OIL SUPPLIES.

HL Deb 06 April 1938 vol 108 cc573-96

LORD AILWYN had the following Notice on the Paper: To draw attention to the Report of the Sub-Committee on Oil from Coal, and to ask His Majesty's Government what steps they are contemplating to implement the recommendations in that Report; and whether, with a view to conserving oil supplies for those essential services which are inherently dependent for their functioning on this fuel, they will encourage and assist the provision of alternative fuels for use in those services which can, not only efficiently but economically, use them; and to move for Papers.

The noble Lord said: My Lords, I feel that my first words in moving the Motion which stands in my name should be of apology for so soon again troubling your Lordships with the question of our oil supplies, and at the same time, if I may be so permitted, of tribute to the noble Viscount, Lord Falmouth, and those associated with him, for the very comprehensive document they have produced in the form of this Report. This document bears eloquent testimony to the great labours undertaken by that Sub-Committee, and I feel that its value has already been appreciated by all who have studied it. I have an uneasy feeling that the sight of to-day's Motion on the Order Paper may have provoked a certain irritation among some of your Lordships at the prospect of another oil debate. Indeed, I do not forget that this is the fourth occasion that this subject, in one form or another, has been discussed in your Lordships' House since last summer. My excuse is that I am genuinely concerned, not to say disturbed, over this question, and that I find this concern to be shared in no small measure by a considerable and increasing number of people in this country.

As regards the Navy, I have already indicated to your Lordships my view on the urgent necessity for safeguarding the mobility of the Fleet in time of war by dual firing all ships of new construction. That view, shared though it is by many who have given long, anxious and expert thought to its practicability and its advisability, has unfortunately not yet found support or favour in those circles in which move those illustrious persons who guide our destiny in these matters. Fortunately one is an optimist, and I do not despair of their seeing the error of their ways. I only hope they will see the light before it is too late; that is, before we are too hopelessly committed to our new construction programme for this simple, yet so vital, as I see it, modification to be introduced.

So far as I can see, the situation of our oil supplies in the event of war is not one whit more satisfactory than it was when I last had the honour of addressing your Lordships on this matter. I will not enlarge upon the grave risks and dangers, as I see them, but will be content on this occasion merely to enumerate them. Firstly, our continued dependence on foreign imported oil, and inevitably, therefore, the precariousness of our supplies at the source. In this connection the history of recent and present strikes and unrest in the oil fields, and the serious situation existing in Mexico to-day, will not have escaped your Lordships' notice. One also reads disturbing things concerning the oil supplies in Rumania. Secondly, the dangers inseparable from the long transit by sea of the tankers transporting the oil, if it is released at the source, and the inescapable necessity for convoy and escort. Thirdly, the ransom prices we may well be called upon to pay for this foreign fuel. Fourthly, the economic weakness inherent in the tanker, in that she is but half a ship. The collier carries coal one way and raw materials and food the other way. The tanker carries oil one way and nothing more sustaining than salt water the other. Fifthly, the possibility of oil exhaustion; that is to say, the drying up of the world's virgin oil supplies.

These perils are undeniable, and these risks the Government are apparently prepared to accept. One tries to draw some crumbs of comfort from the White Paper on Defence. We read there, on page II, that Schemes are proceeding for the maintenance of oil supplies, including measures for conserving the use of oil in emergency and providing alternative methods of propulsion. I find these crumbs woefully few and sparsely scattered, And so one passes to an examination of this Report and to what other means we have of safeguarding our essential oil supplies, and to a study of the processes of oil from coal, and the provision of alternative fuels for certain forms of transport. I would remind your Lordships that this Report has now been in the hands of the Government for over three months. It would appear reasonable, therefore, to question Ministers on their decisions or intentions with reference to the Committee's recommendations. The fact that this document is not the complete Report, owing to the omission of certain confidential matter which we are told it was not in the public interest to disclose, precludes the possibility of a completely frank discussion, which is regrettable but clearly unavoidable. It is possible therefore that some of the criticisms which I have to make concerning this Report may in fact turn out to be ill-founded, for the reason that these matters may have been included in the confidential section.

The Committee recommend the continuance of a guaranteed preference on [home produced spirit] for a period of twelve years from 1938, the rate being increased from 4d. to 8d. per gallon, and the guarantee extended to include diesel oil for use in motor vehicles. It is to be hoped that the Government will accept this very desirable provision, and announce their decision as soon as possible. It will be of immense benefit to all the various processes, up and down the country, which are struggling to produce something for the good of the country. It is clear that without this preference the ninety-year-old Scottish shale oil industry, for example, which the Committee consider is worthy of every encouragement, would be very hard put to it to maintain itself. Perhaps the noble Earl will be able to tell us this afternoon of the Government decision on this matter. I do not intend to refer to the Committee's recommendations concerning the low temperature carbonisation and the synthetic processes. Other noble Lords who follow me will doubtless have something to say concerning them. Nor shall I refer here to the hydrogenation process. I want to consider the broad aspect of the case of those processes in the country which were not examined by the Falmouth Committee rather than the case of those uneconomic processes which were examined at such length by them.

