HL Deb 05 December 1973 vol 347 cc604-36

3.5 p.m.

LORD KENNET rose to call attention to the energy crisis; and to move for Papers. The noble Lord said: My Lords, since we last debated energy nine months ago, we have seen one of the most vertiginous accelerations in the history of our lifetime. We have, over the last decade, imprudently become more and more dependent on a single group of countries for our energy supplies, while permitting a third country to expand and take more and more of their territories. It is no good huffing and puffing about "blackmail". Whatever the elders of Zion may say, we know perfectly well that every nation in the world would do exactly the same as the Arabs have done. Suppose our own country had been attacked by one of our neighbours, armed with American weapons, and backed by two distant—


My Lords, if I may be forgiven for interrupting the noble Lord, Lord Kennet, could he state precisely—



My Lords, I hope that the noble Lord will intervene later in the debate—


Could the noble Lord amplify whom he means by "the Elders of Zion"—



My Lords, I do not feel inclined to accept an interruption at so early a stage. Suppose, my Lords, our own country had been attacked by one of our neighbours armed with American weapons and backed by two distant and powerful States, and that our enemy had occupied, say, the South-West as far as Bristol. Suppose that all United Nations attempts to rectify that had failed and that again, 11 years later, that country had attacked from their base in the South West, again armed with American weapons, and had driven our Army back to a line, say, from Southampton to Birmingham and that the United Nations had passed a resolution that they should go back where they came from, and they had not. Then suppose that after six years of waiting and hoping we, in desperation, took the law into our own hands and attacked them, for the first time, and that, after hard fighting in which they were again supplied by America, we found that we could not drive them out; and that we were, if anything, a little worse off, even after this third war. Supposing all this, my Lords, can anyone think that we should not then turn to economic sanctions against the countries which were backing our invaders?

What do we think the Arabs are? Do we think that they are men or footstools? Well, my Lords, the world's "under-dog" has at last risen up, and they have imposed on their sole export commodity not a ban but a production cut-back. This cut-back makes for confusion, and confusion makes for losses. I suspect that, even if this or that country, including ourselves, are intended to be exempted by the Arab oil-producing countries from that cut-back we shall continue to lose supplies over some time because of the confusion caused by the general cut-back in production. For myself, I believe that it is the price increase which will concern us even more than loss of imports over the long term. I do not believe that we have yet realised, and shall not realise until the ships which even now are at sea come in, what the effect of these price increases will be. It will make our whole economy settle into a different shape. It is very hard to foresee this shape at the present stage. Certain effects we can already foresee. First, Middle East oil ceases now, from this moment, to be the cheapest and most convenient fuel we have. Second, our own North Sea oil and gas becomes thereby an asset far more valuable than we supposed and, it may well be, far more worthy of conservation and long-term management than we supposed. Third, during the remaining lifetime of Middle East oil the money flow into the Middle East countries, which has already surpassed their domestic absorption capacity, will be greatly increased, probably to £50,000 million a year, quite soon.

This increase confronts the Western World with two unfamiliar dangers. The first is that so much of this money will be invested back into the industrial and financial institutions of the West and of Japan as to give the Middle East countries effective control of our economies. The second is that the Soviet Union will greatly benefit from that money flow in a most unwelcome way. Let me explain why. Unlike the United States, which virtually gives arms to Israel, the Russians charge the Arabs hard currency and hard cash for the arms they sell them. This hard currency the Russians then use to buy ever more goods and services from the West, especially capital goods, and this frees Russia's internal economic resources for the gigantic arms build-up we have seen over the last eight years. Neither of these two long-term effects of our dependency on Middle East oil can be welcome to us: neither that we should pay for our oil supplies in reduced sovereignty over our own economy, nor that we should pay for them in increasing Russian weapons levels. We shall need imagination, my Lords, to get out of those dangers.

