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Thursday, 27 September 1973
Page: 1623

Mr CONNOR (Cunningham) (Minister for Minerals and Energy) - We have listened with great interest to the speech of the honourable member for McMillan (Mr Hewson) and we do not disagree with its substantial content. In fact at a later stage I will move an addendum oy way of amendment to the terms of his motion which 1 think will put matters in their true perspective. We give the honourable member due credit for what he has done in the interests of his constituents. Of course, he has every reason to do so because, representing the major portion of the Latrobe Valley and such areas as Morwell and Yallourn, the retrogression of Victorian Government interest in the brown coal deposits of that area is a matter of immediate concern to him and his constituents.

As he correctly said, he made certain undertakings in his campaign. So did other people and, in particular, a very talented and able group of Victorian parliamentarians who formulated a proposal in a document entitled Labor's Blueprint for the Latrobe Valley' which was put out just before the last federal election. The co-authors were the parliamentarians Mr D. Amos, Mr Frank Mountford, the honourable Eric Kent, Mr Robert Fordham and Councillor Bartholomews. In compiling the document, they included matters of Federal and State policy and said:

Commonwealth and State Government Co-operation Rule National Fuel and Energy Commission - The Latrobe Valley contains the largest resources of accessible brown coal, anywhere in the world. Labor will establish a Joint fuel and energy commission to devise and implement an integrated and co-ordinated national fuel and energy policy. The regional office of this Commission would be sited in the Latrobe Valley.

We have heard nothing from the honourable member for McMillan on that point. They go on to detail the functions of the proposed commission in exploration, development, transport and marketing. National fuel policy is the next item of interest. The document states:

The place of the Latrobe Valley brown coal reserves in Australia's total energy requirements must be determined, bearing in mind the present and future depletion rates of other fuels needed to match Aus,tralia's requirements in chemical processing, general industry and national development.

The next heading is 'Brown Coal Research'. This of course is where the Victorian State

Government has seriously tapered off its interest since 1963. They said this in their document:

The Commission would establish a research centre in the Latrobe Valley, attached to the BIAE (Gippsland Institute of Advanced Education). At present the only research into alternative use of brown coal is being carried out at Melbourne University. The development of the char industry is just one example of the sorts of industries that might result from this research. Feasibility studies into the economics cf the production of petrol from brown coal would be given top priority.

There has been a considerable slackening of economic activity within the honourable member's electorate since the introduction of natural gas at exorbitantly high prices, thanks to the machinations of former Premier Bolte. Victoria now has the worst of both worlds with the cessation of the production of coal gas under the Lurgi process and the alternative choice of natural gas at exorbitant prices. I note also that even the sale of briquettes made from the brown coal in the honourable member's electorate is declining.

I also note from the latest statistics available from the Joint Coal Board of New South Wales that natural gas has made only a 9 per cent impact on the total Victorian fuel market when it ought reasonably to have been between 20 per cent and 30 per cent. Again, that is directly attributable to the exorbitant price which has been imposed upon it. Of course, the companies are hanging on. At the present time the Esso-BHP people are simply hoist with their own petard. They want a top price but they cannot get the volume to make it a going proposition. They have yet to learn a fundamental economic proposition which is that it is volume that counts and a competitive price. Victoria has neither and that is a matter to which the honourable member for McMillan might properly address himself in his future activities in this House.

Mr Hewson - It has already been done in the Victorian State Parliament.

Mr CONNOR - It has been done in the State Parliament by the Labor representatives. As recently as this week, certain questions were asked in the Victorian Parliament which are readily available in the reports of the Victorian Legislative Assembly where they- can be perused and duly noted. Of course, the honourable member for McMillan has a further difficulty. He was elected with the preferences of the Democratic Labor Party, and to that extent he must dance to their tune. The Demo cratic Labor Party's obsessions are defence and intrigue. Imitation is the sincerest form of flattery and the honourable member for McMillan, wittingly or unwittingly, has flattered those Victorian Labor members of Parliament who have been so active in this matter.

