AUST. FUEL POLICY SUBJECT OF REPORT

Press, Volume CIII, Issue 30542, 10 September 1964, Page 20

AUST. FUEL POLICY SUBJECT OF REPORT

[N.Z.P.A. Australian Correspondent] SYDNEY, Sept. 8. A report that could be of great interest, especially to the West Coast of the South Island, is expected to be handed down in the Federal Parliament in the next few days. It is a report into the competitive position of the coal and fuel oil industries in Australia. The report is expected to bring down suggestions which could lead to a national fuel policy for Australia.

As on the West Coast and in other New Zealand coalmining areas where fears have been expressed over the future of the industry, Australian colliery owners, too, have been expressing concern over their lessening share of the energy market. Whereas 10 years ago the coal industry was supplying almost 66 per cent of the market, its share last year had dropped to just over 50 per cent. In the same time the oil producers had increased their share of the market

which stood at 27 per cent 10 years ago to almost 36 per cent last year. It has been calculated that at the end of the 19705, coal’s share of the market will have slumped to about 45 per cent and oil’s share grown to almost the same figure. EXCISE DUTY In approaches to the Government last month, leaders of the coal industry submitted that there should be the immediate imposition of an excise duty on fuel oil as an incentive to the oil refining companies to modify their production so as to produce less furnace oil and more of the lighter fractions. i The coal men said a widely held view was that the price of oil as a fuel would increase as soon as coal was destroyed as a competitor.

Already the coal industry Is prepared to agree that certain sections of the market, notably the railways which have switched more than 50 per cent of their fleet to oil burners or diesel electric engines, are better served by oil than by coal, but has expressed alarm at the growing fuel oil output from the refineries. Coal men refer to furnace oil as essentially a waste product from the oil refining process whereas oil people say it is a legitimate product in its own right. Furnace or fuel oil is the residue of crude oil after the petrol, aviation fuel and other distillates have been extracted from the crude oil in the refineries. PRODUCTION DOUBLED In the years since the war, the Australian coal industry has spent more than £loom to make coal one of the most mechanised industries in the country. In the last 10 years coal production has been almost doubled. Included in the industry’s submissions to the Government was the point that already the United Kingdom and the United States had taken action to protect their coal industries from the threat from oil. In the United Kingdom a levy of 2d a gallon or £2 a ton of fuel oil had been imposed with the United States forcing refineries to halve their output of fuel oil. A new threat facing the Australian coal industry is the threatened competition from natural gas. As yet there is no major natural-gas industry in Australia, but with increased tempo in the search for oil and the discovery of huge pockets of natural gas, coal men have foreseen further setbacks for their product: hence their call for a national policy. Their chief spokesman. Sir Edward Warren, said that for the long term, the only solution that could adequately meet the situation was for a fully-integrated national fuel policy. The expected Parliamentary report could lead to this.