We need a settlement in the Middle East. It is easy to stand up here and preach that those embattled countries should do one thing or the other. I think a long-term lasting settlement must depend on the emergence of a generation—because in Israel and the neighbouring Arab countries who can see, who can envisage, who can imagine the natural symbiosis of advanced Israeli technology and Arab resources and manpower? At the moment this is merely "pie in the sky". It really should not be any harder for them to see it than it was for Germany and France to see the very same vision in the late 1940s. What we await is the emergence of the Adenauer and the Schumann of the Middle East. In the meantime, the least that all of us can do in the highly developed modern world is to try to get a general arms embargo on both sides in order to render less likely the outbreak of a fourth war.

My Lords, the energy problem, viewed over a period of perhaps 100 years, is among one of the most serious challenges mankind has yet had to face—in my view, about equal to that posed by nuclear weapons. Essentially the question is which of two courses civilisation will follow. The first course supposes that new sources of energy are successfully brought into play; for instance, fusion, solar, geothermal and breeder reactors. If our population increase levels off, and if social justice is adopted world wide, our race may then continue well. The second course supposes that no new energy source is found, so that after the period of rapid financial growth, which has been taking place since the Industrial Revolution, energy sources run out and civilisation gradually drops back again, with little possibility of a second chance. So, of course, does population, not by the means we wish but by starvation, war, plunder and so on.

The solution, if it exists, the way to hit the first course, will involve massive technology and very difficult science pursued over many decades. All the short, medium and long term alternatives to oil involve high technology: for example, the use of tar, sand or oil shales; the production of oil from coal, or hydrogen or methane from nuclear energy; the safe use of fission reactors, nuclear fusion, whether magnetic or laser induced; the use of solar energy, geothermal energy, and so on. Therefore I submit that the current tendency to play down science and technology in the universities and to reduce Government establishments capable of pursuing long-term work will, if it is persisted in much longer, prove catastrophic, or nearly so.

Whichever way it goes, the favourable course will require a radical change in our sources of energy supply over the next few decades. This will mean that we need highly-trained scientific and industrial staff as well as managers to bring these sources into operation. Since it takes many years to build up such a potential, we have to begin encouraging it straight away by training energy scientists and technologists in the universities and making sure that there are jobs available for them to go to so that they are not lost while we sort this thing out. They must be ready before we even know precisely the right answer.

The timescale for bringing in a new energy source is very long indeed, so long-term planning is needed but allowing for options at each stage. The current Atomic Energy Authority forward look extends up to 2050. Let us look back for a moment. Fission was discovered in 1939, but we do not expect a massive build-up of nuclear energy generation until about 1980, with full effect only by 2000 A.D. That is sixty years. The deuterium-tritium fusion reaction was discovered in the early 1930s, but the A.E.A. currently estimates that fusion reactors will take over, if indeed they are successful, only between 2010 and 2030. That is nearly 100 years. Our national planning machinery is not up to this sort of timescale. It involves closed-door decisions by civil servants and a limited number of advisers chosen by the civil servants. It is a truism that bad science and bad decisions thrive on secrecy. Because the problems are so complex, and the consequences of error so tremendous, there should be a much more open discussion in which all qualified people can take part, so that errors can be more easily detected in advance and so that there is more public understanding of the course adopted and public commitment to it. The United States is rather better at this sort of thing than we are, since the reports of Congressional investigating committees contain certain detailed technical arguments and are freely published. Ours, on the whole, do not contain much—they are freely published but they do not contain much technical argument.

To take one familiar British example, we have had three investigating committees on fusion research: one which recommended a cut-back, one which recommended maintaining research at cutback level, and then one which recommended an expansion. None of those reports has been published—at least I assume there have been reports. There have certainly been changes of policy, and they must have been based on something. Some of the planning decisions which have been taken have been obviously wrong. For example, it should have been clear to everybody that a continued switch to oil would put the United Kingdom and Europe, and indeed Japan, in the very dangerous position where we are now. The national strategy should have dictated a much bigger investment in the success of the Magnox reactor stations, since the extra cost to the consumer, compared to the cost of oil, or of coal, or of advanced gas-cooled reactors, or even compared to breeders, was always quite small.

