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Wednesday, 16 May 1973
Page: 2204


Mr JACOBI (Hawker) - I rise to support the Bill and to compliment the Minister for Minerals and Energy (Mr Connor). The Bil) contains a part of the Australian Labor Party's long standing fuel and energy policy. I refer to the setting up of a national pipeline body to link Australian petroleum fields of proven reserves. The present Opposition has had nothing comparable at all. I was interested m the remark passed by the honourable member for Stirling (Mr Viner) about the Government's jigsaw puzzle. Might I point out to the honourable member that after almost a quarter of a century of Tory government in this country we came into office to find this area in complete shambles. We found on taking office that there was no balanced evaluation at all on a national basis, particularly in the crucial area of fuel and energy. The task was left to this Government to clean up what in fact was a complete mess.

The Pipeline Authority has already been likened to the Snowy Mountains Corporation in its scope and in its importance. I was rather intrigued with the remark of the honourable member for Stirling about the insidious growth of the national Pipeline Authority. Does he consider that the Snowy Mountains scheme was an insidious project? I can well recall, I think from 1947 to 1949, that his own Party boycotted it. I do not know of a more efficient organisation. In fact it was equally as efficient as perhaps one of the largest in the world, the Tennessee Valley Authority in the United States. The initial estimated cost of the Snowy Mountains scheme, which was completed this year, was $800m. On completion the. cost was exactly $800m. If that is not efficiency, I do not know what is. That scheme plays an extremely valuable role in Australia's economic fabric and also it returns to the Government a handsome profit each year. What 1 am trying to point out is this: The function of the Snowy Mountains Corporation when it was proposed was criticised as being outside the Commonwealth sphere. That was put up in 1949. I am not suggesting for a moment that this is the argument which the Opposition is putting in relation to the legislation before the House. But it is as untrue today as it was then in relation to the Snowy Mountains Corporation, and it is even more untrue in regard to the Pipeline Authority.

The Commonwealth should be very concerned with natural resources and works that: (1) Are important for defence; (2) involve land acquisition on a large scale; (3) involve (potentially) harm to the environment; (4) are situated in areas remote from seats of State Government; (5) involve a large capital investment; (6) play a potentially large role in the maintenance of balance of payments; (7) involve the seabed around Australia; (8) are national in scope but are subject to conflicting State laws; (9) are situated on Federal territory; (10) are required by citizens in Federal territory; and (11) promote decentralisation. Does the Opposition disagree with that analysis? All of those points underline concerns of pipeline building and maintenance and therefore point to Commonwealth control. If there had not been tardiness by the previous Government the Commonwealth would be giving the States the lead in legisation on this matter.

I was interested also in the remarks passed by the honourable member for Stirling about national aspirations and ownership. He said that ownership means the individual - you and I. Let us analyse the position insofar as the Palm Valley-Sydney link-up was concerned. I suggest that the position with regard to the fight for control of the pipeline from Palm Valley to Sydney was not, in my humble view, over concern to capture the indigenous market. Rather it involved the long term export market potential. Hence the fact that there is to be a 34-inch pipe. Let us take the current figures in South Australia. I do not suggest for a moment that different figures apply insofar as the 20-year contract for the Palm Valley to Sydney pipeline is concerned. But there is a vast difference between the gate price of 16c a thousand cubic ft and a price of $1.25 a thousand cubic ft at the other end which would have been the terms of the agreement between Magellan Petroleum Australia at Palm Valley and the Pacific Lighting Co. of the western seaboard of the United States.

This national Government is faced with a world energy crisis. Let me compare the figures of the static index and the exponential index insofar as oil and gas are concerned. On the static index we have sufficient reserves of gas resources for about 30 years. On the exponential index the estimate is about 27 to 28 years. It seems deplorable to me that one should be faced with the situation that exists today. Most national governments of the world have reached the stage where no longer can they permit corporations or multi-national corporations to have control over fuel and energy resources and any government that opts to do so is acting completely irresponsibly.

The previous Government subjected itself to the influence of foreign owned companies. The honourable member for Stirling talked about individuals. What does he mean by individuals? Most of the resources of this country in terms of gas and crude oil regrettably are under the control of overseas corporations. Palm Valley is largely controlled by Magellan, United Caruso, Freeport Sulphur and Pantepec which are all of the United States. The only equity that I can recall or understand on Palm Valley is in fact Flinders Non-Liability, and from memory I think we have about 9 per cent of that. If we look at the north-west shelf of Western Australia we find that exactly the same situation applies. We have now reached the stage where overseas corporations control that vast holding to the extent of almost 87 per cent. We have about 13 per cent equity left in that area. The same thing applies equally in respect of Bass Strait where Broken Hill Pty Co. Ltd and Esso are working. Esso-Exxon has a 50 per cent equity in this venture. This is the first of the 7 big multi-national oil corporations.

