17 
i believe that a representative of the firm has been studying the latest developments in 
refining in the United States of America, especially cracking processes, research into which during 
recent years has led to enormously greater yields of gasolene (petrol) from crude oils. This, 
besides being profitable, has helped the companies to keep step wit h the increasing demand for 
motor spirit due to the rapid development of the motor car and allied industries. The adoption 
of a satisfactory modern cracking process will also help to revive the industry. 
The mine and works hi the Wolgan Valley are situated in a deep, narrow gorge bounded 
by precipitous cliffs of the Rawkesbury sandstone. Access is obtained by means of a narrow 
gauge railway which has a fall of about 2,000 feet in a distance of less than 40 miles between its 
junction with the western Railway at Newnes and the floor of the valley. This means steep 
gradients, a high cost of upkeep and consequently expensive transportation. Moreover, the valley 
is not adapted to pastoral or agricultural activity, so that the line serves no purpose other than a 
means of communication with the shale works. The shale which is being mined at this spot 
is rather thin and erratic in its behaviour. The dip is more or less northerly, so that the bed is 
being mined down the dip slope, which is not good practice and increases costs. Possibly also, 
there is some adverse psychological effect on the workmen who have to live in this isolated 
and exceedingly confined valley, and this will have to be considered in studying the causes of the 
industrial troubles which have made successful development impossible in the past. Now all 
these adverse factors would be removed or minimized if the works could be shifted bodily over 
to the Capertee Valley, only a few miles to the north. The Capertee Valley is broad and fertile 
and is well farmed. A railway through it would be a boon to the farmer, would assist in 
settlement and development and would carry much produce in addition to serving the mines 
and works. Even the shale here is thicker. Cambage (loo. cit.) states that “ On the Capertee 
side one tunnel has exposed an average thickness of between 3 and 4 feet over a distance of 4,000 
feet,” which is better than anything discovered on the Wolgan side. Moreover, mining can be 
done here with a dip in favour of the miner, thus making his work more easy and expeditious 
and diminishing mining costs. Workmen could be housed in surroundings which, I feel sure, 
would, to some extent at least, minimize labour troubles. It is possible to construct both rail 
and pipe line to Windsor on the Richmond branch line. The fall would be 1,065 feet spread 
over 78 miles, which is not excessive. The pipe line especially would be of great advantage, 
not only to the industry itself, but for naval and defence purposes, especially if if had an outlet 
in Sydney. A bold scheme on these lines would probably pay in the long run, especially with 
some initial State assistance. A good deal of capital is necessary, but a good deal of capital will 
also be necessary before the Wolgan Valley works can be put on its feet again. 
With the idea of greatly reducing the cost of production, Mr. Fell carried out a daring 
experiment based upon a conception which suggests a spark of genius. A point was selected 
where the kerosene shale outcrops in the cliffs above the floor of the valley, openings were made 
and the shale fired in situ. By walling up the openings, arrangements were made to admit a 
current of air which could be regulated, and the gases were drawn off by means of suction through 
pipes of large diameter. After some initial success, falls of roof took place and interfered with 
the circulation system. Mr. Fell wished to open up the passages and clean out the falls, but I 
am told that Departmental official objected to the course on the ground of danger. Mr. Fell 
considers that a large body of crude oil has been formed by condensation of the gases down the 
dip inside the workings, which is of course quite possible. It is a pity that the experiment did not 
continue to prove successful, for it is quite certain that, had this been the case, oil could have been 
produced almost as cheaply from the shale as from oil wells. The scheme is worthy of consideration, 
though the difficulties in the way of continued success are obvious. Success depends to some 
extent upon the fact that the shale when burned does not crumble to ashy powder, but retains 
practically its original form and bulk. Thus there should be no falls of roof excepting in the 
passages for circulation of air and gas. This being the case, however, it is hard to see how air 
can get to the fire when the fire has penetrated into the seam to any extent, and how the 
circulation can be kept going without some danger to those whose duty it might be to keep the 
circulation ways open. 1 do not: see, however, why some research should not be carried out 
to see whether these difficulties do really exist and whether they can be overcome in a satisfactory 
manner, if they do. The method holds out such promises if it can be worked successfully, that 
matters should certainly not be left without further investigation. 
I should like to point out that in the long run these kerosene shales may be more profitable 
to Australia than oil wells, especially if only small wells and limited pools be eventually 
discovered. Moreover, there is no certainty that such pools will be discovered. In the meantime, 
the amount of shale can be ascertained definitely ; we can find out what our resources are, what 
can be done with them, and make plans accordingly. Beds of kerosene shale are not so erratic 
and uncertain as oil wells. Water troubles and careless drilling will not affect them. They 