Let me remind your Lordships of the terms of reference of the Falmouth Committee. They were: To consider and examine the various processes for the production of oil from coal and certain other materials indigenous to this country, and to report on their economic possibilities, and on the advantages to be obtained by way of security of oil supplies in emergency. "To consider and examine the various processes"; the Committee's interpretation of these words is the point that I would ask your Lordships to consider. They say in paragraph 9: Nor did the Committee consider that they could investigate the claims put forward in respect of a number of processes which have not been developed beyond the laboratory stage. They proceed to justify this interpretation in the succeeding paragraphs of the Report. It may be that on broad principles this was an admirable conclusion at which to arrive, but I venture with great respect to suggest that such principles should not be so rigidly applied as to cause injustice to individual deserving cases. Moreover, such application in the end may well result in a stultification of the objects for which the Committee was set up. Let me develop this argument a little further.

It has to be remembered that shortly after the passing of the Hydrocarbons Act, 1934, the then Chancellor of the Exchequer announced that in no circumstances should any further money be found for, among other things, oil from coal processes unless or until the written approval of Government experts had been obtained. And these Government experts, in the shape of the Fuel Research Board, have laid down that no written report can be given upon any plant which is not operating commercially. It becomes apparent, therefore, that a private company which may have practically exhausted its resources on many years of intensive research and experiment before finally perfecting its process will be faced with almost insuperable difficulties in finding the finance with which to erect its demonstration commercial plant. To the plain man it would appear that these rules and regulations made by the Fuel Research Board, or by the Department of Scientific and Industrial Research of which the Fuel Research Board is a branch, are too drastic. One would have thought that once a commercial plant is erected no report would be required from the Fuel Research Board or from anybody else. The results of that plant would speak for themselves; they are either successful or they are not.

Be that as it may, one realises that the motive for such caution is the protection of the public and to prevent, if possible, the unwise investment of money in what may turn out to be unsound propositions. I have no quarrel with any such laudable intention, but I venture to state that there are more important things to-day than the protection of a gullible public. Our outstanding need to-day—and I think it impossible to exaggerate the urgency of this need—is to find an economic process for the manufacture of oil from coal in this country and so make ourselves independent of foreign imported oil. The Government have repeatedly confirmed this both in your Lordships' House and in another place. The Falmouth Committee was set up in order to discover such a process. I have no knowledge of how many companies addressed themselves to the Committee asking that their claims should be examined, but one can imagine with what high hopes they must have heard of the appointment of this Committee and with what eagerness they doubtless approached them. I can only speak with personal knowledge of one of these companies, which shall be nameless. Their claims were very far-reaching. They made repeated requests to be called before the Committee so that their claims might be heard and, if possible, their process examined. They were completely unsuccessful, and the Falmouth Committee eventually reported to the Government without having heard what they had to say.

I had intended dealing this afternoon at some considerable length with the case of this particular company and their relations with the Fuel Research Board, and the subsequent treatment they received at the hands of the Falmouth Committee. It was pointed out to me, however, that such action would savour rather of an ex parte statement, which indeed it would be, and through the courtesy of an official of your Lordships' House I was put in touch with the secretary of the Department of Scientific and Industrial Research. The result of my interview with him—and I would here like to pay tribute to the helpful co-operation with which Sir Frank Smith met me—was that immediate contact was re-established between this company and the Fuel Research officials whose duty it is to examine these various processes. There had been misunderstandings which had caused a condition of stalemate between the two parties. I am thankful to say that this has now been removed, and I am confident that nothing but good will result from this contact having been re-established, and I am hopeful that the country in due course will greatly benefit thereby.

But the point I wish to make is that it should not have been necessary for a humble individual like myself to have to step in in order to bring to light what appeared to me to be outstanding claims of a process of immense potential value to the country. Surely this was the very type of case that should have been explored and examined to the full by the Falmouth Committee. How many other cases may there be of a similar nature? My information is that there are other cases which have been ignored in the same way. It is possible that if the Falmouth Committee had devoted more time to investigating some of these cases they would not have expended so much time and labour on the wholly uneconomic processes of low temperature carbonisation and hydrogenation which, however valuable a compromise they may be for the time being, achieve at immense cost a mere shadow of the substance that is required. I feel bound to say that it seems most unfortunate that the Falmouth Committee should not have seen their way at least to hear evidence in support of some of these claims.

