HC Deb 28 January 1991 vol 184 cc764-72

Motion made, and Question proposed, That this House do now adjourn.—[Mr. John M. Taylor.]

10.45 pm
Mr. Tony Speller (Devon, North)

I have already received two reactions in advance of my speech tonight on the possibilities of natural gas or hydrogen gas as a future fuel for vehicles.

The first reaction came from Mrs. Halliday, a lady whom I have never met and probably never shall. She telephoned me to say that, during world war two, methane-driven cars were used and that, in Wolverhampton, taxis ran on gas supplied by British Oxygen. I did not know that, and I am grateful to Mrs. Halliday for her helpful comments. I cannot say the same about the rather pathetic efforts of a local newspaper that managed the headline Chicken Dung Plan to Foil Saddam". I have read and respected that paper for many years, and it is a pity that it can treat such a serious subject in such a flippant manner.

The majority of my speech relates to research that has been conducted in the United States. It is more fearful of oil shortages than the United Kingdom, for understandable reasons. When the United States had its first oil shock a few years ago, many Americans started to think about alternatives to total dependence on fossil fuels. Two thirds of the oil consumed in the United States is burned by motor vehicles, but at present there are no practical substitutes for oil. American experts say that the most likely alternatives to gasoline or diesel will be methanol, compressed natural gas and electricity.

The essence of the problem is the general lack of knowledge on the subject. In Britain, when a problem goes away, we tend to forget about it until it recurs. The problem about oil has resurfaced now because of the Gulf conflict.

As environmental problems become more serious, and are taken more seriously, natural gas becomes a more important fuel than those of us who use it for our central heating and cooking have ever thought. Apart from the sun, wind and water power, natural gas is by far the cleanest source of energy. It could be the fuel of the future for motor vehicles, which are the greatest cause of pollution on our streets now.

A refrigerator can run on electricity, kerosene or gas. It may surprise people to learn that most bits of machinery, including motor cars, can be run on such energy sources. We are used to conventional cars that use regular or unleaded petrol, or diesel. Most of us are aware that various forms of gas, mostly methane and gases derived from sewage, have been used in the past to power vehicles. I accept that such ventures have been undertaken mostly out of curiosity or to promote a particular enterprise. For some years, Anglian Water has used escort vans powered by its home-produced gas. Such project have been experiments rather than serious operations.

Electric milk floats are common, but no one has ever produced a battery sufficiently compact, swift to charge and sufficiently powerful to take a full sized vehicle on the road for the normal distance required in the working day.

Why gas? At this time of the Gulf war, which is at least partly oil-related, there is every logic in looking for a basic fuel for vehicle propulsion that has its source in those countries that do not want to be dependent upon oil from the middle east.

In future, electricity generation will turn largely to gas in a co-generation role as opposed to the previously more conventional coal, or the long expected, but frankly distrusted, nuclear power.

In the past, everyone has assumed that gas, a finite substance, would run out at the end of this century or not far into the next century. For basically commercial reasons, gas stocks have always been underestimated. There is no doubt now that supplies in Europe alone are enough to keep us going well into the middle of the 21st century.

Gas is far less damaging to the environment than coal, or petroleum products. If I seem to swing between electricity generation and vehicle propulsion, that is simply because, for far too long, we have lived under a rather stratified form of science which assumes that energy for electricity generation comes from coal or nuclear and that energy for motor cars comes from petroleum products. When pressed, experts may accept that there are possibilities in gas or electric or even steam-driven vehicles, but these are considered unimportant, almost amusing, relics of past research.

The problem with new ideas is always that no one knows whether they will work in practice, even though they work in theory. So it was with gas vehicle propulsion. But no longer, although I was surprised to have to travel to Minnesota to find such propulsion not only acceptable but becoming almost mandatory at state level as a method of economic and environmentally sound propulsion.

In the USA, with its speed limit of 55 miles an hour, gas propulsion is acceptable, and I find it similar to diesel. Certainly gas-propelled vehicles have slower acceleration, but they have a good cruising speed and excellent fuel economy.

Ingenuity is the hallmark of the new gas engineer. In Minnesota, gas spigots are installed free of charge in people's garages if they possess a gas-powered car. They drive in at night, fill up overnight and drive off next morning without needing to fill up at a service station.

New service stations are now required to have facilities to fill up vehicles with gas as well as with diesel or petrol. That is all very sensible, but by and large none of these things have happened or even been accepted in this country as yet.

I chair the all-party alternative energy group, which is not against any form of power generation but which is much in favour of conservation—that famous fifth fuel—and the use of fuels which are efficient, economic and low in pollutants. Alas, I do not expect in my time to be able to offer the House a water-propelled car, but one day H20 may be split into hydrogen and oxygen and we shall get our gas fuel, if not from the tap, then at least from a local source.

