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Thursday, 12 April 1973
Page: 1422

Mr ANTHONY (Richmond) (Leader of the Australian Country Party) - I wish to speak to the statement that has been made in the House by the Minister for Minerals and Energy (Mr Connor). I believe this to be a major policy statement. It is regrettable that we have not had more time to examine it so that there could have been a more informed debate by honourable members on this side of the House and a closer examination of the impact and the consequences of the statement. This debate could have been adjourned but I think from the experiences of the last few weeks there would be great doubt in the minds of members of the Opposition as to whether the debate would ever come on again so that we would have an opportunity to speak on this matter. So I speak today to this statement which I see as highly significant. I see it as a blueprint towards nationalisation of the Australian petroleum and gas industry. I believe that stemming from this statement today we will see the encroachment of bureaucracy into this area of commerce in Australia. There is no mandate for the Government to move in this direction. There was no statement in the policy speech of the Australian Labor Party that there would be created a national petroleum and minerals authority which would have control over the exploration, assessment of resources, development, transportation and the refining of minerals or petroleum in this country.

We can see from this statement that the Labor Party is standing behind the resolutions of the 1971 ALP Federal Conference held in Launceston. Apparently every Australian now has to read the results of that Conference to determine what the Labor Party suggests it has a mandate to do. In other words, the people at that Conference - not the members of Parliament - determine the policies of the Australian Government. I see this emerging as the socialist instinct of the Labor Party. The Labor Party seems to regard big business as a bogy. If it is big, it is bad. If it is foreign business, it is twice as bad. The Labor Party is now launching its attack on the oil and gas industry in Australia. I see this as a very disastrous move for Australia. There will be. disaster because this move will create doubts and uncertainty in the minds of those people who are willing to invest their money in companies which carry out exploration to find the necessary energy resources that we will need to meet our demand during the balance of this decade. If the present rate of exploration is not maintained or indeed is not built up, we will have such a deficiency of petroleum in this country by 1978 that we will have to rely extremely heavily on imports of petroleum.

The action of the Government in announcing today that it is to move into these areas must create doubts and fears in the minds of the people who are already active in them. There are methods of controlling companies which operate in the areas of gas and petroleum in this country. There are Commonwealth laws and there are State laws. These laws initially extend from the granting of exploration leases right through into every phase including the control of the retail price of petroleum. But apparently this is not good enough for the Government. It intends to move into these areas in much greater depth. The Government has to become more and more involved. The history of oil exploration in this country has not been a very exciting one. Until the early 1950s it was the popular belief that there was no petroleum to be found in Australia. Many holes had been drilled over a period of half a century and all had proved to be dry. Geologists believed that

Australia was too ancient a country to produce oil, that the sedimentary basins were J ry. Not until the discovery of oil at Rough Range in 1954 was new life given to exploration programs in this country.

Why did that discovery take place? It took place because the Bureau of Mineral Resources had carried out an assessment of likely resources of petroleum in this country and had interested the Ampol Petroleum Co. Ltd in undertaking a drilling program. Ampol discovered that it did not have the necessary financial resources or the knowhow to become involved in this work, so Sir William Walkley travelled around the world and interested the California-Texas Corporation in forming WAPET. As a result of this effort, bringing in overseas risk capital and knowhow, Rough Range was discovered. This discovery also resulted in a decision by the then Government to give incentives by way of subsidies for oil drilling and taxation concessions to encourage people to invest in exploration. We needed to find oil to try to replace our heavy import requirements. But another discovery of oil was not made in this country until 1963 when oil was found at Moonie. A period of 9 years had gone by and a lot of people had despaired. During that time almost 100 holes were drilled, every one of which was dry and investors thought that they were wasting their money.

