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Thursday, 27 September 1973
Page: 1620


Mr FAIRBAIRN (Farrer) - I second the motion. I do so with considerable enthusiasm. 1 congratulate the honourable member for McMillan (Mr Hewson) on an excellent speech. It is quite obvious that he has done a great deal of research on this subject. I believe that the proposals that he has put forward are in the national interest. 1 only hope that we can treat this matter on an all party basis because T do believe that the proposals put forward by the honourable member contain considerable merit. I think that they could even be broadened.

Let me say something about oil from coal. There is nothing new in producing oil from coal. The late Harold Holt used to recount a story of an incident when he was a Minister in this House. Mr Rowley James, the father of the present honourable member for Hunter (Mr James), was a member of the Opposition. He was very keen on producing oil from coal. One day, he asked a question of Harold Holt on the subject. Harold asked: 'Did you say "coal" or "gold", Rowley?' Rowley said: 'Coal, you fool - c-o-l-e.'

There is nothing new in this form of obtaining oil. We all know that, in the course of the last war, Germany had vast plants for making oil from coal. The only problem with such production is that of cost. In wartime one can make oil at a cost when it is needed for Messerschmidts and for other uses. That is what Germany did. We know that, more recently, the South Africans have established a plant operating at Johannesburg which makes a considerable amount of oil from coal. There is a major plant in the United States of America. One could not call it a pilot plant because it is even larger than one would expect such a plant to be. Quite obviously, nations are moving to the stage of doing more and more research into ways of getting oil other than by processing crude oil. I understand that some of the oil companies are now moving to buy large coal reserves, particularly in the United States, knowing that sooner or later they will need to turn to this other form of oil supply.

Australia is particularly fortunate in the quantities of coal which it has. The honourable member for McMillan has mentioned the vast resources of the Latrobe Valley. We know that Australia has very large resources of brown coal and also of black coal. Some of that coal is coking coal; some of it is steaming coal. In my electorate near Oaklands, there is a very large deposit of coal which in quality is halfway between brown coal and the best BTU black coal. Undoubtedly this coal in addition could become the basis of some future industry formed to make oil out of coal. We have been told that we have vast deposits in Australia and only recently there have been 2 big discoveries - the discovery by Utah up in the Peak Downs-Goonyella area of Queensland and a discovery, I am not sure by whom, in South Australia.


Mr Jacobi - Utah.


Mr FAIRBAIRN - Utah made the discovery in South Australia. I may be wrong in saying that Utah discovered the Queensland deposits but certainly the Utah discovery in South Australia has again delineated large quantities and this has meant a 25 per cent increase in the nations reserves of black coal.

There is no doubt whatsoever that large quantities exist and are now known. The Minister for National Development, Sir Reginald Swartz, my successor, announced not so long ago that Australia's known resources were sufficient at the present rate of usage for the next 250 years at least, and that statement was made before any of these new discoveries. So there is no doubt that the availability is there.

In addition we have large quantities of shale. Oil can be made from shale. Work is proceeding on this in the United States which has large quantities of shale and where is a big demand for oil. Owing to the present problems of a big increase in demand and a reduction in the search for and discovery of oil in the United States that country is turning to shale. We know that during the last war a shale plant was set up at Glen Davis. It continued to operate until the Menzies Government came in and determined that there was no need to continue petrol rationing and that it was much cheaper to import crude oil from overseas than to pay the large price involved in the making of oil from the Glen Davis shale. One of the problems with the Glen Davis shale was its poor quality. Since that time we have delineated a large body of shale in the Julia Creek area. The advantage of that discovery is that the shale is associated with vanadium. I believe that at some time in the future this deposit will be mined because of the possibility of making oil from it and also the possibility of extracting the vanadium at the same time.

I believe that we should do a considerable amount of research into this problem which has been delineated. I would like to see it go further than the proposal outlined by the honourable member for McMillan. The honourable member talks only of brown coal. 1 think it should bc a general attack on oil from coal and from shale. When I was Minister for National Development the National Coal Research Unit was doing quite a bit of research. I have not heard what has happened to it since, but I do have a vague belief that it has been closed down. If this has happened it is a tragedy. In addition there was some most interesting work being carried out on the use of power from brown coal by pulverising brown coal and using a turbine. This was being done at Fishermen's Bend under a team headed by Dr Wisdom. The work showed great promise. The only problem that the team had to overcome was the build-up of some of the ash on the turbine blades, but it was thought that this problem could be overcome. Unfortunately with the discovery of crude oil offshore in Bass Strait that work came to an end because it was felt there was no necessity for it. I think it is a pity that that project was closed down because in the long term it could perhaps be necessary to continue that work.