I submit that gas propulsion is not only not eccentric but the logical future method of propulsion. It is economical to use, although I have no doubt that my right hon. Friend the Chancellor would soon slap the equivalent of a petrol tax on if it became a standard fuel. But my argument in favour of Government support, and Government consideration is also a request to the private commercial sector to consider whether it should not look at something unusual but not illogical. We have gone from theory to practice. For many years, we have been able to convert petrol-driven cars to gas, with a bulk cylinder filling the boot. Indeed, one of my hon. Friends has run a vehicle twice around the clock using gas. Yet I suspect that hon. Members did not know that or realise that the effect had been achieved.

For years, this conversion method has worked, and now the Americans are building cars with engines designed to run on gas. That is the logical way forward. General Motors has manufactured such a car, codenamed GMC 3500, I believe. Toronto Transit uses 40-seater buses that run entirely on natural gas.

Mrs. Sandra Hale, commissioner of administration in Minnesota, has said: The Mideast crisis has made energy conservation fashionable again but, in Minnesota state, good energy conservation never went out of fashion. When our Country's petroleum supplies were threatened in the 1970s, Governor Rudy Perpich initiated energy conservation measures that carried the State through the crisis. These measures became a permanent part of State operations because they made sense for the longer term. The results have been impressive. Energy-efficient compact vehicles predominate. Minnegasco is the local natural gas distributor in Minnesota. With its help, more than 20 commercial fleets have been converted to natural gas propulsion.

Also in the United States of America, the solar energy research institution in Golden, Colorado, is working on clean fuels such as the hythane system, whereby natural gas is blended with hydrogen towards an ultimate clean vehicle fuel. Nearer home, according to Automotive Engineering, May 1990, BMW is researching hydrogen-powered engines for some of its luxury cars. It will take a long time to make the full transition, but the beginning is there.

In the United Kingdom, British Gas recently acquired—with good timing, in view of my debate—Consumers Gas of Ontario, Canada's largest gas distribution company. British Gas is far from being some dreary old utility. It is now a huge international group seeking, treating and selling gas worldwide. Its chairman, Mr. Bob Evans, is a frequent visitor to the House, and confirms that the new company is fully committed to caring for the environment. He intends to spend $30 million in Canada on research and development, much of which will concentrate on the use of gas to power vehicles.

There are other good things to come. The Ricardo Group, a British research and development company, claims that natural gas is a high-quality engine fuel, and that existing petrol engines can be easily converted to use it. But that is the past. The group is now testing prototype gas bus engines on behalf of the co-Nordic natural gas project. This involves a consortium of five major Scandinavian urban bus companies, with the tightest emission controls anywhere in the world. There is already acceptance that the system works, and people are experimenting—but not shouting the news as loudly as I would like. British Gas, the leader, has been in the field for many years, and is now committed to research and development.

Mr. Colin Shepherd (Hereford)

I am grateful to my hon. Friend for allowing me to put a question to him in his very interesting debate. As he said, I have been running my car on liquid petroleum gas for 13 years to remarkably good effect in terms of engine wear, and of feeling clean environmentally. However, it has been enormously frustrating to see the negative pricing policy adopted by retailers, plus the Government's negative taxation policy, lead to a steady reduction in the number of outlets, so that liquid gas is now hardly available throughout the country. I am fortunate that I still have access to it.

Does my hon. Friend agree that British Gas and others must develop an aggressive, competitive and outgoing positive policy, and should educate retailers of the advantages? Above all, the Government must adopt a positive taxation policy that will result in it being in the interests of the public to use that alternative and very effective fuel.

Mr. Speller

I can only agree with my hon. Friend, and I thank him for his endorsement of the policy that I suggest.

The Government showed great sense in their tax policy on unleaded fuel—which, although it may be more expensive to produce, is cheaper to buy. That was the first good sign. If interests such as British Gas are serious—I believe they are—they will have to develop a countrywide distribution system, though probably starting in London and the south-east. If that is not done, the whole concept will come to naught.

Manufacturers must follow the lead of General Motors and acknowledge the need for clean-fuel cars. Britain and the whole of Europe are now prepared to talk clean motoring as well as just plain motoring.

It would also be good to be independent of oil supplies from the middle east and to lower particulate emissions. Although Britain has its own oil resources, it has even greater gas resources. I ask my hon. Friend the Minister not for cash—which makes a pleasant change these days—but to support such research as may be sought. On the commercial side, it is important for the Government not just to make an appraisal of the possibilities but to level the playing field between the various forms of motor fuel. I believe that gas is the logical fuel of the future. We have it. It should be cheaper. It is certainly cleaner—and it makes good sense to many of us to use it.

