Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Friday, 20 November 1936


Senator COLLINGS (Queensland) . - -It is essential that a bill which proposes that Parliament shall grant a huge sum of money to the Government to carry on the services of the State should have very close scrutiny by every one taking any interest at all in the government of this nation. In the committee stage of the bill, honorable senators will have an opportunity to deal with specific items of expenditure and will then be able to say whether they approve or disapprove of them. Control of the expenditure of public money by the Crown i3 one of those privileges which Parliament now possesses, but which it did not always have to anything like the same extent. Keeping in mind the struggles of the British people at different stages of their history to secure over-increasing control over expenditure by the Crown, we who occupy positions in a British legislature should not to-day regard that privilege lightly.

I desire to address myself at the moment to a very important matter, to which this Government has given a- good deal of attention, but without having yet achieved any practical results. I refer to the development of the oil resources within the boundaries of the Commonwealth. Successive governments have considered this subject for the last fifteen years, but no practical results have yet been obtained. I know of no other question which is of more immediate vital importance to the nation. It should not be necessary to stress the importance of the development of our oil resources. I am sufficiently optimistic to believe that flow oil will be discovered in this country. I think that it should have been found a long time ago. I was closely associated with the attempts made in Queensland in that direction, and I have reason to believe that the experiments made there would have been much more successful than they were, had it not been for the sinister operations of foreign interests. Whilst I do not suggest that we should relax our efforts to discover flow oil. I do assert emphatically that . we should proceed immediately with the production of oil from coal and shale. This work would give employment to thousands of men who are now out of work. The discovery of flow oil or the production of oil from shale or coal would be of immense commercial benefit to Australia. An attempt is to be made to improve the unfavorable trade balance between this country and the United States of America. Is there one thing, apart from the complete manufacture of motor cars in Australia, likely to be more effective in improving that balance of trade than making this country selfcontained in the matter of oil supplies?

The importance of oil for the purposes of defence needs no elaboration. The people of Australia should not worry greatly about their national safety; I consider that we have no potential enemies. If we show goodwill to other nations we have nothing to fear. Our splendid isolation affords natural protection. A country that prepares for defence, and asserts definitely, as every country does, that its preparations are not for the purpose of offence, should have no fear of offensive measures on the part of neighbouring countries. The present Government symbolizes the fears of that section of the community which believes that Australia is in imminent peril. Should Australia ever be attacked it would be of incalculable advantage for it to be independent of the outside world in regard to oil supplies. When the imposition of sanctions against Italy was under discussion in this chamber, the Opposition took a definite stand in that regard.


Senator Hardy - It adopted a wrong attitude.


Senator COLLINGS - That interjection makes me feel all the more sure that the stand we took was right. I stated in this chamber that sanctions would not be imposed in respect of oil, and the Leader of the Senate (Senator Pearce) asserted that the next thing to be taken into consideration in connexion with sanctions was oil and its derivatives. As events proved, sanctions were never imposed on oil. The Mediterranean ports were choked with it, and the defeat of Abyssinia was accomplished. I merely direct attention to the national importance of taking definite steps to discover or produce oil in this country.

In replies to questions submitted to the Prime Minister (Mr. Lyons) in the House of Representatives on the 13th March last, it was stated that the total sum expended by the Commonwealth Go- vernment in the search for flow oil was £578,290, of which £25,000 had been contributed by the British Government. The expenditure was made up as follows : -

 

Recently the Government made £250,000 available for the purpose of inducing private enterprise to undertake a thorough search for oil, but up to the present time no good results have followed. I applaud the efforts of the Government to obtain all the data possible. Thechannels through which it has been making investigations are numerous and appropriate, but the time has come for action. No doubt, I shall be told that to do anything satisfactory in the production of oil from shale would cost £10,000,000. That statement was made by the Minierter-in-charge of Development (Senator A. J. McLachlan) for the purpose of silencing me on a former occasion. I do not intend to be silenced by sophistry of that kind now. Times of national emergency are predicted throughout the world, and if these fears are wellfounded the expenditure of £10,000,000 would be a mere bagatelle. During the last four and a half years, we have remitted taxes to the wealthy landholders of this country to the tune of nearly half of that sum, and more remissions are to follow; therefore, the production of oil from shale should not be abandoned on the score of expense. What are the possibilities regarding the discovery of flow oil in Australia? I direct attention to the follow ing extract from the Sydney Bulletin of the 18th. January, 1923-

At a Commercial Congress held at Honolulu in October last, a paper was read by Dr. David White, Chief Geologist of the United States of America Geological Survey on the Oil Resources of the Pacific Basin. In his final summing up,he gave North America, including Alaska, Western Canada, Western United States of America and one-half of Mexico's reserves as 5,000 million barrels and Australia as 4,000 million barrels.

