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Thursday, 5 August 1926

Senator GRANT (New South Wales) . - It is about time that a halt was called in this business of paying out public money to encourage experiments in the extraction of oil from our shale deposits. This work has been going on for many years, and, as far as I can see, with unsatisfactory results.

Senator H Hays - Not unsatisfactory, because if the oil is not extracted from the shale, the Government as not called upon to pay the bounty.

Senator GRANT - The people should be encouraged to depend upon their own resources, and not to be continuously asking for assistance from the Federal Treasury.

Senator Thompson - It is a policy that is endorsed by the honorable senator's party.

Senator GRANT - Nowadays, immigrants expect to receive large sums of money before they go about the business of settling on the land. This was not always the case. The history of the pioneering of Australia shows that men came here of their own volition, and made their way unaided by the Government. The position is different to-day. Even a great wealthy State like Western Australia is holding out its hand for assistance.

Senator Crawford - What has that to do with this Bounty Bill?

Senator GRANT - Everything. It is time that men and wealthy companies relied on their own resources, instead of leaning on the Government. Why should the people of Australia be called upon to find money for a bounty to enable John Fell and Company to build up a monopoly in New South Wales ? In 1868, when no Government assistance was forthcoming, 17,000 tons of shale oil were produced in Australia,presumably at Newnes, in New South Wales. In 1919 the production was 25,453 tons, and in 1920, 21,004 tons. Practically the whole of it came from Wolgan, in New South Wales. In recent years, oil shale deposits have been discovered in Tasmania, and, of course, as usual, the Tasmanians have been holding their daily caucus meetings, and have come to the conclusion that this bill gives them another chance to hold out their hand for assistance from the Commonwealth Treasury. Oil produced from shale cannot compete with flow oil. We have voted large sums of money at various times in connexion with proposals to ensure an adequate supply of oil in Australia. At present the Government holds a controlling interest in the Commonwealth Oil Refineries Limited, because it recognizes that we cannot rely upon the few million gallons of oil that may be extracted under the most laborious conditions from our oil shale deposits. In 1923 and 1924 we obtained 50 per cent. of our oil from the United States of America, and from the north-east Indies, and 4,000,000 gallons from Borneo. The proposal outlined in the bill does not appeal to me. The Government should hold shares in the companies that receive the bounty. Senator Thompson would not invest his money in a concern unless he held scrip corresponding to the amount of money he invested. The proposal to pay a bounty on shale oil is a matter of considerable interest to those who are engaged in the exploitation of Australia's cil supplies.

Senator Foll - They have lost thousands of pounds in the search for oil.

Senator GRANT - Some of them have, and some -of them have not. But even if they have lost money, is that any concern of the Commonwealth ?

Senator Thompson - Yes. Does not the search for oil provide employment?

Senator GRANT - So far as I know, no work has been done in the Newnes Valley for about three years. No doubt there is a good reason for that. For a number of years Australia will have to depend almost exclusively on oil imported from the United States of America or South-East Asia.

Senator H Hays - The time may come when we shall not be able to get it.

Senator GRANT - That is quite likely, and for that reason we should take care to ensure that adequate stocks of oil are stored in Australia. Our oil requirements are increasing each year. In the year 1923-24, Australia imported 66,608,949 gallons of oil, at a cost of £4,206,846. In the following year our importations of oil increased to 89,667,820 gallons, the value being £5,375,133. The quantity of oil which we could obtain from shale, even with the expenditure of large sums of money, and after much work, would be negligible. I understand that the Commonwealth Oil Refineries Limited makes a profit of only 10 per cent. The Government might do more to increase the business of the Commonwealth Oil Refineries limited. A determined effort should be made to secure additional supplies of oil. The tendency is for oil to replace coal as a fuel, both on land and sea. No one can estimate with any degree of certainty the oil resources of Asia or America.

Senator H Hays - Or Australia.