10.59 pm
The Minister for Roads and Traffic (Mr. Christopher Chope)

I congratulate my hon. Friend the Member for Devon, North (Mr. Speller) on obtaining this debate, because he has made a stimulating contribution on a subject of which many hon. Members are blissfully ignorant. I am sure that in the years to come many people will read his speech and will say that, as chairman of the all-party alternative energy group, he has yet again made a valuable contribution. Certainly gas-powered vehicles are an interesting subject and one that we must take seriously in our search for more environment-friendly road transport.

At present, the Government are targeting vehicle emissions. We are successfully encouraging the use of unleaded fuel and we have recently agreed in the European Community, tough emission standards for all types of new car which will take effect from the end of next year. We are now seeking much tighter standards for lorries. Later this year we shall introduce a totally new emissions check into the MOT test to encourage people to keep their engines in tune.

Alternative fuels are a good example of an area where one needs to consider the trade-off between the advantages and the disadvantages. Solving one environmental problem by switching from one fuel to another can often create another—or there may be an economic penalty. The objective must be to get the balance right in each case. So what role do we see for alternative fuels?

A very wide range of alternative fuels is in principle possible, but there are no panaceas. It is necessary to consider not only the environmental benefits but other factors, such as the practicality of the fuel for road vehicle use, availability, refuelling and supply infrastructure and cost. The possibilities include LPG, natural gas, electricity and hydrogen, among others. Some of those are already in use to a limited extent in some countries—for example, natural gas in New Zealand and electric vehicles in this country, where by world standards we have a large fleet of electric vehicles. Others, such as hydrogen, are at the experimental stage.

The Government recognised many years ago the benefits of natural gas as a clean, convenient fuel for domestic and industrial use. Since the exploitation of resources in the North sea began in the early 1960s, gas production has increased steadily. In 1989, 45 billion cu m was being produced from 28 offshore gas fields and one onshore field, at a value of about £2.1 billion. Four new offshore fields began production in 1989. There are reserves of between 560 and 1,770 billion cu m, which is estimated to be between 10 and 30 years' consumption at the current rate of 55 billion cu m per year.

Recently, concerns about global warming have focused attention on the use of fuels such as natural gas instead of the conventional fossil fuels, oil and coal. These fuels have low carbon-to-hydrogen ratios and produce less carbon dioxide, the principal greenhouse gas.

The successor companies to the Central Electricity Generating Board—PowerGen and National Power—are considering projects to generate electricity from natural gas using energy-efficient combined cycles of gas and steam turbines. A number of other companies are making similar plans in competition with PowerGen and National Power.

As my hon. Friend will know, the Road Vehicles (Construction and Use) regulations permit the use of gas as a fuel for road vehicles, but the only type of gas allowed by the regulations at present is liquefied petroleum gas. This can be stored in liquid form at comparatively low pressures—about 250 psi—and has been used as a fuel in motor vehicles for many years, but not in large quantities, at least in this country.

The use of any other gaseous fuel in road vehicles is prohibited by the regulations. This is because the detailed requirements cater only for gases at the sort of pressure found in LPG systems.

Mr. Colin Shepherd

Will my hon. Friend recognise and look into the argument that I tried to make in an intervention on my hon. Friend the Member for Devon, North (Mr. Speller)—that liquid petroleum gas has not been more widely used in this country, as compared with Holland and western Canada, because the taxation structure has been wrong, and the Government have had a large role in the lack of uptake of gas-powered vehicles?

Mr. Chope

I shall certainly look into that. It is a responsibility of my right hon. Friend the Chancellor of the Exchequer. I know that my hon. Friend has first-hand knowledge of this subject. I am sure that my right hon.

Friend the Chancellor will be interested in his experience, and I will ensure that these comments are drawn to his attention.

Compressed natural gas has to be stored at very much higher pressures—up to 3,000 psi—and compressed to very high pressure to store reasonable quantities in the vehicle. This requires much stricter standards for safe storage and use. That is why the number of vehicles using CNG is very small, and the number of special approvals that we have given is also very small. If the demand for the use of CNG were to increase, we would have to consider an amendment to the Road Vehicles (Construction and Use) Regulations, setting out standard specifications for the gas systems to be used.

We permit reputable organisations to experiment with CNG in road vehicles, but they must apply to the Department of Transport for approval, with details or the gas system that they propose to use, its design specifications and how they propose to inspect and test it. At present, to my knowledge, three organisations hold such approvals, with 29 vehicles running on the roads. In the past, some have experimented with gas reclaimed from waste disposal areas, but all are now obtaining their supplies from the gas mains.

