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Wednesday, 28 November 1973
Page: 3998


Mr CONNOR (Cunningham) (Minister for Minerals and Energy) - We have heard all this before, but that is typical of the honourable member for Farrer (Mr Fairbairn). He referred to petroleum search exploration. The figures supplied to me by the Bureau of Mineral Resources to the end of June this year show that the amount expended for off-shore exploration was $79m and for the previous year it was exactly the same amount - $79m. The Government subsidy was increased. The amount for on-shore private drilling dropped from $24m to $13m. There is a very sound reason for that.

MrFairbairn What about


Mr CONNOR - Oh, dry up.


Mr SPEAKER -Order! Interjections are out of order. The honourable member for Farrer spoke in complete silence. I ask him to extend the same courtesy to the Minister.


Mr CONNOR - He would not be capable of it. Australia is the oldest of the continents, geologically. The prospects of finding substantial flow oil on-shore are limited. The mass of figures quoted by the honourable member for Farrer were in respect of on-shore exploration. Offshore, where the young sediments are and where the oil is, the success record has been remarkable. In the case of Woodside-Burmah Oil NL the ratio has been 1 : 3.2 - one of the best in the world. The normal average world ratio is 1 successful hole in 16. In respect of Bass Strait, similarly, Esso-BHP went straight in and got it - and in big quantities. The honourable member for Farrer has the gall to read a sermon to the Government on what should be done with relation to oil exploration, but he is the guilty man. As a matter of fact, today in Australia natural gas supplies only 5.6 per cent of the total black coal equivalent in the energy market. It ought to be supplying 20 per cent as that is the world average figure, excluding the Soviet Union and China. If it were supplying 20 per cent, there would not be the present strain upon hydrocarbons, particularly upon crude oil. As for what is available, I shall quote no less a person than Mr Wittwer, who happens to wear 2 hats. He not only is the president of the Australian Petroleum Exploration Association but also is in charge of hydrocarbons for the Broken Hill Pty Co. Ltd. In an address this year Mr Wittwer had this to say:

In the absence of further oil discoveries within Australia in the next 10 years we could find ourselves once again virtually dependent upon imports for our crude oil supplies.

Mr Wittwerhas every reason to be reticent about it because, thanks again to the mismanagement of the honourable member for Farrer when he was the Minister holding this portfolio, his company will keep mum as to what it really has until it can re-negotiate the price for Bass Strait crude oil. As for the nitpicking-


Mr Fairbairn - Are you alleging dishonesty?


Mr CONNOR - I am alleging business canniness, and the honourable member would do the same. On-shore the position is not good; but off-shore it is good, and we are going about it in the right way. In future there will not be any handouts or overseas farmouts similar to what was attempted in respect of the Woodside-Burmah company. The typical Woodside-Burmah farmout was this: It holds more than it could ever hope to explore and test and it would farm it out to someone else with a 50-50 split of the profits. In the case of the Shell Company, it was 66ยง per cent to Woodside-Burmah and 33i to Shell. When the Petroleum and Minerals Authority commences operation we will not be rushing into these vast expenditures of money. Plenty of overseas firms will be prepared to come in on a proper basis so that the equity of the Australian people is protected. I have never heard such a dirge, such a jeremiad, on behalf of overseas interests.

Let us look at the record of the honourable member for Farrer. As a result of the Petroleum (Submerged Lands) Act, what is the position on the north west shelf? lt is that only 15 per cent is owned by Australia. It is an absolute disgrace, and the honourable member for Farrer is the guilty man. In respect of Bass Strait, 83 per cent of BHP shares are owned in Australia and that company has a 50 per cent interest in it. So, there is a 41 per cent Australian interest. This is what he wants to continue - giving resources away. In addition, he wants to jump on the bandwagon with respect to coal hydrogenation. Life is an equation in hydrocarbons. It is a matter of transmuting one to the other, and we are in the hands of the chemical engineers on it. I refer to an instance of nitpicking for which the motivation was a letter from a Mr Condon of the Hartogen firm. The honourable member chose to try to twist it around. If the oil recoverable in Australia is a total figure and one divides that by the present consumption of what is produced in Australia, one gets what is the recoverable amount for a period. Anyone with an elementary knowledge of oil technology would know that it would vary according to the pressure. However, this is the other side to it: We will take every possible step to conserve all hydrocarbons in Australia.

