Address by the Hon. Frank Crean, Deputy Prime Minister and  Minister for Overseas Trade to the 14th Annual Convention of  the Australian Gas Association held in Canberra, 29 September 1975

On behalf of the Australian Government I warmly welcome

delegates to the Australian Gas Association Convention to

Canberra. I would like especially to welcome those of you who

have come from overseas for this Convention. I hope that not

only will your visit be fruitful in the discussions you will

hpld during the present convention, but that you will enjoy your

visit to Canberra and to Australia.

As your President is aware, the Prime Minister had

been asked to address you today and it had been his intention

to do so. However, this has not proved possible. Whilst I

am pleased to be here with you the Prime Minister very much

regrets that he cannot be here himself and has asked me to

tell you so.

It is appropriate that the Australian Gas Association

should be holding this year’s convention in Canberra because it is

the first annual meeting since the Association has established its

administrative headquarters in the national capital. Increasingly

Canberra is becoming the headquarters for national industry groups

and a popular convention centre.

2.

Gas in its many forms, and from its numerous origins, has

become an increasingly important source of energy. But it is

difficult to think of gas without also thinking of related sources

of energy and of the question of energy itself.

Energy in its many forms has become such a regular part

of life of the human race that many of us take it for granted.

I suggest that few of us really focus on the fact that all man's

needs and activities, both essential and non-essential, depend on

energy. This dependence is both direct and physical as in the

case of transport and heating and indirect such as where energy

is necessary for obtaining and converting materials into finished

goods which we eat or use in some way every day.

The use of gas as a source of energy has greatly influÂ­

enced the development of society as we know it today. Its impliÂ­

cations for the future are enormous.  It is gratifying therefore

that during this Convention there will be wide ranging discussions

on the current situation, and what the future may hold.

Moreover, I regard the theme for this convention, "Gas -

Pacific", as a very appropriate one. This is not only because

Australia is located in the Pacific region but also because of

the significant differences among countries in the region in terms

3

of energy resources and their use. These very differences should

help to stimulate your discussions. However, I do not propose

in this address to try to provide any kind of framework for

your discussions or to anticipate any particular issues.

The world now faces a very different situation as regards

the use of energy in all its forms than it did just two years ago.

In looking at some elements of this changed situation I intend to

draw, in part, on two recent reports compiled by the Organisation

for Economic Cooperation and Development relating to energy

prospects and research and development.

The sudden end of a low-cost energy situation has brought

tremendous problems * " 0 the industrialised, as well as to those

developing countries which at present lack adequate hydrocarbon

resources, not to mention the critical consequences for the interÂ­

national financial and monetary situation. The transition from a

low-cost to a high-cost energy economy entails direct and indirect

effects, the gravity of which, although perceived, is still difÂ­

ficult to evaluate. There is obviously a world wide need to

conserve energy as much as possible, and to develop alternative

sources of energy which may liberate the world from over-dependence

on limited or unreliable energy sources. On present patterns very

few countries in total produce more energy than they consume and,

even where they do, such as Australia and Canada, the situation

is imbalanced with a surplus in some forms and a deficit in others.

ÃÂ'Â· Â·

4.

The implications of t:he change are wide-ranging and

call for approaches that are far seeing and cooperative. You

are, of course, aware of proposals for international discussions

which have their origin in the aftermath of the oil crisis.

The primary purpose of the proposed discussions is to initiate

a dialogue between producers and consumers of oil and other

commodities. This is an objective which Australia has

consistently supported because it represents a welcome moveÂ­

ment away from the danger of confrontation. As a major

exporter of raw materials and food we are firm believers in the

value of cooperative discussions between producers and consumers

of commodities. It now seems likely that these proposed

discussions will go beyond the areas that were originally of

primary interest, namely oil and energy, and extend to comÂ­

modities generally as well as to the development problems of

developing countries. Our interest in and our ability to

contribute to the discussion of these questions is obvious.

\

Australia is fortunate in having substantial reserves

of energy in a number of forms. In addition to natural gas

we have coal, crude oil, uranium and hydro-power.

