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Thursday, 5 August 1926


Senator NEEDHAM (Western Australia) .- In 1917, Parliament passed a Shale Oil Bounty Bill, under which £270,000 was appropriated to encourage the production of shale oil in Australia. Of that amount £125,491 has been expended to date. When provision was first made for the payment of a bounty on shale oil, operations were being conducted on the. deposits in the Newnes Valley, in New South Wales, but owing to a dispute arising between Fell and Company and the employees, work has been suspended for some time, and consequently scarcely any bounty has been paid. Of the amount originally appropriated, £144,000 remains unexpended. New South Wales is the only State that has produced shale oil in large quantities. In making that statement I hope that I do not offend the susceptibilities of my Tasmanian friends. That State has produced a little oil from shale.


Senator Ogden - But it has spent a good deal of money.


Senator NEEDHAM - I admit that it has spent a considerable amount of money in endeavouring to obtain oil from shale. I have visited the shale oil deposits in both States, and it is my belief that the working expenses in Tasmania are much lower than those in New South Wales. In the Newnes Valley, where the great shale oil deposit exists, the working expenses axe large, because the shale band is in the centre of a large quantity of other material that does not possess any value, but has to be taken out before the shale deposit can be worked. In the Latrobe Valley, Tasmania, there is a face of shale, with a 6-ft. seam, that does not present any obstacles.


Senator Ogden - The only thing required is the right process for retorting it.


Senator NEEDHAM - That is the vital point. I understand that, in the Latrobe Valley, experiments are being conducted with the Bronder system of retorting.


Senator Crawford - In the Newnes Valley the plant is being worked by what is known as the cracking process, from which it is hoped to obtain nearly double the quantity of petrol.


Senator NEEDHAM - The vital necessity is to obtain the proper system of retorting. The value of the New South Wales. shale is greater than that of the Tasmanian shale. It has been claimed that 100 gallons per ton is obtainable, and has been obtained from the former.


Senator H Hays - That is a very high percentage.


Senator Foll - It is richer than the Scottish shale.


Senator NEEDHAM - Sworn evidence has been given before the Accounts Committee to that effect. I understand that the value of the Tasmanian shale is 40' gallons to the ton.


Senator Ogden - It also is richer than the Scottish shale.


Senator NEEDHAM - All the Australian shale is richer than the Scottish. According to a geological report, New South Wales has approximately 40,000,000 tons, and Tasmania approximately 12,000,000 tons, of shale.


Senator McLachlan - Is it fairly compact?


Senator NEEDHAM - Yes, in both cases. The biggest proportion of the shale that has so far been produced in New South Wales has been taken from Wolgan. Valley, in the western area of the State. I quote the following figures regarding production in New South Wales andTasmania :-

 

The Council of Scientific and Industrial Research could very well have referred to it the question of ascertaining what process would be most suitable for retorting our shales. Senator Ogden, I think, will admit that that is a very vexed question. There is a vast difference between the shale that is found in the Latrobe Valley and that in the Newnes Valley. Those; who are engaged in the production of oil from shale are at .their wits' end to deters mine the best system of retorting. When! the Minister (Senator Crawford) is reply-: ing, I should like him to inform me whether there is a regulation which states that a condition of participation in the bounty is an output of not less than! 250,000 gallons per annum. The Committee of Public Accounts recently in"vestigated the expenditure on oil exploration, development, refining, &c, in the Commonwealth and Papua. I shall quote, from its report to show the importance of this matter and the position which Australia would occupy if we had at ourdisposal oil from shale, not only for commercial purposes, but also to meet our requirements if we were to be subject to aggression. At page 4 of the report the,' following statement is made: -

In New South Wales- it is estimated that, there are 40,000,000 tons of shale, representing. 3,500 million gallons of oil of which 20,000,000 tons, or 2,000 million gallons, are in the Newnes' district. . The Newnes deposit, extending from.: the Capertee Valley to the Wolgan Valley, is the most extensive yet . developed, being proved' over an area of 5,000 acres, the thickness of the seam varying from 14 to 50 inches. The NewSouth Wales shale is stated to be one of the richest shales in the world, containing from GO to 150 gallons' of oil to the ton, and averaging in actual distillation about 101 gallons.. Large quantities have in the past been exported for use by gas manufacturers. The quantity of shale mined in that State from 1865 to 1924 has totalled ' 1,919,685 tons, the annual amount varying considerably. In Tasmania the reserves and probable reserves of' shale are set down at 42,000,000 tons, or 1,700' million gallons of oil; the Mersey Valley repre''senting 10,000,000 tons of actual reserves and' 27,000,000 tons of probable reserves, or 1,000- million gallons of oil.

Another interesting extract in relation to. the Newnes Valley deposit is the following: . -s

During the periods of their activity, viz.,from 1909 to 1912, and from 1915 to January,- 1923, these works have produced 25,260,015: gallons of crude oil and crude naphtha, from which were derived the following products : -

 

The disastrous effects of the closing of such works, consisting of shale and coal mines, power plant, retorts, and complete distillation plant for the preparation of refined products From the crude oil, as well as the railway, the locomotives, and rolling-stock, can only be properly appreciated by a personal inspection. At the time of the Accounts Committee's visit, December, 1924, the shale mine was falling into decay, the drives were gradually closing in, and the works generally, including the railway, were rapidly deteriorating for want of use and through absence of proper maintenance. As a result of its inspection, the committee was impressed by the urgent necessity for early action being taken to prevent further loss, as it was apparent that the longer such a state of affairs continued the more expensive it would be to remedy it.

There is only one other quotation that I desire to make from this report. Dr. Wade was brought out to Australia by the Commonwealth Government as a crude oil expert. He visited the Wolgan Valley district, and inspected the shale deposits and works. Special reference thereto is contained in his report on petroleum investigation in New South Wales - Parliamentary Paper No. 38 of 1925. Hia concluding paragraph reads -

I should like to point out that, in the long run, these kerosene shales may be more profitable to Australia than oil wells, especially if only small wells and limited pools be eventually discovered. Moreover, there is no certainty, that such pools will be discovered. In the meantime, the amount of shale can be ascertained definitely; we can find out what our resources are, what can be done with them, and make plans accordingly. Beds of kerosene shale are not so erratic and uncertain as oil wells. Water troubles and careless drilling will not affect them. They remain where they are, and will not " peter out " when most wanted, as oil wells sometimes do. Their profitable development will depend upon research and business methods, and not so much on wild-cat speculation. I consider them to be one of the greatest assets that Australia possesses, and the day of their very great importance may yet come.

Instead of keeping the shale in reserve in the event of an emergency, we should develop the deposits to the extent of providing a nucleus supply of oil, so that there would be a reserve for the purpose of meeting any emergency that might arise. We should not allow the deposits to lie untouched, but should encourage the industry until the fields in the Newnes district and in the Mersey Valley are in full operation. We should take the opportunity in time of peace to develop the deposits, so that they will be available as a reserve in the event of war.







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