I remind the House that section 13 of the Pipeline Authority Act states specifically that all - I emphasise 'all' - liquids associated with natural gas will be retained in Australia and restructured into motor spirit. What will they be? In the case of the Redcliffs refinery they should be of the order of 12,000 to 15,000 barrels a day. In the case of the north west shelf, where they will come ashore in 1978, I would say that they will be in the order of at least 50,000 barrels a day, because that is a particularly wet gas. On this matter I have had the advice of no less a person than Dr Lewis Weeks, who is the world authority. I saw him yesterday, and we will be acting on his advice as to what we should do. Even the honourable member for Farrer would not be able to tell me anyone better in the world to go to than Dr Weeks. We shall accept that advice and act on it strictly and for the benefit of the people of Australia and not for the benefit of foreign shareholders and the local friends of the honourable member. He is the man who made the deal with Sir Henry Bolte. Australia today is stuck with that deal, under which only 5.6 per cent of the Australian fuel market is supplied by natural gas when it ought to be 20 per cent. Yet the honourable member has the gall - I repeat, the gall - to stand up here and attack the Government because it is not finding the necessary amount of oil on the methods that he suggests. His methods have proved to be incompetent and the honourable member has proved to be incompetent. He is the tragedy of all time in respect of his administration and its consequences.


Mr Les Johnson (HUGHES, NEW SOUTH WALES) - We have been selling our resources for years.


Mr CONNOR - Exactly, and the honourable member for Farrer would continue to do so and so would his Party. This is the man who was responsible for the present Act and for a situation whereby, out of $841m spent on petroleum exploration, $4 19m will go, either by cash payments by the State and Federal governments or by taxation concessions into the pockets of the overseas oil companies and not one red cent, not one share, will be retained for Australia. Nevertheless, he has the impertinence to stand up here and attack this Government. Shame on him. As I stated quite recently in Parliament, there is a very real need for quite a number of industries in Australia to give thought to the future. We need to conserve oil and to conserve natural gas. There is also a real need for industries which at present are using imported fuel oil for their boilers and heat treatments to move over to natural gas where it is available. Similarly, there is a very real need - although not quite so urgent - for some of the domestic consumers in the colder climates to give thought to using electric power, of which there is plenty in Australia, thank God and thank the Labor governments in New South Wales and Queensland which achieved a plentiful supply of electricity generated from coal.


Mr Fairbairn - You did not do it.


Mr CONNOR - It was done when I was a member of the New South Wales Parliament, and I am proud of it. We were in office in Queensland until 19S6 and the infrastructure of the Queensland electricity system is the result of the efforts of the Labor Government there. Oil is becoming scarcer and dearer. The crucial year will be 1980, by which time we will find that there will be a considerable depletion in oil reserves throughout the world. Even at present there is an oil crisis. Of course, the Opposition would prefer to see Australia embarrassed in terms of oil supplies, provided it could tip the Government out of office. However, it would not have a hope and, more than that, it would not know how.

In 1980, and possibly even 2 years before that, it will be found that the price of crude oil will be beyond the cost of extracting by hydrogenation motor spirit and the other derivatives from coal. As I have told this House before - and I hate to have to repeat it even for the dim intelligence of the honourable member for Farrer - we will undertake a crash program in coal hydrogenation research. This is necessary because coal will be the bridge to the future - the bridge between the rapidly dwindling oil supplies and the ultimate world energy sources which will be uranium and solar energy. Coal will be the bridge.


Mr Les Johnson (HUGHES, NEW SOUTH WALES) - Does not the honourable member for Farrer know anything about that?


Mr CONNOR - He would not know what a coal mine was if he saw one.


Mr Fairbairn - I cannot hear the Minister.


Mr SPEAKER - Order! Interjections will cease. The Minister will address the Chair.


Mr CONNOR - In all prudence, we will take every possible action which may be necessary. We are most tolerant. At present about 24,000 barrels of liquid petroleum gas is being exported each day from Australia.


Mr Jacobi - And at shocking prices too.


Mr CONNOR - Yes, at shocking prices. It is being exported as the result of another deal made by the former Government on behalf of its friends. If it is necessary - and in a grave crisis it could be - we will give serious thought to using that liquid petroleum gas in Australia. Who would say what the future holds in terms of our imports of oil? But I repeat that only in a grave crisis would we take that action. We will honour contracts where it is possible to do so. But, in a grave crisis, we would need to give consideration to using those exports ourselves. In terms of heat equivalent those exports amount to a great deal more than 24,000 barrels a day. That would be an addition of about IS per cent to Australia's output of crude as - and again the honourable member for Farrer chooses to ignore this fact - in terms of the oil allocation agreement for Bass Strait crude both liquid petroleum gas and condensate are treated as crude oil. The honourable member for Farrer would not admit that, but that is the truth and he well knows it. It is for that reason that we will enforce the agreement strictly to the letter, if the emergency arises. I hope that it will not. It would be thanks only to the subversive activities of the Opposition that our imported supplies of crude could possibly be interrupted.







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