Senator GRANT - Our knowledge of the existence in Australia of flow oil is limited. So far as I have been able to ascertain, the only place in Australia where definite indications of the existence of flow oil have been found, is the Roma district in Queensland. In that locality a bore was put down, but when it had almost reached the depth at which it was expected that oil would be found, something went wrong with the machinery. A similar fate befell a second bore at about the same depth. An inquiry should be held to ascertain why those accidents occurred when the bores had almost reached the depth at which oil was supposed to exist.' There may, or may not, be flow oil there. While oil may be discovered in Australia in the future, the fact remains that it has not yet been discovered. Very little flow oil has been discovered in New Guinea. The Government should make a determined effort to secure, at the lowest possible cost, large supplies of oil, and to provide a substantial reserve of oil in Australia. With Senator H. Hays, I agree that if our supplies of oil from abroad were cut off, we should be placed in a very awkward position. The quantity of oil which can be obtained from our shale deposits with the existing machinery is very small in comparison with our requirements. I do not agree that the mere payment of a bounty of 2d. per gallon will have any appreciable effect in increasing the output of shale oil in Australia.

Senator H Hays - What would be necessary to increase the output?

Senator GRANT - In view of the price at which oil can be obtained from abroad, I doubt whether anything that we could do would have the effect of producing large quantities of oil from Australian shale. In view of the fact that the price of oil in Australia is nearly three times as great as it is in the United States of America and Mexico, it may reasonably be inferred that Australia has been substantially robbed by the Vacuum Oil Company and the British Imperial Oil Company. Unless the Government fears to do anything of which those companies might not approve, it should consider whether it would not be wise to acquire an oil well in Mexico or the United States of America, with a view to obtaining direct supplies of oil. That would be more economical and more satisfactory than to pay excessive prices for the oil required in Australia.

Senator Cox - If that were done, how should we obtain oil in the event of war?

Senator GRANT - We should be unable to get it. Australia's oil requirements are about 115,000,000 gallons mer annum. Last year the quantity of oil produced from shale in Australia was about 2,500,000 gallons. It is, therefore, evident that we cannot rely on shale oil, but must import oil for many years to come. The Government should be prepared to tackle the question of oil supplies in a large way. It- should obtain a fleet of oil tankers, and, if necessary, purchase an oil well in Mexico: or elsewhere. The vessels could be used to convey oil from that well or from Persia, although I do not know the extent of the Persian oil supplies. It would not be a difficult matter for the Government to ascertain where oil could be obtained at the best price.

Senator McLachlan - Some of the Government's business ventures have not been particularly successful.

Senator GRANT - Some of them have been successful. At any rate, the oil companies now operating in Australia have been successful. Probably no company in Australia pays better dividends to those who came in on the ground floor than does the Vacuum Oil Company. It is probably true that the other oil. companies operating in Australia also make large profits. I intend to vote against the bill. I shall do so because, in the first place, the Government will have no share in the companies to which the money will be paid; and, in the second place, because I do not think that the payment of a bounty will result in any genuine reform, or in any great increase in the volume of oil obtained from shale in the Commonwealth. Some years ago an appropriation of revenue to the extent of £270,000 was made to assist in the extraction of oil from shale. Of that amount £144,000 is still available for payment to any company which extracts oil from shale. That shale oil has not been produced in Australia in greater quantities is not because of lack of encouragement.' There is, therefore, no justification for the measure now before the Senate, but there is every reason why the Government should provide for a greater and cheaper supply of liquid fuel than is now available. If this is a business Government, as has been stated, it should give some tangible evidence of its business acumen by endeavouring to assist a very important section of the community. Motor lorries are a necessity, and motor cars have ceased to be a luxury, but every one who uses these vehicles, or who employs stationary engines in which power is generated by liquid fuel, has to pay higher prices than those ruling in Canada or America. The Government should, therefore, endeavour to ensure to Australian users a plentiful and cheap supply of oil, and also build up sufficient stocks to meet requirements in any emer gency. That cannot possibly be done by means of oil obtained from shale. Under the present system, a small industry may be kept in operation, but it will never be a serious competitor with the big oil producers at present supplying us with this necessary commodity. Instead of continuing this policy, which does not produce satisfactory results, the Government should launch out in a businesslike way to supply the people of Australia with a cheap and plentiful supply of liquid fuel.

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