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Friday, 20 November 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) - The honorable senator objects, of course, to anybody obtaining a rake-off, but if the field were developed as a government undertaking there would be one long rakeoff. The Government is impressed by the necessity for the production of oil in Australia for the reasons mentioned by Senator Collings, and also because, as Senator Payne pointed out, the industries of this country would benefit enormously. I have dealt with Newnes, because I do not wish it to be thought that the Government is ungrateful to those who are now making investigations there. I hope that they will be able to submit proposals which will justify the Government in going ahead with the scheme.

As far as flow oil is concerned, we have been working hitherto in the dark. One or two companies are examining various regions geophysically and geologically on a basis worthy of consideration. They have eliminated all of the areas in which it is definitely known that flow oil cannot be found, and they are now carrying on the geological and geophysical investigation of promising areas. Details of these examinations have been submitted to me, but I shall not mention in what States the promising areas lie. There are several of them. The Government proposes that each of these areas shall be examined by the three most qualified men in Australia - Dr. Woolnough, the Commonwealth geologist; Dr. Keith. Ward, of South Australia, and Dr. Arthur Wade, whose reputation as an authority on oil is world-wide. The committee of the Cabinet which has been appointed to administer the fund established to assist in the search for flow oil, can grant financial aid only on the recommendation of the three experts. Numerous applications for assistance have been received, and one or two only have been granted. Every precaution is being taken to ensure that the money is spent to the best advantage. The Leader of the Senate (Senator Pearce) will speak later of oil investigations in the territories of the Commonwealth outside Australia. In the past the discovery of flow oil has been left to chance, but the work is now being carried out on a scientific basis. Honorable senators would be most amused at some of the proposals that have been made to me in connexion with this matter. In some instances the discoveries alleged to have been made in certain wells and bores suggest that the applicants for assistance are extraordinarily innocent, whilst other applicants I could hardly describe as innocent. I desire honorable senatorsto realize that in relation to flow oil and shale, the Government has left no stone unturned, consistent with its principles of keeping out of this deal itself, in order to obtain the production of oil in Australia.

The third matter which was referred to by Senator Collings was the hydrogenation process. If some honorable senators had their way, they would install hydrogenation plants to-morrow. I am not aware ' whether the Leader of the Opposition has seen the latest statement which has been made in connexion with this matter, but judging by some of the remarks which fell fromhis lips, this morning, I assume that he musthave done so. There are as many methods of producing oil from coal and shale as there are members of the House of Representatives and the Senate. Sir David Rivett, Chief Executive Officer of the Council for Scientific and Industrial Research, whose absence overseas has been largely for the purpose of checking up what has been done in connexion with the development of the hydrogenation process by Imperial Chemical Industries Limited, has written me that the names of the various companies which are experimenting in this matter are legion, but that from every one of them secrecy is demanded of the man who inspects their plants, with the result that it is naturally useless for representatives of the Commonwealth to examine them. But two matters emerge from the visit of Sir David Rivett to Great Britain and the Continent. In the course of his investigations he visited Germany, and was doubly impressed with the FischerTropsch process, and indicated that if all that was claimed of this process, compared with the Bergius process, were borne out, it would probably be the more suitable one for Australia to use. The Leader of the Opposition, in his "youthful " rashness, would rush headlong into the adoption of the Bergius process.

Senator Collings - I did not say so. I said that I should proceed with the installation of some process, instead of wasting time on talk.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - By so doing, the honorable senator would probably get himself into trouble, because before he knew where he was, he would find himself in the same trouble as others who have embarked upon this matter.

Senator Collings - I would give it a fly?

Senator A J McLACHLAN (SOUTH AUSTRALIA) - That is the sort of thing which we would have experienced if Senator Collings were a member of a Labour government in office at the present time. He would give the taxpayers' money a good fly. He would let their money fly away at a rate at which I do not propose to let it fly.

I do not desire honorable senators to think that this Government has not been fully alive to the necessities of this country in regard to securing oil supplies, for the two reasons which I have mentioned. The Leader of the Opposition should recognize that we are proceeding along safe and sound lines. The Government has sent abroad a leading officer of the Council for Scientific and Industrial Research, and Imperial Chemical Industries Limited have permitted him to examine their experimental plant at Billingham-on-Tees from one end to the other, in order to enable him to acquaint himself with every detail of whathas been done there.

