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 John Pardoe Mr John Pardoe , North Cornwall 12:00 am, 26th November 1973

I shall come to the Athabascar tar sands reserves later. My information is that it is unlikely, with present day technologies, that oil from Athabascar tar sands would be economically viable under about 10 dollars a barrel. Of course, I would not mind betting that we shall reach that level before long. I shall come on to those reserves later. The figure that I quoted from the Alaskan oil fields of 8 per cent. of United States domestic consumption by 1985 is little more than one year's growth of America's domestic consumption.

Are we aiming to be self-sufficient in oil? At best, by 1985 we shall have about 250 million tons a year from the North Sea, which is far more than the Government are officially estimating. That is about the most optimistic forecast that one could possibly make. Even at that rate, we would be self-sufficient for only a few years from 1985 onwards. I should like to know how long the Government believe that period of a few years will be. Will it come in 1985?

It would be nonsense to suggest that self-sufficiency in oil is a safeguard for this country against the oil economics of the world market place. For example, the Secretary of State said that we would have considerable energy resources a few years hence. Is the right hon. Gentleman right to think in those terms? We cannot exist in an oil fortress. There is a world market and value for oil, and there will be by 1985.

One thing that I learned from Adam Smith—I might not have learned this if there had not been an oil crisis after Suez—was that if we were to produce enough oil from the North Sea for our own needs we could hardly use it if its value was substantially greater by selling it abroad than using it here. By using it ourselves at well below the world market price we would be subsidising our own industry and might add less to this nation's wealth than by selling it abroad. That these are perfectly orthodox economic considerations, is obvious from the cheers of the hon. Member for Oswestry (Mr. Biffen) from a seated position. We cannot, therefore, rely on using our North Sea oil reserves at less than the world market price in 1985, or whenever.

I now come to the point mentioned by the hon. Member for Bedford (Mr. Skeet) about the substitution of other unconventional oil sources—Athabascar tar sands, shales, and the conversion of coal. An enormous manpower cost is involved in present-day technologies. I am the last person to suppose that such technologies will last for ever. Necessity will almost certainly breed considerable inventions in this sphere.

I do not doubt that technologies will improve, but even if they are improved the investment required to get the oil up and out to the world will be enormous. We cannot dodge that question. There is considerable doubt about the economic price at which the oil would be viable. The hon. Member for Bedford said that it would be 4 dollars a barrel, but I have seen estimates of as high as 10 dollars a barrel, and it could be more.