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North Sea Oil

Volume 941: debated on Monday 9 January 1978

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8.

asked the Secretary of State for Energy if he is satisfied with the current off-take of oil from the North Sea oilfields.

17.

asked the Secretary of State for Energy whether oil production from the North Sea is in line with the targets set by his Department.

I am satisfied with the level of production, which is now meeting nearly half our requirements. Figures for 1977 production, when available, are expected to show a slight shortfall on our forecast.

Does my right hon. Friend consider that oil is in very short supply, not only in the North Sea but throughout the world, when compared with the amount of coal that is available? Will he ensure that the smallest quantity of oil is consumed in power stations, if its use is not abolished altogether? Will he ensure that coal takes the place of oil? Does he agree that that would give the mining industry the impression that the Government were giving their support to increased productivity?

I agree with my hon. Friend. What he suggests has already been done. There has been a substantial shift away from oil burning. New arrangements have been made governing the import of coal, and Drax B has been ordered. I am not suggesting that the switch has gone as far as some would like it to go, but the pattern of our energy policy is firmly based upon coal, and forward forecasts, which have now been made public, indicate the rôle which coal will play. There should be no fears in the mining industry on that score.

Is the Secretary of State aware that oil production is at present four or five times Scotland's annual consumption and that by 1990 Britain—if it still exists—will be importing oil at a much higher cost? Will he give urgent consideration to the request by the TUC that an oil depletion policy should be followed?

There has been a statement on the Government's depletion policy, which is set out in the working document which went before the Energy Commission and which will appear in its final form in our Green Paper. This sets out our position that we are aiming to move towards self-sufficiency. Beyond that, we shall take account of the desirability of preserving oil in the ground and the impact on the industry of the long-term interests of the United Kingdom.

Every part of the United Kingdom is dependent to a substantial extent on every other part in terms of one fuel or another. For example, Yorkshire coal is an important part of our coal reserves and it is transported to other parts of the United Kingdom and used there.

I appreciate all that my right hon. Friend has done in moving towards coal-burn in power stations, but will he again look seriously at the proposal for producing one new oilfired power station?

I understand that my hon. Friend is referring to Insworke Point. I have made it clear that the Government do not favour further oil-fired capacity, for the reasons which I have given in the House today and which emerge clearly from general statements on energy policy that I have made.

Will alterations be made to future Government estimates to take account of the delays incurred by the Government before the announcement of the fifth round of licences? Does the Secretary of State recall that the Government assured the House that there would be no delay in drilling and that the 1977 drilling licences would be caught? But delays have taken place. Does this not fully substantiate what my hon. Friend the Member for Bridgwater (Mr. King) warned would happen when the Secretary of State made his statement on 9th February?

The hon. Member is oversimplifying the matter. There was too large a block of licences in 1972, which had the effect of creating a demand which industry in this country could not meet. I am not blaming anyone for the decision, since I understand the reason. There was a substantial release of licences under conditions that were not favourable. We had to balance out the demand for industry and the demand for oil itself at home and put the participation agreements into place to ensure that we had a proper advantage from them. Taken overall, the speed with which we moved on this was about right. I cannot accept the hon. Member's criticism.