Senator Collings -Every officer who has investigated this matter has told the Minister what has been done in all parts of the world.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Mr. Deputy President, I speak more in pity than in any other spirit on hearing the remarks of the honorable senator. Admittedly, petrol is being produced from coal and shale in Germany and Manchukuo, and boring for flow oil is being carried on in England, but these operations are not being carried out upon an economic basis. It is simply because of the uncertainty of the international situation and the possibility of being deprived of fuel oil in the event of war that these countries are now producing oil from coal uneconomically. At the present time, Manchukuo is the only country in the world which is producing petrol from shale on a commercial basis, and why it can do so the honorable senator probably knows; but what of England and Germany? The protection extended to the oil industries in those countries is something enormous, and I should not for one moment consider that the Commonwealth should proceed along similar lines.

Senator Arkins - Powerful companies are doing the work in those countries.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - That may be so, but of all the experiments which have been carried out, the only one upon which we can really rely, until Sir David Rivett returns from England - he is now on his way back - is the experiment at Billingham-on-Tees. While the plant was in course of erection, the de- signers were obliged to alter the first portion of it, and subsequently they have had to make other alterations.

Senator Collings - That would not be necessary in Australia, because we should have the benefit of their experience.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Yes ; but if we had rushed in, as the honorable senator suggested we should have done, we should have had to go through the same performance as Imperial Chemical Industries Limited. Honorable senators should realize that the people who have investigated the possibilities of Newnes have no interest other thanthe desire to serve Australia. Sir John Cadman's company in Australia is two parts governmental and one part private enterprise, and the Commonwealth has at its disposal the services of gentlemen whose expert advice we do not propose to disregard lightly. Our endeavour is to ensure that, whether ultimately we adopt the Fischer-Tropsch process or the Bergius process, it will function satisfactorily.

Turning to the minor trickle of oil as against the regular gusher which emanated from the Leader of the Opposition, I come now to the suggestion of Senator Payne. If the anticipations of Adelaide Oil Exploration are realized, the possibilities of establishing a valuable shale-oil industry in Tasmania are good; but as the company has notbeen able to submit plans and specifications of its process, the Government's technical advisers are not in a position to pronounce upon its efficacy. The shale from the Tasmanian fields yields about 25 gallons, and is charged with sulphur, but the shale from Newnes yields 100 gallons without' the sulphur. Therefore, if the Newnes proposition is not attractive to private enterprise - I do not say that it is not - it goes without saying that there are less possibilities for the Tasmanian proposition unless there is some fundamental method of removing the sulphur. It perhaps may be done by some secret process in the hands of American companies, and there may be possibilities in it. At the moment the Tasmanian Government is considering a proposal to turn the shale deposits in that State, by a certain process, into roadsurfacing material. A quantity weigh ing some hundredweights is being sent to Canberra and will be tried out by the Department of the Interior. The economics of the company's proposition would have to be inquired into, but if it has a suitable method and faith in itself, no difficulty' will be placed in its way by the Government. I understand that it requires no financial assistance from this Government, but I have been approached by its representatives with a request that the Minister for Trade and Customs (Mr. White) should admit the machinery which it requires for its operations free of duty. If that be the position, the company should approach the Minister for Trade and Customs, who would, 1 am sure, give favorable consideration to such a request.

The Lyons Government has done more to encourage the development of the oil resources of Australia than any previous Commonwealth Government or any State Government, for it has fully realized the importance of the subject.' Every member of the Cabinet, from 1932 onwards, has, in common with myself, had in mind the necessity to obtain oil locally if possible. Unfortunately, however, difficulties have been encountered. We have not in this country the technique that is available in older countries where oil has been obtained by one means or another, but the Government is doing its best to supply this deficiency.

Senator Collings - The results of the research work of those countries are surely available to us.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - So much of the results of such research work are made available to us as- pleases the persons in whose possession it is. Imperial Chemical Industries Limited has freely made available to Australia the results of its operations, but even "the Leader of the Opposition, with all his partiality for hydrogenation, would not. 1 think, advocate the expenditure of £8,000,000 or £10,000,00 in plant and machinery if a probability existed that, by a little more investigation, an expenditure of £1,000,000 would serve the same purpose and give equally effective results.

Debate (on motion by Senator AllanMacdonald) adjourned.

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