To turn for one moment to the Government reply to the noble Duke, the Duke of Montrose, on December 15 last —and I hope I am in order this time in so doing—I do not by any means accept the contention of the Lord Privy Seal when he stated on that occasion that, whatever happens, we are never, in fact, going to be able to produce all our requirements in this country, or anything like all. I have considerable faith in the eventual evolving of an economic process for the manufacture of oil from coal, resulting at long last in our escape from this terribly dangerous reliance on foreign imported oil. I look forward to the day when the Lord Privy Seal will have to eat his words, and I am sure when that happy consummation is a fait accompli that no one will more willingly do so than the noble Earl himself. But there has got to be energy, enthusiasm and drive in this matter. This thing cannot be achieved in a few weeks or a few months. It is not merely a desirable thing to be aimed at in a lukewarm, unenthusiastic manner. It is a vital, essential matter for the country's safety, and should be pursued with all the resolution, vigour, and determination that it is possible to muster. No claim should be ignored, however apparently fantastic; no evidence should be disregarded; no red-tape as to niceties of procedure should be tolerated. The emergence of this country from its present highly dangerous position is, to my mind, a desperate necessity, and the Government and the country should realise that our vast expenditure on rearmament may well be of no avail unless our oil supplies, upon which our defences, our industrial life, and our transport mainly depend for their functioning, are completely and definitely safeguarded.

I am bound to say that I greatly deplore that pronouncement from the Government Front Bench to which I have referred. It was likely to cause discouragement in the country and in the coalfields, at a time when it was and is essential to foster every hope and encouragement. It is not difficult to imagine, on the other hand, the supreme satisfaction that such an expression of opinion must have given to the powerful oil interests in this country, and beyond. In the same way one cannot but feel that the refusal of the Government even to consider the question of dual-firing ships of new construction for the Fleet must result in a falling-off of enterprise and a feeling of discouragement among those who, if called upon, could produce the ideal dual-fired warship. Could not the Government even at this late hour announce that they will give every encouragement and assistance to any firm which will produce a dual-fired warship to a specified design required by the Admiralty? I feel that the actual building of one such ship might have the effect of breaking down some of the prejudice existing in official circles to-day.

I pass to the last part of the Motion. Although outside its terms of reference, one would have been glad if the Committee could have investigated the question of producer gas for heavy road transport. I hope the noble Duke opposite, who has given so much time and thought and labour to its development, will deal with it this afternoon more fully than I have the time to give to such an immensely important subject. Many questions have been put to Ministers in another place—the most recent, I think, on February 22 this year—but the replies have not been over-encouraging. Briefly, I would venture to advocate that energetic action should be taken by the Government to encourage certain forms of transport to operate on producer gas now, while the blessings of peace are still with us, and not wait until a crisis or an emergency arises. As your Lordships are aware, this form of propulsion is very considerably in use in countries abroad. I understand that Germany grants a subsidy of £50 for every producer gas plant installed, and makes an allowance of 50 to 75 per cent. of the normal tax to owners of producer gas vehicles.

I was privileged not long ago to visit the High-Speed Gas works at Park Royal, and was given a demonstration run on a heavy lorry. The smoothness of running and the flexibility of the engine were a revelation. Some of your Lordships may have witnessed the demonstration in New Palace Yard some months ago organised by the noble Duke opposite. It is a form of propulsion eminently suitable for various forms of transport on land and water—lorries, 'buses, tractors, barges, fishing craft, coastal vessels, not to mention stationary plant. It could also be used for base and lines of communication transport in the Army. I understand that a lorry running between Leeds and London for three months continuously achieved a saving of £10 per week on fuel costs. Until this country is in a very much happier situation regarding its oil supplies, I venture to suggest that all home-produced petrol should be earmarked for the one Defence Service which cannot operate on any alternative fuel—our very largely expanding Air Force—and that immediate steps should be taken by the Government to assist, and assist by positive action and not by mere protestations of interest, in the exploitation of this form of propulsion.

There are various forms of it, but the British invention, High-Speed Gas, is the most efficient of them all. It was brought to the notice of the Government by the Governor of the Colony in which it had birth many years ago. It was withheld from the knowledge of Continental Powers as long as that was at all possible. The Government know all about it. They have been kept informed all along the line through all these years of improvement and development. Yet nothing is done. The Gifford Works sent a 4–5 ton truck over to Germany the other day. I have here a copy of a report from the official who went in charge, written from Germany. The report says: The truck arrived safely at Cologne. It was cleared from the Customs immediately and together with three War Office experts we drove it the same day to Cassel in six hours, average speed 60 kilometers, which impressed the experts. Yesterday we had a test run with Henshel and War Office officials to Eisenach and back, 160 kilometers, on the worst lignite low temperature coke obtainable in Germany. The engine pulled beautifully. The War Office people were very much impressed and told us that every other producer firm had declined to run on this fuel. We are leaving tomorrow following an invitation from the War Office to spend a week at their Pest station as their guests. The chief of this station declared yesterday in my presence to the director of Henshels that our truck had the most powerful producer plant he had seen hitherto, and that its simplicity was surprising. It is a repetition of the same old story —a handful of patriotic men spending their lives and substance in research and experiment, and finally producing a gem of inestimable worth and of immense potential value to their country, ignored, left to struggle along single-handed, until their fortunes are exhausted. What is the use of Government research boards and Departments? What are their functions if not to explore and to vindicate their high sounding titles by exhaustive research? I do beg the Government really to get down to this question, the importance of which seems to me to be so obvious that I marvel at the inaction and complacency shown in regard to it.

