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ADDRESS BY THE MINISTER FOR NATIONAL DEVELOPMENT,   THE HON. KEVIN NEWMAN, M.P., AT THE SPEAKER'S FORUM  LUNCHEON- SYDNEY, 26 MARCH, 1979.

.  Nearly every country in the world is at this very

moment wrestling with the problem of how it is going to

get enough energy to meet its requirements. .  '

But Australia is luckier than most. We are one

of the few countries which, apart from crude oil, has

energy resources in excess of requirements. Our reserves

of coal, uranium and, to a lesser extent, natural gas, are

considerably in excess of likely domestic demand for the

foreseeable future. The prospects of increased viable  deposits being discovered are generally rated as good.

While Australia has only one to two per cent of

the world's oil, natural gas and coal reserves, it is  the world's third largest coal exporter and has the  potential to be a significant exporter of natural gas

and, of course, uranium. .

Australia is currently one of only four net energy

exporting countries in the OECD. When we fully develop  our uranium mines, Australia will rank with the leading

exporters of energy in the world.

At present, we currently export about forty per cent

of our energy production. Our energy exports surplus amounted

to $550 million in 1976-77 but could be as much as $2 billion

in 1985-86.

Our most promising avenues for future export growth

lie with our exports of coal, uranium and natural gas.

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Coal is, of course,  our most plentiful energy

resource. In 1977-78 we exported 38 million tonnes of

bituminous coal (mostly coking coal) worth $1.4 billion.

Seventy per cent of this went to Japan. All of the

indications are that the Japanese requirement for coal

will increase substantially in the years ahead. In fact

some interesting work is already underway in Japan and

Australia on the evaluation of both Australian brown and

black coals for the production of solvent refined coal.

If successful, a further important export market for

Australia could develop.

Australia is also well placed to supply steaming

coal to other countries in our region and to European

markets. .

Australia is close to entering the natural gas  export market. The North West Shelf project in Western  Australia will be a significant addition to the world

natural gas trade. The project Joint Venturers are  currently holding discussions on potential sales to both

the Japanese and the United States West Coast markets.

The Australian Government regards the North West Shelf  project as primarily a commercial matter for negotiation

between the interested parties. At the same time the

Government realises that the project will have enormous  significance for all Australians and therefore has extended

a number of. incentives which have assisted the venturers in

such areas as taxation and foreign investment and export

concessions.

Australia has about twenty per cent of the easily

recoverable uranium reserves in the Western World. Australia

is expected to receive the bulk of the new uranium orders  placed in the next few years. As you know, arrangements for

the development of the Ranger Uranium and Nabarlek mines

are now in the final stages.

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.  Everything I have said so far paints a rather rosy

picture of Australia's energy riches.

We have enormous potential in this area. But  this potential will only be realised if we have proper

economic policies designed to encourage further development

of our natural resources. This requires sound economic

management,  the encouragement of necessary foreign investment,   and the establishment of a favourable climate for private

enterprise companies to make reasonable profits on their  high risk investments.

But there are some other very important factors to

be taken into account in assessing our energy self-sufficiency.

The hard fact which we must all face is that we have  limited supplies of oil and oil is still the most convenient .   fuel available to man in our present civilisation.

But the simple fact is that neither the continuity

nor the price of oil supplies can be guaranteed. .

In spite of all the many billions of dollars expended

throughout the world on alternative energy sources,  oil will  remain a virtually indispensable fuel for the foreseeable

future.  .

'  Currently we are about seventy per cent self-sufficient

in oil and projections have been made that it will fall in  the mid 1980s to about fifty per cent. This would have  serious implications for the security of our oil supplies

and for our balance of payments.

In simple terms,  this means that all of us here are

going to become increasingly dependent on the Middle East

oil producers for the petrol that goes into our motor cars,

fuels our planes and plays a vital part in running our

national transport system and our industries. . '

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For this reason, the boosting of our self-sufficiency

Ã¢ÂÂ   in oil was the Commonwealth Government's primary consideration

in formulating Australia's national energy policy.

