Aust, coal-oil report greeted cautiously

Press, 25 November 1981, Page 17

Aust, coal-oil report greeted cautiously

NZPA Sydney Australia could have a huge coal-to-oil industry by the 1990 s that would cost at least sAustl3 billion to set up. according to a new study prepared for the Federal Government. But the report, the result of a joint Austraha-West German study lasting two years, has been greeted cautiously and an immediate start to a liquefaction industry based on Australia's extensive coal reserves is highly unlikely. Progress towards coal liquefaction in Australia has been closely watched by NewZealand energy planners who see the possibility of putting lignite coal reserves in Southland to similar use. A senior New Zealand Ministry of Energy official said earlier this year that brown-coal liquefaction plans for Victoria could have a bearing on developments in New Zealand, the Victorian coal deposits being very similar to those in Southland. The Imhausen study on coal liquefaction in Australia. the results of which

were released by the Minister for National Development and Energy (Senator John Carrick) examined the feasibility of setting up coal-to-oil plants in Victoria. NewSouth Wales, or Queensland. The West German partners in the study said they were convinced the plants were economically and commercially justified, and argued for a liquefaction industry to be set up in Australia as soon as possible. The three liquefaction plants discussed in the report were.— • Victoria (the most commercially attractive): a $3.1 billion project based on rawbrown coal which would turn out 48.800 barrels of petrol a day, 21.000 barrels of automotive distillate a day. and 2300 barrels a day of’liquefied petroleum gas: © N.S.W.: a $4.5 billion project producing 39.100 barrels of petrol. 33,800 barrels of distillate, and 15.800 barrels a day of L.P.G.. and. © Queensland: a similar size unit costing $4.4 billion. The set-up costs were for the liquefaction plants alone and did not include the costs

of the coal mines, townships and infrastructure. i The Imhausen study. ■ named after the leader of trie I group which prepared the I report, based its computa-; tions relating to economic viability on a 3 per cent annual increase in oil prices after inflation over the next 10 years and also ‘ on the basis that the project, or projects, would not be taxed. Senator Carrick said the report was "promising." and that it appeared to provide a basis for more co-operation between Australia and West Germany, and for more detailed investigation of the opportunities for commercial production of synthetic fuels. Others have criticised the report for using calculations j that assume a zero tax rate. r which enhanced the rate of return for investors. The memory of the Rundle oil shale proposal also remains fresh in Australian minds, the costly scheme to turn oil shale into petroleum products having been put on to a back-burner because of the huge financial commitment it would require and questions about the technology required. The Australian coal mining industry has also said that coal prices would need to rise significantly to justify the level of investment. But detailed studies of the feasibility of turning coal into oil are continuing.