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Thursday, 18 May 1939

Mr PATERSON (GIPPSLAND, VICTORIA) - I am glad to have that assurance from the Assistant Minister. In clause 5 1 d reference is made to the acquisition, maintenance, and disposal of stocks of goods in connexion with defence. That covers the storage of oil and other goods. The honorable member for West Sydney (Mr. Beasley) referred at some length to oil in an admirably temperate speech which he delivered last night. He mentioned flow oil, and oil obtained from shale and coal. I desire to make a few remarks on that important subject. There is probably nothing more essential to defence than oil. As is generally known, flow oil is much cheaper than oil obtained in any other way. The landed cost of petrol in the capital cities of this country, free of duty, is about 5d. a gallon. Shale oil is estimated to cost about10.ld. on tank wagons, Sydney, whilst petrol from coal is considerably more expensive than oil from shale. Nothing is more obvious than that flow oil is the most economical. I am convinced that substantial quantities of flow oil can be obtained in Australia.

Mr Blain - On what information is that opinion based?

Mr PATERSON - On the report of the Commonwealth Oil Advisory Committee.

Mr Blain - Who comprise that committee?

Mr PATERSON (GIPPSLAND, VICTORIA) - If the honorable member will permit me to make my speech in my own way, I shall give to him all the information he desires. In December of last year - about five months ago - the Commonwealth Oil Advisory Committee, in a report on the Lakes Entrance oilfield, said that a conservative estimate of the quantity of oil likely to be found on the area which had been tested by bores, was 150,000,000 gallons, or about 600,000 tons of crude oil. Although that quantity is not so great as has been found in certain other oil-fields of the world, it is, nevertheless, sufficient to enable the extraction of 1,000 barrels of oil every day, seven daysa week, for nearly twelve years.

That is a not inconsiderable quantity. Some people seem to think that only a few odd samples of oil have been obtained in the south east. As a matter of fact, more than 100,000 gallons of crude oil has been produced there by the small scale methods hitherto employed. The companies engaged in the work have been mainly concerned with the search for oil. They are not organized for large scale production, because it is necessary for the Government to hold large supplies of oil in this country, and it is prepared to authorize the expenditure of a considerable amount of money to provide huge storage accommodation. At Lakes Entrance we already have a great natural storage of 600,000 tons of oil. How can this be best developed and utilized? In this connexion also, I refer honorable members to the report made by the Commonwealth Oil Advisory Committee last December, in which it is pointed out that while insufficient natural gas pressure is present throughout the area to bring the oil to the surface, the new process known as re-pressuring could be applied. This process is being used extensively in the United States of America and also in Greece. It has been so successful in one area in Greece that the output of oil has increased from 1½ tons to 300 tons a day. The Commonwealth Oil Advisory Committee recommends that the re-pressuring process should be applied at Lakes Entrance. The committee has availed itself of the services of a Canadian expert, who has had a great deal of experience in repressuring, and was actually engaged in the district in Greece, in which such good results were achieved. The report emphasizes that before the re-pressuring can be successfully applied it will be necessary for all lessees and operators in a particular area to agree to unified control. Without this re-pressuring is useless.

Mr Blain - -For what reason?

Mr PATERSON - If the honorable member will possess his soul in patience, I shall endeavour to instil into his mind the reasons. It must be fairly obvious that it would be of little use for one company to put down a bore for the purpose of re-pressuring if another company put down a similar bore just over the boundary of its lease near the first bore. As pressures of 600 lb. to the square inch, and over, are applied in re-pressuring it would be useless to apply this pressure in one bore, if it could escape through some other bore. For this reason, re-pressuring must be applied under a system of unified control over a large area. I understand that complete agreement to undertake repressuring has been reached by companies operating over an area of about five square miles near Lakes Entrance. Expert opinion is that this area is sufficient to allow satisfactory results to he achieved. There is another difficulty, however. A good many old bores have been sunk all through this oil stratum into what is called the water horizon. It will be necessary for these to be cemented down in order to enable re-pressuring, to he applied without leakage. The Commonwealth Oil Advisory Committee recommends that government assistance should be afforded to do this work. Many of these bores were sunk without expert knowledge by some of the pioneers in the search for oil in this country, and it would be unreasonable to expect the companies now holding the leases to incur the expense that would be involved in correcting the errors of persons who, in these cases, have ceased to be actively interested in the search for oil. The Commonwealth Government should grant assistance on a generous scale in order to enable these old bores to be cemented so that re-pressuring could be applied.