British Gas plc recently said that it wishes to promote the use of CNG in road vehicles, and it is setting up an organisation for that purpose. As my hon. Friend said, it is currently setting up field trials in the United Kingdom which will make use of experience in the Netherlands and Canada—the latter arising out of the recent acquisition of Consumers Gas. A great deal of work will need to be done before any results become apparent, but my officials are working in collaboration with British Gas to formulate suitable specifications for the gas system for inclusion in the regulations. Early developments in this market are likely to be in relation to commercial vehicle fleets having the relevant characteristics, and that is where the important environmental benefits will be most evident. I must stress, however, that it will be a long time before vehicles running on CNG are commonly available for the private motorist.

Natural gas has advantages, in that it is abundant and its CO2 emissions can be about 30 per cent. lower than those of petroleum fuels. However, natural gas, or methane, is itself a greenhouse gas, and must be compressed or—in what are at present rare cases—liquefied when used in vehicles. One survey taking possible methane losses and compression and liquefaction into account puts the relative greenhouse emissions of natural gas used in vehicles at 19 per cent. lower for CNG and 15 per cent. lower for liquefied gas, compared with those in vehicles using conventional fuel.

But that advantage is largely offset if account is taken of performance and space standards. That stems partly from the weight and space penalties associated with storage of CNG in the vehicle, and the likelihood that any transition to CNG vehicles would involve dual fuelling, so that cars use petrol or CNG.

Mr. Speller

I am interested to know why a vehicle running on gas must be able to run on petrol as well. No one has suggested that a vehicle that runs on petrol should also be able to run on gas. I hope that my hon. Friend will also mention the great advantage of independence from suppliers in the middle east.

Mr. Chope

There is certainly no reason why a vehicle should not run solely on CNG, but, if the supplies are not readily available, it is understandable that many vehicle owners will want dual fuelling. As, during the transition, only a limited amount of CNG would be available, most vehicle owners would demand dual-fuelling facilities.

New petrol-fuelled cars will soon be much cleaner, with the introduction of stringent limits which will reduce noxious emissions by about 80 per cent. compared with the current limits. A petrol engine meeting those new standards would require accurate fuel management and a catalytic converter, but would produce lower noxious emissions than one powered by natural gas without a catalytic converter. There is no fundamental technical reason why cars using natural gas cannot be designed to meet the new emission limits, but clearly any relative percentage differences between fuels will then be of much less importance in absolute terms, as only very low emission levels are permitted.

In the case of heavy-duty engines for lorries and buses, the very low levels of particulates associated with natural gas may prove a useful advantage, but the CO2 advantage in use relative to diesels is lower. Operators of such vehicles are very sensitive to range and cost factors, but in some countries CNG has been used to a limited extent in bus fleets. Some fleet operators may find the special refuelling facilities and operating costs worth while, and the drawbacks of reduced load space and reduction in performance acceptable for their particular operations.

But even in countries where CNG has established a reasonably large presence numerically, the vast proportion of vehicles still use conventional petroleum fuels. On that basis, it is likely that the vast majority of vehicles in the United Kingdom will continue to use petrol and diesel in the medium term. The small proportion of the fleet using natural gas would have a limited benefit in reducing CO2 emissions, but that would not be a complete solution.

My hon. Friend mentioned the desirability of alternative sources of energy. The point is well taken, but we must have regard to practicalities and, with the best will in the world, I do not think that it would be possible at present to convert the whole British vehicle fleet to take CNG, although, if my hon. Friend has his way, it will come about sooner rather than later.

Mr. Colin Shepherd

Is it not a question of the whole process being incentivised, to use a horrible word? If those who set the parameters wish there to be an increase in the use of alternative fuels, a structure must be devised for it, just as happened with unleaded fuel—to great effect.

Mr. Chope

My hon. Friend has a point, but the point made by hon. Friend the Member for Devon, North was that in Minnesota there is quite widespread use of CNG.. I understand that the tax on petrol in the United States is much lower than it is here. Therefore, one cannot necessarily say that in the United States there is an incentive to use CNG which does not exist here. Due to the higher petrol taxation in this country, one might expect there to be greater incentive to use CNG.

This is a welcome debate, and I am grateful to my hon. Friend the Member for Devon, North for his positive contribution to it. Improvements in the efficiency of conventional vehicles, which constitute the vast majority of the fleet, still offer the greatest potential benefits in helping to limit CO2 and other emissions from road transport. We wish to encourage the development of vehicles powered by currently unconventional sources of energy. We see some long-term potential for CNG vehicles in our continuing efforts to improve the environment.

Question put and agreed to.

Adjourned accordingly at eleven minutes past Eleven o'clock.