A Government-aided consultancy study for the design of two National Coal Board pilot plants to extract oil and chemicals from coal began in April this year.
Later this week, I intend visiting the coal research establishment of the NCB to learn, at first hand, of the board's work on coal liquefaction.
But in view of changing economics, is it not time rapidly to speed up this development and move from research into production? If we are moving into the production stage, will the hon. Gentleman favourably consider areas such as Cannock Chase which are on the borders of the growing Midlands coalfield?
I am sure that the hon. Gentleman will recall from previous years that the location will be a matter for the NCB, which obviously is considering a number of sites and hopes to reach a decision this summer. Our advice so far suggests that there is no lack of interest and concern about this vital project, which will have our urgent attention. However, there seems to be nothing specific which can be done at this stage to quicken the process.
But is the hon. Gentleman aware that the process of extracting oil from coal now ranks in importance with the development of the silicon chip? Will he assure the House that in any public expenditure cuts the oil-from-coal technology will be left untouched?
I hope that I may be permitted to say how much I recognise the responsibility of following in office the hon. Member for Midlothian (Mr. Eadie) after all his work, not only in this area but in the coal industry as well. Recognising that work, I can assure him that the Government will support the pilot plant design studies, bearing in mind the vital importance of those developments for our country.
I am aware of what was going on in the 1930s and 1940s. It is always difficult to give a rule of thumb, but one thing which is coming from the study by the NCB is more specific detail; if one can today assume processing costs of about $15 to $20 a barrel and fuel costs, at £30 a ton production, of about $20 to $25 a barrel, we are already talking in terms of a not-too-distant possibility of price of $35 to $45 a barrel for synthetic crude, so it is more than in the hereafter.
Remembering that about £300 million worth of natural gas will be flared in the North Sea this year, will the Minister give attention to the commercial possibilities of producing chemical by-products from natural and petroleum gases and making sure that this valuable product is not wasted in that way?