To sum up. It is not altogether surprising that in paragraph 301 of this Report we learn that the Committee recommend in general a policy of depending on imported supplies with adequate storage. In so far as this recommendation was based on the limited evidence they thought fit to hear, I do not see how they could well have come to any other conclusion. I hope, however, in passing, that in the confidential section of the Report they had something very definite to say regarding the perilous location of our oil tanks and the great danger and vulnerability of our existing methods of oil storage, and were insistent that underground tanks or other less perilous forms of storage should at once be taken in hand. My principal criticism of the Report lies in the Committee's failure to hear evidence of certain claims on the present possibilities in this country of an economic process of extracting oil from coal, resulting, inevitably, in conclusions based, as I believe, on entirely insufficient evidence and, therefore, on false premises.

May I with great respect add this. I choose my words with great care, and give expression to them with considerable reluctance, but I feel they should be spoken. Perhaps it was not altogether for the benefit of the country, or in the public interest, that such a Committee should have had among its members no representative of the coal interests, while having as its Chairman one who, from his position on the Fuel Research Board and on the Advisory Council of the Department of Scientific and Industrial Research, is of necessity closely related to the oil policy of the Government; while having as its scientist one who is very closely associated with an oil company; and while having as one of its secretaries the Director of Petroleum, whose duties as such are presumably in effect to watch over our oil imports. I venture to make this observation with the sincere wish not to be in any way offensive or to reflect in any way, I need scarcely say, on the unimpeachable integrity of these distinguished gentlemen, but in order that the Government may reflect whether the composition of this Committee was best calculated in the circumstances to produce as completely impartial a Report as it was essential to have in the best interests of the country.

One final word. I desire to end on a note of pleading with the Government. Let there be aroused no shadow of suspicion that the Government are halfhearted over this question of oil from coal and of alternative fuels. The world situation is far too serious to-day to permit of any uneasy feeling of apprehension or lack of confidence in the public mind concerning these questions. It is possible that if a more energetic search after the treasure that we require had been pursued during the last two or three years, the country to-day would have been well on the way to self-sufficiency, if it had not actually arrived there, in the matter of its oil supplies. The country would not easily forgive a revelation that the Government, while professing one thing, had in fact been swayed, by outside influence or by vested interests, into pursuing something different. I beg to move.

LORD TEYNHAM

My Lords, I did not intend to intervene in this debate this afternoon, because I consider the Falmouth Report an admirable one, but certain facts and figures have come into my possession during the last few hours which I think may be of interest to your Lordships. The noble Lord, Lord Ailwyn, has specially drawn attention to the conserving of oil supplies for essential services, and in this connection it would no doubt interest your Lordships to hear that it has been estimated by the oil interests themselves that the quantity of oil already produced in the world during the last half century exceeds the already known reserves. I should, therefore, very much like to support the Motion and the efforts of the noble Lord, Lord Ailwyn, to encourage and assist the provision and use of alternative fuels. And in that connection I would like to say a few further words.

The figures that have been disclosed by the oil interests show that the reserve is astonishingly low—at least where the oil can be economically worked—and that its exhaustion is possible within the next twenty years. That seems to me a very important point to consider. I should have preferred the terms of reference of the Falmouth Committee to have been on a very much broader basis so that there could have been an examination of the question of alternative fuels. I would specially refer to what is known as colloidal fuel, which, as no doubt your Lordships know, consists of approximately 50 per cent. of coal in suspension in oil. Experiments with it have been carried on for a number of years and many of the difficulties have been overcome. One of the main difficulties has been precipitation of the oil in the colloidal mixture, but I understand that that has been very greatly prevented. One great advantage of this fuel is that it is one of the most compact fuels known, permitting the storage of more heat units per cubic foot of bunker space than oil alone. Therefore a ship would have a larger steaming radius per cubic foot of fuel carried. There is one disadvantage from which this type of fuel suffers and that is existing boiler design, but I feel sure that a suitable examination of the whole subject would make it possible to design boilers having the same capacity as boilers fired entirely with oil fuel at the present time. I hope His Majesty's Government will give encouragement to this type of fuel and give assistance for experiments. This type of fuel, I suggest, is of very great importance and is deserving of very great study, but it was never really considered.

