Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Friday, 14 May 1920

Mr FENTON (Maribyrnong) . - I agree with many other honorable members who have spoken during this debate, that a considerable amount of time might be saved if the agreement is referred to a Select Committee of the House, because if it is to be taken seriatim the debate is likely to be very protracted. If, however, it is referred to a Committee, and a report is presented to the House in three weeks' time, it is quite likely that, with the information then available to honorable members, the Bill will be agreed to unanimously. In all these great financial transactions we might very well follow the example of the House of Commons, which refers all proposals entailing a considerable expenditure of money to Committees. In connexion with the Profiteering Act of 1919, Select Committees were appointed, at the instigation of Mr. McCurdy, a member of the British Cabinet, and as the Profiteering Act dealt with a variety of subjects and industries, one Committee investigated the shipping side of the problem, and another inquired into the question of oil supplies in Great Britain.- The latter Committee submitted a brief report, which appears in the London Times, and for the information of honorable members I shall quote the conclusions arrived at after an exhaustive investigation. The report stated -

We find that-

1.   There is grave danger of a permanent world famine in motor spirit, even at fabulous prices.

After analyzing the present and potential oil supplies of the world, the Committee arrived at that very important conclusion. It went on to report that -

2.   The sole remedy for this country is a largely increased production of home and/or Empire produced motor fuel.

3.   Power alcohol is the only potentially unlimited source of supply.

4.   The Government should use every possible means to foster the production of power alcohol and place no restriction on the production and use of power alcohol in this country.

Mr Corser - Surely we need not have any investigation as to power alcohol. The matter has already been investigated here.

Mr FENTON - But since the British Government thought it worth while to investigate these matters, surely we should have an inquiry before we enter into an agreement of this kind. We have had quite recently a concrete illustration of the expedition with which a Committee can report. The Select Committee appointed only four weeks ago to inquire intothe question of sea carriage has already presented to the House a progress report of a very valuable character. In order that the House may be supplied with the fullest information, and so placed in a position to arrive at a proper conclusion in regard to this agreement, we should have an inquiry. This proposal for a Select Committee is entirely non-party. Surely the mere fact that it has emanated from the Leader of the Opposition (Mr. Tudor) should not give to it a party tinge? A Select Committee would be able to analyze the agreement, obtain further information, and report to us within three or four weeks.

This agreement will bind us to the company for the next fifteen years. What will be our position at the end of that period 1 Are we to remain at a stand-still in the matter of the invention and discovery of motor power ? Already we have power alcohol, benzol, and a new product known as natalite competing with petrol. Fifteen years hence, in the matter of power, our position will be very different from what it is to-day. I believe that oil fuel will have competitors that will push it right out of the market. All over the world chemists and other experts are at work looking for substitutes for petrol, because we are faced with a famine in respect of motive power, and fifteen years certainly seems to be a long time to be bound to one company. The Public Accounts Committee conducted an inquiry into the Papuan oil fields, and examined Dr. Wade, who is the only expert representing the Australian Government. -Itreported that -

The opinion of one experienced witness was to the effect that the prospects of obtaining oil in Papua are distinctly good. At the same time, he added, " we have to remember that oil, being liquid, and able to migrate, its accumulation comes under very different laws from those applying to any other mineral; it is the biggest gamble on earth. The thing is to be able to locate the place where the geological conditions are suitable for the accumulation of oil in the pools, and then to bore for it. But in one of those places some little accident in the geological structure underground may have led up to the escape of the oil and its migration elsewhere."

For this reason the witness thought that " there ought to be as many people as possible trying to get oil. The more people there are in New Guinea putting down bores and trying to develop the field, the more likely is it to hit the place for a big supply."

I should like the production and distribution of oil in Australia to be a Govern ment monopoly. The distribution of petrol, and also kerosene, I think, has been made a Government monopoly in France, and is yielding a revenue of something like £2,000,000 per annum. The majority of honorable members, apparently, are averse to the carrying on of this industry wholly and solely by the Government, and are determined to give the Anglo-Persian Oil Company an opportunity to develop our oil resources in Papua. Why not allow other great oil concerns to step in? I admit that we have not made very much progress in Papua during the seven years in which we have been engaged in oil development there. We have expended £21,000 on the work, and the Anglo-Persian Oil Company is going to benefit by that expenditure, which was largely incurred in clearing the country. We have cleared the way for this company to step in and take advantage of the spade work done by the Commonwealth. As the result of our outlay, it will be able to secure a profitable output sooner than would otherwise have been possible. In that respect alone, we are giving the company a great concession.

Mr Poynton - What concession are we giving the' company ? It is merely to be our agent, andwe shall pay it for the work done. It will not participate in any discovery made.

