The Gillard Government has stared down union demands to force petroleum giants such as Royal Dutch Shell to process huge gas reserves onshore to boost local jobs, paving the way for the use of floating LNG on Woodside's $40 billion Browse project.
Unions have attacked the Government in recent weeks over the issue, saying FLNG would cost jobs at the expense of overseas shipbuilding yards. They wanted the Government to use its manufacturing support policy, released this week, to force the issue. But the policy did not contain any references to FLNG or other union and industry demands to force petroleum companies to provide cheap gas.
Shell has said WA's exploding costs have forced it to go slow on land-based processing and accelerate its giant FLNG tankers.
This comes just weeks before it and its partners on the Woodside-led Browse project are to report back to Government on the land-based site's viability under its retention lease obligations.
The Federal Government is on paper committed to the James Price Point site, but Environment Minister Tony Burke has yet to tick off on the plan and this month said that processing the gas offshore would pose fewer environmental hurdles than a gas hub on land.
When asked directly whether the Federal Government would compel onshore gas processing, a spokeswoman for Industry and Innovation Minister Greg Combet directed _WestBusiness _to the general principles of its manufacturing support policy, saying it was against explicit intervention in the market.
"The Government's plan for Australian jobs does not mandate local content or impact significantly on project costs, but will ensure local manufacturers and service providers are given a fair go to win jobs, big and small, on both onshore and offshore projects," Mr Combet's spokeswoman said. Mr Combet is due to speak to the Australian Workers' Union conference on the Gold Coast today.
His statement marks the first time the Federal Government has touched on the issue. Even ministers such as WA MP Gary Gray, the former Woodside executive whose marginal seat of Brand is at the forefront of the FLNG debate, refused repeated requests from _WestBusiness _to comment on the issue.
AWU State Secretary Stephen Price, who is at the AWU conference, said there were excellent elements of the manufacturing plan, but the report missed "a golden opportunity" by not being tougher on FLNG.
He said it was unclear how the Government's requirement that resource projects above $2 billion have a local content officer would work on an FLNG venture that was dealing solely with overseas suppliers.
Federal shadow minister for Industry and Innovation Sophie Mirabella said it was against "mandating for more red tape".
Premier Colin Barnett has vowed to oppose FLNG but not said how.