My noble friend Lord Ailwyn referred to the old question of dual firing for His Majesty's ships. I do not propose to enter into all the pros and cons of that matter which have been debated in your Lordships' House very fully on several occasions, but perhaps your Lordships will allow me to mention one principal point. If you have dual firing you must have increased weight, and increased weight means less armament and therefore less protection for His Majesty's ships. One other very important point, in regard to which I am sure my noble friend Lord Ailwyn will agree with me, because he knows what it means to coal ship, is that when a ship has been coaled the men are very tired and are really not in a fit condition to fight the ship. That is a very important point and I am sure that I am voicing the opinion of the Naval Staff in that matter. Reference has been made to producer gas plant for vehicles. This form of transport would no doubt be of great assistance in time of war in conserving oil supplies, hut from the defence aspect I suggest that it would be better to have producer gas plant designed to lit any vehicle rather than vehicles specially designed for the purpose. I realise that the important question of oil supplies must ever be before His Majesty's Government, but I do suggest that every avenue should be explored that may produce substitute fuels.

THE DUKE OF MONTROSE

My Lords, I am certain that most of your Lordships are very grateful to my noble friend for introducing this afternoon the subject of the Falmouth Report and the supply of power for our Navy and defence generally. Really it is the most important question for the country to-day. We have just had an example in what has happened in Mexico, where, without any warning, or apparently without any warning, our oil supplies have been confiscated. We have this year had similar trouble in Venezuela, we have had similar trouble in Trinidad, we have had similar trouble in Burma, and I understand that the pipe line in Iraq has been punctured or interfered with on fourteen occasions. One thing is quite obvious, and that is that the danger to our national defences in the matter of oil is not so much danger on the high seas as the danger to supplies at the source.

The Falmouth Committee were, I understand, appointed to investigate alternative supplies of fuel. What I have never understood is why the Committee persistently refused to consider alternative solid fuel. The terms of reference to the Falmouth Committee were to consider "oil from coal and certain other materials indigenous to this country." What do the words "certain other materials indigenous to this country" mean? In plain English the meaning is other solid fuels from sources of fuel indigenous to this country. Yet time and time again that Committee refused to deal with solid fuels. I think some explanation of that is required, because it seems to me that the Committee were gambling with loaded dice in favour of oil. It is sometimes suggested that, if we fail to get oil supplies from Mexico or other countries, there is America. Can we depend on America to supply us with oil? I doubt it. If America is not sufficiently interested to be a combatant in a war I doubt if she will supply this country with oil. Why should she? Her previous experience was that her supplies of raw material and oil were not paid for. Why should she supply us with oil again until we liquidate our debt, or unless she is a combatant? Even if she did, I would point out that oil which cost £3 a ton before the last War went up to £15 a ton during the War. Are we going to sit here and place ourselves at the mercy of a ramp by which oil will be increased five times in price during a war when we have raw materials in this country from which we can get the necessary power? The whole thing seems to me to be ridiculous. Why should we be dependent on America for power?

People say at once, "Of course, you are thinking of coal distillation, and coal distillation cannot and will not supply all the oil that we should require in war." The Falmouth Committee repeat that statement time and again. But I assure your Lordships that no coal distiller has ever said that we could supply all the oil required by this country in time of war. We have never said that we could supply all the oil, for the simple reason that oil is a by-product and not the main product of our process. What we have said is that if there is a shortage of oil in this country then the oil derived by coal distillation will be a very valuable contribution in time of emergency. That is very different from saying that we could or would supply all the oil. Quite apart from the oil, the main product—smokeless fuel—is an efficient propellant. At this moment the Bestwood Collieries in the Midlands are putting in plant to distil coal. From that plant they will be able to obtain 100,000 tons of smokeless fuel a year. That 100,000 tons of smokeless fuel can be used, every bit of it, as a propellant, and as a propellant it would give equal power to 14,000,000 gallons of petrol. It means that if you encourage coal distillation you will get not only a certain amount of oil as a by-product but you will get a propellant of which 100,000 tons is equal in horse power to 14,000,000 gallons of petrol. You could draw away 14,000,000 gallons of petrol from your roads, from the fishing boats at sea, and so forth, and transfer it to the Air Force without interfering for a moment with the ordinary transport on our roads or with the cultivation of our fields by tractors. It seems to me extraordinary that the Falmouth Committee refused time and again to consider the possibility of deriving horse-power from solid fuels indigenous to this country.

