23rd Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 3 p.m., and read prayers.
– I direct a question to the Minister representing the Minister for Trade. Is the Minister aware that a member of the Queensland Parliament stated last week that Mr. McEwen instigated the reduction of lead production at Mount Isa? Is he aware also that the same member stated that Mr. McEwen has a financial interest in one of the group of mines now operating at Broken Hill? Is there any truth in the statements?
– My recollection is quite clear on both matters. The decision to reduce lead production at Mount Isa was made by the Mount Isa company itself. It was not a decision instigated by the Minister for Trade or the Department of Trade. The price of lead fell and overseas markets for lead declined. Mount Isa Mines Limited was in the fortunate position that it could, much more profitably, transfer its mining activities to mining for copper. The company made the sound decision to increase its production of copper and reduce its production of lead. My recollection is that Mr. Fisher himself made that statement as a statement of the company’s policy. The allegation that Mr. McEwen has financial interests in these mining companies has been made previously. I am again very clear in my recollection that Mr. McEwen himself publicly stated that he did not have any share interest at all in any of these companies.
– My question is directed to the Minister for Customs and Excise. Is there any difference between the censorship classifications for films shown on cinema screens and those shown on television screens? What are the censor’s various classifications? Since it is compulsory for theatre owners to advertise and display the classifications of all their film productions, would it be possible to insist that television stations be compelled to flash the censor’s classifications before all filmed programmes, and also to insist that the classifications be included in all newspaper advertisements?
– Television films are classified under the television programme standards laid down by the Australian Broadcasting Control Board. The television classifications are G for films for unrestricted showing, A for films not suitable for children, and AO for films not to be televised before 8.30 p.m. I think the question is a very pertinent one. At this stage, I am not aware of any necessity for a television station to flash the classification on to the screens before showing a film. I shall take the matter up with the post- master-General, who is in charge of the Australian Broadcasting Control Board, and discuss with him the advisability of a requirement to flash the classification on to the screens before a film is shown, and to publish the classification in advertisements. I think this is a very good suggestion, and one with which we should proceed.
– Can the Minister representing the Postmaster-General inform the Senate of the result of talks, which the Senate was advised were to be held earlier this year between Government representatives and amateur radio operators, to discuss protests by the latter body against alterations in radio frequency bands recommended by the Government-controlled Frequency Allocation Sub-committee? Does the- Frequency Allocation Subcommittee intend to persist with these proposals for frequency band changes when the International Telecommunications Union meets at Geneva? Will the Minister give consideration to charges by radio amateurs that they have no representation on the Frequency Allocation Sub-committee, that its proceedings are secret, and that they have no appeal against its decisions?
– I understand that some months ago, before the Parliament adjourned for the winter recess, representations were made to the Postmaster-General in regard to the subject that the honorable senator has raised. I myself attended a meeting called to discuss this matter, at which there seemed to be quite a deal of satisfaction amongst the amateur radio people. However, if the honorable senator will put the question on the notice-paper, I shall see the PostmasterGeneral and get a statement of the position as it is to-day.
– Some time ago the Minister for Customs and Excise permitted the migration, under conditions, of some koalas to California. Can he inform the Senate whether those conditions have been fulfilled and whether the koalas are happy and healthy in their new habitat?
– I understand that the koalas have been progressing very well and that they are shortly to be moved into outside cages, in accordance with the conditions laid down at the time of thenexportation. What is more, their number has increased by two, and I understand that another two are on the way.
– I direct a question to the Minister for Customs and Excise. Is. it a fact that in November, 19S7, a Cadillac car was seized by officers of the Department of Customs and Excise from Stanley Eric McCallum of Brisbane? Is it a fact that this car is still in the possession of the department? Is it also a fact that McCallum’s action against the department has now been withdrawn? Will the Minister expedite the return of the Cadillac car to Stanley Eric McCallum? Has any action been taken by the Minister to prevent the occurrence in future of such grave injustice as was meted out to Mr. McCallum?
– I am not aware that Mr. McCallum’s action against the Government has been withdrawn. Until I am informed that this is the case, I must regard the matter as being sub judice and I am not prepared to answer the questions.
– I direct a question to the Minister for Shipping and Transport. Apparently there has been an exchange of telegrams between the Commonwealth Government and the Premier of South Australia on the question of the standardization of the Broken Hill to Port Pirie line. Is it the Commonwealth’s intention to fulfil the Railway Standardization Agreement, that is, to standardize the whole of the Peterborough division, rather than to treat the Broken Hill to Port Pirie line in isolation? If there remains any question on which the Commonwealth requires further information, will the Minister advise me what it is, and whether a meeting can be held with the Premier of South Australia in the near future to clear up any outstanding matters?
– The question asked by Senator Pearson implies that if the Commonwealth is not prepared to agree to the standardization of the whole of the Peterborough division it is breaching the standardization agreement with South Australia. That is not so. Clause 9 of the agreement provides that any question as to the order and timing of the standardization works shall be determined by agreement between the two parties concerned.
The Commonwealth has stated that it is prepared at this juncture to consider the standardization of the Broken Hill to Port Pirie line, which, of all the lines in South Australia, appears to offer the best prospects of an economic return on the money that would be expended. But obviously before committing itself to a project of this magnitude the Commonwealth requires to have a reasonably firm estimate of the cost and of the financial return that would accrue from the standardization undertaking. The Commonwealth has not rejected the concept of standardizing the whole of the Peterborough division. All it has said is that at this stage it will consider the Broken Hill to Port Pirie line. There is nothing contrary to the agreement in this approach.
Whilst the Premier of South Australia has provided a good deal of information on the standardization of the Peterborough division, additional information on a number of aspects of the project as a whole is required to enable the total cost and the economic merits of the project to be completely and properly assessed. There has been an exchange of views between the Commonwealth and the Premier of South Australia on this matter and discussions are taking place between the respective Railway Commissioners in an endeavour to obtain the necessary information. Further elucidation is necessary on such matters as the route of the proposed line, deviations which may be required, the question of priorities and the timing of works, the total cost of the works and the benefits and savings that are likely to result from those works. On all these matters further exchanges of views are necessary at both the political and executive levels, and it is not a question of arranging any single interview with the Premier to enable the issues to be finalized.
– I ask the Minister representing the Prime Minister the following question: Will the Prime Minister request the Public Service Board to make an inspection at the office of the Commissioner for Commonwealth Employees’ Compensation to ascertain how many claims for compensation have been before the Commissioner for longer than two years awaiting decision, and to decide how all claims may be expeditiously handled?
– I shall convey the honorable senator’s request to the Prime Minister.
– I ask the Minister for Civil Aviation whether plans are under way for the construction of a new airport terminal lounge and airline offices at Canberra. Is the Minister aware that the present renovated design, even though considerable expense has been incurred on the alterations, leads to more congestion in the section occupied by Trans-Australia Airlines than occurred before the extensions were made? Will he initiate measures to have the doors made to swing both inwards and outwards to assist passengers who are carrying heavy luggage to enter the lounge, and for more room to be made available to the T.A.A. staff to enable them to deal more expeditiously with traffic at rush periods?
– I am disappointed to hear the view expressed that the recent renovations and extensions made at the Canberra airport terminal have not resulted in increased convenience, both to the travelling public and to the airline staffs who work at that terminal. I have kept the construction under pretty close review, and I have been informed by the managers of both airlines that they are extremely happy with the renovations that have been effected. I have not heard of any complaint about the double doors, but the honorable senator’s question reminds me that they could cause inconvenience. 1. shall have that matter looked at.
– And also at how the staff of T.A.A. are cramped?
– I direct a question to the Minister for National Development. Is it a fact that the number of tourists visiting the Snowy Mountains scheme is expected to increase to approximately 70,000 this year, compared with 35,000 last year? If so, and as the conducted tours include a boat trip on Lake Eucumbene, at present provided by a small vessel, will the Minister consider purchasing a vessel more suitable for the large numbers of people that are expected to make the trip in the future? In view of the popularity of the tour, will the Minister also consider advertising overseas tourist facilities that are provided in the Snowy Mountains area, so that overseas visitors coming to Australia may have an opportunity to see this magnificent venture?
– Last year, between 50,000 and 60,000 tourists went over the Snowy Mountains scheme. I would not dispute that the number may increase to 70,000 this year, because there is no doubt that, as a tourist attraction, the Snowy Mountains scheme is becoming increasingly popular. I hasten to say that the Snowy Mountains Hydro-electric Authority makes a charge for people who go over the scheme. The charge is sufficient to cover the costs of the services that are rendered, so tourist trips are not made at the expense of the public purse.
The advisability of seeking additional tourist trade is a matter to which I would want to give a little thought. After all, the job of the Snowy Mountains Authority is primarily to build the Snowy Mountains scheme. At the present time, the tourist trade is absorbing a good deal of the authority’s attention. I point out that companies serving tourists, such as the airlines and bus companies, are already doing a good deal of advertising of the various trips that they make available. The question whether the Snowy Mountains Authority should branch out in additional tourist activity by buying a larger vessel for use on Lake Eucumbene and by advertising overseas is of some little importance so far as policy is concerned, and therefore I should like to think about it before expressing any decided views.
– My question is directed to the Minister representing the Minister for Primary Industry. Has his attention been drawn to a newspaper report which states that the Queensland local government annual conference was told by a delegate that a £6,000 tractor would cost £60,000 if assembled from parts purchased over the spare parts counter? If this is true, will the Minister endeavour to ascertain the reason for the extremely high cost of spare parts which are being continually purchased by those using tractors in Australian developmental projects?
– I did see that particular item referred to by Senator Wade. I am bound to say that it appeared to me that the statement as given to the Queensland local government gathering was rather meaningless. The make of the tractor was not specified, nor was an indication given of where it was to be re-built. The information was given to this local government gathering by a delegate, the delegate claiming the authority of somebody in the Primary Producers Union. I would think that considerably more detail would be required before any investigation of a statement of that kind could lead to good results. But it is clear, Sir, that if one were to attempt to re-build a tractor out of spare parts, a bigger expense would be incurred than the expense of initially buying the tractor.
Necessarily, spare parts are manufactured and then shipped and held in depots all over the country and the shipping and holding charges would be greater than the initial charge of parts being built into the tractor. The charge would depend on the part of the country where a component was bought - whether in the Northern Territory, for instance, or in Adelaide.
Then again, some tractors are very old tractors, and have been in operation for twenty years or more, and the cost of manufacturing and holding spare parts for them, being a very small requirement, would be greater than making parts when the tractors were coming off the assembly line. All those matters would have an effect on the cost of spare parts for tractors; but if there is a little more detail given on the specific question asked by the honorable senator I will refer it to the Minister and ask for a particular investigation to be made.
– I find it necessary to ask the Minister representing the Minister for Immigration a question that I have asked previously. In view of the very low standard of life-saving equipment and other safety devices on some migrant ships reaching Fremantle from Europe, will the Minister see that all such vessels under charter to- the inter-governmental migration agency, before leaving Europe, shall be certified as sea-worthy by the same high standards that apply to vessels registered on the Australian coast?
– The honorable senator has raised this question before and I understood that she had received a reply. If she has not I shall again direct the question to the Minister for Immigration and ask him to furnish a reply.
– I wish to direct a series of questions without notice to the Minister representing the Minister for External Affairs. They relate to the reopening of the Russian Embassy in Canberra and I refer to answers that the Minister has given me in relation to earlier questions on this matter. Now that the Russian Embassy has been re-opened in Canberra, can the Minister inform the Senate how many Russian diplomats and officers, inclusive of families, are now resident in Canberra? Are any other employees from Russia there? Are any of the employees Australians? How many Australian diplomats and their families are in Moscow? How many Russian employees, if any, are attached to the Australian Embassy in Moscow? Can our diplomats speak Russian? Is it a fact that Russia normally insists that all Russian Embassy employees in Canberra must be Russian? If so, will the Minister make a similar insistence on behalf of the Australian Embassy in Moscow? Has the Government applied similar restrictions to the Russians in Canberra as those that are applied to Australians in Moscow?
– I am sure that the honorable senator does not expect me to be able to reply to all those questions without notice. I think I can give, first of all, the general answer that follows a statement made by Mr. Casey that there have been satisfactory reciprocal arrangements with the Soviet concerning the number of staff at the respective embassies, the activities and the privileges that will be held for those members of the staff. As to whether Mr. Casey will be prepared to give all the details that Senator Hannan seeks I do not know. The way to test that matter is to put the question on the noticepaper and find out.
– My question is directed to the Minister for Shipping and Transport. By way of preface I state that recently in South Australia there has been important news foreshadowing a vast extension of the activities of the Broken Hill Proprietary Company Limited at Whyalla. Can the Minister indicate whether any progress has been made in the matter of providing a rail link between Whyalla and the Commonwealth system at Port Augusta?
– Some months ago the Premier of South Australia made an approach to the Commonwealth requesting specific assistance for the construction of such a line. Inquiries in South Australia and at the Broken Hill Proprietary Company Limited revealed that the extension plans of the company would not be sufficiently developed for some years to warrant the construction of the railway. However, recently the Premier of South Australia made further references to this matter, and I should not be surprised if they were a precursor, as they usually are, of a further approach to the Commonwealth.
– I am persuaded to ask this question of the Minister for Shipping and Transport because of the many and varied rumours .circulating in mainland States, and in Tasmania, as to particular trips of the new Bass Strait ferry “ Princess of Tasmania “ being booked out. These rumours could do a lot of harm to our tourist industry, as people are beginning to feel that it is not worth while seeking accommodation on this vessel. Will the Minister suggest to the Australian Coastal Shipping Commission, which operates the vessel that, from time to time, -especially during the tourist season, it advertise the scheduled trips on which accommodation is available for passengers and/ or motor vehicles?
– I will be happy to discuss this very interesting question with the commission. In general terms, I can inform the honorable senator that the first few trips have been booked out. There are indeed heavy bookings for the first few months of the proposed itinerary, but some accommodation is still available. I shall obtain more detailed information for the honorable senator and will discuss with him his proposal that the commission should advertise details of the accommodation position.
– Is the Minister representing the Prime Minister aware that this week some of the Australian States are celebrating, and others are preparing to celebrate, Education Week? Is he aware of the very wide interest that is being taken in educational systems throughout Australia at the present time, and is he aware of the difficulties besetting all State Governments in meeting the demands made upon them for improvements in their educational systems? In view of those matters, will the Government consider establishing a commission of inquiry similar to the Murray Committee, which did such good work . in connexion with our universities, to investigate the problems of education in Australia with the object of arriving at some solution of these difficulties? After all, the State schools cater for about 97 per cent, of the students of Australia whereas the universities cater for only about 3 per cent.
– My recollection is that this matter has been before the Commonwealth Government already and thai the Government has declined to take action in connexion with State school systems along the same lines as it took for the universities, the reason being that one of the basic principles of CommonwealthState relations has been to leave education, so far as it relates to State schools, entirely in the hands of the States. But, as the honorable senator is aware, the Commonwealth Government has very handsomely increased the financial grants to the States in its present Budget, and this will make the States even better equipped than they are now to carry out that work.
– Replies have been received to questions 3, 6 and 17 on the notice-paper. Question 3 stands in the name of Senator Wright.
