PETROL FROM COAL

Southland Times, Issue 23166, 6 April 1937, Page 5

PETROL FROM COAL

Australian Proposal EARLY ACTION NOT LIKELY SYDNEY, March 27. Because of the prohibitive cost, the chance of the early establishment in Australia of a plant for the manufacture of petrol from coal is remote. The Federal Ministry is keenly disappointed with the result of investigations into the establishment of a plant in Australia for the manufacture of liquid fuel from coal by hydrogenation. These reveal that the cost per gallon of the fuel produced would exceed three times the present landed cost of petrol. Because of high manufacturing' costs in Australia, in which the capital cost of plant, building costs, and the cost of winning black coal are all important factors, a bounty of 5d a gallon would probably be necessary to enable petrol produced from coal by hydrogenation to compete with petrol imported under prevailing conditions. New South Wales Hopes

The estimate is based on the assumption that Australian-produced petrol would be sold free of excise. Because it would displace an amount of imported petrol equivalent to the output of an Australian factory, the Commonwealth would lose, in addition, the equivalent of 7d a gallon petrol tax, and the total added cost would, therefore, be about 1/- a gallon. The Federal Ministry’s decision has greatly perturbed the New South Wales Government, which has energetically espoused the scheme as a means of overcoming the fading fortunes of the northern coalfields in this State. The Premier (Mr B. S. Stevens) made a special study of oil from coal problems during his tour abroad last year, and returned confident that an early start with the processing of coal for oil would be made within the Commonwealth. . “I am keenly anxious to see this industry going because of its defence aspect,” Mr Stevens said. “The capital cost of establishing it would probably not be more than that of building a single battleship.” He made it clear that Australian production of synthetic liquid fuel was a problem which the State Government could not tackle on its own, and was one in which the necessity for full collaboration between the Federal and State Governments was both obvious and urgent. Coal Owner’s Opinion A northern coal owner who has been carefully watching developments in processing oil from coal since before the war, said that all inquiries to date had confirmed the opinion held by the coal industry throughout, that private enterprise would have no hope of economic success in the production of oil from coal for an open market. He claimed that the basis on which the Federal Government was assessing the financial assistance likely to be required by Australian-made petrol was the present price of imported petrol. That price, stated the coal owner, was not likely to go lower; and would probably go to very high levels indeed in the case of a serious war which, while not involving Australia, implicated trade routes by which petrol at present came to Australia.