HC Deb 19 March 1979 vol 964 cc1071-4
2. Mr. William Hamilton

asked the Secretary of State for Energy whether, in the light of recent adverse developments on the international scene concerning oil supplies, he will make a statement on changes in national energy policy.

15. Mr. Hooley

asked the Secretary of State for Energy if he will make a statement on the recent discussions in the International Energy Agency.

The Secretary of State for Energy (Mr. Anthony Wedgwood Benn)

I refer the House to the answer I gave on 8 March to my hon. Friend the Member for Birmingham, Ladywood (Mr. Sever). The Green Paper on energy policy proposed a flexible strategy based on the assumption that oil would become increasingly scarce and expensive. Recent events in Iran, and the resultant effects on oil supplies, have reinforced the Government's belief in the merit of this strategy, which permits a flexible response.

Mr. Hamilton

How soon do the Government expect to reach the 5 per cent. reduction target agreed by the International Energy Agency? What steps are they taking to prevent the abuse of the situation by the oil companies?

Mr. Benn

Our aim is to reach the target as soon as possible. As my hon. Friend has just stated, that will involve a shift to coalburn, which is now being discussed. On the question of the oil companies, we have for some months been monitoring the movement of oil. I have sought and am receiving specific and categoric assurances from the chairmen of the major oil companies to guard against the danger to which my hon. Friend has referred.

Mr. Hooley

How far did the International Energy Agency discuss renewable energy resources and their possible application to help deal with the problem of oil?

Mr. Benn

The pressure to build up capability in alternative energy sources and improve conservation will clearly be accelerated by recent events. It is not possible to look to those sources to meet energy needs in the current year, but work on them has become more urgent.

Mr. Rost

How will the Government increase coalburn in power stations without reducing the thermal efficiency of electricity production, which is already the lowest in Europe?

Mr. Bean

We must deal first with the deficiency of 2 million to 2½ million barrels of oil a day as a result of the situation in Iran. We can make a positive and immediate contribution to meet that deficiency through our coal policy.

Mr. Gordon Wilson

Is the Minister aware that certain oil distribution companies in Scotland have had their supplies cut back by about 15 per cent.? It is disgraceful that that should happen in Scotland, which is producing from the North Sea six times its annual consumption.

Mr. Benn

I am aware of these problems. One difficulty is that brokers come into the market when the spot price is low and build up a market of their own. When the spot price rises, the broker disconnects the telephone and the oil is not available. The major oil companies, some of which are faced with force majeure cuts, cannot therefore take on the additional demands on them. That is one of the most powerful cases for Government control of oil policy, and it is that which lies at the heart of the policies that we developed.

Mr. Robert Hughes

How do the Government intend in the near future to tackle the massive waste of energy caused by heat loss?

Mr. Benn

Generally, on the question of thermal efficiency and heat loss, in the long and mid-term we propose a more rapid move on combined heat and power. But we must shift to coalburn to reduce the importation of oil, and in the short-term that may appear to be counter to the longer-term aim.

Mr. Tom King

How quickly does the Secretary of State expect these economy contributions from the United Kingdom to be reflected in our oil consumption figures? Secondly, is it really any saving at all to save the heaviest fraction of the barrel, where there is not the shortage that there is at the lighter end?

Mr. Benn

Certainly, because the object is to reduce the pressure of demand on world oil supplies. We can make a contribution because we have a powerful coal policy. Our refineries will have to try to split the barrel in a way which deals with the problem to which the hon. Member has referred. This may take some time. Certainly it confirms our wisdom of maintaining the coal industry and resisting the demands from the EEC to cut back our refinery capacity.