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Thursday, 27 October 1949


Mr LANG (Reid) .- The preamble of this bill is as gloomy as is the Apocalypse. It reflects the Government's outlook on this petrol problem. The Government has made no attempt to relieve the petrol supply position. Its sole aim has been to see that rationing of petrol is restored'. Any one who arrived in Canberra during the last three months who was able to indicate ways and means of finding all the petrol requirements of this country without rationing would have been looked upon as public enemy No. 1. The Government predicted chaos, and so chaos had to be. The Prime Minister's attitude is one of "I told you so". Of course, he has been sitting on a full hand. He has control of the issue of import licences. He regulates the entry of petrol into this country. Merely by deferring a decision, vital sources of supply can be lost. We have had all kinds of explanations made of the causes of the present, position. We have been told all about the alleged drain on dollars. But only a small fraction of our petrol comes from dollar countries. So, if the problem is one of meeting dividends for petrol companies owned in the United States of America, why not say so? We still have not been told how much would be necessary, in dollars, to meet all our petrol requirements. We can find money for international relief, for our legations abroad, for the world bank, and for all kinds of unnecessary dollar expenditure; but we cannot have more dollars for petrol. That is why this bill has been introduced. The Prime Minister (Mr. Chifley) is never more stubborn than when the High Court tells him that something which he has done is unconstitutional. That has happened in the case of petrol rationing. It has also happened in the case of the Melbourne City Council and in the case of the doctors. Now, in order to prove that the High Court was wrong, and that the right honorable gentleman was right, we have this artificially created1 chaos of the past month. When the Government forces this bill through the Parliament petrol is expected to flow again into the bowsers. It is proposed to give to motorists sufficient petrol ration tickets to last until the 31st January next. This Government will then have another look at the position. It will decide whether the motorists have been suffering enough. It will decide whether or not it should again reduce the ration. If it carries out its declared policy, it will have to do so. The Prime Minister has stated time after time that for the year ending the 31st May, 1950, he will not permit the companies to sell more than- 440,000,000 gallons, plus the adjustment due to the coal strike. After allowing for government use, the amount available for civilian consumption will be reduced to 433,000,000 gallons. But, according- to Government figures, during the four months period from J une to September the companies have oversold a total of 34,000,000 gallons. The Government is working on the assumption that from October to the 31st January next consumption will be at the rate of 433,000,000 gallons. The new ration tickets which will be issued' on the 15th November will be on that basis. So that, on the 31st January next, with only four months to go there will still be 34,000,000 gallons to be made up. The only way in which it could be made up would be to reduce civilian consumption by 8,500,000 gallons a month. That would involve a 25 per cent, cut in the ration. It would mean the end of all private motorist usage. The Government should tell us now what it proposes to do about those 34,000,000 gallons. Doe3 it propose to allow an increase over the 433,000,000 gallons, or does it propose to stick to its original announcement ? If it is returned to power, what does it propose to do after the 31st January next?' The public is entitled to know. This bill should not be necessary. There are two ways in which to tackle the problem. The first is to lift all restrictions upon import licences and let traders operate on the basis of competitive trade. We have seen the results of a little healthy competion in the last few days. Despite obstruction by the Government, one company succeeded in finding new sources of petrol supplies.

We still have large export surpluses, and they should be sufficient to supply all our needs. There should be plenty of suppliers who are eager to do business with us on the basis that this is a very solvent nation in a world in which many nations are insolvent. It is not for the Government to erect new trade barriers. The Government's job should be to remove such barriers. It should encourage traders to obtain petrol from wherever it is available. The oil companies fully understand the technique of international trade. That is their job. It is not the Government's job.

We are depending too much upon the Bank of England. It astounds me that men who for twenty years have been emphatic that the Bank of England strangled this country in the early 1930's are now anxious to hand over to it the complete control of this country. The Prime Minister tells us that he is waiting on the Bank of England before he can tell the prices commissioners how much should be charged for petrol. He waits on the Bank of England to tell him how many dollars he may expend upon petrol. He waits upon the Bank of England to tell him how many gallons of petrol he may issue import licences for during the coming year. Never before has any government of this country been kept in such close confinement by the Bank of England. Yet, we have huge assets lodged with the bank that may never be redeemed. All we need is a token payment in the form of petrol without which this country cannot function in a modern economy.

Instead of falling hack upon the frustrations and regimentations of rationing, the Government should have taken positive steps to deal with the position. Instead of waiting for Ampol to do a job, it should have invited all companies to do their utmost to find petrol. It should have lifted restrictions upon import licences. Had it done so, this country would have been as well off as are Italy, Japan and Germany, which lost the war but apparently won the petrol peace. In addition, the Government should have taken urgent positive steps to make Australia independent of all outside oil suppliers and oil cartels. It has not done so. Had it done so, there would have been no need for the measure that is now before the House.

The most urgent task of the Government is to discover and develop, within territories under Australian control, sufficient oil to meet our immediate needs. Without petrol, this nation will become a backward nation. No expense and no effort should be spared to ensure that Australia becomes self-supporting. Although we are pouring out millions of pounds upon other projects, last year the Government spent only £49,000 upon developmental work in relation to mineral resources. Our position in relation to petroleum development is an alarming one. We spent a lot of money on Newnes, but practically nothing is being spent upon the far more urgent problems of flow oil and hydrogenation. The truth is that most of the potential oil-bearing areas are now under the control of foreign oil companies. Geological surveys have satisfied the experts that oil does exist in several structures in Australian territories. Large sums of money have been expended by overseas companies, but the results are shrouded in secrecy. We have been told that, in recent test drillings, oil in formation has been discovered in Papua, but we do not know the extent of the strikes. We must be satisfied that these overseas interests are willing and anxious to develop any fields under their control, and also that they would work a concession, the working of which might be a vital economic necessity for this country, even if it did not provide results that were competitive with the results to be obtained from concessions in other parts of the world. The history of oil search in this country is full of strange coincidences and mysterious mishaps, but I do not propose to probe those stories at this stage. The duty of this Parliament is to satisfy itself that the Government is taking every possible step to develop our resources. We shall not get very far on the £49,000 a year that the Government proposes to spend.

