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Natural Gas

Volume 959: debated on Monday 4 December 1978

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asked the Secretary of State for Energy what estimate he has made of the effect of the surplus of natural gas expected in the next 10 years on the market for electricity and coal in the United Kingdom, and the effect on the rate of return on new investment in the electricity and coal industries.

Markets for gas are expected to be able to absorb the quantities provided for in present plans. We do not expect a surplus of gas to arise over the next 10 years.

Does not my hon. Friend think that something should be done to restrain Sir Denis Rooke, the chairman of the British Gas Corporation, from his present dumping policies in relation to the fuel economy of this country? If there is a surplus of natural gas, and it is generally argued that there will be, should not this be exported, because there is a big world market for natural gas?

We are not aware of any dumping of gas. Normally, the complaint that we receive is that gas is too expensive, particularly in the industrial sector. The price of gas in the industrial sector is related to the market price, which in our case is the world price for light fuel oil. In the domestic sector gas has made a big impact and we expect that it will continue to do so, but in no sense could my hon. Friend say that there was a dumping policy. As for exports of gas, if it turned out, as my hon. Friend says, that there was a large surplus—I emphasise that we do not expect that to be so—of course that would have to be considered.

But does not the Minister accept the estimates that there will be a surplus of gas during the 1980s? If that is correct, have any approaches been made to, say, Total that gas from the Frigg field should be exported to France by way of a gas grid along the lines of the proposed electricity exchange system?

No one should assume that reports about large excesses of gas are accurate. We expect that the supply will expand from about 4,000 million cu ft a day to about 6,000 million cu ft a day by the mid 1980s, but we expect that gas to be taken up by the domestic market.

Is it not a national scandal that millions of our most vulnerable citizens—the elderly, the low income groups and the sick—face a winter of further hardship and real danger to health because they cannot buy enough heat, yet the Government continue to subsidise investment in new power stations which will throw away twice as much heat as they will produce in electricity?

That has absolutely nothing to do with the Question about gas, and I do not accept any of the remarks which were the preamble to the hon. Gentleman's supplementary question. He is well aware that we have a code of practice, the discount scheme, the Supplementary Benefits Commission and the DHSS, all of which can help people who are on low incomes and suffering difficulties with fuel bills.

Is my hon. Friend aware that a recent reply from his Department revealed that 386 million cu ft of gas are being flared off every day in the North Sea? Is not that a disgraceful state of affairs? Will he take the necessary steps to restrain the oil companies' urge to exploit the oil which is down below, thus wasting the heritage of future generations?

It is interesting that in one question it is argued that there is a surplus of gas, in another that it is too cheap, in a third that it is too expensive and that now my hon. Friend is saying that we should take all possible action to obtain more of it. I agree with him that we should do that. It is for that reason that flaring consents have been brought under stringent control by the Minister of State. At least one major oil operation has been closed down and we have denied the company and ourselves the oil until we are satisfied that everything possible is being done to prevent gas flaring and to recover an important resource. But we can do that only where it is economic to do so.

In view of the differing opinions about gas pricing, is it the Minister's view that gas at the moment is being realistically priced?

In industrial markets, as I have said, gas is priced in relation to the price of light fuel oil. That is a market operation that is controlled by the British Gas Corporation. We do not seek to intervene in that way. In the domestic sector, it is well known that the price of gas has fallen in real terms. That clearly is of great benefit to gas consumers—contrary to what the hon. Member for Derbyshire, South-East (Mr. Rost) said.

Several lion. Members rose——