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Wednesday, 14 May 1980
Page: 2188

Senator WRIEDT (TASMANIA) - My question is directed to the Leader of the Government in the Senate and follows the question asked earlier today by Senator Tate. What is the anticipated position concerning Rundle shale development? Is it understood that that deposit can be processed into motor spirit? If it cannot, what is required of the companies involved in the development of the project to ensure that the shale can at some stage be processed into motor spirit? If the question of commercial viability is in issue, what is the agreement as to who determines the commercial viability of the product once that further refining has been agreed upon?

Senator CARRICK - Following upon Senator Tate's question, I sought from my Department clarification on whether there are any difficulties in the refining of the synthetic crude oil from Rundle. My attention was directed to its own briefing note to me, which I will read in a moment, and specifically to the Prime Minister's statement of Thursday, 28 February, which was in fact checked for accuracy with the Rundle partners. The prospective partner is the Esso company, or Exxon, which has very considerable technical experience in the whole of the refining business. I draw the honourable senator's attention to the specific paragraph of the statement and remind him that the partners had agreed that it was accurate. That statement reads as follows:

Esso's proposal to SPP/CPM contemplates that all production would ultimately be upgraded to a synthetic crude oil for feedstock to Australia's refineries where it will be refined into normal petroleum products, including petrol.

That was my clear understanding. The brief which my Department -

Senator Tate - That is not my understanding.

Senator CARRICK -Senator Tate shakes his head. If he has any technical reasons beyond those stated here, he should supply them. Honourable senators should bear in mind that this has been made as a public statement by the partners to the stock exchanges of the world. One could be very certain also that the refineries and the technical people in the oil industry would have contradicted this statement if there had been any disability about it. In any case, the advice to me from the technical people in my own Department is that the proposal contemplates that the shale oil produced will ultimately be upgraded to a synthetic crude oil feedstock for Australia's refineries where it will be refined into normal petroleum products, including petrol. If there is any dispute- I do not say this in any vexatious fashion- as to the technical reasons behind this, I would be delighted if either Senator Wriedt or Senator Tate would give me the information, in which case I will have it pursued. Those are the statements of advice to me.

Senator WRIEDT - I ask a supplementary question. I refer the Minister to Part I of the Queensland Rundle Oil Shale Agreement Bill 1980. Clause 8 of the preliminary notes states:

The shale oil extracted in retorts is not suitable for refining to motor spirit without further processing which would impose extra costs. The Agreement recognises that the Companies might produce only fuel oil but this clause 8 places an onus on them to undertake further processing within the State should this be commercially viable.

I also refer the Minister to clause 8 on page 9 of the same Bill. The last sentence reads:

The Companies shall undertake the construction and operation of such facilities -

That is, refining facilities- at such time and to such extent as it is commercially viable to do so.

Is the intent of that which I have quoted obviously different from that which the Minister has quoted? I am not questioning whether he is right or wrong, but quite obviously there is a difference. Will he clarify this? Obviously, a judgment has to be made under the terms of the agreement as to what is commercially viable. Who has the right to make that judgment? If this arrangement that I have read from is the correct one, will the Minister tell honourable senators what the ir -formation is that he is reading to the Senate?

Senator CARRICK (NEW SOUTH WALES) - Basically, what Senator Wriedt has done has been to confirm what I have said and to deny what Senator Tate's inference was, because what he read shows what I have said, and that is that it is perfectly possible technically to turn shale oil into gasolene. The Bill says so.

Senator Wriedt - Read that again. There is nothing about commercial viability.

Senator CARRICK -Senator Wriedt interjects. The question asked by Senator Tate was whether in fact shale oil can be turned into gasolene. My answer was as I have said. I have responded in terms of the partners and otherwise. Senator Wriedt read out something which says that it can be done but that there may be a question of commercial viability. I had not responded to that matter at all because I had not been asked about that before. I had only been asked whether it was possible to do.

Senator Wriedt - I asked you that in the first question.

Senator CARRICK -If I may be allowed to answer, the whole question in this matter is whether Rundle will be commercially viable, that is, whether it will be commercially viable in producing oil or whether it will be commercially viable in producing oil refined stocks. That, of course, will depend entirely upon the pursuit in this community of import parity pricing. The basis of the partners' advice to the community of Australia was that the one basis of their viability in producing oil stocks for Australia would be the sustaining of import parity pricing.

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