HC Deb 28 June 1982 vol 26 cc600-1
11. Mr. Viggers

asked the Secretary of State for Energy what longer-term assumptions on oil and gas reserves in United Kingdom territory are used in deciding shorter-term policies on depletion.

Mr. Lawson

I have taken careful note of the conclusion by the Select Committee on Energy that the Government's involvement in depletion policy should for the present be limited largely to monitoring the rate of production. The latest estimates of reserves are given in my Department's "Brown Book" for 1982.

Mr. Viggers

Does my right hon. Friend agree that the oil and gas industry takes large investment decisions on long-term investment criteria? His initial response to the Select Committee's report will no doubt be useful in updating the Varley assurances, but when does he expect to make a further response to the Select Committee report, and does he then envisage that he will be in a position to give longer-term assurances on depletion policy?

Mr. Lawson

I hope to be in a position to give my full comments to the Select Committee report on depletion policy within the time scale that has been recommended for such replies. On the Varley assurances, as my hon. Friend will be aware, I have announced that there will be no production cuts before 1985 at the earliest.

Mr. Rowlands

We, too, question a number of aspects of the Select Committee's report, particularly on depletion. Will the Secretary of State confirm his confidence in his Brown Book's reserve assessments, particularly on gas? Does he agree that we should not embark on a large-scale rapid depletion of our gas reserves in the North Sea, particularly by exporting them to Europe?

Mr. Lawson

The forecasts in the Brown Book are the best that we can make on the knowledge that is available, but, of course, they depend heavily on the incomplete extent of that knowledge. It is my hope and intention that as a result of the Oil and Gas (Enterprise) Bill, and also as a result of the eighth round of oil and gas licensing, which includes a large number of gas blocks, we shall know much more about the extent of our gas reserves and be in a position to make fuller and better decisions than is possible now.

Dr. J. Dickson Mabon

Will the Secretary of State confirm that it is still the Government's policy to secure net self-sufficiency for the rest of this century, and will he therefore look with concern at the slow-down in the development of an annex B application which would render us net self-sufficient in the middle 1990s?

Mr. Lawson

It is, of course, desirable to maximise the exploitation of the oil and gas resources of the North Sea. It is impossible to say how long we shall remain self-sufficient. It is also important to make new discoveries to fill in the period beyond the present decade. The right hon. Gentleman should not be too pessimistic about the prospect of an annex B application coming forward in the reasonably near future.

Mr. Forman

In making these difficult estimates about the future, what allowance does my right hon. Friend's Department make for the prospect of significant improvements in enhanced recovery techniques?

Mr. Lawson

The technological development in this industry is of prime importance in trying to assess how much is there and how much is ultimately recoverable. The Brown Book contains no over-optimistic assessment of the developments of technology, but I believe that such developments are likely to continue in the future, as they have in the past.

Mr. Hardy

Is the Minister aware that only seven countries produced more oil than Britain in 1981 and that at least 20 countries have substantially greater oil reserves than we have? As we tend to produce more or to accelerate our production when the price is falling, is it not clear that our oil depletion policy is being managed with maximum shortsightedness?

Mr. Lawson

Certainly not. If the hon. Gentleman would care to make a case for curtailing our production now and expanding it later and show that that would be in our interest economically, I should be interested to hear it. Certainly no such case has been made.