– I wish to withdraw that question. [Question withdrawn.]
asked the Minister representing the Minister for Health, upon notice -
– The Minister for Health has now furnished the following replies: - 1 (a), (b) and (c). Nydrane - in combination with other drugs - is useful in the treatment of some forms of epilepsy and is relatively expensive.
asked the Minister representing the Minister for Health, upon notice -
– The Minister for Health has now furnished the following replies: -
Debate resumed from 12th August (vide page 70), on motion by Senator Spooner -
That the bill be now read a second time.
– This measure comes before us as the result of an election promise that was made by the Prime Minister (Mr. Menzies) last October, when he said -
Perhaps the greatest single contribution which could be made to Australian development and a vital improvement of our balances of payment would be the discovery of oil in Australian territory. We have already done a great deal through our Bureau of Mineral Resources, subsidies to drilling, and the recently announced tax concessions to investors. By our recently announced tax concessions we will, in effect, be finding nearly half of the moneys invested by Australians in this search. Other means of helping will be investigated.
We will, if returned, set aside £1,000.000 a year, additional to what is now being done, to assist in oil search.
That is how this bill comes before the Senate. The Government is fulfilling a promise that it made to the electors. In his second-reading speech, the Minister for National Development (Senator Spooner) said -
The Commonwealth professional advisers hold firmly to the view that there should be deposits of oil in commercial quantities, not only on the mainland of Australia, but also in some of its Territories. lt is interesting and satisfactory to see that that view is being increasingly shared by consultants brought to Australia to investigate our oil search programmes.
The field of search for oil in Australia and Australian Territories is a large one. It covers colossal areas. Some of the geographical areas in which there is a possibility of discovering oil include that part of the Papuan basin which extends northnorth west from the Gulf of Papua, the north-western portion of the Carnarvon basin in Western Australia, the Fitzroy basin in Western Australia, the east coastal basin of Queensland, the central part of the great artesian basin and the Perth basin in Western Australia. That list must, of course, be regarded as no more than tentative. 1 was rather surprised to find that the Opposition was opposing the bill. As 1 have said, this is an election promise which the Government is fulfilling. Over the week-end I took the opportunity to find out whether the Opposition had put forward an alternative proposal at the last election. I went through the policy speech of the Leader of the Opposition (Dr. Evatt), but I could find no mention of oil. The Opposition has criticized the bill because it does not make sufficient money available and because it was introduced nine months after the promise was made. As there was no mention anywhere in the Opposition’s policy speech of its intention to do anything about this particular problem, one can only assume that the Opposition intended to do absolutely nothing about it. Speaking from the point of view of cold, hard politics, if the Opposition had intended to do more than we are doing, would not it have mentioned the fact in its policy speech?
When the first Petroleum Search Subsidy Bill was introduced, in December, 1957, the amount allocated by way of subsidy was only £500,000. It is interesting to note that Senator Armstrong, who led the debate for the Opposition then, said -
The Opposition approves and gives its support to this bill to make available £500,000. I congratulate the Government.
Now that the amount of the subsidy is doubled, Senator Armstrong’s leader has opposed the measure. It is interesting to note that the only other Labour speaker on that occasion two years ago was Senator Benn, and that he supported the measure, yet the other day he opposed this measure. I am at a loss to understand the logic of that. If a subsidy is worthy of support when it amounts to £500,000, surely it is doubly worthy of support when the sum is doubled. In the other place, Mr. Harry Webb, who led the debate for the Opposition on that occasion, said that the Opposition supported the bill because it was a step in the right direction. So much for that. i am rather perturbed at what might be termed the malicious gossip that is going on in Western Australia in respect of the highly respectable company, West Australian Petroleum Proprietary Limited. The gossip is that the company has found oil in the north-west of Western Australia, but will not disclose the fact. 1 have never heard anything more ridiculous in my life. The principals of the company are men of high integrity, whose honesty is beyond question. In addition, I believe I am right in saying that an agreement exists between the oil companies which are prospecting for oil and the State Government, under which the companies must disclose to the Government within 24 hours any. discovery of oil. If this malicious gossip were true, would this company - if it knew that oil was there - have invited one of its competitors, the Shell group, to invest money to assist it in its exploration for oil? The Western Australian people are very grateful to West Australian Petroleum Proprietary Limited, which has spent £15,000,000 in their State. The directors of the company are excellent organizers and its key men are very astute businessmen. It would be a sorry day for Western Australia if the company ceased its search for oil in that State.
I support this measure, not only as a member of this National Parliament, but also as a Western Australian representative. One of the colossal problems that faces this nation is the development of the north-west of Western Australia. That development is not merely a State problem. It is far beyond the capacity of the State to do what is needed to be done there. It becomes a national responsibility. The discovery of oil in the north-west of Australia could provide the answer to the problem of the development of that area. There are two sets of opinions on what would happen if oil were discovered. Some people say that it would not make a great deal of difference in the. opening up of that part of the country, but we see in other parts of the world that the discovery of oil has resulted in the opening up of country. There has been some criticism of the fact that in the history of the search for oil in Australia only some 434 holes have been put down, whereas In some other countries between 2,000 and 3,000 holes have had to be bored before oil was found. I think that the Government is quite well aware of that fact. We must not just stop at 434 holes; we mus go on. But 1 do want the Senate to remember that in the. 53 years prior to 1946 only £5,000,000 was spent on the search for oil in Australia.
– Does that include the amount spent in the territories?
– Yes, that includes the amount spent in the territories as well as on the mainland. When the £1,000,000 to be provided under this legislation is added to existing Government commitments, namely, the annual expenditure of £500,000 in oil search activities by the Bureau of Mineral Resources and the Division of National Mapping, and the annual vote of £500,000 under the Petroleum Search Subsidy Act 1957-1958, it can be seen that direct Commonwealth assistance to oil search will amount to about £2,000,000 per annum. Most of this Commonwealth assistance will be applied in ways which will directly assist exploration companies, to meet expenditure on the most costly items in their budgets. It must be remembered that the £2,000,000 to which I have just referred does not include the Government’s taxation concessions in regard to the search for oil. Including those, the total annual contribution made by the Government would be likely to be between £3,000,000 and £4,000,000. So in one year this Government is committed to the expenditure of almost as much as was expended in the 53 years prior to 1946.
We are well aware of the fact that the search for oil is a frightfully expensive business, but in two years the Government has doubled its direct contribution. At least, we have done something, but our friends on the opposite side of the chamber have had the temerity to say that we are not doing enough. However, a perusal of the promises that they made to the electors in 1958 shows that not one mention waa made of oil. If such a mention was made, I should be delighted if the next speaker were to tell me the substance of it and when and where it was made.
In supporting this bill, 1 close on this note. The proposals enunciated by the Minister in his second-reading speech are designed to stimulate investment and exploration. The Government hopes thai they will also excite comments and suggestions from interested quarters. They are constructive and imaginative, and they reflect the Government’s view that the search for oil should be a partnership of public and private interests. T support the bill and give it my blessing:
– I suppose it is true to say that when any parliament deals with the question of oil search to-day it is dealing with one of the romances of our times, with all its difficulties and excitements, and all the rewards that we know from recent history lie ahead if oil is found. I suppose every child knows of the oil strikes so dramatically made in the United States of America and in Canada. I suppose every child knows of the great wealth that has come to very backward places in the Middle East and of the importance of the Middle East as a result of the finding of oil there. We as a parliament take an interest in oil search, as is indicated, by the bill that is before us to-day.
Oil search is a matter of more than merely big. business, although the search for oil in. various parts of the country by big oil monopolies and cartels is the by-product, if not the: direct result, of the desire to make money for those companies and their shareholders. Because of modern threats and expansion, oil search becomes more than just a business venture. An examination of a graph depicting the absorption of coal shows a declining curve. The modern wonder of nuclear energy, amazing as its possibilities are for the future, will not represent a threat to oil in the foreseeable future. I have extracted some figures from a speech by Mr. J. D. Rogers, chairman of the Vacuum Oil Company Pty. Ltd. I accept these figures as accurate because it is very obvious from Mr. Rogers’s speech that he is absorbed in and has a complete knowledge of his subject. He said that in Britain, which has taken the lead in this sphere, where the development of nuclear power over the next twenty years is likely to be above the average of the rest of the world, estimates suggest that by 1975 nuclear power will provide the energy equivalent of about 40,000,000 coal tons a year. Britain’s present consumption of energy in all its forms is estimated to be approximately 250,000,000 coal tons a year. This could rise to 400,000,000 coal tons by 1975 when, on these calculations, atomic energy is unlikely to be providing more than 10 per cent, of Britain’s requirements.
So it is obvious that oil is the modern fuel. This fact, together with the fact that the threat of war is always over us and could easily be intensified, makes the search for oil so important. It is interesting to have a look at the figures showing the Australian consumption, as presented by Mr. Rogers. In 1939 consumption was 584,000 tons, while in 1958, nearly twenty years later, it was 2,500,000 tons. I cite these figures only in an effort to make my own mind grasp the tremendous effect of finding oil in the next few years. This increased consumption and the potential consumption might be termed the thrust and drive that make the modern world turn its eyes towards oil. Superimposed is always the threat of war, because in a modern war the difficulties of tankerage that we experienced in the last two world wars would be multiplied almost beyond imagination. On the other side of the picture is the fact that the figures presented by Mr. Rogers show that over-production took place last year, which, with the development of nuclear energy, might tend to make us a little complacent, particularly as we believe that the cold war may continue much longer than we had expected before a shooting war commences. The figures for potential requirements are only theoretical, but evidently they are based on the best information that we can obtain. We are told that the world might need 33,000,000 barrels of oil a day in 25 years’ time, as against 18,000,000 barrels a day to-day. That may be offset against the argument that as there is over-production no urgency exists in the the search for oil. But if oil were to be discovered in Australia, it would be of great advantage to us strategically. lt is very difficult for those who have tot seen oil-fields, particularly those of -the North American continent, to imagine just what demands are made in the provision of such ancillary services as roads and pipelines. When one looks at the maps that were kindly provided by the Minister for National Development (Senator Spooner) in explanation of his second-reading speech, one feels that he is almost standing on the edge of a vast unknown ocean. We have been told that almost half of the 3,000,000 square miles of Australia constitute a potential area for the discovery of oil. We must remember that the search for oil in other countries has led the searchers even to the bed of the ocean. Incidentally, the cost of searching for oil in the ocean bed is three or four times as great as searching for it on land. When we add to the oil potential of half of Australia’s 3,000,000 square miles the possibility of finding unknown quantities in the ocean bed, we see what a thrilling and important task is ahead of us.
To drill a hole costs approximately £400 a foot on the Australian mainland and more in Papua and New Guinea. When one realizes that only a few hundred of these holes, each having a diameter of 2 ft. 6 in., have been sunk, one realizes just how negligible has been our approach to the search for oil. Of course, all of us probably realize that the sinking of such holes is not merely a shot in the dark, but represents the final effort after a lot of survey has been carried out- From what I have been able to understand from the experts, it seems that the final test in the search for oil is the drilling of these holes.
There are certain disadvantages associated with the search for oil. One is that nature seems to have hidden it in the arid and outback parts. I understand that the white man has never set foot on some of the areas in Australia in which oil may be found and that there are other areas to which very few white men have been. Although that is a disadvantage from the viewpoint of the great cost of providing roads, of shifting oil rigs and so forth, it is of advantage, in the final analysis, from the viewpoint of development. I do not know of what advantage it would be strategically, because nowadays fast aircraft can penetrate inland very quickly. But if oil were to be discovered in the Carnarvon basin or in any of the other basins where we are searching for it, at long last decentralization would become a reality and not merely a talking point.
It almost seems that in Australia we have put the cart before the horse. I speak subject to correction, but I think we are probably well advanced in the refining of oil. It is not uninteresting to note that a substantial part of our oil refining industry is the result of the political situation in other parts of the world. The Kwinana refinery was established because of the activities of the Persian Government and Dr. Mossadeq a few years ago. If crude oil were to be discovered in Australia, it would mean, in effect, that we were harnessing the horse in the shafts. Perhaps the only thing that we would then like would be a market on which to sell our product.
The effect of the measure now before us is to require the Australian taxpayer to make a further contribution towards the search for oil. If and when the search for oil in this country reaches a successful conclusion, the benefits to be enjoyed will flow beyond this country to many people in the free world. In fact, it could mean more to them from the viewpoints of development and security than all the benefits they have derived from money expended since the forming of the United Nations organization in 194S and the concept of such projects as Marshall Aid and the Colombo Plan.
It is interesting to note that approximately 34i per cent, of our imports of crude oil come from what may be described as our own area - that is, from Indonesia - whilst the remaining 65 i per cent, come from the explosive Middle East. It is not difficult for us to imagine the problems that could easily confront us in the Middle East at any time. Although there have been encouraging developments in the search for oil in such countries as the Philippines, it is natural to assume that the aspirations of the people of those countries will drive them towards refining their own oil. In fact, I think Indonesia has already taken steps in that direction. Of course, no one would do other than praise them for taking such steps; any one having a spirit of goodwill would wish them the best in their efforts. Such developments in those countries and the potential danger in the Middle East put us into a very shaky position.
Twelve per cent, of all our imports take the form of refined oil products. Because of the publicity that has been given to our overseas balance of payments situation over the last few years, the fact that refined oil products constitute such a large percentage of our total imports probably makes a greater impact on Australians than does the thought of the vast potential that lies before us. Not very many years ago we used to laugh at cartoons depicting the wooing of the sheikhs in the Middle East by the Americans. But it is interesting to see how, as time passes, one eventually is caught up with the very thing at which formerly one laughed. Now, following a quick turn of the wheel, Australia finds herself in the position in which America found herself and is striving to find oil within her own borders. Even Japan, within the last few years, has been doing everything possible to take up oil concessions in Kuwait and Saudi Arabia. Any one who has read about the Japanese efforts knows what a great victory it has been to Japan to have obtained a tenuous hold on an oil-field so far away.
Of course, the problem in Australia is not concerned only with the inaccessibility of likely areas, the vast distances and the climatic conditions. It is concerned also with the availability of capital, as is always the case in a young country. Very rarely is sufficient capital available in a young, developing country. It must come from the older and more settled areas of the world, where the people are not spending so much of their budgets on development. Because of that fact, I think that the contribution that the Australian taxpayer is making to oil search is of interest
When Senator Branson said that the search for oil in Australia represents a partnership between the Government and private industry, and spoke of the not inconsiderable amount of money which is being spent each year in the search, the thought crossed my mind that perhaps this was an ideal case, and that the Government should take up shares, just rs Shell organization has done, in the search for oil in Australia. Then, when oil was discovered in commercial quantities and fields became established - and I am sufficiently optimistic to think that that day will come - there would be no question at all of the Government’s right to do certain things. Having regard to the price of development and consideration of economic stability, surely even the greatest antisocialist in the community would concede that the Government should at all times have its finger in the pie and be able to direct activities. Once oil is discovered in commercial quantities the profits are considerable, as honorable senators will know if they consider what happened at places such as Alberta in Canda. My friend, Senator Spooner, who is an accountant, should have a look at the way in which deficit budgets in Alberta, before the rinding of oil, became surplus budgets immediately afterwards. If he does so, I think that even his hardened heart will be tickled by the prospects.