.  In 1977 the Commonwealth Government set down our

energy policy objectives.

The Government decided that it was necessary in

formulating a responsible national energy policy to set

the price of crude oil at international .levels,  Â·and, thereby,

to encourage both exploration for oil and other natural  resources and to encourage conservation of our scarce

liquid fuels.  The Government also saw the need for

substantially increasing the level of funding for research

into alternative fuels. Â·

Very shortly, I hope to be able to distribute for

public comment a Green Paper on Australia's energy options.

This will deal in much greater detail with the areas I Â·   have mentioned.

Well, what has been our track record to date in .

meeting these objectives.

I could talk at length about what we have done in  establishing the National Energy Office, in expanding the

role of the Bureau of Mineral Resources,  in encouraging

the use of LPG and natural gas,  and in areas relating to

octane ratings and emission controls. .

- But I only have time at this Forum to focus on

energy research, and oil pricing and conservation which

are, of course, fundamental.

The Commonwealth Government, for the first time

in the history of our nation, has directly committed funds '

for a specific energy research and development program.

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This year we are making available $15 million.  This amount

Ã¢ÂÂ¢  is over and above that provided through normal funding to

the CSIRO, the Atomic Energy Commission, the Bureau of

Mineral Resources and similar bodies.

The.Government has appointed a high level body of

eminent Australians known as the National Energy Research,

Development and Demonstration Council, which co-ordinates

energy research in Australia in accordance with Government  objectives and advises the Government on research developments

in Australia and overseas.

In addition, we have initiated a major inquiry into  the future research role of the Australian Atomic Energy  Commission. I have taken a personal interest in this matter

because it seemed to me that we were not making the best  use of our resources by having so many well-qualified people

being confined to only one area of activity.

I feel that the Atomic Energy Commission can make  a valuable research contribution in areas outside its

traditional nuclear energy field. .  .

The Australian Government is well aware' that no

single nation, however large, can hope to remain at all

the frontiers of energy technology purely on the basis of

its own efforts. With this in mind, therefore,  the

Government has secured a number of co-operative agreements

with other countries which are involved in energy research

and development activities of mutual interest - such as  -  the U.S.A., West Germany,  New Zealand and Japan.

The Government has already announced that Australia

has joined the International Energy Agency. Among the many

benefits that will accrue to Australia from this decision

will be our ability to share energy research carried out by '

the other nineteen countries which are members of the Agency.

...16

I feel that I should explain briefly the reason

for the Government crude oil pricing policy which is

essential to the conservation of energy. .  .

Put simply, the Commonwealth Government has  ensured that the price of every barrel of crude oil

produced in Australia is the same as the price of replacing

that barrel from an overseas oil producer. .

Every major industrialised nation of the world

outside of North America has done exactly the same as

Australia in relation to the pricing of crude oil. Even  now, President Carter, in that country which for so long

has been regarded as almost wasteful in its usage of petrol

(and we can all picture Americans driving around in their

thirsty Cadillacs),is being faced with extreme pressure to

move to world prices for petroleum in order to try and

reduce his country's enormous bill for overseas oil. .

.  Our policies have already had a dramatic effect

on increasing Australia's self-sufficiency in oil both  through increased exploration and through real reductions

in the usage of scarce liquid fuels.

A few years ago we anticipated that,  by the mid

1980s, Australia's self-sufficiency in petroleum might  drop as low as 35 per cent. Under the influence of our  policies, the position has improved, and estimates based

on presently known resources indicate self-sufficiency

will, by the mid 1980s,  be about 50 per cent. Additionally,  we estimate that about 30 per cent of our production at

that time will be from otherwise uneconomic wells that are

now producing as a direct result of the Government's crude

oil pricing policy. .  .

This improvement is very welcome but it is still

substantially below our present level of 70 per cent

self-sufficiency. .

