§ THE DUKE OF MONTROSE rose to ask how many coal distillation plants have been completed in the United Kingdom during 1934 and 1935; what is the annual output of petrol from them; and what is the amount of petrol required now, and likely to be required on completion of the Air Ministry's aircraft constructional programme; and to ask whether His Majesty's Government contemplate taking any further steps to expedite the production of oil and petrol from home sources.
§ The noble Duke said: My Lords, in asking the Question which stands in my name I would like to emphasise the false position in which the defence of this country will be if we go on adding to our naval shipbuilding and to our aircraft building and to our mechanised Army, and at the same time take no steps to add to the supply of fuel oil from home sources. I think it was about eighteen months ago that I asked in your Lordships' House a Question as to what steps the Government were taking, or were 744 about to take, to increase the supply of oil, and I was told by the noble Lord who replied that the Government were about to give a preference of, I think, 8d. a gallon on home-produced oil, as against a duty levied upon imported oil, and it was likely that the preference would be extended to crude oil suitable for the Navy. In the course of the last eighteen months I believe that very little has been done. That is the cause of my Question. I feel that the results have been disappointing.
§ Eighteen months ago there was one firm in this country producing oil from coal. That firm is still in existence, and so far as I know it is the only firm producing oil from coal on an economic and commercial basis. I know that there is the great plant put up at vast expense by the Imperial Chemical Industries Company, but that plant is not so much producing oil from coal as turning crude oil into light oil; and whether you look at this question from the point of view of crude oil or petrol, the result is that the supply of oil from home sources put out by those two firms is a mere bagatelle compared with our Service requirements, or of the requirements for the whole country's use. I think I am right in saying that the output of oil of all kinds from those two firms does not exceed 6,000,000 gallons a year, whereas our Service requirements will be somewhere near 16,000,000 gallons a year. So far as our national requirements are concerned, we require 1,800,000,000 gallons of oil; so that the total home production of oil of all kinds represents barely one-third of 1 per cent. of our national requirements.
§ That is exceedingly disappointing. I feel that nothing is really being done to increase the supply of oil, and that it is deluding the people of this country to go on simply building ships and aeroplanes and doing nothing to provide an increase of the supply of oil from home sources, because it must be obvious that not a ship and not an aeroplane can move or fight without oil. Recently in this quarrel between Italy and Abyssinia there was a suggestion that the Suez Canal might be closed. Who knows whether we might be drawn into hostilities and whether the League of Nations or some such body might decide to close the Suez Canal? If that happened, where would our vast oil supplies from the 745 Persian Gulf and Burma be? It might be that America would decide to restrict the exportation of oil from Mexico. If she did that, where would our oil supply from across the Atlantic be? No one can say for certain that these things will not happen, and it is profoundly unsatisfactory that our national defence in this country should be almost wholly dependent on overseas supplies of oil. The methods of attack on the sea, by submarine and by aircraft, have vastly improved since the War, and there is no finer target afloat than a heavily-laden oil tanker; one shot or one bomb, and she is on fire. Therefore I think it is foolish to go on leaving ourselves dependent on overseas supplies.
§ I would just say one thing I have never said before. I was the originator and inventor of the first mother aircraft ship in the world—the first sea-going ship that could carry twenty or thirty aeroplanes, and go to sea with the Fleet. I completed my plans and lodged them at the Admiralty in 1912, two years before the War. I did all I could to press the Admiralty and the Government of the day to build an aircraft carrier, because I thought we were drifting into war. For some reason best known to themselves, they did not do so, and the War had been going on for two and a half years before my plans were released and my firm was instructed to make an aircraft carrier. The Admiralty and the Government of that day can be charged with lack of foresight, lack of vision and lack of enterprise in not building an aircraft carrier two years before the War. Noble Lords who sit on that Front Bench will be just as guilty of lack of vision, lack of foresight, and lack of enterprise if they do not do something to increase the home supplies of oil in this country.
§ All the Government need do is to intimate that they will guarantee interest upon the capital expended in putting up coal distillation plants. The Government could guarantee a limited amount of interest, say, on £2,000,000. Two million pounds will provide ten plants, and ten plants will be capable of putting out 21,000,000 gallons of oil and would give employment to over 5,000 men directly and indirectly. It would save £300,000 in "doles," in paying people for doing nothing, against a total liability, if you take interest at 4 per cent., of £80,000. 746 Is it worth it? What are we doing at present? We are spending £2,000,000 a year in removing slag heaps, laying out cricket fields, providing all kinds of amenities, but these amenities do not increase industry. The two Commissioners for the Special Areas have both said that coal distillation is the right thing for this country to improve employment, but by the terms of their appointment they are prevented from doing anything in the matter. After all, we are now guaranteeing interest on £35,000,000 for improving London transport, this blood-sucking vampire of industry in London. Why should not the rest of the country have the privilege of capital being guaranteed, thus balancing the gain throughout the Kingdom? If the Government guarantee the interest on putting up coal distillation plants, they will not, only increase employment, but give real security to our national defence. I want to know what the Government are doing and intend to do in this matter of increasing oil supplies from home sources. I beg to ask the Question standing in my name.
