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Substitute Natural Gas Project

Volume 76: debated on Monday 1 April 1985

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asked the Secretary of State for Energy if, when he next meets the chairman of British Gas, he proposes to discuss the substitute natural gas project.

My right hon. Friend and I regularly discuss with the chairman a variety of matters concerning the gas industry.

Does the Minister accept that there is a great future for substitute natural gas made from coal? To make the best use of our energy resources, and to achieve our potential in export markets, should we not be giving the green light to British Gas, saying, "Go ahead with the home market," so that we can obtain advantages from exporting?

British Gas research into substitution is of an extremely high standard. I acknowledge the hon. Gentleman's point. There is considerable export potential. In looking towards the end of the century, Britain is fortunate in having adequate supplies of natural gas and access to liquefied natural gas. That means that we shall not need substitute natural gas for some time, but I agree that the research that has been done so far has been well worth while.

Does my right hon. Friend agree that coal priced at £48 a tonne and rising would make it totally uneconomic to go ahead with this proposition? It will become economic at the beginning of the next century, rather than at the end of this century.

I, too, shall not look towards the end of this century. At the moment, substitute natural gas is uneconomic compared with other fuels. None the less, the work that is being done can benefit Britain, not least in terms of export potential.

Why is the right hon. Gentleman so shy about saying to the nation, "We do not have to invent the technology of synthetic North sea gas"? We already have the technology. Should not the right hon. Gentleman be telling the House that, since we have already invented that technology, at Westfield, the nation should be considering ways and means of using it—through coal?

Taking account of current NCB prices for substitute natural gas, present costs are running at about 45p a therm. If that is the price that the hon. Gentleman wants to charge industry and commerce, let him say so.