§ The Under-Secretary of State for Energy (Mr. John Smith)
The rate of depletion for both oil and gas will be such as to secure the greatest benefit to Britain's economy. The primary aim for oil is to eliminate net imports as quickly as possible.
§ Mr. Skeet
Does the hon. Gentleman accept that his answer says nothing? Does he agree with the previous Secretary of State, who told a meeting of mineworkers in November last year that it carried with it the guarantee of room in the market for competitive coal? Does he intend so to manipulate his depletion policy for oil as to suit the nation or the mineworkers?
§ Mr. Smith
Our depletion policy for oil will be geared to a proper and sensible use of a finite resource. This Government inherited no depletion controls 996 whatever. In the Petroleum and Submarine Pipe-lines Bill we are seeking authority from Parliament to have depletion controls. It is necessary to have depletion controls if we are to have a depletion policy. The hon. Gentleman's Government had neither.
§ Mr. Donald Stewart
Does the hon. Gentleman accept that there should be other considerations in the rate of extraction than getting money to set against the British balance of payments? What consideration will his Ministry give to the suggestion of the Shah of Persia that this resource should no longer be used for heating purposes?
§ Mr. Smith
The objective of our depletion policy strategy will take into account not only the economic needs of the country in imports but also the best long-term use of a finite resource. In the short term it makes sense to eliminate the requirement to import oil. I understand that the Scottish National Party wishes to drop it even further—to 50 million tons a year. It has no sense of responsibility towards the construction industry in Scotland, which would be desolated if that policy were carried out.
§ 9. Mr. Alexander Fletcher
asked the Secretary of State for Energy what plans he has for discussions on North Sea oil production with his EEC counterparts.
§ The Secretary of State for Energy (Mr. Anthony Wedgwood Benn)
Production from the United Kingdom North Sea is a matter for the Government, but I shall obviously be keeping my European colleagues informed of the Government's plans for reducing dependence en imported oil.
§ Mr. Fletcher
When the right hon. Gentleman has further discussions with his counterparts in the EEC, will he take the opportunity to give them the answer I would like him to give us today to a question which he himself put at a Tribune Group rally in Glasgow on 13th April, when he asked whether the Commission would assume control of the rate of depletion of North Sea oil and gas, whether the Treaty of Rome would be applied to the Continental Shelf, and, if so, precisely what powers would this give to the Commission?
§ Mr. Benn
The House will have noticed that when I attended the Energy Council meeting in Luxembourg on Thursday I made it clear that I interpreted my function as being constructive as a member of the council, but defending our national interest. I believe that to be correct. We are by far the richest energy source among the nine countries in the Community, in terms not only of oil but of coal, and I would expect, therefore, to consider any proposals that might have an impact upon our power to control our own resources, with a view to seeing that our national interest is safeguarded.
§ Mrs. Bain
Will the right hon. Gentleman explain in detail the implications of the draft European energy directive, particularly in view of the rate of exploitation of Scotland's major resource, oil? Is he aware that the directive speaks in terms of 180 million tons per annum and the Government of 110 million tons per annum, while we in the Scottish National Party want to see 50 million tons per annum and a reduced rate of exploitation? Is he further aware that the rate of exploitation proposed is totally unacceptable to the people of Scotland, who are seeing their birthright sold out by a British Government who have no concern for them?
§ Mr. Benn
The hon. Lady has raised a number of questions—one in particular that was not on the Order Paper. I say this in reply—and I think I will carry her assent: the issues involved in any energy policy formulation, either here or in the Community, are of such importance and are usually so complex that there is a great deal to be said in favour of maximum openness, so that everyone is able to know what is proposed before decisions of any kind are reached.
§ Mr. Edwin Wainwright
Has my right hon. Friend any information about the costs of North Sea oil when it is delivered into Great Britain? If he has any assessment of the cost, will he say how they compare with the costs of the oil that we import from the Middle East? What effect does he think British oil will have on the European economy?
§ Mr. Benn
My hon. Friend will appreciate that relative costs depend on a number of factors, which it is not always 998 easy to forecast. It depends upon the oil price from the OPEC countries and the experience we have or acquire about the cost of getting the oil out of the North Sea. However, I shall ensure that my hon. Friend is kept as fully informed as possible. Such figures as are available were published in the Brown Book.
§ Mr. Patrick Jenkin
With reference to a question asked by my hon. Friend the Member for Edinburgh, North (Mr. Fletcher) does the Secretary of State now concede that he was quite wrong about the question of EEC control over the rate of depletion and his right hon. Friend the Prime Minister and the rest of us were right?
§ Mr. John Smith
Between now and the end of 1980 we expect total oil production from the United Kingdom Continental Shelf to amount to between 300 million and 350 million tons. Using the latest valuation for similar oil currently imported, the cost at current prices in national resources of importing this quantity would be between £l1 billion and £14 billion (thousand million). On the same basis, the cost of production could be in the region of half the import cost, though, because a large share of this will be in respect of domestic resources, the benefit to the balance of payments will be very much larger than half the import cost.
§ Mr. Smith
I think that my Government colleagues and I, and many other hon. Members, are acutely aware and constantly remind the public of that fact. On the other hand, we cannot underestimate the importance of North Sea oil. It will be one of the features which will put this country in a position of energy self-sufficiency in the 1980s, and in that respect we shall be unique in Western Europe.