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Industry sources predict that between 83 and 143  exploration wells will be.drilled this year.  Even if the

lower estimate is reached, this will be the highest level

for 7. years'. In 1975, for example, only 15 wells were  drilled. .  .

In 1978, 52 exploration wells were drilled, more  than double the number of wells drilled in each of the .   previous three years.

Over the next 5 years,  an estimated $500 million  will be spent on exploration both onshore and offshore,

with the largest amount spent offshore Western Australia.

By far the most costly exploration will be undertaken on  the Exmouth Plateau, where the first deepwater well  commenced earlier this month..

There are six offshore drilling rigs operating at

present. Two dynamically positioned rigs are expected to

be imported later this year for further deepwater drilling  on the Exmouth Plateau. These figures compare with a

maximum of 4 rigs working at any one .time in 1976 and only  1 to 3 in the preceding years.

Turning now to conservation, we can also see success  for our oil pricing policies.

Total consumption of petroleum products in 1978

was 237.5 million barrels (0.75 per cent less than. 1977)..

The average annual growth in consumption between 1972 and

1977 was 3.8 per cent. .

Major changes were in the area of fuel oil and

diesel fuel .for industrial use, being reduced by 2 per

cent and 20 per cent respectively over 1977. ' Ã¢ÂÂ   -  *  .

Motor spirit consumption increased by 2.7 per cent

during 1978 compared with 5 per cent in 1977.

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The Government's pricing policy announced in the

Budget would seem to be the major reason for the decrease  in consumption. .

.  These, I think you will admit,  are very real

achievements.

But this is not a matter that involves just the ,   executive government of the day. It is something that '

should concern every single Australian citizen, whatever

his political beliefs.

.  It is for this reason that I have been advocating  .for quite some time now, the need for a bi-partisan approach

to the energy question; the need for Government and  Opposition and industry, and in fact all interested groups,   to get their heads together and come up with policies that

will protect this country's energy position.

But I would have to say that the present Federal

Leader of the Labor Party, Mr Hayden, and his Energy  Spokesman, Mr Keating, have done nothing but bumble around,

muttering that the Government's policy is wrong or misguided,

or evil-intentioned.

It makes me rather sad to think that they claim

to be the alternative Government of Australia. You know

the Irish playwright and author, Brendan Behan, once said

of his countrymen that if it was raining soup the Irish

would be out in the streets with forks. As I said in the

Parliament last Thursday, I think that if it suddently .

started raining petrol,  the Labor Party would be out in

the streets lighting bonfires to celebrate.

But,  in spite of all his blustering and criticism,

the fact is that the Labor Party does not have an energy

policy. I understand that Mr Hayden is releasing a draft .

policy paper in Canberra today but obviously this will

Ã¢ÂÂ   need to be considered by the ALP Conference in July 1979.

' ...19 .

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Ã¢ÂÂ¢  Â·ÃÂ½.

Apparently Mr Hayden thinks the world energy crisis

will stand still while the ALP thrashes out its attitudes.

Of 'course,  even then, there is absolutely no guarantee that

Mr Hayden's policies will be accepted by the National .   Conference of his party.

'  I think the most disturbing aspect of this matter

is that there is a danger that the Left Wing of the Labor

Party could again impose its will on the more moderate

elements of the ALP at the National Conference in July.

Talk of setting up a National Fuel and Energy

Commission smacks of an attempt to impose the kind of  socialistic centralism that was the hallmark of the  Whitlam-Conner era. .

Ã¢ÂÂ¢  Additionally, it is clear that the Labor Party

would like to See Australia withdraw from the International

Energy Agency - and, as a result, deprive us of our

insurance policy in times of an international oil' emergency.

Moreover,  the ALP is committed to introducing a

resources and capital gains tax. These "taxes would have '

a stultifying.effect on the future of this country and

would again bring exploration to a halt.  .  . .