The Prime Minister, in reply to a question that I asked recently, expressed his grave concern about the terms of the oil agreement with the Commonwealth Oil Refineries Limited. That agreement was signed in 1920. It is high time that it was jettisoned. The Commonwealth holds one more share than 50 per cent, of the total issued capital. The rest of the shares are owned by the AngloIranian Oil Company, of which the British Government .owns a half share. It was formerly known as the AngloPersian Oil Company. According to the Prime Minister, the Commonwealth has no say in the control of the Commonwealth Oil Refineries Limited. The Anglo-Iranian Oil Company appoints four directors and the Commonwealth appoints three directors. This is the company that was established in the first instance to finance and develop Australia's own fuel oil resources ! Under the oil agreement, the Commonwealth was to supply to the company for refining indigenous oil up to a maximum of 200,000 tons a year, as it became available, from within the Commonwealth or from any territory under Commonwealth control. Until local oil became available, the Anglo-Iranian Oil Company was to supply the Commonwealth Oil Refineries Limited with such crude material as it needed, up to but not exceeding 200,000 tons a year. So, it is not in the interests of the Anglo-Iranian Oil Company for Australia to develop its' own petroleum deposits. It would lose a market of 200,000 tons a year for its Iranian product, and would become merely a refining company, instead of being the supplier of the Crude oil and having a half interest in the refined product.

The Oil Agreement Act 1920 provided that the oil must be carried in

Anglo-Persian freighters, which were owned by a subsidiary company, and the terms of that freight have never been disclosed. Article 14 (&) of the agreement provided not only for the refund of any customs duty paid by the company but also for a guarantee of protection in the form of duty, if needed. Why should a company in .that favoured position be anxious to promote the development of independent oil supplies by this country?

The largest oil concessions in Papua are in the hands of the Australasian Petroleum Company Limited, in which the shareholding interests are the Shell Oil Company of Australia Limited, the Vacuum Oil Company Limited, which is cue of the Standard Oil group of America, the Oriomo Company, a subsidiary of Oil Search Limited, which is another subsidiary of the Vacuum Oil Company Limited, and the D'Arcy Oil Company, a subsidiary of the Anglo-Iranian Oil Company. William Knox D'Arcy, an Australian, made the original discovery of oil in Persia, and obtained the concession from the Shah. Those foreign oil companies hold concessions which total some 20,000 square miles in Papua.

Oil was produced in Papua as far back as 1914, when shallow wells were drilled to a depth of 200 feet on the Vi-lulla River. The oil produced in those tests was actually used in launches. The field was being worked by Dr. Wade when the Anglo-Persian Oil Company took over. That was the end of the operations. The same interests have now returned to the same area. There have been many discoveries of oil seepages in Papua. Geologists say that there are suitable oil structures in the area, and the surveys have been favorable, but the foreign oil companies constantly intrude. What the Prime Minister has said about the Commonwealth Oil Refineries Limited should be a sufficient incentive for the Government to call for a complete investigation.

Australian companies which have invested their money in the search for oil in that area appear to have run into all kinds of obstructions. Considerable evidence has been shown to me which should receive impartial and thorough investigation. The men in charge had the highest qualifications. One was a topographical surveyor for the Anglo-Persian Oil Company and he conducted the original survey. The foreign concerns were given concessions of thousands of square miles, but his company obtained a concession of only 75 square miles. It had also to contend with all kinds of obstructions from the Commonwealth Oil Advisory Committee. The company alleges that its employees were moved from an area in which they had found live oil at 500 feet. The foreign companies are not in the. same position as the Australian companies. They have to assess the possibility of an area in relation to the yields from other areas, and have to justify themselves on a purely, competitive price basis. They are also governed by world output. If there is an abundance of petrol to be obtained from existing fields, why should they spend millions of pounds in developing new fields?

This Government is in an entirely different position. It must develop petrol supplies, even if they are non-economic in comparison with other sources of supplies. It is not a matter of world parity, or Gulf oil prices. We must have enough to enable us to keep transport moving and to serve defence purposes. Therefore, the search for oil should be in the hands, not of foreign interests, but of Australian interests. The Commonwealth Oil Refineries Limited is not at present a satisfactory vehicle for government action. That position should be cleared up quickly. We need ' the best experts that Ave can obtain and we must make certain that they are completely independent of outside interests. We must pay salaries that will attract the best oil technologists. The director of the Bureau of Mineral Resources receives a paltry £1,687 a year, the petroleum technologist £1,450 a year, and the chief geophysicist £1,020 a year. How can we expect men on unattractive salaries to direct a. great national project such as the search for oil ? It is a scandal. Some of these men are being paid less than many bricklayers and carpenters are earning. We should get the best, available oil technologists, supply test: equipment and get busy as quickly as possible. We must also be prepared to support any . Australian company which is equipped with the " know-how " of oil search. I ask the

Government to give this problem immediate consideration. Several royal commissions and select committees have inquired into oil and oil production. What we need now is an intensive search and production drive. If we fail in this task, the consequences can be disastrous to' our national development.







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