Every attempt to find flow oil in Australia has been unsuccessful, but geophysical authorities declarethaat the main oil basin of the world is in the Pacific, and that the greater part of it lies within Australia.


Senator Sir George Pearce - I do not believe that any recognized authority has said that.


Senator A J McLACHLAN (SOUTH AUSTRALIA) - Rather the reverse.


Senator COLLINGS - I can assure Ministers that authority for the statement is available. I obtained it from a report published in the Sydney Bulletin some years ago, as the result of investigations then being made.

I have a return, which shows the amount spent up to date under the agreement made in 1920, between the Commonwealth and British governments, and the Anglo-Persian Oil Company. I do not propose to read it because the details of the expenditure are included in the general statement which I have already made. In reference to the importance of this matter, I quote an extract from the Sydney Sunday Sun and Guardian of the8th November, 1936, which deals with the position of Iraq, a country of fewer than 3,000,000 inhabitants, but one of vital importance to the British Empire, because of its oil resources: -

Iraq produces oil - in a world whose oilthirst increases every day, and in which wars are won and lost with oil. Britain has a greater stake in Iraq, in proportion to the population, than in any other foreign country except, perhaps, the Argentine. And it has been said that the Iraqi cities of Bagdad and Basra are to the air communications of the Empire in the East what the Suez Canal is to the seaborne trade with Asia.

I now propose to make a brief review of what Australia has done in connexion with the discovery of oil. Over a number of years the Government has continually excused itself because it has not proceeded with a policy for the development of the extraction of oil from shale and coal, and it was only quite recently that any definite action to encourage the finding of indigenous oil was taken. In regard to shale, the Government has done nothing whatever of a practical nature. I do not deny that voluminous reports in connexion with this subject have been submitted time after time; that royal commissions have delved into the whole matter, only to have their reports shelved; and that frequent ministerial statements in respect of the value of the development of the shale resources have been made; but in no instance has anything practical been accomplished. In view of the fact that throughout the world other countries are extracting oil from coal and shale, this apathy on the part of the Commonwealth Government is deplorable; yet we continue to exist in a happy state of uncertainty in the spirit, " Things are all right to-day; let to-morrow look after itself." Another important point is in regard to what is being done in connexion with the search for oil in Australia, and more especially in the Mandated Territories. Certain companies have made tentative proposals to the Government in respect of the quest for oil in Papua and New Guinea, and my researches have disclosed some interesting facts.

The directors of the Papua Oil Development Company Limited are Mr. V. Smith, who is general manager of the Shell Oil Company; Mr. C. J. Ahearn. a partner of the firm of Gillett, Moir and Ahearn, solicitors for the Shell Oil Company; and Messrs. W- H. Anderson and M. Bland, both of whom are officials of the Shell Oil Company. The directors of the Island Exploration Company Proprietary Limited are Mr. H. Hamilton, an official of the Vacuum Oil Company; Senator J. D. Millen, who is actively associated with the Vacuum Oil Company; Mr. W. A. Ince, solicitor for the same company, and Mr. J. C. Blair, one of its leading officials. Thus there is a possibility, by no means remote, of all our endeavours to discover oil in the Mandated Territories being definitely blanketed by these great oil companies, whose objective is not to discover oil in Australasia, but to maintain their stranglehold on the oil supplies of the world. These are matters that should be made known to honorable senators and to the general public. In view of the fact that the two companies which I have mentioned are enormously rich, they should not be allowed to exploit any portion of the sum of £250,000 which the Government has made available for exploration purposes in connexion with the search for oil.


Senator Sir George Pearce - Companies operating in New Guinea and Papua are excluded from sharing in that grant.


Senator COLLINGS - But these companies have been negotiating with this Government, and doubtless the Minister in charge of the bill will be able to tell honorable senators how effectively they are excluded.


Senator Sir George PEARCE - They are certainly excluded from participating in the grant of £250,000.


Senator COLLINGS - In my opinion the Government could assist companies which have taken out or are about to take out permits to search for oil, and have not the enormous reserves of the major companies. For instance, there is Oil Search Limited, a company composed entirely of Australian shareholders with no foreign capital aud no foreign entanglements. It is undoubtedly doing good work in this connexion, as the Minister admitted a few days ago.


Senator Sir GEORGE Pearce - That company has been given a permit.


Senator COLLINGS - Yes, a permit to search for oil in New Guinea, and I am of opinion that this and any similar company should be entitled to assistance in regard to its geophysical survey. At the present time, it is not entitled to receive the assistance in this regard which it is entitled to get in connexion with drilling operations.