It is said that the C.E.G.B. ground rules require that the cost of the oil and the coal to fuel each new power station throughout its life should be estimated at current prices; that is, prices in the year in which the decision is being taken. This is absurd. If a realistic assumption had been made of the likely rises of oil and coal prices over the current decades, the nuclear power stations would probably always have had the advantage. What happened instead was that the A.E.A. was forced into devoloping a whole series of different designs in order to bring the generating cost down by fractions of a penny, so as to compete on the basis of those ground rules—which they have, in fact, succeeded in doing. But the difference between the various designs, in terms of the cost to the consumer, was very small compared to the inflationary increase in the price of electricity even in one single year. Another unfortunate decision has been the run-down of the Atomic Energy Authority itself by a few per cent. each year in order to diversify an increasing part of its work on to new programmes, on the ground that most of the reactor problems for which the Autho- rity was originally set up have been solved and can now safely be left to industry.

First, the rundown has meant that it has been impossible to recruit new young staff, which in turn has reacted back on to the universities, and even to the schools, so that atomic energy is regarded as an old industry even before it has really started. Secondly, the Atomic Energy Authority's Research Group has been forced to concentrate on cash-earning projects in order to remain what is called viable, and has to build up to an income of £5 million a year from its source by about 1975. Naturally, this is an immensely difficult task, and a great deal of management attention has been devoted to it, with some success. But this is at the expense of work on reactor design and on reactor safety. Is this desirable? Here I think we can see the effect of that famous customer/contractor principle, according to which the Government have seen fit to reform the research structure of the country, and which will run us into more and more trouble as we go along.

This brings me, my Lords, to the great question of reactor choice. We have violent public dispute here, and I do not want to get too deeply into it. I am not qualified to sit in judgment on the Report of the House of Commons Select Committee on this matter, but this I do say: it is clear, reasonable and coherent. The Government's comments on it, on the other hand, published last month, are very cagey indeed. They are as empty of reasoning as they are of conclusion. But, still, this is only the beginning of the age of Parliamentary and public contribution to great technological decisions, and perhaps the Government will in due course learn to come cleaner about this sort of thing. I certainly have high hopes of the renewed sessions of that Select Committee this week and next.

My Lords, I had planned to speak about the dangers which are alleged to exist in the light water reactor which it is said we are now contemplating buying from the United States. Perhaps I should touch on it for a moment. This is a new animal, and a very big one—much bigger than anything we have. The trouble about it is that it is inherent in its nature that you cannot put a figure on the risk of failure without testing it in a manner which would completely destroy the reactor you tested, which would be many millions of pounds down the drain, and might risk the very disaster the likelihood of which you are trying to assess. This is a difficulty. Now what are we talking about? We are talking about the total melt-down of an L.W.R., and if it were to happen—everybody agrees that the likelihood is extremely small, though we can put no figure on it—it would involve the release of enough radioactivity to kill many hundreds of thousands of our citizens, and would involve the write-off geographically of a whole region for many decades.

Let us look at the insurance situation for a moment, because this, I think, is a good guide in these cases. At present in regard to the Magnox stations the Act requires the licensee—that is, the C.E.G.B. —to cover £5 million of the risk in the open market, and the Government carry the rest—nominally £25 million. That £5 million is paid for at a premium of about 2.7 per cent. a year, or sometimes higher. On the other hand, the Government's guarantee is a hypothetical tax on the people. If, after an accident, payments have to be made exceeding £5 million, the taxpayer forks out.