We are of course thoroughly aware of the total brown coal resources of the Latrobe Valley. I want to pay my tribute to Dr Andrews for the work that he did, to the various Victorian State governmental authorities for the work they have done in the generation of power from brown coal which is, at best, a medium quality fuel and also to what was done with the production of gas under the Lurgi system. We look upon the brown coal resources of the Latrobe Valley as the ultimate or the final resource of Australia in terms of its energy needs. As I informed the House in a policy statement some S months ago, we intend to have an energy budget under which we will assess annually Australia's energy needs and how they can best be met by the present recoverable resources. They can vary from time to time, according to market impact.

In addition to the valuable deposits in the Latrobe Valley there are also equally valuable deposits, particularly for purposes of gasification and hydrogenation, in the South Maitland area of New South Wales. The hydrogenation of those deposits can be easily used for the extraction of motor spirit from the Greta seam coal. But, as the honourable member for Farrer (Mr Fairbairn) said, an attempt was made by Hitler to conquer the world and he had to depend very heavily on the hydrogenation of coal. Only last year the Chairman of the Royal Dutch Shell Petroleum group said that the future of the world's energy needs lay with coal. Not only is research being carried on in other parts of the world by the major oil companies, but also in Australia attempts are being made to acquire blocks of black coal for the purpose of hydrogenation.

Mr Jacobi - By the multinationals, too.

Mr CONNOR - By the multinationals. I have had occasion to interview some of their representatives and I have told them that, whilst the granting of leases is a matter for the respective State governments, by the same token if there is any question of hydrogenation and they are seeking to export those products they will not be able to do so because the immediately available reserves, of coal suitable for easy hydrogenation will need to be kept in Australia. Australia's needs come first so far as an Australian national government is concerned.

Reference has been made to the rising price of crude, and this is a matter of concern to me. At the present time Liberia is pushing the price of crude up to $4.90 a barrel and it is going higher with the policies and the combinations of the Organisations of Petroleum Exporting Countries. Our light Australian crudes are notably deficient in residuals which are suitable for furnace fuel development. For that reason I suggest to the honourable member for McMillan that probably the first efforts that should be made in black coal and brown coal research and development are for the extraction of a furnace oil. Only last week I had the pleasure of interviewing a Mr Lyon from the South Maitland coal-fields. He reminded me of the work that he and his brother had done in this field some 30 or 40 years ago. The price of crude will go higher and it will go to a point at which it will have a crippling effect on Australian industry.

Obviously, the need is to use alternatives. We must minimise our imports of crude oil and particularly the heavy crudes from which the residual fuel can be extracted. For that reason we will maximise the use of natural gas as a furnace fuel and considerably reduce imports. As for the irreducible requirements that will still remain, a thick coal oil will be the obvious substitute for the present fuel oil which is obtained from imported crudes. So the honourable member can be assured that the Government has this problem well in mind.

For the future, we will be very pleased to co-operate with the Victorian Government in our planning for the transcontinental natural gas pipeline. We know that in the ultimate and when the point comes when Australia's reserves of natural gas are finally depleted, it will be to the brown coal gasification of the Latrobe Valley and the black coal gasification of the Hunter Valley that Australia will look for its ultimate means of industrial subsistence. We are following very closely the developments overseas in research into synthetic natural gas. The United States of America in particular has been forced to seek an alternative to its seriously depleted natural gas reserves and is seeking to obtain by hydrogenation synthetic natural gas which will be of approximately 800 to 850 British thermal units to the cubic foot as compared with 450 for ordinary coal gas and 1,050 or 1,100 for natural gas. That will probably be the first and the best means by which we will ultimately gasify both the brown coal and the black coal for Australia's needs. My time is approaching its end, so 1 move:

That the following words be added to the motion: and congratulates the members of the Victorian Branch of the Australian Labor Party, who were responsible for the compilation and publication of the document " Labor's Blueprint for the Latrobe Valley ", from which this motion is derived'.

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