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Tuesday, 18 May 1920


Mr NICHOLLS (Macquarie) .- I should very much like this agreement to be referred to a Select Committee empowered to make the fullest investigations. The Prime Minister (Mr. Hughes) stated that the Government would have to continue the policy of assisting and developing the Australian shale oil industry. I fear, however, that by the establishment of this enterprise we shall practically extinguish the whole of the shale oil companies now operating in Australia. The Prime Minister contends that the agreement will not interfere with them in the slightest degree. There does not, however, seem to be any reason for rushing this agreement through the House. If it were referred to a Select Committee that Committee could make the fullest inquiries in regard to our present shale oil industries, and also as to the personnel of the AngloPersian Company. I have not had time to carefully consider the whole schedule to the Bill, but I have perused it, and can find in it no provision for empowering a private company to establish oil refineries here and to import its crude oil free of duty. If any other private company established refineries here, and attempted to import crude oil, it would thus be crushed out of -existence by this monopoly. That appears to be the stumbling block to the ratification of the agreement. If the Government are anxious that Australia shall have an adequate supply of crude oil, it has an excellent opportunity to develop the oil-fields of the Commonwealth. There is now in operation in

NewSouth Wales a company with 250 square miles of undeveloped oil shale country. The shale is positively the richest in the world. One ton of shale will produce something like 102 gallons of crude oil. The honorable member for Robertson (Mr. Fleming) should be familiar with the territory to which I am referring.


Mr Maxwell - Notwithstanding the fact that ,the company has received a bonus, the quantity of shale oil produced has been infinitesimal.


Mr NICHOLLS - I am prepared, to admit that, but it must be remembered that the corporation has only now reached the stage when it is in a position to produces If the honorable member will read the history of the Commonwealth Oil Corporation, the works of which are at Newnes, he will find that approximately £1,250,000 has been spent on plant and railways. When the deposits there were first opened up, the company was not in a position to treat crude oil, and it was not until after a period of four or five years had elapsed, when Mr. John Fell took control, and when experimental retorts were erected, that the venture began to make any progress. To-day the industry is in a position to compete with other industries of a similar character.


Mr Maxwell - This agreement is to cover only one-half of the requirements of the Commonwealth, and other companies will be in a position to supply the balance.


Mr NICHOLLS - There would be plenty of .scope for the Commonwealth Oil Corporation to continue its operations under ordinary circumstances; but the Government are assisting a private company in such a way that competition by outside companies will be prevented.


Mr Maxwell - This is not a monopoly, because only one-half of the needs of the Commonwealth are to be supplied by the company.


Mr NICHOLLS - To me it is a monopoly, as the provisions of this agreement will be detrimental to other such industries at present operating in Australia.


Mr Blundell - If it is a monopoly it is a Government monopoly, as they hold a majority of the shares.


Mr NICHOLLS - If it were a Government monopoly I would not be opposing it very strongly. If the " Government are anxious to establish industries in Australia, I am prepared to assist; but we should see that such industries are under their control, and not in the hands of private companies.

Tha honorable member for Adelaide (Mr. Blundell) stated that this was a Government monopoly ; but, according to the agreement, the refinery company is to have a capital of £500,000 in shares of £1 each, of which 250,001 will be allotted to the Commonwealth, 249,996 shall be allotted to the company, and nominees of the oil company shall be allotted three shares in the refinery company. The company will therefore hold two shares less than the Government, which means that the Government, with the assistance of the Anglo-Persian Oil Company, will control this monopoly.


Mr Blundell - The Government, if they desire, can control the company.


Mr NICHOLLS - Supposing that the company commences refining operations, is there any guarantee that sufficient supplies of crude oil will be forthcoming from Persia or Papua to keep the refinery in operation?


Mr Atkinson - That is the company's lookout.


Mr NICHOLLS - But the Government are subscribing £250,000, and this company is experimenting at the expense of the taxpayers of Australia. Doubtless, it will make an attempt to develop our oil fields, but if supplies are not available, the company will allow the Government to shoulder the whole responsibility.

If the Government are genuinely desirous of developing our oil resources, why do they not commence at home ? There is ample scope for developmental work, particularly in connexion with our shale oil deposits, which, if properly worked, would enable us to obtain supplies for the requirements of the Navy at the same price as the AngloPersian Company will be able to supply it. For some time, I have taken a considerable interest in- the operations of the British-Australian Corporation, and I do not want to see anything done that will be detrimental to- its interests, because I knew the shareholders of that concern have expended an enormous sum of money in developmental work. I am not particularly concerned in the shareholders' interests, but I do not want to see development retarded in such a way that it will result in men being thrown out of employment. The greatest obstacle in connexion with this- proposal is that if any other refinery were to start, there is a possibility of the Government refusing to allow it to obtain crude oil from abroad.


Mr Maxwell - The Government would not do that.


Mr NICHOLLS - They may do it.


Mr Maxwell - Under this agreement, the Government will be supplied with, only one-half of their requirements, and we must obtain 'the balance elsewhere.


Mr NICHOLLS - Supposing that another industry such as this was started in Australia, would the Government allow that industry to import crude oil, free of duty, and refine it under the same conditions as the Anglo-Persian Oil Company?


Mr Maxwell - There is nothing to stop it.


Mr Gregory - Has the honorable member read paragraph c of clause 14 of the agreement.


Mr NICHOLLS - That paragraph reads : " The Commonwealth will cause to be introduced into the Parliament of the Commonwealth"-







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