Now let us consider the light water reactor—several hundred thousand dead, and a region written off; an unknown risk of this happening, although little likelihood. What value should we put on such an accident? Certainly many thousands of millions of pounds. What part of the insurance will fall to the free market? What part will fall to the Government and to the taxpayer? This must be publicly understood and publicly debated. For my part, all my fears about light water reactors would be laid at rest if the Government made the licensees go to the market for the full value of all the risk—absolute liability covered—and confined their attention merely to ensuring that this cover had been obtained. In this field, as in others, such a policy would quickly produce the optimum blend of safety and economy.

In the meantime, my Lords, there seems to be good reason to order one or two more Magnox stations while we carefully consider the future. It is not as though we could buy light water reactors at the moment. The Government inspectorate, which has to judge the safety of each new reactor system, has not yet received even a design. It has only a vague idea of what is proposed. It is obvious that when it is received a very long time must be spent in discussion and meditation before the safety all-clear can be given. If it is suggested that the idea of ordering more Magnox stations is putting the clock back, I would only say that some clocks run fast, and those in whose interests it is that this clock should gain are very powerful indeed. I do not know whether last Sunday's Press report is true, but if it is, I would only say that an interest which would allow an American President—any American President—to praise the safety and reliability of a reactor two and a half miles from his home three weeks after it had broken down, would do anything.

It must also be an open question whether civilisation can survive on a fission economy which involves large quantities of plutonium distributed throughout the world so that relatively I any country will be able to make nuclear weapons, together with large quantities of long-period fission products. For this reason, we really ought to have a considerable step-up of fusion work comparable with what is going on in America. Yet again, we do not even know whether fusion itself will prove successful, and therefore a great deal more effort ought to be concentrated on solar and possibly geothermal power. There is little enough of that effort at the moment.

My Lords, after the excitements of oil and nuclear energy it is usually reassuring to get back to our own old domestic friend, coal. Not so at the moment. This is not the time to get into the dispute about the miners' wages. We nearly did that in Monday's debate on the Fuel and Electricity (Control) Bill in this House, and they did it in the other place yesterday.


And we will here to-day!


My noble friend is getting into it to-day, but I do not want to do so at the moment. I only want to make two points at this stage. First of all, I hope that the Government will remember that coal is nationalised not in order to give them a captive enemy with whom to joust for the control of wages, but because it is so important that the mines should no longer be left in private hands. That is just a thought. My second point is this. Will the Government please keep reviewing the level of foreign investment allowed to the National Coal Board? Is it not perhaps strange that in the new Europe, with free capital movement, there should still be restrictions on investment in this capital industry, which is the largest coal industry in Europe and is now demonstrably the industry of the future?

Lastly, my Lords, to relate all these problems we really do need a National Energy Commission. In the debate in February I was among those who argued for a body with powers. On reflection, I have changed my view about that. I think it would be best to leave the powers where they are, with the Secretary of State, or, as my right honourable friend the Leader of the Opposition said recently, perhaps with a separate Minister of Fuel; but to leave them with the Cabinet. In my view this is right. I think the Commission should have four functions: first, to collect information and to diffuse it; secondly, to co-ordinate existing research and to commission more; thirdly, to carry out cost comparisons within and between the various energy producing sectors, using a wide spectrum of assumptions and interpretations, both those which are enjoined by present law and custom and those which would require statutory and administrative changes; and fourthly, to put to the Government, Parliament and the public from time to time a spectrum of alternative energy policies for discussion, and the adoption of one of them.

Naturally, a corresponding organ of the European Community should be created just as soon as possible thereafter, or perhaps even before. Why wait? If such a thing had been in existence now we might have been spared the absurdity of seeing our brave new Europe saddled with two separation industries instead of the single one we need if we are to cut the painter of dependence on America, with the Anglo-German-Dutch Urenco and the French national Eurodif. Beyond that, we shall have to look to a worldwide agency. There is nothing dreamy about this. We already have a world atomic energy agency, and it might be wiser in time perhaps to drop the word "atomic" from the title.