§ THE EARL OF MUNSTER
My Lords, on the last occasion on which the noble Duke raised the question of the production of oil from coal, he concerned himself practically entirely with the question of fuel oil, and on this occasion, it appears to me, he is more concerned with the production of motor spirit or petrol. My noble friend, in the Question which he has addressed to the Government, first asks how many coal distillation plants have been completed in the United Kingdom during 1934 and 1935, and what is the annual output of petrol from them. As I think my noble friend is well aware, coal is carbonised or distilled at coke ovens, gasworks and low-temperature carbonisation plants, and, judging from his remarks, I presume he is thinking of the last named when he speaks of coal distillation plants. The number of these particular plants in operation in 1934 was nine, the same number as in 1933. Unfortunately, the general particulars are only collected once a year, and I am not yet in a position to give my noble friend the figure for 1935. The quantity of crude spirit obtained from these plants was 741,000 gallons in 1933 and 767,000 gallons in 1934, an increase of some 3½ per cent. 747 These low-temperature carbonisation plants provide only a small proportion of the motor spirit produced in this country from indigenous materials.
Up to the present the main sources of supply have been coke ovens, gasworks, and the shale oil industry, and there has been, I am advised, a very material increase during the last year or two in the production of motor spirit from these sources. There should be a very much larger increase in the immediate future when the Billingham hydrogenation plant comes into full working operation. In reply to a Question a short time ago in another place my honourable friend the Secretary for the Mines Department gave an estimate of the production of motor spirit from indigenous materials for the year ending August 8, 1935. He gave that figure as 60,000,000 gallons. He further added that, while it was difficult to formulate an estimate for next year, the figure was expected to be much higher, possibly to the extent of some 50 per cent. The production in the years 1931 to 1934 inclusive was, taking the figures to the nearest million gallons, 38 million, 39 million, 45 million, and 52 million gallons. Your Lordships will see that there appears to be no lack of vision on the part of His Majesty's Government which, during these four years of office, has seen the production of this fuel increased by so large a percentage.
My noble friend further asks what is the amount of petrol required now and likely to be required in the future for the Air Ministry and for their new expansion programme. I am advised that the present consumption of aviation and motor transport fuel by units of the Royal Air Force in this country is approximately 6½ million gallons. As regards the future consumption, it is estimated that, on the completion of the expansion programme, these figures will be more than doubled. It might be of interest to mention that nine Air Force stations in the United Kingdom are at present using a fuel of which petrol distilled from British coal is a large ingredient. The Air Council are always giving particular encouragement to the use of petrol manufactured from the distillation of coal in this country, and so long as that fuel is suitable for the requirements of the Service the Air Council will continue to take it.
748 In the last portion of my noble friend's Question he asks whether His Majesty's Government contemplate taking any further steps to expedite the production of oil and petrol from home sources. As I have already pointed out, the assistance which has been rendered from time to time during His Majesty's Government's period of office has already resulted in a very large increase in the production of motor spirit from home sources, and, as I have also said, a further large substantial increase is to be expected in the near future. I think it worth while mentioning that in the present year's Finance Bill the tax on motor fuel for use in Diesel-engined road vehicles is raised to the same rate as is levied on imported petrol—namely, 8d. per gallon. The Diesel oil which is produced in this country from indigenous material is exempt from that tax, and this, of course, should stimulate further production and the efforts already being made to produce from coal a suitable motor fuel for Diesel-engined road vehicles. I think I can claim with every justification on behalf of His Majesty's Government that they have given very careful and constant attention to this question, and they have frequently rendered assistance of a highly beneficial nature to the industry. The rapid expansion over the last few years is, I think, a further indication of the success of His Majesty's Government's programme. I feel that there has been no lack of vision, as suggested by the noble Duke, but that, on the contrary, the Government may feel and indeed do feel, justly and rightly proud of what has been done.
THE DUKE OF MONTROSE
My Lords, I am much obliged to the noble Earl for his informative answer, but I am very disappointed with it. I cannot help feeling that we are a long way from satisfying the requirements of the Services as regards the supply of oil. The coke ovens principally supply benzol and very little oil for the use of the Navy. It is also disappointing from the point of view of the Special Commissioners of the derelict areas. They will be disappointed that the Government are not prepared to do much more to encourage the establishment of distillation plants in their areas.