The only point on which I disagree with the honourable .member for McMillan is when he said that we have no land based fuel. He was not, quite right on that point. Perhaps it is begging the question a bit but of course we produce fuel at Moonie and also on Barrow Island. There have been discoveries of fuel which I ambled to believe will be developed in the not too distant future in the Cooper Basin. We are*' constantly hoping that drilling will delineate more crude oil on land as well as at sea. So much for the proposal that we should be going inland doing a great deal of research into the production of oil from coal and oil from shale> We know that if we had a suitable energy and fuel policy it would not be necessary to do this immediately. The great pity at the moment is that because of the uncertainty in the industry and the great many impediments that are being put in the way of producers and searchers for oil, the search for oil is not going ahead at the rate at which it should go ahead if we are to become self sufficient and to remain self sufficient.

I have said time and again in this House that I deprecate very strongly the actions that have been taken by the present Government which have reduced the search for oil. We know that it is tragic. We know that the big multi-national companies, or many of them, are looking elsewhere because they get a better reception. They get a better reception in Indonesia. They get a better reception in the Philippines. If they can spend their money wherever they feel like it they will do so, and they will not come into Australia if they feel that the dice are loaded against them. I have mentioned time and again the actions that the Minister has taken to discontinue the investment allowance. Other actions by the Minister include discontinuance of the exemption of dividends paid from petroleum profits; not allowing companies to write off money that is being spent; not paying subsidies; and the refusal to grant farm-ins where people are anxious to get additional money. Everything that is done is discouraging the search for oil in Australia. The net result, is that today we have only 5 rigs operating off shore and, I believe, only 2 rigs operating on shore out of an availability of 21 rigs. We cannot possibly expect companies to put down the number of wells that are necessary unless encouragement is given. Searchers are taking great risks and if a discovery is made they want to see some profit. Unfortunately that is not the attitude of the Labor Party. The Labor Party thinks the profits are evil. Some of these companies have spent millions of . dollars. I can cite one company which has spent $50m and has not got lc back. Yet the moment they have a success the Government gets onto their back and gets everything it possibly can.

At the same time as we look at the proposal put by the honourable member for McMillan, let us look at the so-called fuel crisis. The Minister loves to talk about this fuel crisis, but if there is one it is a political crisis which has been caused by the Minister himself. If we really want to get oil there are a number of ways in which this Government can increase the prospects. One way is to get people drilling more and searching more. Therefore the natural result, one would hope, would be discovery of much greater quantities. The Australian Petroleum Exploration Association cannot understand why it is that Australia is prepared to pay the Indonesians a lot more than it is prepared to pay Australian companies for crude oil. There is a difference of about $1 or more a barrel between the price paid by Australia to Indonesia or an Arab sheik and what is paid to a decent Australian company producing oil in Australia. This is something which the Association finds pretty hard to understand. Why have the oil search subsidies been cut out?

If the Government wants to get more oil it should reintroduce the subsidies. The subsidy was brought in at a time when it looked as though oil search in Australia was disappearing. It had a great effect and it can continue to do so. If this Government wants to get oil it can allow the deduction of expenses up to the time of a commercial discovery as was done under the previous Government. This Government should put everything that it can into the Bureau of Mineral Resources to make sure that it does all the geological work that is necessary to delineate the best prospects. It should give concessions to Australians to encourage them to invest their money in the search for oil instead of cutting out those concessions. The Government should allow farm-ins and farm-outs. It should allow the development of discoveries. It should not just say that is going to socialise oil and gas and that it is going to take over at the well head anything that is discovered. It should allow in overseas capital. At the present moment overseas capital is prevented from coming in. Where Australian capital is unavailable or companies are unwilling to invest I can see nothing wrong in allowing it to come in from overseas.

One could speak at great length about Australia's energy needs. The first thing, as I see it, is to have a proper energy and fuel policy which will encourage the search for crude oil and for gas and to look into the production of oil from coal. But there are many other forms of power. It is time that we looked at power from the sun. What is being done about that? When speaking on the Atomic Energy Bill recently I said that I thought the Atomic Energy Commission would be an excellent body to carry out research into power from the sun. There is tidal power. We know that in the north-west, Australia has available vast amounts of tidal power. Unfortunately, it is not where most of the power is required and there would be problems of transmission and cost of transmission. But at least we should know what is available and what the cost would be to deliver it, particularly in the northwest areas where it is likely to be required for the new developments of iron ore.

We should move quickly into atomic power and hydro-power but unfortunately when it comes to hydro-power we are inclined to say: What is the use of having a vast source of hydro-power such as we have in the Snowy Mountains if the unions can cut off this power at will?' We now know that the Snowy Mountains Council voted - I am fairly reliably informed that it was a 5 to 2 vote - in favour of continuing to operate the Snowy scheme in the way that it was being operated under normal procedures and that something intervened after the Council had voted in that way. I might say that that Council has on it Mr Reddick, who is the Chairman of the New South Wales Water Conservation and Irrigation Commission and Mr Tisdale, the Chairman of the Victorian State rivers and Water Supply Commission. These people knew what the situation was.

Mr DEPUTY SPEAKER (Mr Scholes)Order!The honourable member's time has expired.







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