In the meantime, my Lords, I commend to the Government and to all interested parties the document, Energy for the Future, produced a few weeks ago by the Institute of Fuel. It suggests sensible, forthright and equitable solutions to most of our present problems—and if I have not already spoken for too long I should have taken pleasure in making another speech about it. My Lords, I beg to move for Papers.

4.31 p.m.


My Lords, the noble Lord, Lord Kennet, has raised a number of interesting and thoughtful suggestions as to how we might cope with the energy crisis, and I particularly liked what he said about the change in his thinking concerning an Energy Commission. I shall return to that later, if I may, but I should now like to deal with one or two other points. The noble Lord, Lord Kennet, said that if energy resources run out this would be on a very long time-scale, and I think we should disabuse the public of the idea that energy resources are ever going to run out. What we are going to face is the problem of ever-increasing costs, as supplies I become ever more difficult to obtain. This can be seen in the case of oil, where we have already thoroughly exploited those deposits which are most geologically accessible. We are now moving into the waters of the Continental Shelf at depths of up to 100 metres in the North Sea, and companies are speaking of exploring the Continental Slope, going right down to the bed of the ocean. They are telling us that technologies will be available to do this in a few years' time, but at a much enhanced cost. We shall have to pay something in the order of magnitude of 10 dollars a barrel, as compared with the maximum price being charged by the Arab countries at the moment of just over 5 dollars a barrel. So if the increased price doubles again we might be in a position to start talking about the deep sea resources. We should not run out: we should continue to increase the price as those supplies approach exhaustion, and people begin to use less.

I am very glad that the noble Lord, Lord Kennet, mentioned the connection between the population and energy resources, because this is fundamental to the whole discussion. There are people in the Conservation Society, of which I have the honour to be President, who say that the growth in population is less important in considering the pressure on resources than the growth in the standard of living, particularly of peoples in the Western countries. I think that one should look at both aspects. Obviously, if you have double the number of people enjoying the same standard of living they will consume twice the amount of energy and twice the amount of materials upon which energy depends. So if one is talking about the very long time-scale referred to by the noble Lord at one point in his speech, the population question is vital, and I hope that the current energy crisis will have had an impact on the thinking of the Government in respect of the Report of the Ross Panel.

The noble Lord mentioned nuclear fusion. He quite rightly said that the Atomic Energy Authority are talking about the possibility—and I think it is only a possibility—of this becoming a practical technology some time towards the end of the first quarter of the 21st century. What they in fact say in their current annual report is that although some of the problems relating to the physics of nuclear fusion are not yet understood, when they are there will have to be an extremely large and expensive programme of engineering development, which might possibly lead to a prototype reactor by the end of the century. I think they are being optimistic in saying that commercial versions might be available in 10, 20 or 30 years, because presumably, as with all other major developments of this kind, the prototype would need to be in operation for a considerable number of years before embarking on a commercial programme. However, it emphasises that the timetable for bringing in new energy sources, together with the other ones which the noble Lord mentioned—solar and geo-thermal—is much too long to help us in the present situation, or indeed over perhaps the next 25 or 30 years.