The early development of this Gippsland oil-field is of great importance to the Commonwealth, and the new Department of Supply and Development should interest itself in the project. I hope that the Government will announce an early decision on this subject, and advise the companies concerned what assistance will be afforded them to deal with the old bores mentioned. While the honorable member for Indi (Mr. McEwen) was Minister for the Interior, he accompanied me to this field, and I believe that he was very impressed by what he saw. We were there only a few weeks ago, and we saw oil exuding from one bore under natural gas pressure. Oil was also being obtained by hailing from two other bores. The Minister for Mines in Victoria (Mr. Hogan) also visited the district in my company within the last fortnight, and he was equally impressed. I am satisfied that if any amendment of the State mining laws were found to be necessary 'the State Government would he willing to take action, hut I d6 not think this will bo needed. The Minister for Supply and Development, the Minister for Defence, and the Assistant Minister (Mr. Holt) should interest themselves in this project, for it is vital to the success of the defence preparations now engaging their attention. If we could take advantage of this great natural storage, the large quantities of oil there would be of immense value to Australia in time of emergency.

Mr Ward - Why did not the honorable member do something about this while he was Minister for the Interior?

Mr PATERSON - For the reason that the report to which I have referred was made only last December, twelve months after I had relinquished ministerial office. Moreover, re-pressuring is quite a new process. I believe that the adoption of the recommendations in the report would usher in a new era in the oil search history of this country. I remind the honorable member for East Sydney (Mr. Ward) that in 1936 and 1937, when I was Minister" for the Interior, I took active steps to assist those who were searching for oil. Every obstacle to the early development of this field should be brushed aside, and all possible assistance given to those who desire to apply this new process in this country.

This afternoon the honorable member for Swan (Mr. Gregory), and this evening another honorable member, referred to the possibilities of charcoal gas as a motor fuel. The Minister for Defence and the Minister for Supply and Development should co-operate in giving full consideration to the possibility of our using this fuel in time of war. In 1937, when I was Minister for the Interior, I had an experiment carried out in Melbourne with a motor lorry, fitted with a producer gas engine, using charcoal gas. The loaded gross weight of the vehicle was about ve and a half tons. It was taken for a trial run in the Dandenong Hills and tested on some of the steepest grades to be found there. It was stopped and restarted many times on the hills, and altogether it was put through a very gruelling test. It covered a distance of 62 miles for a total cost for fuel of less than 2s. 6d. When the charcoal was put into the container on the vehicle only two minutes elapsed before the engine was started. There is an ample supply of charcoal in Australia; at any rate there is no lack of the raw material to produce it. This matter should be looked into as fully as possible by the Defence Department. When the test to which I have referred was made, I forwarded the report on the performance of the vehicle to the Defence Department for consideration. The one drawback is that charcoal has rather more bulk than petrol, and therefore requires more space on the vehicle using it. That is the only disability, apart from a slight loss of power. The experiment was very satisfactory.

I disagree entirely with the criticism offered by some honorable members opposite that the proposed annexes to munitions establishments should be confined to Government workshops. It seems to me that in the dreadful event of war the Government must be in a position to marshal the whole of our manufacturing resources and skill whether they are under government or private control. I agree entirely with what has been said by honorable members regarding the desirability of making it impossible for armament manufacturers to engage in profiteering. Even the most extravagant statement that has been made by honorable members on this aspect of munitions manufacture are not too strong. I cannot, however, believe that any harm will be done by carrying out the Government's proposals, or that in this country we shall ever reach the stage when there will be any incentive to make war pos sible in order to secure profits from the manufacture of armaments. It is only right that, in times of emergency, the Government should be able to marshal all of the country's manufacturing resources, whether governmental or private, for a supreme effort in order to be victorious. If all of these " shadow factories ", as they have been called, were attached to railway workshops and other government establishments it might not be possible to staff them. In war time it would be essential to utilize the services of skilled engineers and artisans in private employment, and this can best be done in the establishments in which they are engaged. I agree that there should be an effective limitation of profits. It has been suggested that the Commonwealth cannot do much to check profits, because its powers are strictly limited. . It is true that Commonwealth power in respect of trade and commerce is limited; the Government cannot fix the price of any commodity. But that limitation would not operate in time of war. Under legislation such as the War Precautions Act, the Commonwealth would have power to do almost anything. This legislation will apply in time of war - which, please God, may never come - and it will also apply in times when we may fear war but nevertheless be at peace with other nations. I believe that the efforts now being made by the Government to meet the situation will be adequate, and will result in so effective a limitation of profits as should satisfy any reasonable man. The one great danger which I see in this bill is the wide authority which it may give perhaps to some unknown Minister of the future. But I cannot think of any phraseology by which the bill could be amended in order to place some limit on these powers without, to a great extent, destroying the purpose of the bill. We must trust the government of the day. I would, however, ask the Government, before the second reading is carried, to indicate exactly what the position will be with reference to the Tariff. Board. I have received an assurance, by way of interjection, from the Assistant Minister (Mr. Holt), but I think that if this point could be thoroughly cleared up it would give some degree of reassurance to honorable members who fear the very wide scope of the measure.

Debate (on motion by Mr. Anthony) adjourned.

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