Coal is our largest single resource of conventional

energy matter. Reserves of black coal are estimated at something

in excess of 220,000 million tonnes. In addition, there are vast

reserves of brown coal, mostly in Victoria, which may be further

developed as an energy source. Apart from its value to Australia

as a source of energy for many years, coal is of great significanc

to us as an export commodity. Exports have grown rapidly in

recent years and on current prices their value during 1975 is

likely to exceed $1,000 million.

Recoverable remaining Australian reserves of crude oil

are in the vicinity of 1.7 billion barrels. Production of almost

0.4 million barrels a day covers about 70% of our present

requirements. Even so imports of crude oil and petroleum products

in 1974 cost about $720 million including freight. It is evident

that production out of present reserves will begin to decline at

the end of this decade and in the absence of any major new finds,

dependence on imports will grow. This will have important impliÂ­

cations for our import bill. On the other hand we should not over

look the gains which can be achieved by using other energy sources

particularly gas to partly do the job of oil based energy. SubÂ­

stantial savings of foreign exchange are expected in this regard.

It has been stated by the Australian Atomic Energy

Commission that reasonably assured resources of uranium in

Australia are estimated at 188,000 tonnes. This compares with

a total estimated world resource which presently stands in excess

of 1.6 million tonnes of uranium. But it is estimated that

6.

between 1973 and 1990 the Western World will require about

1.5 million tonnes and that by the year 2000 the cumulative

requirement will have reached 4 million tonnes. Clearly,

therefore, if uranium is to become a major source of energy

over any length of time substantial new deposits have to be

discovered.

The Australian Atomic Energy Commission has initiated

a programme to undertake exploration for uranium in the Northern

Territory. The Commission may participate in joint ventures in

respect of existing leases for uranium exploration and has,

in fact, already entered into such an arrangement. However, as

announced by the Prime Minister last week all new uranium

exploration licences will be granted on the basis of 100 per

cent Australian ownership.

Clearly the world can no longer be complacent about its

use of energy. Moreover, the industrialised nations, in particular,

can no longer base their manufacturing activities on an assumption

of the ready availability of low cost energy materials. It is

evident that those resources most generally used today are finite

and for that reason they must be conserved and utilised in a manner

which will produce the greatest benefit for mankind. I should

recall that when the present Government introduced its positive

policies towards resource conservation and development there were

7.

some who claimed that we were being less than cooperative.

However, I believe that there is now wide acceptance that a positive

resource policy is an essential element in the attainment of our

national economic and social objectives.

i Ã¢ÂÂ  ' - .i  Ã¢ÂÂ

1  It is something of a paradox that until the advent

o:: the industrial revolution, the sun provided man with his

principle source of energy. Yet today solar energy is classified

as a non-conventional source and relatively little effort is

being devoted to its development. Nevertheless, solar energy

offers an energy source of enormous potential.

Geothermal energy is another "non-conventional" source

of energy. It will come as no surprise to most of you that today

electricity is produced from geothermal fields in Italy, the United

States, New Zealand and Japan. While I understand that production

of electricity by this method (geothermal - dry steam or hot

brines) is relatively expensive in comparison to the more conÂ­

ventional methods,  there appears to be enough incentive in

view of its high potential for further development of this source

in those countries where it is available. Obviously, massive

research and development programmes will need to be developed

and implemented in the foreseeable future to develop these and

other possible sources of energy.

8.

The onvi.ronmental aspect of developments in the use of

both existing and new energy sources is of special importance.

How long we survive as a viable planet capable of supporting the

human race may well depend on what we do this century to preserve

and improve the environment and ecology which already exists.

Creating energy from waste could help solve some of the

serious environmental problems raised by population growth and the

tendency for population to move into urban areas. The energy

potential of waste has been estimated to be equivalent in the

United States to 6% to 10% of the present electricity consumption.

Thus the potential for effective conversion of waste to energy is

of importance in two respects.