In the past considerable doubts have always been associated with the bona fides of every attempt by certain oil companies to discover oil in Australia. Now, however, the major oil companies of the world are reaching out into new countries because they realize that their present sources of supply may not always be available. "What has been done in other countries in connexion with this matter? What have been the results of the scientific investigations which have been made in other parts of the world ? From my studies of this matter I learn that other countries have been by no means backward in recognizing the importance of discovering oil within their confines, and in doing their utmost to make themselves self-contained in this respect. For example, according to the Sydney Morning Herald of the 3rd September -

The Japanese have already succeeded in carrying to realization their quest for a nearby oil supply in Dutch East Indies. Japan is securing supplies on three of the islands, namely, Borneo, Java and Sumatra. In Borneo, it has been announced that two companies have been producing a daily average of 13,040 barrels for the past veur. Furthermore, the Japanese have arranged for a combine of the Mitsui, Mitsubishi, and Sumitomo interests to operate under the new fuel policy of the Japanese Ministries of the army, navy, foreign office, and colonies. Thus the commercial side of this effort is consolidated by a new Japanese oil combine capitalized at approximately £3,000,000. The American interests take the position that they are merely seeking to augment their sources of oil supply in the East. Australia and Japan are, howover, engaged in an effort to develop nearby supplies of oil that would make them sellsufficient for defensive purposes.

In regard to the production of oil from shale and coal, we should concentrate our activities in this direction at the moment, because' whatever may be said about the uncertainty of discovering flow oil in Australia, we can definitely proceed with the extraction of oil from shale and coal. I know that the Leader of the Senate does not agree with my suggestion that a tremendous proportion of the oil basin of the Pacific lies within the confines of Australia.


Senator Sir George Pearce - I merelysaid that I had never heard of any geologist who had expressed that opinion, and I should like to know the name of the honorable senator's authority.


Senator COLLINGS - I cannot, give the name offhand, but I shall obtain the information for the right honorable gentleman. There is no necessity for us to get down to an argument in regard to Australia's coal possibilities, although I am aware that even in this respect the Government has not given much practical assistance to the industry. I shall not attem.pt to pose as an expert on this matter, but I shall quote the opinions of authorities. There are two processes by which coal can be " cracked " with a view to extracting from it its oil content - the carbonization process, and the hydrogenation process. In this connexion I quote the opinion of Sir David Rivett, Chief Executive Officer of the Council for Scientific and Industrial Research -

Coal is processed by cracking in two ways. It may bc subjected to pure cracking, termed carbonization, and in that way broken down into coke and gas with but small yields of oil; or it may be subjected to hydrogenation cracking and so converted wholly into oil. The production of lubricating oil from coal and the treatment of the tar are two interesting side lines in coal utilization equally in the domain of the scientific worker.

In a later report the same gentleman stated -

The attitude has apparently been that this was some one else's business and the position in which that attitude has landed the industry (coal) is that, as pointed out by Sir Frank Smith in his impressive presidential address to the Junior Institution of Engineers, the industry has, during the reign of King George, lost a total sale of 7.500,000 tons of coal a year for shipping services.. It may not be imagined that the whole of this loss could have been prevented by even the most outerprising and enlightened coal policy but at least something might have been saved.

The Minister-in-charge of Development, according to a report in the Sydney Morning Herald of the 25 th September, 1935, expressed the opinion that the hydrogenation process of obtaining oil from coal was the best for Australia. We can, therefore, confine our attention . to the development of that process. The honorable gentleman also said -

It would be folly for the Government tn embark upon a huge expenditure here of perhaps £10,000,000 per annum before the process had been thoroughly tested. It would hu at least eighteen months before the efficacy of the process, as applied to raw coal, could be determined at Billingham-on-Tees.

Fourteen months have elapsed since the honorable senator made that statement, but the Government has not yet published its intention to proceed with the development of -the hydrogenation process in Australia. I now quote from the September issue of the Industrial and Mining Journal -

Sir DavidRivett (chief executive officer of the Australian Council for Scientific and Industrial Research) has returned from Germany, most enthusiastic regarding the significance to Australia of the development in the processes for extracting oil from coal. At

Oberhausen lie inspected a plant which, is being operated by tlie Fischer process, in which the basic materials are coke, or coal, and steam. The process is relatively simple, and is being exploited at a rapidly-increasing rate in areas where coke and brown coal are readily available. He also inspected plants at Ludwig- shafen and Leuna, which are operating on the hydrogenation process. The output at Len no, at present is 300,000 tons yearly. The hydrogenation and Fischer processes, in certain respects, are complementary, he pointed out, and each is attractive from an Australian stand-point. The Germans were most willing to supply information, either independently or in association with certain British Anns. Close estimates of capital and running costs have been prepared, and will be submitted to the Commonwealth Government.