Australia, Mr. Deputy President, is, I believe, one of the few countries in the world, excluding Canada and the United States of America, which are politically stable and have the requisite oil-refining capacity. It is one of the places in the world where capital should really be used in the search for oil, because although the capital that is employed is risk capital, I think it is true to say that there is less risk in Australia than there is in most other countries. Both the Government and the oil companies have a public relations job to do regarding the search for oil in Australia. I come from Western Australia, where, I suppose, the people are more oil-conscious than they are in any other part of the country, because of the oil boom that occurred there and because most of the oil search has been conducted in the west, and by far the greatest amount of money spent there. Even so, the people of Western Australia do not really understand the great development that took place in, say, Edmonton and Alberta, the great effect on the economy caused by the finding of oil, or the man-power employed and the services made necessary. If the public had an understanding of the results of the production of oil in commercial quantities, 1 do not think that those engaged in the search would be running into so many difficulties, due to the fear that is always being expressed that capital will be withdrawn. I think that there is a great public relations job to be done. The Government should speak fearlessly, not only of one side of the story, but also of the other.
Because of the criticism that is being made of General Motors-Holden’s Limited, and because of the huge profits that are leaving Australia, rightly or wrongly, Australians are beginning to wonder a little about the wisdom of bringing to Australia capital from foreign countries. 1 think that the Government should state clearly and unequivocally to the people of Australia - if it has already done so, the fact has escaped my notice - the arrangements that would be made, if an oil-field were to be established, regarding the repatriation of money to other countries, particularly to America. In other words, the extent to which the Government is to place its finger in the pie should be stated. The people should be told the extent of the decrement that may result as well as the extent of the increment. Up to this moment, either the oil companies nor the Government has done that.
The prize to be won from the discovery of oil in commercial quantities is especially great in Australia, because the discovery would not only assist development, but would make decentralization a real thing instead of just something to be talked about. Strategically, it would do more for Australia, in my view, than does the £200,000,000 a year that we have been spending on defence in the last few years. If we find a payable oil-field in Australia, from that moment, from a strategic point of view, we become the fifty-first State of America- Australia would not then be regarded as expendable. Never again would we have the position of the last world war, when we could have been one of those expendable countries to be taken back when the war was over. If we had a payable oilfield, then, in view of the political stability of Australia and the high standard of education of the Australian technicians, we should never again be likely to be regarded as expendable in the eyes of the Western powers. We have a great job to do in regard to oil search, not only because the discovery of oil would assist the development and the security of Australia, but because that would be the greatest single contribution wc could make to our Western allies.
I feel that the Government must closely watch its search teams. The Bureau of Mineral Resources is doing an excellent and a vigorous job with an impressive lot of young men, but, because of the quickly changing pattern of and the rapid developments in oil. search, the Government has a solemn duty to keep the staff of the bureau right up to scratch. I think it also has a duty to bring from other parts of the world men experienced in oil search, such as men who have actually found oil, or who have been in the tough areas of the Middle East, or engaged on the different type of oil search that takes place in Canada. According to reports, a different type of oil structure was found in Canada from that found here. I think that, the Government could quite easily slip into complacency by saying, “ We have very bright young fellows in the teams. Let them go ahead.” At no stage, should the Government teams fall behind the teams of the private organizations that are searching for oil. If they do, the Government will fall behind in the partnership and will thus be of less use to its partners and do less good for the public.
One criticism that we make is that the Government has not been in the forefront in this matter. There is a vast job ahead of us. Great prizes, but also great struggles lie before anybody searching for oil, particularly in a large country such as Australia. We believe that, the Government should be much more in the field and that it should make its position much clearer to the public than it has done in. the past.
Senator ANDERSON (New South Wales) r4.13]. - At the outset, I wish to challenge the clear inference made by Senator Willesee regarding, the expendability of this nation of ours. I listened to his words very carefully, and I do not think we can escape the clear inference that the great allies of Australia during the last war regarded Australia as expendable. That, I suggest, is a very improper thing to say, and I also suggest that it is not borne out by the story of the. last war. Indeed, history will prove, as we all know, and as Senator Willesee knows, that Great Britain and the United States of America never at any stage regarded this nation as expendable. The achievements of those countries in fighting side by side with Australia is sufficient denial of Senator Willesee’s statement.
If we were to be asked what would be the greatest single contribution that could be made to the future development and progress of this great continent of ours, I think it would be true to answer that the discovery of oil in commercial quantities would be that . contribution. We know that of an import, figure of approximately £850,000,000 a year, we are at the present time spending no less than £135,000,000 on the importation of crude oil. That, I suggest is of the order of 15 per cent, of our essential imports.- In-, view c-f the possibility of discovering oil in commercial quantities in Australia, I was astounded to hear the Leader of the Opposition (Senator McKenna) say that his party, which purports to represent- at least a half of the electors of this great country, would vote against the proposal to grant Commonwealth money for the purpose of assisting the search for oil. Sir, it is the vote that counts in this place, and I remind honorable senators opposite that they accept a very grave responsibility, as representatives of the. people, in voting against the expenditure of public money on the search for oil which, as even the last speaker from the other side. Senator Willesee, admitted is such an important factor in the future progress and development of our nation. Sir. it is an odd thing, an odd circumstance, that the Opposition did not oppose a previous proposal by the Government to expend money to assist the search for. oil - as- well it might not!- Indeed, the Opposition on that occasion made only a token contribution to the debate - there were only two. speakers on the other side - and the measure was passed with great speed. But on this occasion the Leader of the Opposition has said that his party will vote against the measure now before us. This change of attitude is hard to fathom. I wonder whether it is a sample of a new look to be adopted by Labour during this sessional period.
Sir, as the Leader of the Opposition has taken this course, I feel a responsibility, as one of the members of the Government team, to scrutinize carefully the case that he has submitted to the Senate. During the six years that I have been a member of this chamber, in common with other honorable senators I have admired his capacity to present a case and to supply the background story, which very often it is not possible for the Minister in charge of a bill to do in his second-reading speech. In this instance, however, the Leader of the Opposition has made out an extraordinary case. For instance, he mentioned a reference that was made by Dr. Raggatt, the Secretary of the
Department of National Development. As we all know, Dr. Raggatt is a great Australian, a great public servant, and he is doing a magnificent job for the nation in this particular field. Senator McKenna took this reference, made in 1954 no less, out of its context. A generalization taken out of its context can mean anything or nothing. Senator McKenna then related Dr. Raggatt’s statement of 1954 to the situation in 1959. Of course, the intervening period of five years did not mean anything to the honorable senator in making his case! Sir, 1 suggest that this was illogical and that it was hardly worthy of the honorable senator; it would be more worthy of a move adopted by a school debating society. Senator McKenna ignored entirely all the things that have been done during the last five years. Therefore, I submit that this reference, which occupied a large part of his speech, can be disregarded.
During the intervening period of five years much geological survey work was carried out. Senator McKenna not only ignored this work; he ignored also the geophysical work, the drilling for information and the production drilling which we all know has gone on at a very great tempo during the past five years. That is the blind spot in Senator McKenna’s argument. We know that prior to the undertaking of geological and geophysical surveys, a tremendous amount of work is involved in mapping operations over difficult terrain. Sir, the honorable senator’s argument ignores the fact that 433 bores have been already sunk, mostly during the last five years.
There is a tendency to forget the vastness of the Australian continent, which is apparent from a study of the “ Year Book “. The Australian continent comprises something like 3,000,000 square miles. The sedimentary basin, in which oil might be discovered, comprises approximately half of that area. If we were to sink 3,000 bores - as was done in the Province of Alberta in Canada and which seems to be the optimum comprehended - in the sedimentary basin of 1,500,000 square miles, assuming my arithmetic is correct, that would be an average of one bore to every 500 square miles. This indicates the magnitude of the task that confronts us.
I think that the work that the Government has done during the last five years particularly was based on a proper approach to the problem, an approach which suggests that because of the very vastness of Australia we should try to do this preliminary work, thereby concentrating our efforts in the areas where they are most likely to succeed. We all know that oil is found by digging holes in the ground; there is no other way of finding it.
Senator McKenna suggested that the search for oil should proceed on the basis of knowledge. I agree with that contention. In fairness to the honorable senator. I should say that he admitted that he had not had an opportunity, before speaking to this bill, to study “The Search for Oil in Australia “, a publication produced by the Department of National Development. The most striking impression from a reading of this booklet is that we are going about the search for oil on the basis of knowledge, bearing in mind that we have a population of only 10,000,000 people and a limited financial economy. We are trying to concentrate our financial resources on the search for oil on the basis of knowledge. It is to the credit of the Minister and his department that that has been regarded as fundamental. Indeed, it underlies this bill. Governmental and private agencies have already spent something like £56,000,000 in the search for oil in this country - most of that amount during the lifetime of this Government. It is a not inconsiderable sum to be expended by a nation such as ours.
I should like to compare Senator McKenna’s dictum of the basis of knowledge to his reference to Glen Davis. It was extraordinary to hear the Leader of the Opposition citing Glen Davis, which is on record as a social experiment conceived and implemented in complete negation of the principle of basis of knowledge. We all know the story of Glen Davis. Some honorable senators opposite had such training and experience before they entered this place that they must know that the Glen Davis attempt to obtain oil from shale was a tragic socialist experiment. A proper survey of the area was not first made, and it is on record that the Glen Davis site was not the proper site. Secondly, the equipment purchased was not adequate. Despite this, the Opposition gives Glen Davis as an example of the application of the principle of basis of knowledge.
In fact, it provides an example of socialist bungling which proceeded from a complete absence of research and the provision of faulty equipment. There was failure right along the line. To the uninitiated, 3,000,000 gallons of petrol per annum sounds most impressive as the output of Glen Davis, but on inquiry I find that it is less than is brought into Australia in a single tanker. It is, nevertheless, quoted as the high point of Labour’s success in producing oil from shale. Lest there should be any misunderstanding, let me say that a normal tanker carries between 25,000 and 30,000 tons or between 6.250,000 and 7,500,000 gallons of crude oil. That information was provided by the department. On that basis, the claim of the Opposition does not seem very strong. We know that the late Mr. Chifley and the late Senator Ashley, of fond memory, went to Glen Davis time out of number. They pleaded for greater output, stressing that if it were not obtained Glen Davis would have to be closed down. It was left to this Government to carry out that unfortunate task. It is not a happy story, and certainly not one that the Leader of the Opposition should have used to bolster his policy on the search for oil in Australia.
The Government, in pursuance of a promise made to the electors, proposes to provide another £1,000,000 for oil search. It intends that if possible the money shall be spent in providing background information which will enable private enterprise to go out into the field and find oil. It is not an easy task. We have been told that 3,000 borings might be needed, but that is a very false basis on which to work. The Australian sedimentary basin is so vast that many more borings may be needed. The extra money which the Government is providing will at least tend to establish a system of priorities for the various sedimentary basins. It will be possible to concentrate on the areas most likely to produce oil in commercial quantities and the great subscribing and investing community will be able to devote money to oil search with a reasonable prospect of success. If this great task is to be left entirely to the Government the discovery of oil may be denied to us for many years to come. The Government has set itself out to provide the background geological information so that private investment can be encouraged to enter this vast field. It had hoped that the Opposition would support it in this endeavour, but that has not happened.
We have already proved that oil is here, and if we find it in commercial quantities Australia’s future will be limitless. In that regard I find myself in complete agreement with Senator Willesee. Not only will our import problems be solved, but our prosperity will be assured, through our capacity to export to nearby countries. We could have, for all time, a satisfactory balance of trade. We know just what that would mean to Australia. The Government has set about the task of making that a reality, but it has been castigated for doing so by an Opposition which previously criticized it for not fulfilling its election promises. When the Government produces evidence of fulfilment the Opposition votes against its proposals and against the interests of Australia. That is the responsibility which Opposition members have accepted. The people will be their judges.
– The Government’s greatest achievement in bringing down this bill is the fulfilment of an election promise; and, believe me, that is no mean feat for this Government! I can remember a great number of election promises this Government has made and then conveniently forgotten. For instance, I remind Senator Anderson that this Government has talked about such things as putting value back in the £1, low income tax and so on, but has as yet done nothing. In those circumstances, I suppose it can be said that in attempting to fulfil this promise relating to the search for oil the Government is really achieving something, and for that alone I congratulate it.
It is true that the discovery of oil in Australia would of tremendous benefit to the nation, and for that reason everything that can be done to assist in finding it ought to be done. It is also true that there are other things that can be attempted to ease Australia’s fuel oil difficulties, and T intend to say something about them.
The first thing that interests me is that something like £1,000,000 is to be made available this year to help private enterprise to search for oil; but the Government makes only passing reference to the agreement that is to be entered into between it and the groups of private people who are to be assisted in their search for oil. As I read it, the agreement is all one way. It provides that the people of Australia shall set aside £1,000,000 to be given to those private groups which are now and which will be willing to invest some money in the search for oil. It is not a bad proposition for those private groups. The people of Australia are risking their capital in the search for what could provide a very valuable reward if oil were discovered. But, if oil is found, does this Government propose that the private groups who discover the oil shall pay back to the people of Australia the money they provided to help find it? I see no reference to that in the bill. What is to happen to the people’s money if, after receiving perhaps £500,000 of the people’s money, a private group discovers oil. Will this group be required to repay that money to the Commonwealth Government? Are the people of Australia to share in the rewards flowing from the discovery?
– I know how definitely they will share! For many years now, the members of this Government have stated that the Government favours private enterprise, not government undertakings. My mind goes back to the time when this Government took all the risks of establishing an industry and then, after the industry became profitable, sold it to private enterprise. I need only mention the whaling station in Western Australia to illustrate my point. In that case, the Government carried on until all risk was eliminated from the venture and then said. “ We will sell this to private enterprise because we do not believe in Government ventures. We believe that private enterprise should have the opportunity to operate an industry and reap all the rewards from it after we have eliminated all the risk from the undertaking.” This Government’s view is that it is quite all right for the people of Australia to provide the finance when an undertaking is hazardous and for that undertaking to be sold to private enterprise once all risk is eliminated. For that reason. I feel that it is wrong in this instance to ask the people of Australia to provide money to private groups which are prepared to undertake the search for oil, but which have not the interests of Australia at heart. They are not concerned about what benefit Australia will derive from the venture; they are concerned only with making a profit and they are prepared to take some small risk, knowing that if they do discover oil they will become fabulously wealthy. I submit that any agreement made between the Government and the people whom it is proposed to assist should contain a proviso that if the venture is successful, if oil is discovered in commercial quantities then at least the people of Australia shall receive back the money this Government was prepared to sink in the risky venture. I should like the Minister to make very clear to us, when we are in committee, just what provision is being made for the people of Australia in the agreements to be entered into between the Government and the private groups which will be searching for the oil.
I shall protest very vigorously if all thai the Government proposes is to make available sums of money to assist these private groups without requiring that the people of Australia shall share in any rewards that flow from the discovery of oil. Already some assistance has been given to the search for oil, and it seems probable that we shall continue to help in these ventures. In those circumstances, it is only fair to ask that those people who make money available year after year to assist these ventures shall share in any success accompanying the project.
