARDSAustralian Industry Standards (AIS) provides high-quality, professional secretariat services to the Gas Industry Reference Committee, in our role as a Skills Service Organisation. AIS provide services to eleven allocated IRCs which also cover the Aviation, Electricity, Electrotechnology, Corrections, Public Safety (including Police, Fire and Emergency Services, Defence), Water, Transport and Logistics, Rail and Maritime industries. AIS supports these important industry sectors using our world class in-house capability and capacity in technical writing, quality assurance, project management and industry engagement in the production of training packages.

AIS was established in early 2016, 20 years after its predecessor the Transport and Logistics Industry Skills Council (TLISC) was established in 1996. More information about AIS can be found at www.australianindustrystandards.org.au

• We support industry growth and productivity through our modern innovative approach to establishing skills standards.

• We provide high-quality, professional secretariat services to help our allocated industry reference committees develop the skills that industry needs.

• We partner with industry to shape the workforce of the future.

BACKGROUND INFORMATION

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P: (03) 9604 7200E: enquiries@australianindustrystandards.org.auW: www.australianindustrystandards.org.au twitter.com/AusIndStdsLevel 2, 31 Market Street, South Melbourne, Victoria 3205