It is interesting to report that even as recently as September 18, Sir Eric Drake, Chairman of British Petroleum, was saying at a national conference on world energy supplies that the words "energy crisis" ought to be banned from the vocabulary of those involved in the resolution of our present energy problems. The Prime Minister was no wiser on this because he said in reply to a letter which I wrote to him—and this was three weeks before the conflict broke out in the Middle East—in which I drew attention to the dangers and the risks of the Arabs embarking on military adventures against Israel, and also of their use of the oil weapon: I am not as pessimistic about our future oil supplies as you appear to be. Well, my Lords, the crisis is here and it is going to be with us for a long time—in fact I believe until the West adjusts its whole way of life to use far less energy and to reach an equilibrium at far lower levels of consumption than anybody has yet anticipated. As Peter Paterson, the former United States Secretary of Commerce, put it so graphically: We've had a happy era of low costs, low risks and high benefits. But Popeye is running out of cheap spinach. Since the end of the last War, people have been encouraged to believe by politicians, economists, newspapers and in fact all those who influence public opinion, that economic growth will continue virtually ad infinitum and that all kinds of growth are good, but that growth of material consumption is especially good, and that we have to aim at an ever-increasing amount of real disposable income in the hands of individuals. It has been assumed also that the raw materials and energy necessary to sustain these growing levels of consumption will continue to be available at roughly constant prices. The realities of the energy situation call into question the whole of this philosophy, and demands that we should give consideration to an economic policy based on a constant input of primary raw materials and energy. That does not mean to say that nothing is going to change, but that in future products would have to be designed on the basis of greater durability and lower cost in use; that maximum effort should be devoted to the re-cycling of materials (particularly those with a high energy content); that consumers should not be insulated from increases in the market price of energy—and I shall come hack to that point later—and that fiscal policies should be aimed at the encouragement of economy in energy use.

I am not going to argue in detail the case for believing that we have a permanent rather than a temporary change in the situation caused by the Middle East War. I think that all that conflict has done has been to accelerate the process already taking place, albeit very gradually. At the beginning of October the OPEC countries raised their prices by an average of 70 per cent., and it would be a naive observer indeed who thought, once the Middle East conflict was resolved and peace restored, that the price increases which have been made would then be rescinded or that production cuts would be restored to the level required to satisfy growing demand. Without increasing their production at all between 1973 and 1974 the revenue of the host Governments in the Middle East will increase from 10 billion dollars in 1973 to 15 billion dollars in 1974. There is no economic reason for the Arab countries to go on increasing their output to match the potential demand of the West when they can get a 50 per cent. "hike" in their income from one year to another, while retaining production at constant levels. In fact, one could see this coming. Let me give your Lordships some earlier figures. In the autumn, 1970, the Libyan Government's take on a barrel of oil was 1.10 dollars: that has increased by October 1, this year, to 2.83 dollars. As it turned out, it would have been more profitable for the Libyans to have left that oil in the ground for the whole of those three years. Indeed, the Sheikhs have discovered, like Mr. Harry Hyams, that unused assets can appreciate faster in value than the revenue which would have been derived from them had they been brought into use—the difference being, of course, that Centre Point is still there intact after 13 years, whereas the Arabs are concerned with a wasting asset.

The total recoverable reserves in the world are pretty well known, and geologists tell us that it is very unlikely that the estimates will be amended very much in future. Mr. H. R. Warman, of B.P., has quoted a figure of 172 billion tons of crude oil available ultimately, of which 37 billion tons have already been used over the last 100 years, so we have 135 billion tons of crude oil to play with and we are using it up at the rate of just over 2½ billion tons per annum. He deduces from these figures (I will not give the whole of his reasoning, because it is rather long, but it is extremely well presented in the Financial Times conference, which I warmly recommend noble Lords to read) that projected increases in the Free World demand could not be met after 1978, and that production of conventional oil—


My Lords, would the noble Lord give way? I fear that these estimates are made by people who have a very great interest in minimising the reserves. In fact we know that the estimates of the oil companies were usually one-tenth of the real out-turn in the end. For instance, we know that this happened in the case of the West Pennsylvanian oil field in the last century; it happened in the Texas oil field, and it is happening now in the oil fields under the sea, where the noble Lord, Lord Drumalbyn, who began by quoting 25 million, being very moderate, is now up to 70 million—and no doubt by prodding he will come to 200 million.


My Lords, I think, the noble Lord is perfectly correct. There has in the past been a substantial degree of underestimation. But the examples he quotes prove the point that this has generally been applicable to the United States producers, and the under-estimation has not been nearly so significant in countries outside the United States. I believe there were very good reasons why there could have been a more substantial degree of under-estimation in the United States than elsewhere in the world. But if we take the North Sea (though I do not want to be diverted on to that), I agree with the noble Lord that estimates have continued to increase—


In Arabia, too.