There was a time when the Government had an interest in oil. At that time, the people of Australia, through the Government, had a considerable holding in Commonwealth Oil Refineries Limited. But this Government felt that it was not important that the people of Australia should have a say in supplying oil to Australia, and that glorious enterprise should derive the benefit. Accordingly, the Government’s holdings in C.O.R. were sold to private groups. If we do find oil in Australia the people who have assisted in the discovery should have some share in the rewards flowing from it.
Great stress has been laid on the necessity to find oil, on the fact that we depend a great deal on oil to keep our transport running and on the importance of all the other things in Australia that depend upon fuel oil. All these matters are mentioned by the Government in its effort to establish a case for giving the people’s money to those who are searching for oil. Why, Senator Anderson has told us that there is no certainty that oil will be discovered. He mentioned that many holes have been drilled already and pointed out that we could go on drilling for a number of years without coming upon flow oil. 1 have stated many times here, and I repeat now, that we cannot afford to take the risk of carrying on year after year without having enough oil in Australia to keep our transport moving and to meet the needs of fuel oil users.
Senator Anderson referred to the fact that at one time we had at Glen Davis a plant< for the extraction of oil from shale. He argued that this was purely an experimental venture, that the site was poorly surveyed, that it should never have been selected, that the machinery used was obsolete and that from the very outset the hazards were such that it was impossible for the venture to successd. 1 am not going to argue whether that is true or not. T accept that the Glen Davis machinery was bought 25 years or more ago, and that the site chosen was probably a bad one. I point out that when one of my colleagues spoke of something that happened five years ago, he was told that that was outofdate thinking. When honorable senators opposite speak of Glen Davis as being a failure, they must remember that they are referring to something that was commenced more than 25 years ago. To quote the failure of Glen Davis as a reason for not trying to obtain oil from coal in Australia to-day is an example of out-of-date thinking.
During the war period Germany made extensive use of substitute fuels in order to keep its war effort going. It started its substitute ventures at short notice with inadequate machinery, but those ventures proved capable of rendering very great service to the German people. Since the war South Africa has commenced to extract oil from coal on a very large scale. The petroleum that the South Africans are making from coal is already supplying the bulk of South African transport needs. The scheme is working on an economic basis. I suggest to the Minister that the obtaining of oil from coal is a certainty, not just a hope, as is the case in our search for oil wells. We hope that if we drill enough holes we will one day find oil. We go on year by year clinging to that forlorn hope, notwithstanding that some day we may be faced with the situation that we have not enough fuel to drive our vehicles and do all the jobs for which we need oil. Whilst it may not now be an economic proposition to produce oil from coal, it is a certain way of obtaining oil. As I have said, oil is being obtained from coal in South Africa on a commercial basis. Since South Africa commenced to produce oil commercially from coal, developments have taken place which indicate that, given proper encouragement, we could produce oil from coal commercially in this country.
The certainty of having enough oil or petrol to keep our transport system in motion during a period of crisis is something for which the Government should be willing to pay a substantial subsidy. After all, we build fighter aircraft which cost many millions of pounds and then we discard them. Ten or fifteen years after we build them, they are useless. We say that it is necessary to do that to defend our country. I point out that you can build all the fighter planes in the world, but if you have not got the fuel to drive them they are of no use to you at all. It is possible that our supplies of petrol from overseas could be stopped in a day, and within a brief period this country would be at the mercy of an aggressor. 1 put it to the Minister that it would be prudent to commence developing plants in which oil could be obtained from coal, to devise a plan under which, after a few years, sufficient money would be available to establish plants which, in a time of emergency, would supply enough oil to carry on the activities of the country. Already the Broken Hill organization at Newcastle is making a considerable quantity of petrol as a by-product of its manufacture of steel. It is true that that production is not a commercial proposition, but the petrol could be used to drive a fighter plane or to supply some of our transport needs. If that process were developed, it could be of great assistance during a period of crisis.
We have great resources of coal in our country. It is probably the only fuel that we have, but at the present time there is stagnation on our coal-fields. Thousands of men leave Cessnock every morning .to go to Newcastle to work, and many others travel longer distances to their work. At a time when stagnation exists in the coal industry, the Government ought to be planning to ensure that our coal resources could be used to supply us with enough petrol to carry on during a period of crisis.
I am glad that the Minister for National Development is now in the chamber. I put it to him that the only form of agreement contained in the bill, as 1 read it, is an agreement between this Government and the companies which are searching for oil for profit, under which the Government is agreeing to give the people’s money to the companies on certain terms. The Government is saying, in effect, “ If you do this and that, we will give you so much “. I ask the Minister whether there is any clause in the agreement which provides that if these companies strike oil, they will repay the Government the money that has been given to them and. in addition, will give to the people of Australia a share of the rewards flowing from a successful search for oil.
I feel that it is very wrong for us to be paying out this money without a chance of gaining something. If you take a ticket in a lottery, you might say that you are merely helping to keep the hospitals going, but you have a chance of getting something back for yourself. We are paying this money out to people who hope to find oil and make huge profits. These people are interested, not in whether Australia benefits, but in how much money they will get out of it themselves. If public money is to be spent on such a project, there should be a reservation to the effect that if these companies make a lot of money, the people of Australia will participate in the rewards. 1. believe that we ought not to be paying out huge sums of money to the groups of people who are prepared to take the risk of finding oil. We purchased and had in Australia all the equipment needed to drill for oil. I believe this Government did a great wrong when it sold to private enterprise that equipment which ought to have been used by the Government in the search for oil. The best way to use money for this purpose is in the purchase by the Government of its own drilling equipment to be used by its own people.
– You would never convert Senator Spooner to that proposition.
– I have tried pretty hard for a long while but have never yet got anywhere.
– Hope springs eternal!
– Yes. I do not agree with the spending of the people’s money in the search for oil in this great private-enterprise country. If there are people, as there are, who are prepared to take the risk in the hope of reaping huge rewards, let them have a go at the job. If the Government is sincere, it ought to obtain the drilling equipment we had previously and itself engage in the search for oil.
Finally, I put it to the Minister that we are living in a fool’s paradise if we say that by spending X amount of money one day we might find oil, while, in order to justify the subsidies paid, stressing to the people the danger of not having oil in Australia. What I suggest may not, at the present stage, be commercially or economically possible, but the Government has vast resources of coal and idle men who could be mining it. We have in Australia the know-how that could result in our obtaining a considerable amount of petrol from that coal, and certainly enough to carry on this country in an emergency. I plead with the Minister and with the Government to do something about the production of oil from coal.
– The finding of oil is possibly the most exciting thing that could happen to this country. Oil would be of tremendous value to us and therefore anything that can be done to help the finding of oil is to be highly commended. I take this opportunity of commending the Minister for National Development (Senator Spooner) for his very broad vision in directing the efforts of the Government in this field over the past few years. Very often governments are dogmatic in their refusal to do things that might directly help certain people, but the view that Senator Spooner has induced the Cabinet to take, as enunciated by the Prime Minister (Mr. Menzies) in his policy speech, is deserving of the highest commendation.
The search for oil can involve the expenditure of a great amount of money. It has been continuing over a long period, rising and falling in intensity according to the hopes in the minds of investors and the failures that have been recorded. I remember the search for oil in the Roma district, in my own State of Queensland, its fluctuations, and the great hopes that were held. We have seen the same hopeful outlook develop in other parts of Australia. Not very long ago in the north-west of Australia small pockets of oil were found and great excitement resulted throughout Australia. There has been another upsurge in the drilling for this elusive fluid, and I feel sure that this is the result of the visionary outlook of the Minister and the Government. I believe, too, that the increasing intensity of the search each year makes the chances of finding oil brighter and brighter.
A careful reading of the Minister’s secondreading speech shows that the whole scheme has been planned on a most scientific basis. The Government measures fall into two categories, one the tax concessions and the other the actual search for areas that have possibilities and the subsidizing of drilling by companies. These are positive and practical methods of helping to find this very precious fluid, which we hope will some day flow very strongly in this country. The small amount of money which is being expended by the Government, in comparison with what the ultimate yield might be, is, I think well justified. I know that, if oil were found tomorrow, everybody would say that the expenditure the Minister has induced the Government to incur was a worthwhile investment, and 1 do not think that any person in this chamber would be game to say that it was unjustified. If oil were found, immediate wealth within the country would be created. We would be assisted over a major difficulty which has been hampering us for some years in the shortage of overseas exchange. An amount of approximately £135,000,000 is at present going overseas for the purchase of oil. This would remain in Australia and be available for the purchase of equipment and plant to modernize our factories and help our economy in various other ways. Therefore, apart from the wealth created within the country, the saving in international exchange would be of concrete benefit.
Senator Arnold is a public accountant, and 1 was surprised at some of his comments, because he is one of the men on the other side to whom we look for very sound statements. He asked what the Government would get out of the finding of oil in return for subsidizing the drilling ot wells. Would the companies recompense the Government for the expenditure of that money? I understand that the Government would be recompensed for the cost to it of drilling a well in which oil was found. Other wells which had proved to be of no value would be a complete write-off. The point is that if oil were found as a result of the Government’s expenditure of money, we would get that money back in many ways. We would get it back in greater prosperity for the country and more employment for our people. We would ge it back directly many, many times over, because of the increasing wealth which would mean greater returns from income tax levied on the people and companies producing that wealth. If any of us was spending, as an individual, the amount of money that the Government is spending, and receiving in return the amount which the Government stands to receive in taxes he would say that he had made a very great investment.
The discovery of oil is of great importance to Australia, not only from the viewpoint of the economy; but also from the viewpoint of our security. Although the expenditure of approximately £4.000,000, together with subsidies and tax concessions, may seem to be quite large, surely, if we think clearly, we must regard it as being a very wise investment. I feel confident that the attitude of the Minister for National Development and the Government will pay off handsomely in the not-too-distant future. As I said earlier, no one will then squeak about this outlay. I can well recall the attitude of the Minister when the Government sold a drilling rig a few years ago. The Opposition raised a hue and cry about the selling of that rig; but a little later, because of th? sale of that rig, a small pocket of oil came to light in Western Australia. Nobody then condemned the Minister for having done what he was criticized earlier for doing, because everybody then felt that oil would be found in payable quantities. I am of the opinion that the Minister for National Development works on a very sound basis.
Having read his second-reading speech very closely, I cannot help feeling that he has outlined a very grand conception and a very practical method for helping the search for oil.
I repeat that to my mind the possibility of finding oil is the most exciting thought that presents itself to the people of Australia. If the bill we are discussing helps any one to find oil in Australia, then every one will be proud of the fact that the Minister is a man of such calibre, and of the Government for backing him in the attitude he is adopting towards the search for oil. I support the bill very strongly. I congratulate the Minister and the Government upon having introduced this forward-looking legislation; it is practical and down to earth. I do not think any one could honestly criticize the idea that lies behind it. We sincerely hope that the efforts of the Minister and the Government will be crowned with success, because if they are every one in the Commonwealth will be so much the richer and so much more secure.
– There seems to be a commendable spirit of agreement on both sides of the chamber as to the desirability of doing everything possible to find oil in Australia. We all realize that the finding of oil would make a wonderful difference to our overseas balance of payments. It would also add to our security, which could be endangered if our oil supplies were cut off at any time. Moreover, it would make a big contribution to the wealth of the Australian people. But there seems to be strong disagreement as to the method proposed in the bill for helping the search for oil. The Government says that it promised on the occasion of the last election to help the search for oil to the extent of £1,000,000, that it is now carrying out that promise, and that therefore it feels it deserves commendation particularly as on the previous occasion on which it made a grant for this purpose the sum allotted was only £500,000. On the last occasion, members of the Opposition, led by Senator McKenna, expressed their approval of the legislation.
But a different spirit obtains on this occasion. That part of the Opposition which is led by Senator McKenna proposes to vote against the bill. I realize, of course, that it is the duty of the Opposition to oppose; but 1 am afraid that I cannot support the method of opposition that was suggested by Senator McKenna. If one thinks that not sufficient money is being allocated for a particular good purpose, is that sufficient reason for saying that one will vote against allocating even the smaller sum? I could not support that proposition. Let us take an analogy. The Government, in the Budget, proposed an increase of 7s. 6d. a week for pensioners. I think it ought to be more, and 1 intend to express that point of view; but because I adopt the view that the increase should be more than 7s. 6d., I would not in any circumstances vote against giving the pensioners the 7s. 6d. increase that the Government proposes to grant. So I propose to vote for the legislation now before us. Honorable senators on one side of the chamber say that it is necessary to spend £1,000,000 and honorable senators on the other side say that we should spend a lot more. Well, I do not intend to vote against spending the £1,000,000. My attitude is that, if the proposal is a good one - I propose to examine that question - I shall vote for the sum proposed.
In some ways, the attitude of the official Opposition towards this legislation is a little unusual. The Government, which is wedded to the principle of private enterprise, proposes to support, to the extent of £1,000,000, an industry which notoriously has powerful financial resources. The official Opposition, which is wedded to the principle of government enterprise, says, “ The sum proposed is not enough. Let us give a lot more. “ I think we must look at the circumstances surrounding this industry. We must consider the reasons why people overseas are prepared to invest money in the search for oil in this country, and also the ultimate good of the Australian people.
Why is overseas capital being invested in the search for oil in Australia? It is not being invested here because of any love or affection for the Australian people, otherwise the interests concerned would have come here years ago. In the past, those interests preferred to go to undeveloped countries where labour was cheap and which they felt they could exploit more easily than they could exploit countries such as Australia. They are now faced with the situation, as T think Senator Willesee pointed out, that
Australia presents advantages that are not to be found in other countries. Australia has stable democratic government. No one could describe the governments in some areas where oil is being produced to-day as being stable. I refer to the Middle East, where anything could happen at any time to cut off. oil supplies, and to some of the South American countries.
Those people who have made big profits from the sale of oil and who are interested in the industry realize that it is necessary for them to look to the future and to look elsewhere lest international events cut them off from the areas they have developed in the past. I think they have come to this country for that reason and that they have been marvellously well treated when they have come here. What are we doing for those people? We are saying to them, “ You may come here and search for oil. We will give you big taxation advantages. We will subsidize your search to the extent of £1,000,000 “. I am amazed at the kindliness of the Australian Government, because when these people have gone to other countries to search for oil they have had to put down a lump sum and make very tight agreements to pay royalties on all oil they have extracted.
– But do not forget that they knew oil was there.
– Senator Hannaford says they knew it was there. We have heard the Minister. I do not think he is ill-informed in these matters. He said that he believes that oil is to be found in this country, and I accept his opinion. Senator Hannaford need not accept it if he does not wish to do so.
The real issue in relation to this bill, as I think was mentioned by Senator Willesee and developed very well by Senator Arnold, is “Who is going to get the profit from the oil when it is found?”
– The Australian people, I should say.
– We are told that the Australian people will get it.
– In the event of an emergency, where would the oil go? lt would be kept here. Do not worry about that.