Then, coming to another form of alternative power, the Committee never looked into what could be done with coal. There is such a thing as colloidal coal: a mixing of coal with oil. We have propelled one of the big Cunard liners across the Atlantic and back again on a colloidal fuel which represents 40 per cent. coal and 60 per cent. oil. That would mean that if you adopted colloidal fuel in the Navy you would save 40 per cent, of your oil. You would make your oil go very much further. The difficulty with colloidal fuel has been to maintain suspension of the coal particles in the oil. The coal is heavy. But if you have coal distillation, the smokeless fuel is extremely light, and in that way you get over all the difficulties of suspension. I cannot understand why the Admiralty or the Fuel Research Board have never really experimented with colloidal fuel on a proper scale.

Then there is the question of powdered coal. This is used enormously in America at all the large power stations. Powdered fuel can be blown, in exactly the same way as oil, through the same nozzle under the boilers. It can be pumped from store tanks in just the same way as oil is pumped. It can be stored in just the same way as oil is stored. It can be utilised on board ship in exactly the same way as oil. If you used powdered coal instead of ordinary coal, it would be ever so much easier, and its thermal efficiency is much greater. Why have we not tried powdered coal on board our warships on a large scale? It has been done abroad; it has been done in America and elsewhere. Why have our people not done it? I cannot understand it, for of all countries in the world this country most needs some fuel alternative to oil, because we draw 95 per cent. of our requirements from abroad. I venture to support my noble friend in all that he has said in advocating very thorough research into alternative fuels for the Navy and for defence generally.

LORD BARNEY

My Lords, I am sure that we shall all be very grateful to Lord Ailwyn for having raised this matter. He has brought out in his speech, and other speakers have brought out, how much this is a technical matter. Undoubtedly, however, there is in the country a large body of opinion which is profoundly interested in the question. This debate has come at a particularly opportune moment, because various proceedings which in the quite recent past were regarded as economic heresies are to-day regarded as normal in this country. One is impressed, for example, by the thought that only six years ago the Government decided on the ground of economy that they would not spend the small amount of money, perhaps £600,000, which they had paid for the annual camps of the Territorial Force. To-day there is a change of ideas, and it seems that anybody who can think of a new way to spend money on armaments is applauded. I introduce that note just to emphasize the great change that has taken place in the country.

This matter has technical aspects about which it is very difficult for a layman to know anything. The layman, on the other hand, is profoundly moved with the idea that there should be applied to this question the same sort of examination as is being applied to all other matters of the conservation of national resources. I am particularly interested in this subject, and that is my excuse for intervening in the debate. I got back this morning from Germany after a tour in that country. During that time I had the opportunity of being a good deal with German industrialists who are actively concerned in the development of the substitution of their traditional imports by internal products. Their methods in this particular field are well known. I see, in references to the report of the Falmouth Committee in The Times, of which I have just turned up a copy, that Lord Mottistone is stated to have said as recently as last July that Germany was already providing just under two-thirds of the petrol required in that country. We know that is generally not believed to be on an economic basis, but it is in conformity with the national policy.

I should like first to refer to the use that has been made of home-produced fuel for road transport. I, like other members of your Lordships' House, have looked at these vehicles which are running to-day, ridden on them, and, purely as an amateur, been immensely impressed with their possibilities. I am surprised at the apparent inactivity, as Lord Ailwyn has said, in not examining this matter from the national aspect with a view to conservation of fuel in time of war. The other aspect is the development of the production of our own supplies of fuel. When you circulate in Germany you find industrialists who are enthusiastic in their confidence that they will in the not distant future reach the point, which has been disclaimed as a possibility here, at which they will be to a large extent self-sufficient in the matter of liquid fuel. One suspects that the tardiness has been largely due to our deeply-rooted conviction that we must make sure that all these substitutions are strictly economic. I think of the case of sugar. Only eighteen months ago—I think it was—the Government decided to put all the sugar factories under one single control. There was a tremendous outcry in the Press about the extravagant cost of producing sugar at home. One suspects that to-day the Press would be much less vociferous and would say that it was a very proper thing, regard- less of cost, to produce the reasonable requirements of the country in sugar at home.

This is really a question of financial orthodoxy: that we should import as much as we can. We say that we must import in order to be able to export. In Germany I was impressed by the fact that the whole of their set-up is that they must export before they can import. One thinks, therefore, that there may be a tardiness in substituting orthodox economy by political expediency. The Report, as has been pointed out by Lord Ailwyn, was largely confined to the examination of oil production by a limited number of methods. Of course it is inescapable that in all these matters of the use of fuel other than what has, in recent days, been followed, the oil interests in this country are given special consideration. They are very large taxpayers, and it is natural that they should be. But to sum up my ultimate feeling, I wish to say that I hope the noble Earl, when he replies, will be able to give us some assurance that this possibility of the use of home fuel for road transport is going to receive intensified examination, and that the principle of a strict commercial economic basis shall not be a ground for limiting intensified experimentation and even the development of processes for producing some of our requirements at home.