How much longer can we go on with a situation in which most of the important reserves in terms of fuel and energy in this country could in fact have been controlled, dissipated and exploited by overseas corporations. The other field to which I want to make some reference because I think it is apposite to a matter that was raised this morning is the question of uranium. It is estimated that there will be a shortfall of gas and crude oil by 1985. I have said in the House before and I will repeat it now that 90 billion metric tons of crude oil are currently the world's reserves and that 50 billion metric tons are situated in the Middle East or in North Africa. It is estimated that by 1985 Western Europe, Japan and the United States will have to import crude oil heavily. The United States will have a cost burden for imported crude by 1985 of $32 billion per annum. If one talks in terms of uranium of which we have about 200,000 short tons, it has been estimated that the United States will not be in a position to export enriched uranium after 1980. Already the West Germans are negotiating with the Russian Government to import enriched uranium into West Germany.

The important factor is that the fuel reserves of uranium will be vital by 1985, and it must be a national Government that controls these reserves. This cannot be left, I suggest, to the States or the multi-national corporations. I know this Government will not do so, but any government that opts out of its national responsibility will be casting a gloom over the future prospects of this country. The approach of the previous Government to fuels and energy was correspondingly a piecemeal one and was dependent on the initiative and export incentives of such companies. This applied in the case of Palm Valley.

Commercial control of a national pipeline is not feasible for the reasons I am about to state. I have noted the remarks of the right honourable member for Higgins (Mr Gorton). Firstly, the contracts for pipe building may be in the interests of the companies but not in Australia's interests. Secondly, companies should not be given rights to private land on such a huge scale. Thirdly, some companies maintain an absurd veil of secrecy over their operations. Fourthly, needless legislation on permits, rights to land and so on is eliminated by Commonwealth control and the acquisition of land is already feasible under the Lands Acquisition Act 1955-66. Fifthly, a national policy, not a field by field or a company by company approach, is desirable. Indeed, I would go so far as to say it is crucial. Sixthly, no company discrimination against people or towns is wanted.

Besides the more mundane building and maintaining of pipelines, the Authority will carry out important policy functions with regard to buying and selling petroleum products. A fine line must be drawn between the rights of the exploration companies with thenhuge investments based on export hopes, and those of the Australian consumer. Ultimately, of course, the Government will directly go into exploration itself. And so it should. France, Great Britain, Japan and Indonesia do, so why should not Australia? It would be as great a mistake to undercharge the consumer, I suggest, as to overcharge him. Petroleum products are becoming scarcer and must be consumed wisely and valued correctly. 1 was interested in the remarks that the honourable member for Farrer (Mr Fairbairn) made about the United States. I would like to make the humble observation that whilst 1 agree that there is a world energy crisis, if one takes the time to analyse the situation in the United States one finds that a high proportion of oil, gas uranium and fossil fuel is owned and controlled by multi-national corporations.

The second point to be noted is that a high proportion of research expenditure in the United States in recent years has been in the area of nuclear power and a very minute proportion has been in MHD - that is the conversion of fossil fuel whereby one can reduce the pollution content. Had the multinational corporations diverted their money into research in this area they could nave conserved for the United States a far greater proportion of that country's oil and gas. It is my humble belief that if one takes the time to study this matter there is a vast dichotomy between the figures that are tabled by the United States multi-national corporations and those given by the Bureau of Mineral Resources in the United States. It is perfectly obvious what the multi-national corporations in the United States have done and have persisted in since the agreement was reached under which the National Fuel Commission operates in the United States. They pushed a public relations exercise across the board in the United States in the hope that it would force the American Government to decontrol the price control structure in that country. But they did not go far enough. They were very wise not to go far enough to force the Federal Government in the United States to take a hand.

The point I am trying to make is simply this: The situation in the United States could have been alleviated to a marked degree had the national government taken a far deeper interest in the energy problem that currently faces that country. Its failure to do so has put the United States in a position where today its natural gas and particularly its crude oil reserves have reached crisis proportions. This country must never be placed in that situation. The United States may have valued its natural gas too cheaply as compared with other fuels. Natural gas may be cheap to supply, but it is not cheap to replace when the wells give out. I have suggested to the Minister and have made submissions to him to the effect that this country would be well advised to devote a high proportion of its research expenditure to the alternative of long term solar energy. In the world there are 3 important basins - in Central Australia, the Sahara and Northern India. If solar energy becomes economically viable it can be converted to liquid hydrogen which can be pumped throughout Australia by duplicating or utilising the national grid that is set up for natural gas. The national Pipeline Authority should have a policy not only with respect to natural gas but also for the possible alternative energy source - solar energy. Solar energy and nuclear power must not be forgotten simply because Australia is late in developing its natural gas.

I conclude on this point: When the people of Australia realise just how important it is for a nation to control its resources, whether they be oil, gas, uranium or fossil fuel, in the national interest and in terms of the world energy crisis, the Government must be in the position to act in the national interest and, more importantly, in the international interest. I was rather surprised to hear the honourable member for Stirling (Mr Viner) talk about individuals and ordinary corporations. It was found in the Middle East that the countries concerned would never get an increase in their royalty payments if the fields were permitted to be carved up by multi-national corporations. As a result of the unity that resulted from the formation of the Organisation of Petroleum Exporting Countries, the Middle Eastern and North African countries have, for the first time, been able to get a greater return from their crude oil than had they remained as

Individual entities. I support the Bill. I commend the Minister and the Government.







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