AISP4' ie' F" 4
-aUST-U EM4BARGO: 6: 30 pm
FOR MEDIA SUNDAY, 2 MARCH, 1980
ELECTORATE TALK
The decision to proceed with the development of the Rundle
shale oil deposit is welcome news for all Australians.
Esso's participation with Southern Pacific Petroleum and
Central Pacific Minerals to develop Rundle ' s massive
reserves of shale oil signals the start of what may well
become one of Australia's greatest industries. It also
further enhances the energy-riches of this country and
highlights our unlimited potential as we proceed into
the 1980s and beyond.
Of particular interest is the role played by the Commonwealth's
oil pricing policies in making the Rundle development
possible. The Government's policy of import parity pricing for crude
oil has three main objectives: to encourage oil exploration;
to conserve our scarce liquid fuels; and to enhance the
viability of alternative energy sources.
We are already seeing the success of these policies. Spending
on oil exploration and development has risen dramatically from
the depressed levels of the mid 70s and further Bass Strait
reserves have been proved. ' Increased efforts are evident in
conserving our scarce liquid fuels and there is a concerted
movement away from oil to alternative fuels such as natural
gas and electricity.
If we had not adopted a realistic pricing policy for crude oil
and instead allowed oil to be sold at an artificially low price,,
the plans for the development of the Rundle shale oil deposits
could not have proceeded as they have. The policy of setting
market prices for crude oil has provided the certainty necessary
that this massive resource project would be viable.
I have said before that the choice we face-is between paying
realistic prices for oil now, or paying far higher prices for
insecure imported crude in the future. The development of Rundle
to its full potential will reduce significantly our dependence
on imported crude. / 2
I
2
Beyond energy policy the Government's general economic
policies have also been important. Our policies here have
created the climate in which once again investors, including
those from overseas, can plan with confidence and are
prepared to outlay the massive amounts of risk capital necessary
for our vast resource projects.
The potential magnitude of the Rundle project is difficult
to comprehend. Even in the pilot stage investment of some
hundreds of millions of dollars will be involved and many
jobs will be created. If the pilot plant is successful the
joint venturers plan to expand output to around 200,000 barrels
of oil per day. This phase will require several billion dollars.
Production from Rundle will be particularly important on two
counts. Firstly, it will coincide with the presently anticipated
run-down of Bass Strait output from the mid 1980s and thus enhance
the security of Australia's supplies of liquid fuels. It has
become clear that world oil markets will remain uncertain in the
future and that imported fuels will become increasingly scarce.
The Government has given a very high priority to the development
of indigenous sources of liquid fuels and it is pleasing to note
the success of these policies in this particular area.
The second important aspect of Rundle is that it is likely to
act as a catalyst for the exploitation of other deposits of shale
oil in Australia. Potentially, the shale oil industry could be
one of the largest and most important in Australia.
Some concern has been expressed about the magnitude of the
Rundle project and its possible effect on the environment.
As I said on Thursday, the project will need to satisfy
Commonwealth and Queensland Government requirements in a number
of areas, one of which is environmental considerations.
The companies have already done some work in this area and I
anticipate that satisfactory arrangements will be able to be
worked out that will protect the environment.
In closing, I would like to return to my earlier theme about the
fundamental importance of the Government's oil pricing policies.
Unrealistically low prices for oil mean that as a nation we
would squander the scarce reserves of oil and ignore the needs
of future generations. Our pricing policies not only preserve
existing supplies of liquid fuels for our children but are also,
as evidenced by Rundle, bringing forward projects to increase
these future supplies of liquid fuels. Only in this way can we
guarantee the future strength of Australia and ensure that the
very high standard of living currently enjoyed in Australia
is shared by future generations. 000---