THE LORD PRIVY SEAL (EARL DE LA WARR)

My Lords, the noble Lord, Lord Ailwyn, in opening this debate gave your Lordships some apology for raising this subject once again. I do hope that he will feel, after this debate, that he is certainly under no obligation whatsoever to apologise to the House for raising such a vitally important question—a question that is of vital necessity to us in time of war, and is of very great peace-time importance also. At the same time, before saying anything further on the subject under debate, might I take this opportunity of joining with Lord Ailwyn in his very generous tribute to the noble Viscount, Lord Falmouth, for the work that he has done in presiding over this Committee. If I do not indulge in the somewhat back-handed compliments which came towards the end of the speech, I am sure your Lordships will understand. For myself, speaking on behalf of the Government, I cannot help feeling that this country is under a very great debt of gratitude to the noble Viscount for what he has done, and I shall hope in a few moments to refer to some of the points, both with regard to the Report and the composition of the Committee, which have obviously worried Lord Ailwyn.

Before coming to those points, perhaps I might take in their order some of the issues which the noble Lord has raised. He referred once again to the question of dual firing in His Majesty's ships. That is a matter which, as the noble Lord reminded your Lordships, has been discussed many times before, but, as he has also told us, he is an optimist and hopes eventually to be able to persuade the Government that after all there is something in his contention. If the noble Lord hopes to persuade us on that particular case I think indeed he is probably rather a strong optimist. I speak only as a layman, and this is a very difficult technical subject, but the points which have been brought out in prior debates on this subject do seem to me to be extraordinarily conclusive and powerful against the case that he has so very ably argued. I read in those debates, for instance, that it requires twice as many engine room ratings for a coal ship as compared with an oil ship; that these men have to be housed and fed; that if a modern 10,000 ton cruiser had its oil-burning boilers and equivalent machinery removed, and the space filled with coal-burning boilers, then the coal-burning ship would be three and a half knots slower than the oil-burning ship. The point has also been already raised in these debates that in the event of such transformation being carried out the weight and armament of a ship would have to be completely different. Further, a coal-firing ship with the same radius of action, and other qualities, as a 10,000-ton oil-firing cruiser, would have a total displacement of 21,000 tons and would need about 550 more men, and cost twice as much. The noble Lord shakes his head. The noble Lord admittedly knows more about naval construction than I profess to do, but I can only tell him that these are the opinions of our expert advisers on the subject.

But I do not think your Lordships want me, nor do I think the noble Lord invited me, to weary you on a subject which has been so frequently discussed before. The question of the noble Lord on the Paper is first and foremost what steps the Government intend to take with regard to the Report of the Falmouth Committee, and, as he has told your Lordships, the main recommendation of that Report is that there should be a continuation of the preference on home-produced spirit of 8d. for a further twelve years, whereas before it was going to be at the rate of 4d. for nine years. The noble Lord expressed the hope that I should be able to make an announcement to your Lordships as to whether we accepted that recommendation. I am afraid I am not in that position; but perhaps the noble Lord can take some comfort from the fact that, while it does not take very long to turn down a recommendation, it sometimes takes a short period to consider fully the details of a recommendation to see whether one can or cannot implement it in part or in full.

The noble Lord brought up certain points. The main one was the expression of regret that the Falmouth Committee had not given more adequate consideration, as he thought, to a number of processes which he felt to be of importance in the consideration of this subject. But the Committee did not refuse to consider any processes which it was possible for them to consider in the light of their terms of reference. The noble Lord must appreciate the tremendous gap that exists between a process that has been examined simply and solely in a laboratory, handling possibly only a few pounds of coal, and a process which has been through the stages of development which is in any way comparable to production in a factory. By that I do not mean to imply that a process could not be considered by the Committee which had not in fact reached the factory stage. We know that it would have been almost impossible for some of these experimental firms to raise capital to bring that process to the factory stage without some assistance, by way of recommendation or otherwise, from an authoritative source. But I think the noble Lord realises that the Fuel Research Board is in a position to examine these processes at a very early stage, though hitherto it has been laid down that that stage must be such as makes it possible to draw economic conclusions from the examination, and I think the noble Lord fails to realise that the particular process to which he has referred had not reached that stage. However, I am glad to think that the noble Lord is now satisfied, as I gather from his remarks, that he has been able to put these people with whom he has been in contact in touch with the Fuel Research Board, and that he is satisfied that their claims are going to be gone into once again.

I have been asked what other steps the Government are tiling with regard to other processes for bringing about the use of alternative fuels, and producer gas has been particularly mentioned. I would like to assure the noble Lord and your Lordships that the Government have this question under very serious consideration and are actually taking action at the present moment. There are a number of things that we are doing, a number of methods which we are examining and having examined, which I prefer not to be asked to go into in any detail. But I can say that we are examining them, and examining them with a sense of their importance. In the meanwhile, as I think the noble Lord realises, there is in operation at the present moment a relief of taxation to the people who are using producer gas.