One of the consequences of the 1973 oil crisis was an

increased awareness of the benefit to be gained from intensified

research and development, not only in finding,  exploiting and

bringiqg into use further energy resources, and in decreasing

dependence on oil, but also in reducing the rate at which the

demand for energy was growing while using present day technologies

The crisis also spotlighted the weakness of earlier

policies. For example,.while there had been a sustained research

effort in certain sectors such as nuclear energy, others had been

neglected. Certain aspects, including a more rational use of

energy,  were almost completely disregarded.

9.

Moreover, because of the time scale required, research

and development in the energy field falls into the medium and long

term category. However, research and development should not be

limited to the production of energy. It would seem necessary that

the way in which it is used and the effects of the energy production

and consumption systems on the structure of the economy and society

should also be the subject of continuing study. .

One thing that has clearly emerged is that energy should

be the subject of constant vigilance.

Although the outlook for gas has not changed to the same

degree as that for oil, it nevertheless has changed significantly

as a result of the alteration to price expectations following

the quadrupling of oil prices. In 1972 natural gas covered a

little over 20% of total primary energy requirements of OECD

countries. Forecasts at that time indicated that this share would

gradually fall over the next ten years. In the United States, for

example, which is far the largest producer among OECD countries,

there had been a steady fall in the real price of gas and this

along with rising costs discouraged exploration. Now under the

impetus of increased prices, supplies can be expected to increase

and a new balance created between gas and other energy materials.

10.

As you in the industry well know gas in Australia

has been a much less significant energy source than in North

America and Europe, but its importance is increasing rapidly now

that substantial resources of natural gas have been proven.

Although the history of gas usage in Australia extends

back to the middle of last century,  production increased only

gradually until relatively recently with the development cÂ£

natural gas deposits. In the last 20 years production increased

eight-fold but in the last six years the increase was more than

four-fold. -

For its ]j>art the Australian Government has assumed a

major role in the development and distribution of natural gas.

The controlled development of Australia's natural energy resources

will ensure that they are put to the best use.

Indeed it is a policy objective of the Government that

all of the nations resources be used in the most economic and

efficient way. As Minister for Overseas Trade,  I am particularly

concerned that every sector of our economy should develop greater

efficiency and thereby become more competitive both on the

domestic market and overseas. It is important that our processing,

manufacturing and transportation industries should have available

11.

adequate supplies of energy, at competitive prices, as a means to

greater efficiency and productivity.

The aim of the Government is that sources of natural

gas and markets should be inter-connected by pipelines under the

control of the recently established Pipeline Authority. This

will ensure that natural gas as an energy source may be made

available where it is needed quickly, efficiently and on a basis

of uniform pricing. A pipeline grid will provide the greatest

possible flexibility in coping with changing sources of supply

and in dealing with emergency situations, so that continuity of

overall suppliers may be maintained.

Although progress is being made in the development of

Australia's natural gas resources, much still remains to be

done. The largest proven and probable reserve of natural gas is

on the North West Shelf which contains 343 billion cubic metres comÂ­

pared to known reserves of 190 billion cubic metres on the Gippsland

shelf. .

The supply of natural gas from the North West Shelf to

key centres in Western Australia is a high priority project of

the Pipeline Authority. However, progress in developing the North

West Shelf is being seriously delayed by the challenge in the High

Court to the constitutional validity of the Seas and Submerged

1 12.

Lands Act, 1973.

The development of the North West Shelf would provide

.  and

immeasurable benefits for the nation,/particularly the State of

Western Australia. As my colleague the Minister for Minerals

and Energy has foreshadowed, the development of these reserves

may involve the construction of an associated refinery and

petrochemical plant.

Clearly the further development of our natural gas

resources represents a sizeable task. But there is no doubt

that the end result will bring benefits far in excess of the

costs and efforts involved. Apart from the direct benefits from

the use of natural, gas there can be important technological

spin-off. For example, development of our distribution network

has imposed demands for new techniques in the manufacture of

pipes to the rigid specifications necessary. I am happy to be

able to say that Australian industry has responded to the challenge

and has met these demands.

Through the Pipeline Authority the Government is in

partnership with private enterprise in the development and

distribution of one of our basic natural resources. I am confident

that this partnership will serve the nation well, and maximise

the benefits from a planned development of our resources and

concurrent protection of the environment.