That is to say nothing of the Labor Party's intention

to abrogate legal contracts to export uranium, and,

consequently, do enormous harm to Australia's reputation

as a reliable exporter of raw materials.

The Commonwealth Government's stated objectives place

emphasis on self-sufficiency in liquid fuels and this involves  questions of pricing, the encouragement of exploration, and  the development of reserves. What it also states, clearly,

is the necessity to restrain the average rate of growth of  energy consumption. .  .

.  ./10

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I have been speaking of what the Government has

been doing. Now I want to talk to you about the role

that every Australian citizen can, and should, play in

conserving liquid fuels.

I have dealt at.:s.ome length with the.. .  '

Government policy on pricing and the effects it will

have. Although our decision on oil pricing has already

had a definite effect on oil conservation, more needs to

be done.

I believe that there has to be a national  conservation program as well. A program that will  encourage people to use less petrol and fuel oil.

For some time the Government has been planning  a national energy conservation program with the States.

In November 1978 the Government commissioned a consultant

to carry out research into the best way of conducting such

a program. .. .  .

The objectives of the proposed campaign would be

to increase the public's understanding of the energy

problem, the efficient use of energy and, in the longer

term, to promote individual and community acceptance of  energy conservation as an integral part of the Australian

life-style. .

I have received a report from the consultants and

we are now proceeding, in consultation with the States,

to test and study the recommendations.

The research into public attitudes carried out by

the consultants is of special interest. I has revealed

the very daunting talk that the Government faces in trying

to convince Australians of the oil problem and what can be

done about it. There is apparently no conception of the

seriousness of the problem within our community. This

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applies whether we are talking about the man in.the street,

leaders in industry.and commerce, .  or the men and women who

earn their living in the journalistic profession, whether

in newspaper, magazines or television.

As far as the man in the street is concerned the

study reveals that the energy problem worries him only

mildly, if at all. Conservation is an unattractive concept;

there is a belief that somehow, somebody will wave a magic  wand which will solve the problem. In particular, the

majority of.people see the prospect of solar energy as the  magic answer. (Of course, the reality is that solar will  make very little contribution to solving our liquid fuel

problem.). More alarmingly, the study revealed that our

community believes that petrol is one of the very few .

commodities for which we are paying no more than a generation

ago;  petrol is known to be cheap compared to other commodities

and to other countries.

'  Perhaps the greatest obstacle to community acceptance

of the problem is the revelation that, in our country, wasting

energy is a readily admitted individual pastime. To waste

energy signifies a degree of material affluence and is

considered to be a status symbol.

v In industry and commerce there is more consciousness

of our oil problems, but awareness has not yet reached the  proportion where energy conservation is an issue.

.  The research shows that there is very little

appreciation in industry of the cost implications of

increasing dependence on external oil supplies. It also

reveals that among industry there is considerable cynicism

concerning this matter. There are a number of people who

believe that the Government and/or oil companies have

ulterior motives in saying that there is an energy problem.

The study shows that the news media accords a very

low priority to energy as an issue in this country. Among "

representatives of the news media there was a general

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agreement that we, as Australians , Â·  waste fuel.  The media  attribute this mainly to the fact that people see no reason

to conserve because they regard fuel as being very cheap.

So, all in all, the study shows that much has to

be done to change attitudes of Australians towards oil -

conservation. .  .  .

More encouragingly, the report is positive in its

claim that the potential for energy savings in industry and

throughout the community is very significant. To give two  examples:  In one industrial case, savings of 25 per cent

were quoted as having resulted from the installation of .

an automatic control on a steam boiler. Secondly, the

report points to a 1977 report of the Institute of Fuel

which estimates that 30 per cent of our liquid fuel use  would be eliminated from the substitution of coal or gas.

In conclusion, I would simply say again that .

Australia is in a very, fortunate position in regard to  energy when compared to many other nations but it is. .

incumbent on every Australian citizen to give his full  support to a national energy policy which is designed to

protect our children and our children's children.