Those are the particular points which the noble Lord has raised in his Question on the Paper; but there are one or two rather more general points which he discussed. He regretted a statement of mine, made some time ago, that this country would never be in the position of producing all its oil requirements from coal. Well really, although I made the remark, I think a remark of that character has extraordinarily little value, because it is dealing with matters so far ahead that we are talking of things about which we cannot be certain. But I can say that at the present moment we are producing about seven per cent. of our requirements, and that is only by means of a preference of no less than eightpence a gallon. I see the noble Lord, Lord Cranworth, in his place. He is interested in the beet sugar industry. When I was at the Ministry of Agriculture I was repeatedly being attacked because the Government assisted such an uneconomic industry. If beet sugar is an uneconomic industry, I hesitate to try to find a word which would describe the position of this industry. Certainly the amount of public assistance that it has received is on a much larger and more generous scale than that given to the beet sugar industry. I only hope that the noble Lord is right and that I am wrong. It would be a magnificent thing for this country if we could produce all our oil.

I think it would be good also from the point of view of other questions in addition to that of oil supply. It would give us an enormous source of smokeless fuel, and one of the worst things that the modern industrial age has done for this country is to make great areas of it extremely ugly and dirty. If it were possible not merely to produce all our oil supplies, but to take all the smoke and grit out of our coal, we should be doing a great and magnificent work for the country. But I repeat that we have hitherto only reached the point of producing by all our different processes, heavily assisted as they are, seven per cent. of our requirements, and it certainly does look as though we had some considerable way to go. But I hope we can reassure the noble Lord, Lord Barnby, that we are not looking at this matter from a purely economic point of view, because we are already giving that assistance of eight-pence a gallon, and His Majesty's Government are at the present moment considering seriously the recommendations of the Falmouth Report.

There is only one further point in which your Lordships might be interested, and that is the work which the Government are doing with regard to the oil supplies of this country. The noble Lord in his preliminary remarks said he was afraid that the position was no better than it was a few months ago. I would like to reassure him on that point. It certainly is better than it was when he raised this question the last time. Not only have Service stocks gone up, but the Government have been giving attention, in company with the oil companies, to increasing civil stocks, and also to the question of the protection of civil stocks. We have also given a great deal of consideration to the tanker question and to the protection of tankers, and also to the question of rationing in time of war. Considerable progress has been made on all those questions since the noble Lord last raised this subject, and therefore I hasten to give him that reassurance. I think I have answered most of the points that he and other noble Lords have raised. If not, I think he has an opportunity of reply.

LORD AILWYN

My Lords, I would like to thank the noble Earl for his courtesy and for the fulness of his reply. I am extremely glad to have the various bits of reassurance that he has been able to give us. I do not intend to keep your Lordships for more than a very few moments, and therefore I shall not follow noble Lords into the various technical details of colloidal and powdered fuel; first of all, because I know very little about them, and, secondly, because I understand there are definite technical objections at the Admiralty to their use. As regards what was said by my noble friend Lord Teynham, it is a good many years now since he and I used to coal ship. The question of dirt and exhaustion is almost a thing of the past. The figures that the noble Earl gave your Lordships' House about dual-firing I thought and hoped had been sufficiently repudiated before now. I have no wish to start the war over again, but may I say this, that in the case of a 10,000 ton cruiser dual fired, instead of being 10,000 tons, it would be 10,600 tons and not, as has been suggested, 20,000 or 21,000 tons. I should qualify my statement by saying that that is the answer from engineers and ship constructors outside Admiralty walls. I might even say this. Supposing these figures of the noble Earl had been correct, would it be better to have a 21,000 ton ship able to steam at a slow speed on coal, or a 10,000 ton oil cruiser lying derelict on the face of the ocean for lack of fuel?

EARL DE LA WARR

Extra tonnage would be needed to accommodate the extra crew required.

LORD AILWYN

As I am challenged, I must just say this, that in the view of constructors and engineers, if you are doing to dual fire, say, a 10,000 ton ship in order that that ship may be able to steam on coal at economical speed in the event of the oil failing, there would not be required any additional personnel whatever. The existing stoker personnel required to achieve the immense horsepower necessary to make that ship move through the water at the very high speeds which the Admiralty think it necessary to have in these days would be sufficient to fire the few dual-fuelled boilers on coal at the speed required—12 or 13 knots. No extra personnel would be required. I will not detain your Lordships any longer, but I should like to thank those noble Lords who have taken part in the debate, and to express the hope that this dilatoriness has now come to an end regarding the examination of solid fuels for road transport. I am very glad to have the assurances which the noble Earl has given us to-day, and I hope they will soon bear fruit. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.