The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. TUESDAY, DECEMBER 7, 1937 THE PETROLEUM BILL.

Auckland Star, Volume LXVIII, Issue 290, 7 December 1937, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun.

TUESDAY, DECEMBER 7, 1937 THE PETROLEUM BILL.

For the cause that lack* aaeietanc*. For the wrong that need* reeistanoe, For the future in the distance, And the good that we etm do.

It is to the credit of the Home, and cnlnrly of the Minister of Mines, that, the

slntion providing for the control of New Zealand's petroleum industry (as yet mainly hypothetical) is beinj; so carefully ami thoroughly considered. Important alterations to the Bill were made by the Mines Committee, and in the second rending debate last night there was evident the desire of both Government and Opposition that the legislation, when passed, should embody the lessons of experience dearly gained in other countries. When the Opposition took exception to the proposals regarding royalty payments the Government made no attempt to use its always available majority, but secured the adjournment of the debate. It is a pity that when other legislation—o£ which the Primary Products Marketing Amendment is the most recent example—has been before the House the Government has been less reasonable.

In the light of experience in the l'nit«'d Stales, and fit' lri, r islntion pa.-Med in West Austrnlin and Victoria, no exception onn be tjiken to the liasic ■ provision of fh>> Hill, which makes "all petroleum existing in its nilturn 1 condition on or below the -t|irf;"e nt' any land" the property of the Crown. The Crown will grant prospecting licensee nml mining licenses, and it will receive a royalty "compirted at the rate specified in the license on the selling value of all crude petroleum, casinghead spirit and natural giis that is produced." In the event of a lucrative strike of oil the Crown will receive "not less than f> pet* cent" of the selling value, and the licensed company the remainder, up to 9.1 per cent. The rate or rates of royalty shall he specified in the license (i.e., before oil is

found), as also the term of the concession, which is not to exceed 42 years. No indication has been given as to the probable length of the licenses that the Minister will grant, but it must be strongly urged that it should be considerably less than 42 years. No Government and no Minister can possibly foresee the situations which may arise long before •uch a period has elapsed.

The Crown will receive not less than 5 per cent of the wiling value of oil produced, ai-A the mining company up to 95 per cent. What of the owner of the land? He is to receive nothing, except "full compensation for all loss, injury or damage suffered by him." Moreover, his land may be taken from him (under the Public Works Act) by the Government on behalf of the mining company. It would apparently be possible for the Government, "on the application, of a licensee," to take Maori land and hand it over to a company. Has Mr. Webb folly considered how invidious would be the position of a Government in such circumstances 1 The Maori occupier might be represented by a Maori Land Board, and receive full value for his land —but ihe inevitable result would be another landless (and ultimately impoverished) Maori. Against this possibility there should be more adequate safeguards than appear to be provided in the Bill. For the particular argument raised by the Opposition—that the owners of the land should receive a share of the royalty—there is certain to be strong support from landowners, but it is difficult to see that they have any real claim on the revenue from resources which were utterly unsuspected by them when they bought the land, and which resources they have done nothing to develop. But, in recognition of the special position of the Maori race, the Government might well consider whether the whole or a part of the royalty derived from oil produced from native lands should not be set aside for the special purpose of Maori land settlement, and thus used for the benefit of the race as a whole.