OIL FROM COAL

Wairarapa Times-Age, 1 June 1938, Page 3

OIL FROM COAL

HIGH COST OF EXTRACTION Although Australia needs urgently to develop its resources so as to be independent of outside supplies of oil, sight must not be lost of the fact (says the “Melbourne Argus”) that if extraction from coal becomes necessary, the process in its early stages at least Will be extremely costly, and a huge capital outlay will be required. The problem of extraction of oil from coal has occupied Governments In ‘ Australia for many years. Last year the chief executive officer of the Council for Scientific and Industrial Research (Sir David Rivett) in a report tabled in the House of Representatives, said that the capital cost of a hydrogenation plant capable of producing 45,000,000 gallons of petrol a year from bituminous coal would be about £11,000,000 and for a similar plant to operate brown coal, the cost Would be nearly £12,000,000. Extraction of oil by low temperature carbonisation would also necessitate a heavy capital expenditure. The cost of petrol a gallon produced by hydrogenation, Sir David Rivett said, would be 13.8 d from black coal and 14.4 d from brown coal, calculating 3J per cent, interest on capital and allowing 15 years for amortisation. When it was taken into consideration, that the price of imported petrol was 5d a gallon c.i.f., a subsidy of at least £300,000 to £400,000 a year would be required to enable such an industry to continue and supply its product to-the market in competition with other fuels.

In the same way the economic production of briquettes, which in the last 12 years has been undertaken in Victoria by the State Electricity Commission, calls for a heavy capital outlay and operation on a relatively large scale. Although the commission’s plant at Yallourn is especially favoured by reason of its proximity to the coal fields and the electricity plant, thus enabling coal to be obtained at a lower unit cost than if briquette manufacture were carried on separately and distinctly, the industry has not yet succeeded in making itself financially self-supporting. This is in spite of very efficient methods of manufacture and the great advantage of being associated with the electricity undertaking. It any private enterprise should contemplate the erection of another plant for the manufacture of briquettes in Victoria, a capital outlay of at least £50,000 would ,be required if operations were to be efficient and economic. In addition, it is estimated that to develop and equip a coal field to supply the plant and raw material, including the provision of modern machinery and the working capital for the removal of the overburden, not less "than £200,000 more would be needed.