– I am glad to hear Senator Hannaford say that in the event of an emergency the oil would be kept here, because no other spokesman for the Government side has given that assurance. We are entitled to an assurance. When 1 read the speech of the Minister I found the opposite view stated. He said -
We do not attach conditions to overseas investment in our potential oilfields.
Senator Hannaford says that we are going to keep the oil here, and the Minister says that we are not attaching any conditions. If I am wronging the Minister and am referring to a sentence which he used in a particular context, I shall be grateful if he will clarify the position at a later stage.
– He will.
– I am glad that Senator Hannaford is so confident that the Minister will do so, but even if mine were the only voice I would still ask, “Who is going to get the profit?” I want to know what the Australian people will get out of it, and I also want to know, in the event of an international emergency, what is going to happen to our oil. I want to know, too, how we are going to conserve the oil if it is found. Are we going to allow it to be drained off, on the decision of overseas investors, without regard to our particular needs? Some countries are already in serious trouble because of the extent to which they have allowed their oil wells to be exploited.
If there are no conditions attached to the grant of this money I cannot in any circumstances support the suggestion that we ought to be granting a lot more money. My opinion is that, if there are no conditions, £1,000,000 is an extremely generous grant. I think that the Australian people have to be considered. If we are inviting overseas interests to come here and drill for our oil, and there is no suggestion of the methods by which we are going to control production once oil is found, and no suggestion regarding royalties, I am not prepared to give a penny more than £1,000,000. In fact, I have grave doubts whether we ought to give £1,000,000 until the position is clarified. What country in the world to-day, other than Australia, is inviting overseas companies to come in and drill for oil on the basis that it is there and - “ If you get it it is all yours “?
It may be that 1 am exaggerating the position, but I am deliberately putting the case because I want to know where we stand if oil is found. Are we to get royalties from the production of oil? What are we going to get out of it, other than the things that have been mentioned? What is being done to ensure that we will receive a fair share of the profits, and what is being done to ensure that our oil wells will not be exploited to an extent that disadvantages us?
In some other countries immense sums of money are obtained from oil wells that have been brought into production. We sometimes hear spectacular accounts of how the money is spent, of eastern potentates spending oil royalties on Cadillacs and large-scale harems. Fortunately for us, being a democratic country, the leaders of Australia will not be enabled to indulge in those activities; but concerning other countries, reasonably civilized countries, where oil production is fairly considerable, I have read descriptions of the magnificent cities that have been built, of splendid roads, and of wonderful development that has been financed by royalties on the oil being produced. That is the reason for my curiosity as to what is going to happen here and what the future decision of the Government in regard to oil will be. Is there a policy7 Can we be assured that the Government will see to it that we will get a reasonable return from the oil that may be discovered in this country?
I could understand the view of the Opposition that more money should be spent by the Government on oil search if its supporters said that oil should be nationalized. I could understand it if they said, “ Let us provide money because, when oil is found, we intend to extract big royalties from the oil companies”; but 1 cannot understand the suggestion that we should spend more money than is envisaged in this bill when we do not seem to have any guarantee as to what is going to be done with the huge profits that can be made if we have a large-scale oil discovery in this country. I appreciate the benefits that will accrue if oil is discovered, but from the point of view of the Australian people, and because of lack of knowledge regarding the extent to which our oil wells could be exploited, I certainly think that £1,000,000 is a very generous grant indeed. Therefore, I propose to vote for the bill as it stands.
The only other matter that I want to raise - I have mentioned it before - is the question of the control of our oil reserves. Perhaps I may be looking too much to the future, but I presume that the Government will certainly bear in mind that if oil is discovered there will have to be some watch kept, some form of control on the development of our oil reserves. We have to consider our own interests. I understand other governments already exercise a form of control. As I say, I am prepared to vote for the bill as it stands. I would not give any more money; but I should like to know the attitude of the Government towards protecting the well-being of the Australian people and securing for them a fair share of the profits if a large-scale discovery of oil is made here.
.- 1 was rather astonished by the very narrow, discouraging and parochial outlook of Senator McManus. He apparently failed to appreciate that vast wealth could accrue to this country if we were able to bring in oil in commercially payable quantities. There must be encouragement to people to invest their money in enterprises of this kind. According to the information contained in the second-reading speech of the Minister for National Development (Senator Spooner), private enterprise and government sources have spent £56,000,000 to date in the search for oil in Australia. That is a very great sum of money. So far, there have been no rewards for the investment of such a large sum. Although Australia is very close to oil-producing countries, such as Indonesia, so far we have not been able to obtain anything more than showings of oil. There has been nothing of any commercial value. Therefore, there is nothing really outstanding to attract investors to put their money to the test in such a vast area as the Australian continent. We. should be most grateful to any investor at all, wherever he comes from, who is prepared to risk his money in the search for oil in Australia. Senator McManus referred to the fact that big oil companies have been tied to certain conditions by other countries. 1 remind him that those arrangements apply only in countries where oil has been already found in abundant and payable quantities That is a horse of a different colour. As I said a moment ago, we ought to be very grateful indeed to any body of investors that is prepared to risk money in the search for oil in this country.
If oil can be discovered in payable quantities in Australia, great wealth will accrue to our people, compared with which the expenditure of £1,000,000 a year, proposed by this bill, would be only petty cash. I am thoroughly sympathetic to the Minister and to the Government in this matter, and 1 am prepared to shake hands with any investor who puts his money into this great task of trying to locate oil in our country. Already, 433 holes have been sunk. Although only one well in Western Australia has shown positive signs of oil, there might be vast quantities of oil awaitng discovery, but it will cost a lot of money to locate it. In New Guinea, only one well - Puri well - has shown positive indications of oil. It costs a lot of money to put down a drill in the right place, the place where a reservoir of oil might exist.
Senator McManus expressed the fear that if we were engaged in a war a foreign power might order us to deliver oil to here, there and some other place. However, the matter is not so easy as that. If we had oil in this country, who would respond to such orders, and how could the oil be got out of Australia other than by the use of arms? The honorable senator should not be so pessimistic. I am one of those who believe that perseverence, determination, and the willingness to risk our cash will sooner or later find reward in some part of Australia. I think that the policy that is being pursued by the Department of National Development is a good one and that, in subsidising the preparatory work, the Government is on the right track. It is important to establish the geological zones where accumulations of oil are likely to be.
– Why does not the Government do the lot?
– Why should the Government spend any more money on this work than it can help spending? Why should the Government undertake a task of this kind when private companies have available money and splendid rigs and drilling gear? Goodness knows, in Queensland I have seen enough of government enterprises! Nobody could convince me thai the Government should do all the work in the search for oil after what I have seen of the way that socialistic enterprises have wasted millions of pounds in my own State over the years. If private enterprise discovers oil in Australia, the Government will reap its reward for the assistance it has given in the search. Make no mistake about that!
Tax concessions are granted in respect of money invested in companies engaged in. the search for oil - and properly so! If 1 had the say in this matter, I should make the tax concessions very worth-while. With the discovery of oil, the Australian people will reap their reward by the provision of greater employment opportunities and the development of towns, cities and railways, all of which go to make up a magnificent Australia. I wish that honorable senators opposite could envisage the wealth of possibilities that would come to us if oil were discovered in payable quantities in this country. Let us not lose that vision. Opposition senators should realize that every £1 counts in the search for oil. I regret to say that governments cannot always secure the degree of skill and loyalty that obtains in the field of private enterprise.
The purpose of the subsidy provided by this bill is to encourage the search for petroleum in Australia by subsidizing stratigraphic drilling and certain other operations. Stratigraphic drilling over the sedimentary basin is designed to find out what is below the earth’s surface and to determine whether developmental drills should be put down. The bill emphasizes the importance of basic survey work. A part of the amount of £1,000,000 that will be provided in terms of the bill will be paid as subsidy; the remainder will enable further work to be performed by the Bureau of Mineral Resources and the Division of National Mapping.
Mapping, is more important than appears on the surface. As the Minister has explained in his second-reading speech, the mapping work that is being done is of value to the country, apart altogether from the oil interests, in ascertaining what various areas where geological exploration is carried out have to offer. This is a great help to State governments, local authorities and those persons who are engaged in the search for oil. The Department of National Development is already expending £500,000 a year on oil search activities and a similar amount under the Petroleum Search Subsidy Act 1957- 1958, which this bill supplements. The passage through the Parliament of the measure now before us will ensure a total amount of £2,000,000 per annum to assist the search for oil. Indirect assistance is provided by the Government by way of tax concessions, which are designed to encourage people to invest their money and to help in other ways in the search for oil. As the Minister pointed out, tax concessions added to the money already provided for subsidies under the 1957-1958 act and the bill before us will make available a total sum of from £3.000,000 to £4,000.000 as an encouragement to those who are engaged in the search for oil If we add to that amount the sum of approximately £6,000,000 per annum, being the present annual expenditure by exploration companies, we get an annual expenditure in the search for oil of approximately £10,000,000. That is more than has ever previously been provided for this purpose. I am sure that the Minister is on the right track in wanting to give to those engaged in oil search the material that they must have if they are to know where to put the drill down. That is the biggest thing of all. Geophysical, geological and stratigraphic research must take place before the drill is put down. Mapping and trial drilling reveals what is beneath the surface. The driller then knows that he is working in country which should trap oil. That is the only way to find it, but this is the first time, in my knowledge of the Australian oil industry, that such an approach has been made by the Government.
I should like to make brief mention of the Roma district of Queensland as an area which is worthy of further research. I know that a great deal of money has already been spent there. I used to make a tew pounds on the stock exchange by investing in Roma oil shares when I did not think there was any oil there. The day came when I was satisfied that there was, and [ then lost a good deal. I had been bitten by the bug! I still hold the opinion that the Maranoa basin offers good prospects for oil search. Many of the old hands at Roma, though they have lost money, still feel that modern techniques may lead to the finding of oil there.
In 1897 a town bore was drilled at Hospital Hill, Roma. When a depth of 3,683 feet was reached natural gas blew into the hole. The flow was estimated at 39,000 cubic feet of gas a day. That was the beginning of the search for oil at the turn of the century in Queensland. The gas was a “ wet “ gas, which is often associated with the presence of oil. It is so-called because it contains the hydro-carbon which, when condensed, forms liquid petrol or gasoline. In 1927 an absorption plant was erected in Roma to record the petrol content of the gas. The petrol recovered was sold locally to motorists and truck drivers from a kerbside bowser. Altogether, 27,000,000 cubic feet was processed. From this, 30,000 gallons of petrol were recovered and sold. In 1931 diminishing supplies caused the closure of the absorption plan. In 1930 I was driven round Roma in a car running on Roma petrol. Later, the Roma Blocks Oil Company, which was working 9 miles north-east of Roma, drilled down to granite bedrock at 3,561 feet. At about 100 feet above bedrock, grits which contained oil and water were penetrated. The oil was a dark, reddish brown crude oil with a paraffin base and a specific gravity of 0.88. By baling, 10 gallons were produced each 24 hours. The oil was not, of course, in sufficient quantity to have any commercial value, but it was the dinkum oil! It was not merely a driller’s “ showing “. Accordingly, many people at Roma believe that accumulations capable of yielding far greater quantities must exist somewhere in this zone. The presence of petrol-forming hydro-carbons in the Roma gas wells certainly suggests the presence of oil somewhere in the region. In my view, companies searching for oil should not lose sight of the fact that this area offers as good a prospect as is offered by any other locality in Australia. All the indications of the presence of oil are there and I am sure that sooner or later some one will put a drill down in the right spot. The aim of the Government is to participate in, and encourage, every kind of oil survey work, hoping for additional exploration by others, but leaving the whole field of production drilling to private investors. We must offer a reward in return for the risks involved in the search over wide areas for oil.
I remember attending a school picnic when I was a boy in the central west of New South Wales and taking part in a greasy pig race. The prize was a golden sovereign, for that was the currency in those days. We all chased the greasy pig over fences and through mire until only a small aboriginal boy was left in. He finally captured the pig. The judge said, “That was a mighty display of stamina. Will you tell us why you ran so hard? “ The boy said, “ Boss, all the time I ran after that greasy pig I could see that golden sovereign shining in his tail “. That was the incentive in his case. We must give a like incentive to those who wish to search for oil in this country. I think that the Minister and the Government, through these subsidy measures, are doing just that.
– in reply - It has been an interesting and informative debate and I should like to spend some little time answering the queries that have been raised. If it suits the convenience of the Senate, this might be an appropriate time to suspend the sitting.
Sifting suspended from 5.44 to 8 p.m.
– I think it is fair to begin my reply to the secondreading debate by saying that the attitude of the Opposition to this bill is a most extraordinary one indeed, and one which I find it difficult to reconcile by any process of logic that occurs to me. Senator McKenna, almost from the beginning to the end of his speech, acknowledged the supreme importance of the task of finding oil in Australia. Let me quote some of the things he said.
He said that the discovery of oil would revolutionize the finances of this country. He said it would undoubtedly provide enormous avenues of employment for our people. He said that if we found oil we could expect a reduction of the cost of all transport based on oil and that that was of the most profound importance because one of the flaws in our cost structure was the high cost of transport. He said that the discovery of oil would accelerate that highly desirable aspect of development - decentralization. Indeed, he concluded his speech by saying that if we were to find oil the face of Australia would be literally changed in a decade. Then, having said all those things, he announced the decision of the Opposition to vote against the bill which proposes to increase by £1,000,000 to £2,000,000 the amount which the Government proposes to spend on the search for oil! He extolled all the virtues of oil search and I find it strange indeed that, having acknowledged the supreme importance of the task, he proposes to vote against a proposal to double the governmental allocation, a proposal to increase the government subsidy by no less than 100 per cent.!
I think it proper for me to go on and add to that criticism a little recital of the circumstances. I remind the Senate that, as a Government, we went to the people at the last election with the clear statement in our policy speech that if we were returned to power we would spend an additional £1,000,000 on the search for oil. And I think I am correct in my recollection when I say that there was no mention of any policy relating to the search for oil in the policy speech of the Labour Party at that election. I have no recollection of any challenge by the Opposition throughout the whole course of the election campaign to the Government’s policy on this matter. Members of the Labour Party did not then go on the hustings and say that what we propose to do should not be done. They did not go on the hustings and say that the proposed amount was insufficient. Indeed, I think it is fair to say that throughout the whole election campaign the Labour Party was supremely indifferent to what happened about the search for oil in Australia. Yet, against that background, it comes forward now and says it intends to vote against this measure!
Let us look now at the objections that have been raised in this extraordinary situation. I start by making the general statement, which I believe to be correct, that there is not the slightest substance or merit in any of the criticism that has come from the Opposition side of the chamber. I make the further statement that in those circumstances the Labour Party certainly takes on a great responsibility in voting against this measure because if that adverse vote were carried, it would be a very grave setback indeed to what I look upon as being the most important area of potential development in Australia. The Opposition carries the responsibility for capriciously voting against this measure and I believe that the Australian public will not easily forget such action.
Having said that, let me take one by one the arguments that have been adduced by the Opposition. First, although the Opposition proposes to vote against the legislation, although its members do not believe it is good legislation, one of the grounds of criticism is that we have been too leisurely in bringing it before the Parliament. If a more contradictory approach than that can be found, I should like to hear of it. To that criticism I give the short answer that it is better from the point of view of Australia as a whole that there should be a leisurely approach on the part of the Government than that there should be complete indifference on the part of the Opposition.
