Coal Liquefaction

Oral Answers to Questions — Energy – in the House of Commons at 12:00 am on 11th June 1979.

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Photo of Mr Gwilym Roberts Mr Gwilym Roberts , Cannock 12:00 am, 11th June 1979

asked the secretary of state for Energy what steps he is taking to encourage the extraction of oil and chemicals from coal.

Photo of Mr Alexander Eadie Mr Alexander Eadie , Midlothian

asked the secretary of state for Energy if he will make a statement on the progress of the two United Kingdom projects involved in the extraction of oil and chemicals from coal.

Photo of Mr John Moore Mr John Moore , Croydon Central

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.

Photo of Mr Gwilym Roberts Mr Gwilym Roberts , Cannock

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?

Photo of Mr John Moore Mr John Moore , Croydon Central

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.

Photo of Mr Alexander Eadie Mr Alexander Eadie , Midlothian

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?

Photo of Mr John Moore Mr John Moore , Croydon Central

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.

Photo of Sir David Price Sir David Price , Eastleigh

Will my hon. Friend bear in mind that many years ago we were making oil from coal? The process is well known; it is all a question of relative economics.

Photo of Mr John Moore Mr John Moore , Croydon Central

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.

Photo of Mr Gordon Wilson Mr Gordon Wilson , Dundee East

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?

Photo of Mr John Moore Mr John Moore , Croydon Central

I am sure that the hon. Gentleman is aware of the research being done at Stoke Orchard. I shall give this as much attention as the other areas, but it is clear that the scientific development in NCB laboratories is far in advance of that of many of our competitor nations.