The great LNG whine got more interesting this morning. From The Australian:
WEST Australian Premier Colin Barnett has confirmed for the first time that Royal Dutch Shell is pushing to develop the enormous Browse gasfield through its revolutionary floating liquefied natural gas solution, as tensions between the state government and the international oil and gas giant continue to rise.
Mr Barnett yesterday declared that the development of Browse via floating LNG technology would be “a silly result” for Western Australia, which would deprive the state and the nation of jobs and domestic gas supplies.
“We would be stark raving mad as a country not to have Australian participation in the development of Australian resources,” Mr Barnett told reporters at the In The Zone conference in Perth yesterday.
“If the project is offshore, there’s very few jobs for Australia, the whole structure will be built offshore, and indeed there’ll be no gas coming onshore at all,” he said. “That’d be a disastrous result for Australia and Australia’s natural resources.”
FLNG ships are designed and built in Korea. Hence the line by Barnett that there’d be no jobs here. But the fact is, for offshore fields, FLNG may well be significantly more efficient. There is no need to lay long pipelines or pay to pump the gas through them over time, for instance. In short, no expensive Australian tradies required.
I support this in principal as the kind of innovation that advances productivity. We’ve already got the Petroleum Resource Rent Tax (PRRT) to extract value for the nation. As Shell says:
FLNG technology represented a way for Australia’s LNG industry to become more cost-competitive in the face of potentially cheaper LNG exports out of the US, Canada and East Africa. “The Australian industry has a major problem in general,” Ms Pickard said, adding that LNG from North America was capable of being delivered to Tokyo for cheaper than LNG out of Australia.
And reducing the cost pressures on local labour will also in time bring down inflation and the dollar, meaning other tradeable sectors do not have to die for mining to rise, leaving us with a more balanced economy.
In the end, when it comes to jobs, all pollies are cut from the same cloth.