But that short answer would not do justice to the circumstances because, in the proposals that we have advanced, a great number of technical and financial considerations have had to be thought out. I think the proposals are fairly clearly stated in the bill, but it will be remembered, that in my second-reading speech 1 requested that the Government be. allowed some degree of flexibility in the programme that it carries out. Even now we have had consultations not only with people within Australia, but with people overseas. I point out, too, that despite the fact that we have advanced our programme and. given reasons in support of it, Dr. Raggatt, the head of my department, and an. acknowledged authority on oil geology, is now overseas looking at. what is being done in other countries. He is going not only to the United States and other oil-bearing areas, but also into the Sahara to see what led to discoveries there, because we have been told that there is a great similarity between geological conditions in the Sahara and those in certain parts of the interior of Australia, and there may well be good lessons to be learned from seeing what is happening in the Sahara.
I make no apology for thinking this matter out as well as I could before bringing specific proposals to Parliament because, after all, the spending of £1,000,000 a year is indeed a great matter. We have not yet reached the stage in Australia at which the expenditure of £1,000,000 a year is not a quite appreciable draw upon our resources and, that being so, we have a great responsibility indeed to see to it that the programmes advanced and the ideas thought out are the best that we can get and that the money that we are given is spent well. I think that disposes effectively of the criticism that we have made a too leisurely approach to the matter.
Then we heard the criticism that applications were being rejected because of lack of funds and that more than £1,000,000 should be provided. There may be grounds for misunderstanding on this point. In truth, up to this present stage no applications have been rejected because funds were not available. A great number of other reasons exist for rejecting or deferring applications. In some cases, for instance, applications are made for a subsidy in an area in which the geological sequence is already well known, so we do not need to subsidize for the purpose of gaining information. We get a number of applications that are immature; the arrangements have not been properly and adequately worked out. Then we get a number of applications where the proposal is to drill to a depth which would not be great enough to give us the information we need.
I have had some more up-to-date figures prepared which show that so far we have had a total of 77 applications: Of those applications, twenty have been approved. 21 have been rejected and 36 have been deferred. Of the twenty that have been approved, nine of the drilling operations have been actually completed, three of the applicants are now drilling, four are preparing to drill, and three applications have been withdrawn. It might be of interest to the Senate if I elaborate this a little more than is necessary to reply to the criticism that has been made, because I think it is of great importance that we should get us correct a picture as is possible. Of the 21 applications that have been rejected, sixteen were rejected because the sites were located in areas where the geological conditions were so well known that the proposed new drilling could not be expected to yield information of further geological significance. Of the 36 applications that were deferred, a number were deferred because the applications were made before the actual drilling sites were selected. They were applications in the broad, rather than adequately detailed applications. Others were deferred because the applicants came to us and asked for subsidies before they had made arrangements to get their proportion of the finance needed for them to carry out their responsibilities. There artenough applications coming forward to make it unnecessary for us to deal with applications unless we are quite satisfied that the applicants have the financial stability that would enable them to carry their operations through to completion. Then there were cases where the applicant was not able to satisfy us that he had the drilling plant to do what was needed.
– Were any of those applicants oil companies?
– Yes, a lot of them were oil companies. I know that that is anathema to the honorable senator, but 1 think it is fair to say that in most of the major oil search programmes that are being carried out in Australia and Papua to-day, Australian capital is invested. In Oil Search, Santos, Wapet and other companies there are Australian shareholders.
The next point of criticism is that there should be a complete scientific study of the whole of a sedimentary basin. The criticism is that nobody is making a systematic scientific approach to a survey, basin by basin. That discloses a misunderstanding of what is being done. What the Leader of the Opposition has advocated is precisely the Government’s aim, and in achieving that aim the Government believes it is making good progress. There is excellent cooperation between the Commonwealth, the State governments and the companies engaged in oil search. The Carnarvon and Canning basins of Western Australia are pretty big areas, but they have been pretty effectively and completely surveyed by the Bureau of Mineral Resources and Wapet in their joint operations. Most of the basic work in those two big basins is almost complete.
I make the point that it would be wrong to try to deal entirely with one basin at a time. It would be wrong to finish all the work in one sedimentary basin before going on to the next basin. It must be remembered that not all the work is being done on government account. Oil search companies are engaged in this work, and the more companies we can have searching for oil, the better. Quite naturally, these companies spread their activities over various basins. One basin appeals more to one company than it does to another. One company has better professional knowledge, about one basin than it has about another. We aim to get holes drilled in each of the basins of the Commonwealth. We aim to build up a complete picture of the whole of our sedimentary basins, but I remind the Senate that it will be a long and tedious jobOff the cuff, I hesitate to put a time limit on the job. I think that the work of the Bureau of Mineral Resources in the Western Australian basins has now been spread over the best part of a decade. A great deal of work has to be done in each basin, ranging from aerial mapping to surveys by ground parties. That work takes a long time.
That leads me to the next point of criticism. Senator McKenna said that we should equip the Bureau of Mineral1 Resources with the necessary staff. He suggested that all that the Government has to do is to offer enough money and it will get the best brains and all the staff it needs. Unfortunately, that is not true. There is a great dearth of professional people in Australia, and indeed throughout the world. The facts are that in 1954 we advertised 24 positions, but got only fourteen recruits. In 1955 we advertised 26 positions, but got a response of only eight. In 1956, we advertised 29 positions and obtained only two people. In 1957 we advertised for eighteen people and got ten. This year we are advertising 24 vacancies. Those figures are an effective reply to the comment that has come from the Labour Party. They show one of the reasons why the whole of this job should not be done on government account. Money is not the only thing involved in this. The technical knowledge and know-how of professional people are also needed. Each one of these companies which comes from overseas brings somebody with it who has a world-wide knowledge of these matters. Every Australian syndicate and Australian company that starts up also brings some additions from the reservoir of scientific people overseas and adds them to the pool in Australia.
Then it was said that what we should do . is to engage people with overseas knowledge. Of course, that is exactly what we are doing at the present time. We have on the staff of the bureau at present men who have been actually doing this work inside and outside of Australia, as members of such well-known oil companies as Shell, Trinidad Leaseholds, Kern Trinidad, Bahrein Petroleum, Anglo-Iranian - now British Petroleum - Burma Oil Limited, Assam Oil, and even a company operating in Poland. The Bureau of Mineral Resources is a focal point. It brings people from overseas to Australia. Then - for my part I take no great exception to this - we find quite frequently that the outside companies attract men away from the Bureau of Mineral Resources and put them on their own staffs. I think that that is a desirable feature. The bureau takes young fellows and gives them valuable experience and knowledge. Then, if they are attracted by higher salaries somewhere else it is a good thing for Australia that they will have been trained.
– What about increasing their salaries?
– I think that they are not unreasonably paid at the present time. One has to remember that with some professional men it is not only money that counts. It is important to them that they have an opportunity to do work they wish to do in a particular field. A further criticism was that as information is obtained from each hole it should be published. That is a matter that has to be kept in its correct perspective. Great sums of money are involved. It is not only the money that goes into the drilling on the Government’s account. The individual companies and their shareholders, whether they are Australian or overseas, have a legitimate right to have protected for their own use for some reasonable period the information that is obtained. We should not run away with the idea that it is an easy matter to get people to come to a decision to drill a hole. The legislation provides that the subsidy may be 50 per cent, or two-thirds, but the cost of these holes is so great in many cases that we are increasingly making definite arrangements as to a particular amount. Our subsidy on the Puri hole in New Guinea, which cost £1,000,000, was £250,000. We did not subsidize to the extent of 50 per cent. There was a somewhat similar arrangement in regard to the Santos hole at Innamincka. Our subsidy on that, I think, was about one-third, instead of 50 per cent. If valuable information is obtained by drilling a hole that is subsidized, it is quite reasonable to allow the company concerned to have twelve months in which to take advantage of it. It may take the company a year to evaluate properly the geological information that is obtained. That geological information may indicate the desirability of drilling in an adjacent area. It would be, I think, more than a little unfair if a company spent, say, £1,000,000 on drilling a hole, with the Commonwealth subsidizing onethird of the expenditure, and the information obtained led to the conclusion that a hole should be drilled in some neighbouring locality, and as a result of the information so obtained some other company got in and obtained the right to drill such a hole.
– That cannot happen. They have the right of search before they start.
– I do not say these things lightly.
– Have they not leases for a certain period?
– Leases are renewable from period to period. When results are interesting, there is a good deal of competition for those renewals. Then there was the criticism of the disposal of the Commonwealth’s drilling plant. That is an illustration of the usual clash of socialism with private enterprise. I put the matter in simple terms. There is not any doubt at all that £56,500,000 would not have been invested in the search for oil in Australia on conditions in which the private investor - the private speculator, in many instances - felt that the Government was to be a competitor with him in the task. That, I hope, replies to the main points that Senator McKenna raised.
I shall turn now to the matters that Senator McManus raised. I think that he, in his approach, missed or perhaps did not appreciate the point that the search for oil and minerals and a lot of other activities are inherently and basically the prerogative of the State governments. It is the State governments that have legislative rights, and in all States there is at present State legislation which, I think, meets the point that he has raised. I arranged for my officers to obtain some information for me on this matter and, with the consent of the Senate, I shall read it.
The petroleum legislation of the States and territories provides that all oil produced in Australia and required for consumption in Australia shall be retained for that purpose if the Minister - that is, the State Minister in each instance - so directs. The acts also provide that in an emergency the Government has the right to take over control of all oil production. The laws provide that the oil shall be recovered from the ground in such a manner as will ensure the conservation of natural resources and avoid waste. The leaseholders are required to pay rental on their land at a given rate per unit of area and, after production of oil has commenced, pay royalty at specified rates on that production. The laws also provide that where two or more operators shall be in control of a unit oil field, they are required to draw up a plan for the orderly development of that oil field and submit it for the Minister’s approval before commencing the production of oil from that field.
So the points that Senator McManus raised are, by and large, covered in State legislation. I remind Senator McManus that the old recipe for jugged hare begins, “ First catch your hare “. In view of the enormity of this task, we must be very careful that we do not become oppressive and create conditions that will drive private investment out of the field. Let me illustrate the point in this way. The Santos people, during a recent discussion, told me that if the structure upon which they are operating at present were in a country where oil had been found in commercial quantities, they would expect, because of the extraordinary size of the structure, that some 5,000 or 6,000 holes would be drilled on it, in contrast with the one that they are drilling at present.
So, while we all have high hopes in the search for oil, let us not by any means underestimate the task that has to be done.
Let us, I suggest, always be receptive to the creation of conditions which will encourage people to come here to add to our resources their own resources of finance and know-how. Although the States have their own relevant legislation, we must not let the matter remain in their hands. We must not sit back and wait until the happy time when oil is found in commercial quantities. My professional advice is that once oil is found in commercial quantities and the geological circumstances in which it occurs become apparent, the probabilities are that, given that clue, key, or formula, we may expect to find it in other places. In other words, the greatest help we could get is to learn the geological conditions in which oil occurs in Australia.
I turn now to what Senator Arnold said and I say to him that there is a lot of loose thinking about producing oil from coal. For example, Dr. Andrews of .the Gas and Fuel Corporation of Victoria said that, with a subsidy of £1,500,000, he could produce economically 70,000,000 gallons of petroleum products per annum. Let us examine that statement. Seventy million gallons represents only 3 per cent, of Australia’s consumption per annum.
– Order! The Minister’s time has expired.
Suspension of Standing Orders.
Motion (by Senator Paltridge) put -
That so much of Standing Order No. 407A be suspended as would prevent the Vice-President of the Executive Council and Minister for National Development (Senator Spooner) speaking in reply for more than thirty minutes.
– There being present an absolute majority of the whole number of senators, and no dissentient voice, I declare the question resolved in the affirmative.
– I thank the Senate for its courtesy. If we take Dr. Andrews’s statement that a subsidy of £1,500,000 per annum would enable him to produce 70,000,000 gallons of motor spirit a year, and if we remember that that quantity represents only .3 per cent, of Australia’s requirements, a subsidy of the order of £50,000,000 a year would be needed to make .from coal Australia’s requirements of motor spirit. ,But probably more than that would be involved, because the possibility is that with that output of motor spirit there would not be a market for the by-products that would be produced at the same time.
I remind Senator Arnold that distant fields are always green. We hear a good deal about the Sasol project in South Africa. That project represents a capital investment of £50,000,000. It operates on coal produced at 7s. 6d. per ton by native labour and in competition with spirit which has to be transported many hundreds of miles by rail. In spite of all those advantages, we do not receive very glowing reports about Sasol operating economically and profitably. But what I have said is not to be construed as an attempt by me to pour cold water upon the objective of producing petroleum products from coal. I ask the Senate to remember that, in accordance with the Prime Minister’s policy speech, I have appointed what I believe to be a first-class group of people to investigate the research that is being carried out in Australia.
asked what would happen if oil were found in Australia. It has always been the policy of the Government that, if oil is found in commercial quantities in a hole that is being subsidized, the company concerned shall refund the subsidy. The earlier legislation contained a provision to that effect, and the same policy will be applied to the administration of the legislation now before us. It must be remembered that with every hole that is being drilled, particularly holes that are subsidized, we are gaining additional geological knowledge. That knowledge is being added to the information already obtained in order to base soundly the general search for oil. So it can be said that, with the payment of this subsidy, we are buying information. That applies particularly to the offstructure holes, in relation to which we contemplate paying two-thirds of the cost.
Let me say again, as I said to Senator McManus, that we need to have flexibility in our arrangements and to create conditions that will attract people to Australia to engage in the search for oil. I say with respect that it is completely unreal on the part of the Opposition to suggest that the search for oil in Australia should .be entirely on government account. Doesany one seriously think that, with all the demands that are made upon Commonwealth resources, if the cost of the search for oil was on government account only, £30,000,000 would have been spent unsuccessfully in Papua? Does any one think that Australian governments would have had the courage and the resources to continue the search under those conditions? Does any one really think that £56,500,000 from the pocket of the taxpayers would have been spent on the search for oil in Australia? To suggest that such expenditures would have been incurred is to engage in wrong thinking. I say to Senator Arnold: What is wrong with the idea of giving incentives to people to do something that will yield results which are in a national interest? Does the honorable senator suggest .that the Commonwealth Scientific and Industrial Research Organization, for example, should not be given funds to spend on coal research and research into matters related to increased primary production? There is no difference in logic between providing funds for those purposes and subsidizing the search for oil. Would the honorable senator remove the gold-mining subsidy legislation from the statute-book? Is it not as important to find oil as it is to maintain our gold-mining industry? Would he destroy the Tariff Board, which gives protection to secondary industry?
– We established it.
– Then be logical Why does the Opposition criticize the payment of subsidies to help the search for oil? We have heard another old shibboleth raised. The Government has been asked why it sold its shareholding in Commonwealth Oil Refineries Limited. Does any one in this chamber really believe that a Commonwealth government, whether it be a Labour or a Liberal government, would have put £40,000,000 or £50,000,000 into the building of a refinery at Kwinana? Does any one really think that the Australian taxpayers should have been called upon to find such a great sum of money for that purpose? Does any one really think that, if it had been the policy of the Government that it should become a partner in that great venture, and if all the decisions to be made had been subject to the red tape that governs all government decisions, those great works would have been completed in the time in which they were completed?
