Orders of the Day — Fuel and Electricity (Control) Bill

Part of the debate – in the House of Commons at 12:00 am on 26th November 1973.

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Photo of Mr Peter Walker Mr Peter Walker , Worcester 12:00 am, 26th November 1973

I beg to move, That the Bill be now read a Second tme.

May I first of all say that I believe that no one on either side of the House welcomes a Bill of this nature. We all regret that circumstances have meant that the Government have had to come to this House and ask for the wide-ranging powers contained within it. I believe the country and the House would also like to be aware of the background to the energy situation, particularly when it is asked to enact business of this nature.

It is particularly regrettable that we should be asking for these powers at this time when, on all possible theories, this winter should have been one in which we were faced with relatively small problems of energy supply. We started the winter with good stocks of oil and coal. We had a situation where the generating industry was able to meet demand and the decline that had taken place in coal production was levelling off. The combination of these events should have meant that energy supply would have been one of the smallest of our problems in the winter of 1973–74.

Alas, the war in the Middle East has created a considerable uncertainty over oil supplies to this country and the world as a whole. The industrial action that has taken place in the electricity power industry and the coal industry brings a great deal of uncertainty with it. The dependence upon coal and oil is basic and considerable. Over the years there has been a dramatic transformation in that dependence, particularly upon oil. It is interesting to reflect that in 1960 almost 75 per cent. of our energy came from coal and 25 per cent. from oil, with minor figures for other forms of energy. By 1972 our dependence on coal had halved and the figure was 37 per cent. instead of the 75 per cent. 12 years earlier. The figure for our dependence on oil had almost doubled, from 25 per cent. to 48 per cent. of our total resources. The balance of 15 per cent. comes from natural gas and nuclear energy.

Faced with the likely prospect of an oil crisis in the Middle East it was right for the Government, I believe to decide as they did a year ago, to pursue the only sensible energy policy available to the country, which was swiftly to increase the supply of energy from every available indigenous source. I want to tell the House of the broad prospects of meeting to some extent our present problems and our long-term problems.

I come first to our oil resources in the North Sea. It is interesting to reflect that the first commercial field was declared commercial only two years ago. There are now six such fields, and on every possible conjecture of developments there is every chance that by 1980 two-thirds of our oil supplies will be coming from the North Sea. There is, alas, a popular misconception that it is all readily available and if only Governments would put in a little more effort it could be substantially speeded up. Unfortunately, that is not so. When for example, I was asked on Friday by a journalist in Leicester why was I exporting half our oil supplies from the North Sea I was able to ask him whether he realised how much we were getting from the North Sea. Obviously he, like many others who are of the opinion that it is there ready to be obtained, was not aware that we are likely to get virtually no oil until 1975, although by 1980 the volumes will have substantially increased.

It will be the policy of the Government to develop these oil resources as speedily and effectively as possible. We have a decision to make about future licensing arrangements. On the information available to us it would appear that the speediest development in the North Sea can be obtained by applying all available resources to the areas already under licence. In this way our energy situation in the 1980s will be completely transformed.

Our energy situation has already been transformed when it comes to gas. It is remarkable that in the North Sea we already have five fields in the southern basin and one in the northern basin. We have negotiated with the Norwegian Government to purchase their interests in gas in the Frigg field, and by the mid-1970s we shall be obtaining five times as much gas from these sources as we were using in the pre-natural gas era. This has been a remarkable achievement by the gas industry, and it certainly relieves our immediate problems.