Presumably, they have been submitted to the Commonwealth Government in the intervening period of three months, but the Government has not yet announced its intention to proceed with this work beyond making available £250,000 for the encouragement of prospecting for oil. South Africa is also doing wonderful work in the distillation of oil from coal. !Ii i this connexion the Queensland Government Mining Journal of the 15th June, 1935, stated -

A very effective start has been made in the commercial development of coal by-products by the South African Iron and Steel Industrial Corporation Limited, and the production to dato represents a very creditable achievement.

There is surely no need for me to discuss the general question at any greater length, al though I could amplify the evidence that I have already submitted. I wish to know why the Government has not done more to develop our Australian resources. I hope that the Minister will not merely tell me that the expense is too great, or that investigations are still being made - though I confess that I have this fear. Abundant evidence is available from wally countries to demonstrate the practicability of various processes for the extraction of oil from coal, and the inaction of the Government cannot be excused on the ground of lack of information. I suggest strongly that this undertaking should be put in hand by the Government itself and not left to private individuals, for if private enterprise embarks on the work, vested interests will be established. Moreover, private enterprise is solely interested in making profits for shareholders. The Opposition believes that these great natural resources of Australia should be exploited for public benefit and not for private profit. It, therefore, asks the Government to proceed with this important work without further delay.

Coming now from the general to the particular, I wish to refer to a letter which the Rockhampton Chamber of Commerce recently wrote to the Ministerincharge of Development on this subject. I shall not cite the whole letter, but it stated, inter alia -

There can be only two States concerned in this oil-from-coal experiment or business, viz.: New South Wales and Queensland, as Victoria and South Australia have only brown coal, Western Australia cann el coal, and Tasmania undeveloped deposits, and tlie last two might be ruled out of consideration as not being central enough.

Honorable senators from Tasmania will, no doubt, be able to inform the Government as to the possibilities of Tasmania in this respect. I have no definite information on the subject. It must be admitted, however, that Australia has a wonderful variety of coal deposits. "Whatever the kind of coal required for the hydrogenation process, it can be found in Australia, and, I believe, in Central Queensland. The letter to which I have already referred, continues -

Now South Wales has. undoubtedly, immense deposits of good quality coal, but no part of Australia has tlie variety of coal, the immensity of deposits, or the high quality coal which Central Queensland possesses.

It may be safely said that New South Wales coal is all of the bituminous type - very good, useful coal suitable for steam and gas-making, its is the case with the southern Queensland and Bowen coal; but in Central Queensland we have, this type as well in the Styx and Balmoral mines, and have, in addition, the free-burning coal of Blair Athol in 95-ft. seam with light over-burden, the anthracitic coal of Cambria Colliery, so named because tlie Royal Navy, years ago, reported on it after tost as " approximating more nearly to Welsh coal than any found outside of Wales ", and the semi-anthracitic scams of the Dawson Valley, and the immense deposits of brown coal at Point Clinton.

I well remember the report submitted years ago as to the quality of the coal of the Cambria Valley. The letter proceeds-

We laymen are in the dark as to what class of coal is going to be most suitable for the extraction of petrol, but here is a choice from the lowest calorific values to the highest, which does not obtain in any other district in Australia.

If the Commonwealth Government and Imperial Chemicals Limited are going to combine in the erection of works in Australia, Queensland has an incontestable claim to be considered in the site selected.

The Minister replied very courteously to that letter and observed that the committee was impressed by the possibilities of the Blair Athol field; but significant silence was preserved respecting several other fields mentioned in the letter that X have read. It seems, to me that the Government could well give consideration to these various fields and should do so without delay. It cannot be denied that Australia has every, class of coal that might be required for use by any of the processes to which I have referred. Perhaps I should not argue that the deposits in Central Queensland are better than those elsewhere, though I believe that the information contained in the letter from the Rockhampton Chamber of Commerce is accurate. I appeal to the Minister to see that effective action is taken without further delay in connexion with this important subject. "We need no further inquiries or investigations, for ample resources have already been discovered in Australia to enable the Government to proceed at once to establish plants to extract oil from coal or shale, or both. This subject is of such immense importance to the Commonwealth that I offer no apology for having occupied the time of the Senate in discussing it. The Government should make no more investigations, appoint no more commissions, and permit no further procrastination. If the meagre sources of information at my disposal have yielded such convincing evidence, I have no doubt that abundant additional information could be obtained from the Government's archives in which there must be numerous reports of royal commissions, scientific investigators, and many others which have been accumulated during the last twenty years. It is high time for the Government to be up and doing.







Suggest corrections