I ask Senator Arnold not to forget two main points. First, there is no doubt that the great flow of overseas investment that is coming into Australia, and which is helping us so much in all our international dealings, is coming here basically because we have in Australia a stable free-enterprise government. If the honorable senator thinks that if a socialist government was in office in this country, there would be such a flow of overseas investment, he is quite wrong. The second point is this: It is said that Johnnie Government is a partner in all sorts of business transactions and that what we subsidize and what we spend on the search for oil we will get back many times over if we are successful.
I conclude by saying that this legislation provides the most striking evidence of the fact that this Government not only is eager to find oil in Australia, but also is going about the search for it in the best and most practicable way. We have made it plain to all persons interested in the search for oil, whether they are from overseas or are Australian shareholders, that with the subsidies for which provision is made in the bill, with the work that is being done by the Bureau of Mineral Resources and with the tax concessions that are being granted, the Commonwealth Government is finding approximately SO per cent. of the total sum of £8,000,000 that is currently being spent on the search for oil. For the Opposition to make a halfhearted attempt to oppose this bill makes nonsense of all its thinking in terms of national development and of the professed aspirations of honorable senators opposite to see Australia develop. Indeed, it does very little credit to them.
Question put -
That the bill he now read a second time.
The Senate divided. (The President - Senator the Hon. Sir Alister McMullin.)
Majority . . 9
Question so resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
Clause 3 (Definitions).
, - I should like, first, to direct the attention of the Minister for National Development (Senator Spooner) to the definition of “ Australia “. The clause states - “ Australia “ includes the Territories to which this Act extends;
If I may refer to clause 4 in passing, in order to show the application of the definition, the clause provides that -
This Act extends to the Territory of Papua and the Territory of New Guinea.
In clause 7, everything rests upon operation in Australia. The clause indicates that the provisions of the act will relate to applications made by persons who propose to carry out operations in Australia. A doubt was expressed to me about the application of the legislation to sedimentary basins in the Northern Territory. I know the legal argument to the contrary, but I should be glad to have the Minister’s assurance that in the bill, as it stands, the word “ Australia “, as defined in clause 3, is wide enough to comprise, not only the Northern Territory, but also the Australian
Capital Territory. It is my own belief that it is, but I should welcome the Minister’s assurance on the point.
The other item in the definitions to which I wish to refer relates to off-structure drilling, which is defined as follows: - “ off-structure drilling operation “ means a drilling operation that the Secretary certifies to be in an area in which, so far as the Secretary is aware, a structure favorable to the accumulation of petroleum does not exist;
I think the Minister will agree that, on picking up the bill and reading that definition for the first time, it sounds rather strange, having regard to the fact that it occurs in a bill relating to petroleum search. It seems to me that the thought that the Minister expressed at another stage of the consideration of the bill might well be incorporated in that part of the definitions clause; that is to say, that the words “ but which the Secretary certifies could help in the search for oil elsewhere or in adjacent areas “ might be added. I think that the Minister will see the defect in the definition from that view-point.
An off-structure drilling operation is again referred to in clause 9, where provision is made for that type of drilling operation to be subsidized to the extent of two-thirds of the cost. Anybody who initially picks up the bill must wonder, in the absence of an explanation, why the Government is prepared to pay two-thirds of the cost of drilling an off-structure hole which the secretary certifies is in a structure not favorable to the finding of oil. On the face of it, it looks a little absurd, and I am suggesting to the Minister that, for the purpose of the record, he might indicate the true objective of an off-structure drilling operation, and also indicate how the type of operation that is contemplated will in fact assist in the search for oil in areas removed from that in which the drill is to be put down.
– The Leader of the Opposition has raised two points. He was good enough to give me an indication that he would raise the matter of the Northern Territory definition, so that I am armed with a note from the draftsman about it. I have been asked whether subsidy will be payable under the bill in respect of oil search in the Northern
Territory. My answer is that it will be payable. All Commonwealth acts operate in the Northern Territory unless a contrary intention appears in them. It is clear that there is no contrary intention in this bill, because clause 7 provides that a person who proposes to carry out oil search in Australia may lodge an application for the Minister’s approval of the proposed search. As the Northern Territory forms parts of Australia, it follows that the Minister can approve of oil search in the Northern Territory and that subsidy can be payable in respect of approved search operations in the Northern Territory.
Papua and New Guinea, however, are not part of Australia. Moreover, the Papua and New Guinea Act provides that the laws of the Commonwealth do not apply in Papua and New Guinea unless expressed to apply there. Accordingly, it was necessary to provide expressly for the application of the bill to Papua and New Guinea, and clause 4 of the bill was inserted for that purpose. The same process of reasoning - the same circumstances - apply to the Australian Capital Territory.
As to off-structure drilling, the position is not as easy to explain. I circulated to honorable senators for general information some notes on the search for oil in Australia. Attached to those notes is a map which, I think, graphically illustrates the size of the task that we have ahead of us to find oil, and shows the great portion of Australia which is included in sedimentary basins. It is not to be assumed that a sedimentary basin does not contain oil, although not all sedimentary basins have commercial deposits of oil.
What I may describe as drilling operations are spread over three different types of holes. There is, first of all, the hole drilled on a structure and in which the person concerned hopes that he is going to strike oil. He has made his inquiries and had geological and seismic surveys made, and based on the information in his possession he has high hopes that he will strike oil in that hole. But the geological circumstances are well known. The department knows the geology of the area, so that that hole is not eligible for subsidy.
I come to the next classification, which is a hole drilled on a formation, lt is an area in which the geological sequence is not familiar to the department. There are prospects of finding oU in the hole, but the hole becomes eligible for subsidy not upon the prospect of whether oil will be found, there or not but upon the foundation that the department wants the geological information to add to its mosaic, to add to its pattern, to add to its information on sedimentary basins throughout the country.
Now I come to the third classification of hole, called the off-structure.. Again, the pattern is to build up information on all geological sequences throughout Australia. It may well be - and it is so - that the prospect of striking oil is so remote in these holes as to be negligible, yet it is of great importance in the correlation of all information throughout Australia that we should have geological information on areas in which there is not a structure which may contain oil. It is anticipated that a number of these holes will go very deep - to from 10,000 feet to 15,000 feet. Not all offstructure holes will be as deep, but they will be major drilling operations aimed at getting scientific information rather than in the hope of getting oil. That scientific information will be invaluable when it is correlated with information already held by the department and by the oil searching people in respect of other areas.
That is my personal explanation. The departmental note, put in more technical terms, runs in this way: - Off-structure drilling means drilling for information deep in a sedimentary basin where the sediments are thickest and structures favorable for the accumulation of petroleum are not likely to be found. Nevertheless, the information obtained from such holes is very valuable as an indication of whether rock types suitable for the formation of petroleum exist in that basin. In other words, operators drill at depth to see whether at depth they find a rock formation in which petroleum could accumulate in. a particular area or a particular basin.
This proposal was adopted after a great deal of thought and after a great deal of professional advice that we obtained not only within Australia but also from overseas. As I think I said when replying to the second-reading debate, we have had professional advice from overseas people of great standing which says, in effect, that the conditions in the Sahara where oil has been found have been repeated in some of our- sedimentary basins in the heart of Australia, and it is most: desirable indeed that we should, know what there is at depth in all those sedimentary basins. There is no great incentive on the part of the company concerned - it is a long range view on its part - to provide even one-third of the cost of drilling a hole which gives information but which is not likely to be productive.
Clause agreed to.
Clauses- 4 to 6 agreed to.
Clause 7 (Approval of drilling and other operations).
– This clause is largely a repetition of section 7 in the old act, as I understand it, but I notice that a new element is introduced in sub-clause (2.) (a), which provides that the applicant shall furnish to the Secretary to the Department of National Development - particulars of the reason for” carrying out the proposed operation, including an appreciation of the geology of the area in which the proposed operation is to be carried out and of the new stratigraphic information that the proposed operation is- expected to provide;
The obligation to supply that information might prevent exploration of a new area. I can understand the reason for the provision, but I take it that the Government is interested in promoting drilling in fields that have not hitherto been explored. If the information is not forthcoming; will the application be automatically discarded?
– I can answer that by saying that if I were the secretary of the department I would discard the application. Surely we would not be justified in subsidizing a hole unless we were clear as to why it was being put down. In certain cases we could be acting very unwisely indeed. As I said earlier, a good many applications come from people who have a hunch about a certain area. They want to put down a hole there but cannot provide basic information to justify governmental expenditure. They may be prepared to punt their own funds upon the venture, but it must surely be basic that the applicant satisfies the department that an adequate survey’ has been made, that all the necessary preliminaries have been undertaken, and that the required information is forthcoming.
– Hitherto, applicants have not been obliged to supply this information. How has the department decided whether their proposal was worthy of a subsidy? Have officials formed their own opinion of the merit of each case?
– I am informed that the secretary has always required such information as a condition precedent to the granting of a subsidy. The bill merely gives him the statutory right to do so.
– Under sub-clause (1.) a person who proposes to carry out an operation may lodge with the secretary an application in writing. Under sub-clause (3.) the secretary shall take into consideration certain matters, including the extent to which the proposed operation is likely to assist in the search for petroleum in Australia. Under sub-clause (4.) the Minister may approve, or refuse, the proposal. I understand that companies have had no difficulty in obtaining subsidies for drilling on completely new structures. If such a company fails to obtain oil from the first hole and wishes to drill a second a certain distance away from the centre of the structure, will it qualify for a subsidy? There might be a likelihood of oil being found, and the second hole might not be drilled if a subsidy were not forthcoming.
– The criterion “is not whether the hole will produce oil, but whether it will produce additional geological information relevant to the search for oil. We are not, under this legislation, subsidizing production drilling. If the drill strikes oil that is all to the good, but one does not qualify for a subsidy upon the basis of one’s expectation of finding oil. In the example mentioned by the honorable senator a subsidy for the second hole would probably be refused. That hole would not, because of its proximity to the first hole in the same structure, be likely to yield new geological information.
.- A number of these off-structure drilling operations will take place in the artesian basin, and may produce water suitable for stock.
It is likely that, as the number of drillings increases, applications will be made to the drilling companies, and to the Government, for the right to use such water for stock purposes. Has consideration been given to it being made available? Would the drilling company be able to negotiate with a farmer or grazier wishing to acquire the right to use the bore? Would the Government receive anything from such an unexpected result of its off-structure projects?
– What the honorable senator suggests is possible, but unlikely. Most landholders have a very good idea of the location of artesian water on their properties.
– They are always short of it.
– If they need artesian water they usually drill for it themselves. It is true that artesian water could be found in the course of oil drilling, operations, but if geological information indicated the presence of artesian water a hole would probably not be drilled. Moreover, if artesian water were found in such circumstances, the rights and liabilities of the parties would not be a matter for the Commonwealth to adjudicate - except in the Northern Territory. Those rights and liabilities are the closely guarded province of the State Governments, to whom the artesian water reserves are of such importance.
Clause agreed to.
Clause 8 agreed to.
Clause 9 (Amount of subsidy).
– I direct the Minister’s attention particularly to sub-clause (2.) and preface my remarks by saying that in studying this bill one cannot but be impressed by the fact that the distribution of the money voted is to be left to the discretion of the Minister acting on the advice of the Secretary. The subsidy is to be paid, not with respect, to any project, but with respect to a mining operation, and this gives great opportunities for distinguishing between different applicants on a whole variety of different considerations. There is nothing more corroding in the administration of a fund like this than the idea that somebody is preferred for a reason unknown while somebody else is rejected. People resent very strongly indeed the whole idea of discrimination.
J thought sub-clause (1.) was the provision which required some standardization or uniformity of treatment. It says - an agreement shall provide that the subsidy in respect of the approved operation to which the agreement applies shall be -
So there is required to be in every agreement a provision to subsidize the costs of the drilling operation, other than an offstructure drilling operation, to the extent of one-half. But sub-clause (2.) presents to me a little puzzle, unless there is more intended in the word “ specified “ than I can gather from it, for that sub-clause reads -
An agreement may provide that, notwithstanding the provisions of the agreement giving effect to the last preceding sub-section, the amount of the subsidy shall not exceed an amount specified in the agreement.
It seems to me that sub-clause (2.) enables those who write the agreement to ignore completely any part of sub-clause (1.). It may be, of course, that the intendment of sub-clause (2.) is to say, “We will approve this drilling operation, and we agree to pay one-half of the costs of the drilling operation, other than an off-structure drilling operation, provided that does not exceed, in the whole, £10,000 “, or some other figure. That would be a sum specified in the agreement. But it also seems to me that another meaning is that sub-clause (2.) provides that, notwithstanding anything in sub-clause (1.), the amount of the subsidy shall not exceed, say, an amount equal to 10 per cent, of the cost of drilling operations, other than off-structure drilling operations. It can be seen, therefore, that the word “ specified “ must be relied upon for the distinction. If the clause intends to fix a limit, I should think that it would be better to say that, whilst providing the fixed proportion which sub-clause (1.) requires, the Minister shall be entitled, in any agreement, to fix a limit of subsidy that will be paid with respect to the costs of any one particular operation.
– This is one of those provisions which have been inserted as the result of experience gained in the administration of the scheme. There are a number of reasons that justify it, and those reasons have to be looked at against the background that each transaction in question is a big one, based upon a great deal of preliminary work, and that the agreement to subsidize is reached after negotiations or discussions spread over a lengthy period.
One of the early difficulties we encountered was that, after producing our programme for the expenditure of the £500,000 which we then had under our care, and after making our budgetary arrangements, the drilling company concerned in a particular transaction, because of physical conditions or other difficulties it had encountered, was not able to commence its programme at the time set out, and we ran the risk of not being able to spend the money in the time we had available.
Then, at the other end, after the transaction had been completed, there was sometimes a series of arguments or disputes as to whether particular items included in the cost were or were not eligible for subsidy. The subsidy agreements varied from drilling operation to drilling operation. For instance, in some operations we would agree to subsidize access roads, while in others we would agree to subsidize housing. They varied from place to place. Very early in the piece, we found that, in the interests of efficient administration, it was essential to sit down and reach agreement, wherever practicable, with the people concerned as to what might be the order of expenditure, and then to say that the amount of our subsidy would be fixed and determined on that basis. This avoided subsequent negotiations about the transaction.
Then we ran into the situation that we were asked to subsidize very big transactions indeed. I mention the Puri hole as an instance. From memory, the cost involved there is well over £1.000.000. When the proposal was put to me, I said that I could see all the advantages of it. but that I did not think it was in keeping with the spirit of the legislation that we should spend the whole of the amount available in subsidizing one drilling operation. We made a deal in that instance. We thought that in that case we would be getting value for our money if we subsidized to the extent of £250,000.
