SEARCH FOR OIL.

Auckland Star, Volume LXIV, Issue 2, 4 January 1933, Page 4

SEARCH FOR OIL.

AUSTRALIA'S TASK. I PRODUCTION FROM SHALE. 1 STATE SITBSTDY WANTED. i (From Oar Own Correspondent.} SYDNEY, December 30. { Dr. W. G. Woolnongh, the CommonI wealth oil expert, has delivered an address ' to the Royal Empire Society here en the I subject, *Ts the Search for Oil- in Aus[tralia Worth While!''' This authority, j who was recently engaged in an aerial | survey of Australia, reminded his audience I that oil has already become a necessary ot i our existence and national life. The (demand for o'd, even within the Empire, is virtually unlimited, and Dr. Woolnongh pointed out that Britain, which consumes one third oi the world's total output, produces' only 3 per cent of the supply. As to Australia, the lecturer explained that various areas in Victoria, Queensland and West Australia are definitely oil-pro-ducing, but that geological survey methods on a large scale are required to locate arid delimit the profitable petroliferous regions. Coal Industry's Plight. Another recent reference to the demand t for oil was made by Seasator MoLacbiaa, the Federal Minister for Development, in his reply to a deputation representing mine employees, and requesting Federal assistance tor the development of the country's natural resources. Incidentally, Senator McLaehlan blamed the heads, of the coal industry for not making some preparation for the change-over from coat to oil, oi which the world has had so many warnings. As a matter of fact, it is the virtual collapse of the _oace prosperous coal industry of New South Wales that has turned public attention toward the possibilities ot oil. What with increasing cost of production, loss of markets through strikes, foreign competition and displacement of coal by oil, it is not surprising that many once-thriv-ing towns in the coalfields, 33 Greta and Walkecd, are now on the verge of rain. But the rapid decline of coal mining naturally suggests that the_ time has come to develop, sonae alternative source of energy, and these faces may serve to account for the interest now beinz displayed by miners and capitalists aiixe in Newnes and its shale deposits. Rich Deposits. Senator McLachlan had a great deal to say about Newnes. On the Woigan Valley side of Newnes the shale deposits have been driven in for three-quarters o: a mile, and on the Capertee side—the other side of a huge hill—the drive has gone in for a mile. The average thickness of the deposit of shale right the hill is about three feet, and the shale is extremely rich, producing about 100 gallons of crude oil to the ton. As valuable shale deposits in Scotland and _ America produce only 30 or 40 gallons of_ oil per ton are worked at a huge profit, it is evident that there are immense potentialities in Newnes. The Mines ? Department has estimated that in this one locality there are at least 20 million tons of shale. The Geological Surrey Department four years ago put down the total shale reserves in the State at 40,000,000 tons, and estimated that from these deposits at k-ast 3500 million gallons oi erode oil can be won. The old-time process of distillation gave only 8 per cent of motor spirit, but the modem process of "cracking-" gives.6o per cent of motor spirit, and over 20-per cent of erode oil at mach iower cost. There is no reason, therefore, why the Newnes shales, under proper treatment, should not prove a huge commercial success. Yet so far all attempts to handle the problem have failed, and "the tragedy of Newnes" is Australia s closest parallel to the tragedy of Mount Morgan. According to the Federal Minister for Development about £1,700,000 has been spent in attempts to develop the Newnes shales, and what is left of these enterprises could be purchased now for £40,000. The last attempt at exploitation was the offer of Treganowan and Chambers, two . Melbourne promoters, who deposited . £5000 as a bond, and asked for a £10,000 • subsidy from the Federal Government. But it turned out that they expected 100,000 shares for themselves in a £300,000 ' company, of" whkh they expected the ■ general public to contribute £100,000 — and they received a very inadequate response. But with the revival of public confidence in New South Wales, and the general recognition of the immense value • of oil as a national asset, an attempt is now being made in Sydney to organise the , Newnes project on an entirely new basis. Mncb Capital Needed. The promoters of this scheme are Sir ' Hugh Denkon and Sir John Batters, both financiers and company promoters, and , both prominent in the directorate of Associated Newspapers, Ltd., the group ; which publishes the "Sun" and the "Daily Telegraph." The proposals that they are submitting to the Federal Government are stiii quite tentative, hut it H : understood that the Commonwealth authorities are prepared to refund £10,000 • more in proving the extent of the Newnes shales, and may also be induced to draw upon the sum of £50,000 still unexpended ' out of a Commonwealth grant originally made for this purpose. It is assumed in ' some quarters that the State Government, which has just begun to "socialise" public ■ transport, might a little in this direction ae well, and with "State aid" on ' a substantial scale Sir H. Denison and ; Sir J. Butters can iraarantee that a very large amount of capital will be forthcoming from themselves and their powerful financial allies.

Of course such a project would require a Yerj large amount of capital to work economically. The Minister for Development told the secretary of the miners' federation the other day that "the cost of erecting a hydrogenation plant in Australia capable of producing 50,000,000 gallons of petrol a year—aboat one-third of the present consumption—would be from £8,000,000 to £10.000,000. The figures are given on the authority of a distinguished British expert, and they are rather calculated to make one's brain reel. Employment Aspect. It is claimed that the enterprise would absorb a considerable body of the_ nnemployed. The Sydney syndicate, it is said, can start work in a few days if it can induce the Commonwealth- Government to grant- it satisfactory terms, and 500 men could begin at once on the construction of a new tunnel and a small railway track. Newnes:. as it happens. is close to a part of New South Wales where unemployment has already developed into a serious social danger. "That district," as one of oar weeklies has pointed out. "from Newnes to Hartley and Lithgow, is abundant in half-starved and mutinous unemployed: it is one of Australians danger spots, and to provide safe employment for these distressed miners would be a boon to the Commonwealth."