§ The following Question stood upon the Order Paper:
§ 67. Mr. SKEET
To ask the Minister of Power when he will reach a decision on the two applications, lodged under Section 1 of the Pipe-lines Act 1962, for oil product pipelines between the Thames and the Mersey.
§ The Minister of Power (Mr. Richard Wood)
With permission, I should now like to answer Question No. 67.
I have decided to allow the application by United Kingdom Oil Pipelines Ltd. to go forward, and to refuse the application by Trunk Pipelines Ltd. The applicants are today being told of my decision.
The companies participating in United Kingdom Oil Pipelines Ltd. supply about nine-tenths of the light oil products consumed in the areas to be served by the pipeline. There is thus assured support for this scheme from all 727 the major users, and most of the other potential users have told my Department that they prefer this scheme to that of Trunk Pipelines Ltd.
The Trunk Pipelines scheme was designed to follow canals and railways and to produce some revenue for the transport boards. Against this, the United Kingdom Oil Pipelines scheme is likely to cost between £2 and £3 million less on a comparable basis, and the costs of operating the pipeline would also be lower.
I consider that this proposal offers the prospect of greater economies in the cost of transporting oil, and I have decided that it should go forward to the next stage of the procedure laid down by the Act for public advertisement and, if necessary, for inquiry into objections.
§ Mr. Skeet
I think that the House will appreciate my right hon. Friend's commonsense approach to this problem. Can my right hon. Friend say whether any application has been made under Sections 9 and 10 for additional capacity on this line? Also, can he say whether any lateral deviation will be permitted under the application?
§ Mr. Wood
No application has been made at present. Those Sections might operate later, but both pipelines were to be constructed to deal with all the demand likely to be met. I cannot at the moment give any information about the lateral deviation. No doubt this might be the subject of representations which might result in an inquiry.
§ Mr. T. Fraser
Is the Minister aware that we on this side of the House regret very much that he has rejected the application of the company which proposed to follow a line along the canals and railways which would have yielded an income to the very hard-pressed public enterprise transport undertakings? Has the right hon. Gentleman a firm assurance that the interests of the oil companies which are competitors with the members of this consortium for use of the pipeline in the years to come will be protected?
Inasmuch as the granting of this application confers powers which hitherto such an applicant would have obtained 728 only by successfully taking a Bill through Parliament, will the right hon. Gentleman make available to the right hon. and hon. Members, by means of a White Paper or in some other way, the nature of the application and all the circumstances and considerations which he took into account in making up his mind, so that the House will be able to judge the matter fairly and squarely on its merits?
§ Mr. Wood
I certainly took into account the effect on the canals and railways and the possible loss of income. But I took the decision because of the great saving in cost of construction and operation of the United Kingdom Oil Pipelines line.
The oil companies have given me a number of undertakings, the most important of which is that there will be no discrimination at all against those competing with the owners of the line. Indeed, they have been willing to submit to an independent technical check to see that there is no discrimination. In any event, as my hon. Friend the Member for Willesden, East (Mr. Skeet) pointed out, I have powers under Sections 9 and 10 to prevent abuse.
Lastly, may I deal with the hon. Member's point about this being an alternative to a Private Bill. It is, of course, essential that if compulsory rights are required a compulsory order can be issued by me, and it would be subject, as the hon. Member knows, to special Parliamentary procedure. Therefore, the House would be able to express a view on it.
§ Mr. Doughty
When my right hon. Friend is considering the details of this scheme, will he remember that it is hoped that very shortly oil will be found under the North Sea and that this scheme should be linked with the oil which, we trust, will be found?
Mr. H. Wilson
Will the Minister give us the names of the oil companies concerned in this consortium?
§ Mr. Lubbock
First, can the Minister give us an estimate of the amount of 729 income being lost to the canals and railways by the award of this contract to the other company? Secondly, can he make clear something which, at any rate to me, is rather a mystery? He said that the capital cost of the scheme which has been accepted is £2 to £3 million less than the one which was rejected, and yet the rejected company would not have had to purchase way leaves and rights of way through private land because the pipeline would pass through land belonging to canals and railways. Can the Minister therefore explain how it comes about that the rejected bid was so very much higher?
§ Mr. Wood
The difference in cost took into account the extra expense which would fall on the oil companies for obtaining the way leaves. The main reason why it would have been more expensive to construct the line along canals and railways is that the work would have had to take place in considerably cramped conditions. It would also be a longer line and, therefore, more expensive. The cost of operating it would be greater, not only because the oil would have further to go, but because the capital charges would be greater.
§ Mr. Warbey
On a point of order. I understand that, earlier, you, Mr. Speaker, half-called my name. I was hoping that you would now add the other syllable.