The same thing applied in connexion with the Innamincka operation, where again very great expenditure is involved. We very much wanted to see the hole drilled there for the information it would provide, but we did not want to go to the extent, nor indeed did we find the need to do so, of financing the full 50 per cent. of the cost. The spirit of the legislation is that there is a limit of 50 per cent. of the cost in one sort of transaction, and twothirds of the cost in another sort of transaction, leaving open the question of the exact amount to be paid with respect to each transaction.
– I refer to clause 9 (1.) (c)) which deals with the amount of subsidy that we are discussing at the present time. It reads - (1.) Subject to this section, an agreement shall provide that the subsidy in respect of the approved operation to which the agreement applies shall be-
I visualize that the Bureau of Mineral Resources and the Government are eager to obtain structural information as to what exists at depth in water bores so that that information can be given to oil companies which are interested in the search for oil. Reference is made to the terms of an agreement, but there does not need to be any agreement. Water bores - particularly some in the artesian basins - would go to a depth of 1,500 or 2,000 feet. Whilst the information would be of vital importance from the Government’s point of view, it would not be of great interest - in the initial stages - to an oil company. Therefore, I cannot see that an agreement would be entered into between the oil company and the Government. I ask the Minister whether it would be better to alter the wording of this clause to provide that in respect of a bore-hole survey of a waterbore in which the bureau is interested the Government will pay the whole of the costs of finding out the necessary information. The information is obtained by making a survey of the water-bore with electrical equipment. It is necessary for an operating company to obtain that information before it decides to drill on any specific structure. The company wants that information, but I do not believe it should have to pay any proportion of the cost of that survey. I think that cost should be borne by the Government and the information provided free to interested companies that intend to search for oil in a given locality in a basin anywhere in Australia. There are several of them. The particular area may not interest a company at any stage until it obtains the necessary information from the Bureau of Mineral Resources.
– Before the Minister for National Development replies to Senator Scott I should like to refer to clause 9 (1.) (b) which refers to off-structure drilling operations. We know that this clause sets forth the subsidy basis and the proportionate cost to be met by the Government in connexion with the various drilling operations.
I should like the Minister to tell me whether off-structure drilling is accepted practice by oil companies throughout the world. Has it been undertaken in Australia by private companies for the purpose of obtaining geological data or for other purposes? If it is not an accepted practice, or has not been carried out in Australia, what is the likelihood of private companies engaging in off-structure drilling when there is a strong possibility that they will not find oil? They would expend a considerable amount of money with little likelihood of finding oil. The subsidy will be available to them only to the extent of two-thirds of their costs in the case of an off-structure drilling operation. I should also like the Minister to give me some information about offstructure drilling in other parts of the world.
– I ask the Minister whether there is any merit in the suggestion that off-structure drilling was undertaken to see whether oil from a sedimentary basin has escaped into another area as the result of some fault or movement of the earth. Is off-structure drilling undertaken in order to determine the structures and changes in the strata of the earth? Would that have any application to the matter? You are off the sedimentary basin, I take it?
– No, you are on the sedimentary basin but not on the structure.
– A structure being what?
– A structure being the dome.
– With the necessary reservoir and the cap rock. I merely put the suggestion that due to some convulsion of the earth oil may escape out of a sedimentary basin or out of such a structure into another area. I presume that it would be a purely geological exploration to find whether the configuration of the sub-strata of the earth had been changed, and it might lead to a discovery of the place to which the oil had migrated. That would be a possibility.
My main purpose in rising was to ask about the bore-hole survey of a waterbore. I take that sub-clause (1.) (d) to mean what it says and that the Government does not intend to subsidize the actual boring operation of the hole. It is merely a subsidy to compensate for the trouble of recording all the information that is found in the bore-hole. It is a survey of the bore-hole for which the Government will pay the whole cost. I am told by those who are operating in Western Australia that they have found on going through the area that farmers, pastoralists and others have sunk bore-holes. The operators were able to get very valuable information from these farmers, pastoralists and others who, although they did not have the actual specimens of the earth taken from the bores, were able to give exact information. The farmers had kept records in many cases. I assume that the survey would consist simply of checking what comes out through the bore and making a record. I take it that an officer of the Government would be present?
– That may be so. This work is done by special electrical equipment which may be owned by the Government or by some contractor. The record that the equipment produces provides the necessary information.
– One thing I want to be clear about is whether I am right in saying that the Government is subsidizing, not the actual boring operation, but only the cost of recording the geological information that is found?
– Thank you.
– Senator McKenna has inquired about offstructure drilling. All sedimentary basins, I understand, are possible sources of deposits of oil, but a basic condition to a deposit of oil is to have the type of rocks that will retain the oil. Therefore, one of the main things to look for in an offstructure drilling operation is whether at depth those types of rocks exist which could contain oil and which, if they are in a structure, might be an oil reservoir. It will be noticed that bore-hole surveys are in two categories, first water bores, and secondly holes other than water bores. Our present thinking is that electrical logging for these bore-hole surveys will cost us about f 25,000 a year. In terms of an appropriation of £1,000,000, that is not a very big item, but the belief is held in the bureau that although it is true that some people who bore holes for water retain the geological information, by and large that is not done. Three parties are concerned - First, the Government, which is collating the information and keeping it; secondly, the farmer or settler on whose land the water-hole is drilled, and he is concerned only with getting water and not greatly concerned, as a rule, with keeping the geological information; and thirdly, where the water bore is on an area which is under permit to some one searching for oil, that person to whom the information would be of as much interest as it is to the government department. What is contemplated is that this logging equipment will be kept in operation and that we will build up information, wherever we think it desirable to do so, from water-drilling programmes on the sedimentary basin.
– I am afraid that the Minister did not answer my query, although he certainly gave Senator McKenna some information upon it. I was curious to know whether it is the accepted practice for private companies to embark on off-structure drilling for the purpose not so much of finding oil as of finding the geological data that they require. I am wondering whether companies operating in Australia, even though subsidized to the extent of two-thirds, would find sufficient encouragement to take the risk of drilling an off-structure hole which could entail them in considerable loss, in the knowledge that the drilling would be very” unlikely to result in the finding of any oil. I have an element of doubt in my mind as to whether this provision will be availed of. I know that £1,000,000 will be made available. In the Minister’s second-reading speech, some mention was made of the proportion of costs in the different fields that this bill covers. I am wondering whether off-structure drilling opportunities will be availed of, even though the subsidy will be larger than that paid in other categories, and whether we shall achieve very much by introducing a provision of this nature if the companies themselves will in the long run almost certainly suffer a loss on the transaction.
– The Minister might tell us whether any off-structure drilling operations have been subsidized as yet.
– I am sorry that I did not answer Senator Hannaford’s question. The answer is very definitely that off-structure drilling is an integral and important part of oil search programmes in all parts of the world. It has already been done in Australia. The Wapet organization has already drilled three off-structure holes, of which two have been subsidized under earlier programmes. Whether this provision will be availed of is the 64-dollar question. We badly want to see this type of drilling encouraged, and that is why we are offering the higher rate of subsidy. We believe, on the indications, that the companies concerned will take the long view. The information obtained will be extraordinarily valuable to them. It is most valuable to a company which has a great area under permit to be able to correlate the geological information throughout the area. We hope that this provision will attract a type of drilling operation that, in the view of the Govern-
I ment’s professional advisers, is very much required in Australia. In practice we shall try to encourage drilling of holes or series of holes to build up a picture of all the sedimentary basins.
– I asked the Minister’ a question relating to water bores and, in reply, he said that anybody who was prospecting for oil in Australia would be only too glad to receive any information relating to water bores and that it would be left to the Minister and the owner of the lease to come to an arrangement under which the Minister would agree to pay up to 100 per cent, of the cost of obtaining information regarding the structure of a water bore. Probably it would be quite safe to say that artesian basins extend over 50 per cent, of Australia. To the best of my knowledge, the areas over the whole of these artesian basins are not taken up by oil companies prospecting for oil. It would surely be to Australia’s interest if the Government, on its own initiative, paid for the obtaining of structural information or the logging of water bores in those basins in areas that are not held by lease holders, in order to obtain all the available information so that it may be given to intending oil prospecting companies.
– That is what is proposed to be done.
– It can be done under the bill.
– If that can be done, it will be of great help to the oil companies. We have these electrical logging companies in Australia. The company which operates for Wapet has the most advanced equipment which can give most detailed information on bore holes of any type, whether for oil or water. If that is proposed under this legislation, it will be of considerable interest to those who are searching for oil in Australia.
.- In this proposal to subsidize off-structure drilling in areas where, according to present geological information, oil is most unlikely to be found, will the Government have any say in the matter of the diameter of the bore hole or in ensuring that it will be of the minimum size necessary to obtain a geological core from the strata, instead of being of the orthodox size for bore holes? Will the Government exercise any jurisdiction over the size of the bore?
– The Government will not subsidize any drilling operation unless it has been carried out to the satisfaction of the Government’s technical advisers and unless the company concerned gives to those advisers the information they want about the hole. There is even provision to the effect that those who are subsidized must give samples of the core at regular intervals to the Bureau of Mineral Resources, in addition to whatever obligation they have to give samples to the State governments. So far as the Department of National Development is concerned, each of these proposals has to be technically sound before the Government will come in as a party to it.
Clause agreed to.
Clause 10 (Terms and conditions of agreement).
– This clause provides, in part -
Subject to this Act, an agreement may contain such terms and conditions as are agreed upon between the Minister and the other party to the agreement and, without limiting the generality of the foregoing, the agreement may make provision for or in relation to -
the making of payments on account of subsidy and the repayment of any amount by which payments so made exceed the subsidy;
the withholding by the Minister of payment of subsidy, or the reduction by the Minister of the amount of subsidy, under circumstances specified in the agreement;
in the case of a drilling operation - the rights and obligations of the parties to the agreement (whether with respect to subsidy or otherwise) in the event -
of the operation being discontinued before the operation has been completed;
of drilling being continued to a depth greater than that required by the agreement; or
of petroleum being discovered in the course of carrying out the operation;
I wish to pose to the Minister a question arising from what happened in the Rough Range area. After the first strike was made in No. 1 bore and oil was actually brought to the surface, the company immediately proceeded with continuous exploratory boring for the purpose, I understand, of determining the area in which oil may exist and of pegging the field. At a certain stage, the company decided to cease operations in that area and engaged in exploratory boring in other areas.
I assume that, pursuant to this clause, the Government may enter into an agreement with a company and make payments concurrently with the carrying out of operations by the company. In other words, if the company spends £100 and the Government is to subsidize it to the extent of two-thirds of that amount, it will pay the company £66 13s. 4d. and continue to do so whilst operations are in progress.
Let us assume that at a certain stage the company decides not to continue operations on a certain hole. It seems that, under this clause, the Government may, if it so elects, continue to bore until such time as its requirements are met. Of course, the subsidy ceases when the company ceases to bore; but I should like to know whether the cost of the completion of the operation is to be debited against the £1,000,000 that is to be made available or charged against another vote.
– It would have to come out of the £1,000,000.
– The other matter I wish to raise concerns the making of an agreement by the Government with a company or another party to subsidize certain boring operations which form part of the exploratory venture of the company. It may well be that a company, knowing the area in which it is operating, puts down four or five exploratory bores for the purpose of pegging the field. The company, in the example I quote, believes there is very little possibility of its striking oil. Does the Government incorporate in its agreement with such a company any conditions governing the recovery of money paid by way of subsidy if oil is struck in the operation?
– I refer to paragraph (c) (iii), and the relevant introductory words -
Subject to this Act, an agreement may contain such terms and conditions as are agreed upon between the Minister and the other party to the agreement and, without limiting the generality of the foregoing, the agreement may make provision for or in relation to -
in the case of a drilling operation - the rights and obligations of the parties to the agreement … in the event -
ii) of petroleum being discovered in the course of carrying out the operation;
That is to say, the agreement may determine what the rights and obligations of the Government and of the operator may be in the event of oil being discovered. I take it that a form of agreement has been settled by the Government with the ten applicants who have been dealt with already in the first year. I should like the Minister, without naming the parties, to indicate what kind of provision appears in the agreement to determine the rights and obligations of the parties in the event of oil being discovered by a drilling operation which the Government has subsidized.
– I shall deal first with Senator Cooke’s question. Matters of the kind that he has mentioned are considered when negotiations are carried out between the department and the drilling company. It will be remembered that the subsidy is paid only for the purpose of obtaining stratigraphic information and not for the purpose of subsidizing production drilling. The honorable senator may take it as being within the realms of serious consideration that the department would not subsidize four or five holes before the real one was put down. Having got the geological information for a particular area, we would not subsidize a second hole in the same area.
In reply to Senator McKenna, I point out that the proviso in the agreements has been altered from time to time. It should not be forgotten that this is not old legislation. There has been a good deal of pioneering and of seeing how things worked out in practice. The relevant clause in one of these agreements reads as follows: -
If at any time during the course of the drilling operation the Company discovers petroleum and if after examination of the evidence relating to the discovery the Minister forms the opinion that the petroleum discovered is in quantities of commercial significance -
no further subsidy shall be payable and any subsidy already paid under this agreement shall be repayable to the Commonwealth on demand; and
the Commmonwealth will be entitled to retain and make use of all information, cores and samples obtained during the course of the drilling ..operation to the depth of the discovery and forwarded or to be forwarded to the Minister under this agreement.
If the company drills any hole or holes directionally from the subsidized hole, the drilling of such hole or holes shall for the purposes only of this clause be regarded as a par: of the drilling operation.
The second part of the clause has direct application to the Puri hole, where there was first a discovery which turned out to be disappointing. The management then drilled a deviating hole from the main hole. In accordance with this additional clause in the agreement, if there were a discovery in that deviation the subsidy would be repayable.
Clause agreed to.
Clause 11 agreed to.
Clause 12 (Statement for Parliament).
.- This is an important provision of the bill. It reads -
The Minister shall, as soon as practicable after the end of each financial year in which subsidy is paid, cause to be tabled in each House of the Parliament a statement concerning the operation of this Act, and the payment of subsidy, during that financial year.
The requirement that a statement is to be tabled “ concerning the operation of this Act “ is capable of a wide or a very narrow interpretation. It seems to me that, having regard to the width of discretion and authority in the disbursement of these funds, the Parliament should be informed as fully as possible, particularly with regard to the possibility of discrimination. Therefore, I hope that the amendment I am about to move will have the approval of the Minister. I move -
After “Act,” insert “the applications under section seven of this Act in respect of which the Minister refused approval or the Secretary deferred a recommendation,”.
The idea of the amendment is that the annual statement should specifically be required to state what has been done in relation to refusal of applications, whether the refusal has been by the Minister or by the secretary.
. -I said earlier that we were pioneering, to a degree, with this legislation. The first annual report that I presented to the Parliament did not contain the information which Senator Wright has suggested such reports should contain, but the second annual report on operations will contain such information. Therefore, the amendment that. Senator Wright has moved is in accordance with the practice which we are adopting this year in presenting the report to the Parliament, and I shall accept the amendment.
Amendment agreed to.
Clause, as amended, agreed to.
Title agreed to.
Bill reported with an amendment; report adopted.
Bill read a third time.
Senate adjourned at 9.56 p.m.
Cite as: Australia, Senate, Debates, 18 August 1959, viewed 22 October 2017, <http://historichansard.net/senate/1959/19590818_senate_23_s15/>.