This discovery was closely followed up by a discovery on Barrow Island. But even the Barrow Island discovery required the drilling of 100 wells before that field could be declared economic. A sum of $100m - Si 00m of risk capital - went into proving that ground. This was the amount spent by an overseas company which had the knowhow that we did not have in this country. As a result of these 2 discoveries many many more companies were formed. We saw the establishment of Australian companies, joint Australian and overseas companies, and overseas companies. They came in and they spent money. It was not until the discovery of a substantial oil and gas field by Esso-BHP on the Gippsland shelf off the Gippsland coast that this exploration paid dividends.

It is worth looking at the discovery which took place on the Gippsland shelf because after the Broken Hill Pty Co. Ltd had carried out its original survey it realised that it did not have the capital - Australia's biggest company did not have the sort of risk capital required - or the knowhow to be able to do the job. So representatives of the company went off round the world and talked to international oil companies to see which company would be interested in joining up with BHP. Eventually the Esso Company agreed to do this. It took almost 5 years after the discovery of this oil for the fields to be brought into production. During this time enormous amounts of money had to be spent. There were no other significant discoveries of oil or gas in this country after 1965 until 1971 when Woodside-Burmah discovered a large deposit of hydrocarbons basically in the form of gas on the north-west continental shelf. That company was offered a very substantial lease in that area when no one else was interested in taking up the options available. It drilled and found some smells of hydrocarbons. The company went on and spent $100m in drilling holes until it got a proven field. I heard the honourable member for Hawker (Mr Jacobi) talk as though this were one of the biggest fields in the world. The estimated size of the field is 20 trillion cubic feet of gas which is not big by world standards. Some of the fields in Siberia have an estimated capacity in excess of 200 trillion cubic feet. So let us not be extreme. Although the north-west continental shelf field is a significant and important field for Australia it is just one of the fields around the world.

The Government is now giving notice that it will move into these areas and that it will do the work and use public funds - the taxpayers money - to chase oil in this country. Let me assure the Government that even in those parts of the world where oil is known to be, where there are relatively proven areas, only one out of 12 holes proves to be successful. The Government will be getting into a very expensive business if it moves into the business of offshore drilling. Of the 5 rigs commissioned around Australia only 3 are operating at the moment. These three are being operated by Woodside-Burmah on the north west shelf. It costs $33,000 a day to operate each one of these rigs. The cost of operating the 3 rigs is $100,000 a day. Already this year the company has lost 30 days because of cyclones and strikes which means that a total of $3. 25m has been lost in unproductive time because of these factors. Yet this is the sort of business that the Government is talking about getting into. Apparently the Government gives this activity a greater priority than it gives to other areas of government responsibility that it should be attending to, such as social welfare and helping the needy in the community.

We have the chance of attracting overseas interests to this country who are prepared to come in and spend their risk capital and to try to develop our resources. But the Government is not satisfied. It wants to use Australia's already important and strategic financial resources to spread its activities to all aspects of industry. Let us consider the cost of running the north-west shelf field where deposits of gas have been found. These deposits now need to be developed and it will cost from $300m to $400m over the next 5 years to make this field productive. To continue proving the fields over this period will require an expenditure by the company alone of $30m to $40m. Is this what the Government will do?

I mentioned earlier that I believe that the Government's policy is a policy of disaster as far as meeting our energy requirements by the end of this decade is concerned. I say that, because if the Government frightens private industry and creates doubts as to the certainty of its investment in this country it will have to come in and replace that capital. The Government will require at least $100m for exploration each year on top of the funds needed for development purposes which, as I mentioned before, will run to $400m or $500m in the initial stages of the operation of the northwest shelf field alone. I believe that if this is to be the approach of the Government - this socialist Government - it is putting its priorities in the wrong place as far as the expenditure of public funds is concerned. So I have grave reservations about the statement made by the Minister today. I believe it to be a doctrinaire statement which illustrates the Government's obsession to get into the private sector of the economy. The way the Government is carrying out its objectives is hamfisted, because from what I can find out already there has been no consultation at all between the Government and the people who understand the problems of the industry. The Government is just barging in with stand and deliver tactics on the industry because it has an obsession about big business, and big business is overseas business.

Debate (on motion by Mr Daly) adjourned.

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