Natural Gas (Hansard, 20 December 1966)

§ 20. Mr. Palmer
asked the Minister of Power if he will introduce legislation to provide for a National Natural Gas Corporation which will bring into national ownership all present and future natural gas resources, absorb private concessions and distribute natural gas to all users, public and private, on a fair commercial basis under conditions laid down by Statute.

40. Earl of Dalkeith
asked the Minister of Power if he will give an assurance that private enterprise industries investing in North Sea gas exploration and production will not be nationalised.

§ The Minister of Power (Mr. Richard Marsh)
The Government have no plans to provide for a national natural gas corporation or for nationalising the private undertakings now engaged in the search for oil and gas in the North Sea.

§ Mr. Palmer
Is my right hon. Friend aware that a modest estimate is that by 1980 natural gas will provide 64 million tons of coal equivalent for the country's fuel economy? If, therefore, time is to denationalise the coal industry, should 1165 not the nation be acquiring this valuable national asset in place of coal?

§ Mr. Marsh
My hon. Friend does no service to the coalmining industry—which has had a great deal of difficulty as a result of statements of this sort—by producing figures for which there can be no reliable evidence. It is not true that natural gas, on any of the calculations which can at present be made, offers an alternative to coal.

Earl of Dalkeith
Does the Minister see any further ways in which he can seek to encourage private investment in this important industry? If so, what might they be?

§ Mr. Marsh
At the moment, there is no reason to have any doubts or objections about the rate of investment in the North Sea. Therefore, the second part of the question does not arise.

§ Mr. Hector Hughes
Does not the Minister appreciate that the North Sea is not private property and therefore should not be exploited by private persons and companies for their profit to the exclusion of that of the British nation?

§ Mr. Marsh
If the position were not as set out by my hon. and learned Friend the Government would be under no obigation to co-operate, but a change was in fact made and under the terms of the Continental Shelf Act the North Sea was partly nationalised. The Government have control over the sale of the gas and the price to be charged, so that there is now provision for sales to be provided for the benefit of the country.

§ Mr. Patrick Jenkin
Whilst recognising that the reply of the right hon. Gentleman will give considerable satisfaction to many of the people who have put their capital at risk in these ventures, may I ask if the Minister will not try to dissuade his hon. Friends from continuing to make their rude noises about the nationalisation of North Sea gas which are leading those who are negotiating on the price to feel that to some extent they are negotiating under duress?

§ Mr. Marsh
There is no evidence of this either. Negotiations are taking place at the moment. I could wish they were being conducted a little more privately, for I think some of the public statements 1166 are of no help to either side, but I think there is no evidence at all at the present time that the situation is not working to the national interest.

§ 21. Mr. Palmer
asked the Minister of Power if he will make a statement on the progress of the negotiations with the oil companies over the price to be charged by them for the sale of natural gas to the Gas Council.

§ 19. Mr. William Hamilton
asked the Minister of Power what new plans he has for ensuring that the public interest is safeguarded in current negotiations on the price to be paid for North Sea gas.

§ 23. Mr. McNamara
asked the Minister of Power if he will now make a statement on his policy in respect of charges to be levied for gases coming into the grid from supplies obtained from the North Sea.

§ Mr. Marsh
With permission, I will answer this Question and Questions Nos. 21 and 23 together.
I would refer to the Answer I gave to my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) on 15th December. [Vol 738 Col. 150.]

§ Mr. Palmer
Does not my right hon. Friend agree that the oil companies have a vested interest in keeping the price of natural gas as high as possible because they fear competition in the sale of oil in this country?

§ Mr. Marsh
If this were so, natural gas would not make an appreciable difference to oil sales. The fact that the price is under the control of the Government means that it is a price which is arrived at after negotiation, and it is a price for sale to a monopoly buyer. In these circumstances the national interest is clearly safeguarded.

§ Mr. McNamara
Will not my hon. Friend agree that, in view of the veiled threat of blackmail from the oil companies, through the threat of non-co-operation, he ought to reconsider the answer which he gave to the earlier question by my hon. Friend the Member for Bristol, Central (Mr. Palmer)?

§ Mr. Marsh
I repeat what I said before. These are difficult negotiations; they are terribly important negotiations; and they are not helped, I agree, by some of the 1167 comments which have been appearing in the national Press and neither side is assisted by this. There is still no reason why the oil companies should not be able to get a fair price for their product, but it is in the interest of the nation to make sure it does not pay more than is fair for it. The two sides must come together to fix a sensible price.

§ Mr. Barber
Would the right hon. Gentleman not agree that the public interest demands that the price to be paid for North Sea gas should be such as to provide an incentive to the operating companies to find and produce the maximum amount? Secondly, is he aware that the operating companies are daily becoming more despondent at the inordinate delay and the inept handling of the negotiations?

§ Mr. Marsh
Taking the last question first, I do not believe that the negotiations are inept. In fact they have hardly got off the ground yet. So far as the price is concerned, I sometimes think that judging by the Press I am perhaps the only person left in the British Isles who does not know what it is going to be. But, whatever it may be, one of the factors to be taken into account is the insurance of a sufficient return which will make it commercially worth while for the companies to maximise exploration. Having said that, the public also have an interest and it is not unreasonable that it should not pay an unreasonably high price.