Mr FENTON - Oil has already been discovered in Papua. Two . men who were non-experts were the first to make the discovery, and their dependants have got very little out of it. The presence of oil has been located over a number of square miles in Papua, and any company now entering into the industry has only to further explore the fields already discovered. Dr. Wade is the only expert representing the Commonwealth Government, and we ought surely to be prepared to take his advice. He has said that if we intend to allow private enterprise to enter these oil-fields, then the greater the number of persons, that we have boring for oil the better. Since the Government have determined to depart from the policy that has been followed for some years, and to allow private enterprise to step in, we ought to say to every company, " You can come in under conditions similar to those which we are laying down in respect of the Anglo-Persian Company, and bore for oil in Papua and Australia," The greater the number of experts we have at work the sooner shall we have an adequate supply of oil. Why limit this undertaking to one company, especially when we know that its antecedents are, in some respects, no better than those of some of the biggest combines in Australia? Something has been said as to the guarantee we have in the presence of Lord Inchcape as a representative of the British Government on the company's board. The Minister for Home and. Territories (Mr. Poynton), who is now in charge of the Bill, not long since pointed out in this House the serious competition to which the Commonwealth line of steamers was subjected. I would ask him who was the man he had in mind when he made that statement? He was able to inform the House that, under the chairmanship of Lord Inchcape, a great shipping concern had obtained control of practically half our British bottoms, and it has since swallowed up many more small shipping companies. The honorable member for Flinders (Mr. Bruce), in 'dealing with this Bill, said that, so far as he could see, the only profit that the Anglo-Persian Oil Company would make under this agreement would be by carrying crude oil from Persia to Australia, and refining it here. It will obtain two profits - a profit on the production, of the crude oil and a profit on its carriage from Persia to Australia. Having taken these two big bites out of the profitable cherry, it will allow the Commonwealth to take a small bite out of the remaining piece. If the Government are going to change their policy in regard to oil development, let them throw . open our oil-fields to the world.

With the decline in the production of gold in Australia, we shall have to look more and more to our primary industries, and particularly to the pastoral and agricultural industries, for our development. Power alcohol is coming into the field more largely than ever. It is said that this is a petrol age, but we know that Germany during "the war was cut off from her supplies of petrol, and by resorting to the production of power alcohol, was able to carry on much of her transport operations. Think of the number of vegetable products from which power alcohol can be produced. It is extracted from molasses, sugar-cane, sorghum, wheat, oats, barley, maize, kaffir corn, potatoes, sweet potatoes, beet, sawdust, wood, prickly pear, fruit, vegetables, honey, and palm trees. Any plant which produces starch or sugar can be used for the manufacture of natalite; in other words, anything which contains starch and sugar will produce power alcohol.

Mr Fleming - Practically it can be obtained from everything that grows.

Mr FENTON - Yes. I know that a good deal of alcohol is used for internal combustion, but it is the wrong kind of internal combustion. I am aware, too, that if alcohol be used for power purposes there are some persons who will not hesitate to consume it even in its raw state. In Germany, to prevent that being done, nauseous ingredients have been introduced into it. That country also imposes a severe penalty upon any person convicted of consuming alcohol which is intended to be used only for power purposes. France is about to follow her example. In connexion with this Bill we have to consider not . merely power alcohol, but many other articles, such as benzol. Our gas companies, for example, are operating under an old Act, which compels them to provide gas possessing a standard of illumination, whereas, if they were obliged to provide gas possessing a calorific value they would .be able to extract benzol from their coal, and thus supply a substitute for petrol. These are the lines upon which it is suggested that the British Government should act. Whilst I am in favour of referring this Bill to a Select Committee, I 'am also in favour of doing all that we can to develop our oil resources. En fact, the report presented by the Finance Committee recommended that the Ministry should go ahead with a more vigorous development of the oil industry, either from shale or crude oil. The Government might reasonably adopt the amendment of the Leader of the Opposition, and appoint a Select Committee to inquire into this matter. By that means the passage of the Bill would be expedited, and the public suspicion that everything is not quite above board would be dissipated. To me it is nothing that the British Government, in their agreement with the Anglo-Persian Company, asked for only two directors out of a total of fourteen. I do not wish to be hard upon the Imperial authorities, but I believe the British Governments and

British, parliamentarians are far more susceptible to outside influences than are Australian parliamentarians.

Mr Lister - That is a very serious reflection to make.

Mr FENTON - If the honorable member will refer to the history of persons who have taken a prominent part in Imperial politics, he will see that some of them who should have been relegated to obscurity have been appointed to very high positions. Take the Marconi scandals, with which a number of members of the British Cabinet were associated. One of those members, in particular, has since been appointed to one of the highest offices in the United Kingdom. Know ing that the3e things are taking place, the fact that Lord Inchcape represents the British Government in this matter is no inducement to me to vote for this Bill. That gentleman possesses great control, particularly over shipping, and is associated with a body of men who are neither fools nor philanthropists. They are out to make money, and if they can make it by establishing an oil refinery in Australia they will do so. In war time the British Government itself proved to be one of the greatest profiteers in the community. Under this Bill the AngloPersian Oil Company will supply Australia with only half its annual requirements in the way of products other than fuel oil. It will be two years before we get a drop of oil from the refinery which it is proposed to establish. What will happen to us in the meantime? We shall be dependent upon the very people whom honorable members opposite so vigorously denounce. What happened to Britain? Out of a total of 300,000,000 gallons of oil required by her annually, the American companies have supplied 200,000,000 gallons. In this connexion I desire to read a paragraph written by Professor Chester Lloyd Jones, of the University of Wisconsin, in which he says -

At present there can be no doubt that the most important economic development of this sort which has occurred to the south of the United States is in oil resources. The most important among these thus far are those in Mexico, a country which in 1001 produced but 10,345 barrels, which began exports a decade later, and which produced in 1917 55,292,770 barrels, a large share of which went to keep the fires burning in the ships of the Allies in their struggle against Germany. In 1918 there were shipped from Mexican ports 53,919,863 barrels. From producing practically nothing at the beginning of the war, Mexico has risen to what is probably second place among potential oil producers, for the oil marketed is now limited, not by the capacity of the wells, but by transportation facilities.

I shall vote against the second reading of the Bill; and shall support the motion of the Leader of the Opposition to refer the measure to a Select Committee, in order to remove the public suspicion with which this matter is surrounded.

Suggest corrections