One Man's Cost Cut is Another Man's Cost Blow-out

[Tree]

Since Aussie labor costs are THE HIGHEST in the world for Oil & Gas workers doesn't it makes a wee bit of sense to avoid as many Aussie workers as possible in an Aussie Project?

Responsible financial efforts are met with the predictable nonsense.

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Woodside’s offshore FLNG push puts WA jobs and safety at risk

Attempts to cut costs by building the Browse LNG processing facility off the WA shore could be disastrous for jobs, the environment and workers’ safety, the Maritime Union of Australia warned today.

Despite opposition from unions – as well as bipartisan political opposition - it appears Shell is not backing away from plans to push its floating liquid natural gas (FLNG) technology on the Woodside Petroleum-operated Browse LNG project, located near Broome.

“Woodside and its joint venture partners do not care about supporting the Australian economy and jobs – putting the facility 200 kilometres away from our coast is an attempt to cut out local workers, cut out local content, and cut out local laws,” MUA Assistant National Secretary Ian Bray said.

MUA Assistant National Secretary Ian Bray

“All the unions in this industry – the MUA, AWU and AMWU – are strongly opposed to the offshoring of the processing site on the basis of safety, employment and environmental concerns.”

Chris Cain, Secretary of the WA Branch of the MUA, said that under current laws, unregulated foreign labour could be used on the offshore site, but that the MUA would be engaging with the Federal Government to ensure this did not happen.

“This is a shortsighted measure to cut labour costs on both construction and operation of the facility,” Mr Cain said.

“It’s no surprise BHP has decided to exit the joint venture – there is a potential disaster looming with this proposal that Shell has been pushing.”

The MUA will be seeking todiscuss this issue with the Federal Government to ensure appropriate national standards around labour, employment, safety, and disaster management are applied - and that the processing remains onshore in Australia.

[admin]

It won't surprise you, but I have to take issue here. The logical conclusion of what you say is to jubilate at all corporate efforts to circumvent all local regulations, customs, wages, benefits, etc., by moving elsewhere (or merely threatening to move elsewhere).

While this would produce a sort of capitalist nirvana of capital being unencumbered by any local requirement, the ensuing race to the bottom in terms of regulations that ensure decent living standards, health standards, and the like (you know, the stuff that keeps horse meat out of beef products or terribly toxic lead out of petrol, or merely keeps wages in line with productivity rises so that production actually meets demand) isn't everyone's cup of tea...

That doesn't mean that in some instances, some local requirements and regulations are unhelpful and/or excessive, but I think these have to be dealt with on a case by case basis, not with sweeping generalizations.

[Tree]

Not at all STP. LNG costs need to be managed and FLNG is just one way. The Aussie O&G labor costs are already the HIGHEST in the world. There is no corporate virtue in overpaying for steel, compressors, engineering, design or labor. I bet you Argentina's inflation rate times any amount you want to put up that this Union Head wouldn't have a problem with Shell's FLNG or it's disastrous effect on the environment if it were built and managed by his boys.

[admin]

I should perhaps have stressed that I wasn't discussing, or even questioning, the merits of this particular case but took issue with the underlying logic, which, if generalized, would open up a dystopian race to the bottom in terms of regulation, wages, benefits, safety, environment, rights, you name it. I believe in at least some countervailing power is necessary even where that creates problems of its own.

I don't know enough about this case specifics to give any opinion that would count for anything (assuming I was able to do that in the first place even if I had the specifics..).

[Tree]

Good thing FLEX appears to be dead then in Gulf LNG I guess. I'd hate for a cost saving measure like a FLNG to "open up a dystopian race to the bottom in terms of regulation, wages, benefits, safety, environment, rights, you name it." (even if it makes fiscal, environment and ethical sense.)

[admin]

Good thing FLEX appears to be dead then in Gulf LNG I guess. I'd hate for a cost saving measure like a FLNG to "open up a dystopian race to the bottom in terms of regulation, wages, benefits, safety, environment, rights, you name it." (even if it makes fiscal, environment and ethical sense.)

Although I somehow have a feeling that is not quite what I tried to argue, I'll give you this one and agree that an FLNG is often a great idea.

[Justin94360]

"Woodside’s offshore FLNG push puts WA jobs and safety at risk"

Has anyone told Wayne that not only his job but his safety is at risk from FLNG!!!

[Tusker]

Good thing FLEX appears to be dead then in Gulf LNG I guess. I'd hate for a cost saving measure like a FLNG to "open up a dystopian race to the bottom in terms of regulation, wages, benefits, safety, environment, rights, you name it." (even if it makes fiscal, environment and ethical sense.)

Although I somehow have a feeling that is not quite what I tried to argue, I'll give you this one and agree that an FLNG is often a great idea.

Both togeather near shore would be a great idea.  FLNG near shore via causway would be cost effective versus 200 Km of sea and

air support.  Not even mentioning when the ground moves or when the wind blows. Some one I am sure thought of that.

Cheers.