Work and Employment Relations in the Offshore Natural Gas Industry — ASN Events

Work and Employment Relations in the Offshore Natural Gas Industry (16396)

Bradon Ellem 1
  1. University of Sydney, Sydney, NSW, Australia

The development of the offshore liquefied natural gas (LNG) industry is a major development in energy supply across south Asia and north-western Australia. The Gorgon LNG project is led by two of the biggest corporations in the world: Chevron and Royal Dutch Shell. The geography of this expansion is striking: the Asia-Pacific is the source of well over half the world’s demand and, increasingly, of production. The increasing proportion of exploration and production in the Asia-Pacific region, as opposed to the more established sites in the Middle East, poses fundamental questions about sustainability and planning, as well as the central issue here, employment relations on new LNG projects. The Gorgon gas project is the biggest ever resource project in Australia – and has become highly controversial. Originally costed at USD37 billion, when work began in 2009, the Gorgon budget is now running at USD54 billion; scheduled to have first gas in 2014, the timing is now in doubt. Cost over-runs and delays are attributed by employers and business lobby groups in part or wholly to labour – be that labour law, trade unions, labour productivity or indeed workers themselves. For the most part, the claims have been made without any serious analysis of the nature of megaprojects in general, the production and contracting networks of which Gorgon is part, or of the industry’s work processes. Explaining why the Gorgon project has become so controversial is something of a problem: much commentary focuses on the allegedly destructive role of the Maritime Union of Australia, yet one estimate puts maritime wages at less than one per cent of the total budget. The cost and time blow-outs therefore need to be explained in other ways. This paper situates the local arguments in a global context to explain why the arguments are so important – this is as much to do with the future, in other sites, as the here and now – and it draws on focus groups and interviews with workers to examine experience at the point of production. This approach throws into doubt arguments about what is wrong with the project and it recasts how we see the industry overall.