Gas-Gathering System (Hansard, 23 June 1980)

§ 7. Mr. Douglas
asked the Secretary of State for Energy if he will make a statement on the gas-gathering system for the United Kingdom continental shelf.

§ Mr. Gray
As my right hon. Friend said in his reply of 19 June to my hon. Friend the Member for Exeter (Mr. Hannam), the Government have given careful consideration to the report from the British Gas Corporation/Mobil study team about a gas-gathering system for the United Kingdom continental shelf. The Government consider it important that a gas-gathering system should be constructed as quickly as possible and my right hon. Friend has, therefore, invited British Gas, Mobil and BP, together with a financial adviser, to form an organising group to develop proposals for the pipeline.

§ Mr. Douglas
Does the Minister accept that we welcome this long-awaited report and long-overdue decision—and it is long-overdue, whatever the Minister might say? Will he consider the public sector equity stake in the consortium? Does he accept that there is no reason why the public sector should not have the majority stake in the consortium? Will the Minister ensure that United Kingdom companies are made aware of the potential so that they can bid successfully for the plant and equipment involved in this exciting development?

§ Mr. Gray
I cannot agree with the suggestion that the decision-making process was slow. The Government received the report on 2 April. It has had to be assessed and evaluated. The Government have done well in making their proposals as quickly as they have. I do not agree that the public sector should have a majority in the equity stake. The public sector will, of course, have an interest. It is not in the best interests of the nation or of the company which is to be formed for the public sector to have a majority stake. Opposition Members frequently confuse State participation with public participation. We hope to encourage public participation.

Mr. J. Enoch Powell
Will not the development strengthen the case for increasing the number and volume of outlets for the sale of North Sea gas in the United Kingdom, including Ulster?

§ Mr. Gray
That matter is under review constantly by the Government. The right hon. Gentleman will appreciate that the Government's view was given on the question of supplies to Ulster not too long ago.

§ Mr. Hannam
Will my hon. Friend accept the congratulations of his hon. Friends on the speed of the decision to proceed with the pipeline? Will he confirm that it represents the single largest energy-saving measure that could be undertaken at present and that it is equivalent to saving 12 million tonnes of oil a year?

§ Mr. Gray
I am grateful to my hon. Friend. He is correct. The pipeline has the potential to increase our gas supply, at present consumption levels, by between seven and 12 years.

§ Dr. Owen
Does the Minister concede that there is a national interest in ensuring, first, that British citizens get their gas at a reasonable price and, secondly, that the gas supply is continued into the next century? Does he accept that that means that there is a major conservation interest? If the Minister refuses to give a national 51 per cent. equity stake in the company, how does he intend to safeguard the national interest?

§ Mr. Gray
The national interest will be fully safeguarded. I remind the right hon. Gentleman that the organising committee is examining the best composition for the new company. The nationalised industry sector will not have a majority stake but it seems likely that British Gas will have the largest individual stake. We see no point in committing more public money when plenty of private capital is available.

§ Dr. Owen
This is a matter of major concern. The House was given an important announcement in a written answer and now the Minister refuses to deal with how the national interest will be safeguarded when there is only a 30 per cent. equity shareholding. Does the Minister intend to write into the statute 15 of the company the right of the Department of Energy, in certain declared areas, to safeguard the national interest and to lay down certain criteria under which the company will operate?

§ Mr. Gray
The gas will be landed in this country. It is not a prerequisite of any scheme which ensures maximum national interest that a nationalised industry has a majority stake. I should have thought that Opposition Members would be learning that lesson at last.

§ Mr. Gordon Wilson
Will the Minister promise that the gas landed from the pipeline system will be made available for the expansion of the petrochemical industry in Scotland in particular and not exported? What consultations has he had with the Scottish Development Agency and the Scottish Office on this point?

§ Mr. Gray
The hon. Gentleman will appreciate that the organising committee has just been set up. It has the task of making recommendations for the creation of a company which will build and operate the pipeline. I can assure the hon. Gentleman that it will certainly have discussions with the SDA.

§ Mr. Douglas
On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I give notice that I shall seek to raise the matter on the Adjournment.