I am quite prepared to believe that by 1985 we shall be producing something like 250 million tons a year from the North Sea, a figure which has been quoted by my friend Professor Peter O'Dell, who is known to the noble Lord as a considerable expert on these matters. That figure is a great deal higher than anything the Government have given us so far.

But even if we could produce 250 million tons a year from the North Sea, that of course includes the Norwegian sector, and it is by no means a foregone conclusion that the Norwegians will bring all their oil ashore in the United Kingdom. They are thinking very carefully about means of bridging the trough so that they can lay pipelines to the Norwegian mainland; and I think the noble Lord, Lord Balogh, will agree that even if they do land it all in this country we have not a pre-emptive right to that oil. It would be perfectly possible for them to export it to other countries. But supposing we could use all of it (and I am sorry for this rather long diversion into which the noble Lord has tempted me), then it might possibly cover the whole consumption of the United Kingdom in the year. But if we are continuing to increase our demand for energy by 5 per cent. per annum, and we have reached the peak of North Sea production, then the trauma of the changeover to other forms of energy and of reducing our consumption according to the decline in production of North Sea oil, will be much more difficult to cope with. I am sorry that the noble Lord diverted me into a long digression on oil, but I wanted to demonstrate to the House that what we are looking at now, partly as a result of the Middle East war, would have happened sooner or later anyway and within the space of a very few years. So people turn to the alternatives. They say, "Let us imagine how we could replace the shortfall of oil from the Middle East or elsewhere by other means of energy production". And the one constantly quoted, of course, is nuclear.

My Lords, I have done some arithmetic on this. I have calculated that if energy demands were to continue increasing by 5 per cent. per annum, and nuclear energy had to meet the whole increase from 1985 onwards, there would have to be a world programme to construct 300,000 megawatts of nuclear power in one year and the cost of that capacity would exceed 150 billion dollars—figures which are so astronomical that I do not think anyone could seriously entertain them. Apart from the enormous sum of money involved, there is the question of the economic and technical capability of industry, which is certainly not up to meeting a programme of that size. Nor, incidentally, does it take into account the investment that would be required upstream in mining processing and enrichment; and it ignores the frightening risk of dependence on nuclear technology to which the noble Lord, Lord Kennet, referred.


My Lords, would my noble friend give way? Could we not put that in ordinary language: that there is no hope of nuclear energy generation matching the conventional ways of generation before the end of the century or the beginning of next?


My Lords, I entirely agree with the noble Lord, Lord Blyton. There is no hope whatever of nuclear energy taking over the whole of the increase in the sort of levels of consumption that have been projected so far.

The noble Lord, Lord Kennet, mentioned that the Secretary of State for Trade and Industry is in the process of taking a decision on the next generation of reactors to be installed in the United Kingdom, and there are strong reasons for believing that he is being pressed by the C.E.G.B. and the Electricity Council into embarking on a programme of light water reactors. On this aspect I should like to make four points which I hope the noble Lord who is to reply will consider. First of all, their record of construction time is no better than ours. In Nuclear Engineering International for September, 1973, lead times are given as 8 to 10 years in the United States, as compared with the same period for A.G.Rs now being installed in the United Kingdom.

The noble Lord, Lord Kennet, mentioned also the case of San Onofre, the light water reactor in the neighbourhood of the President's Western White House, where, although the plant had broken down and was out of operation completely, the President three weeks later quoted this as an example of how splendid the light water reactor programme was. The currently operating plants in the United States are not reaching even their target figure of 75 per cent, utilisation—a figure which has already been well exceeded by the Magnox stations that have been in service in this country for some time. I think there is something in what the noble Lord, Lord Kennet, said: that one of the alternatives we should consider is the building of more Magnox stations. At least it has been shown that they are safe and reliable. The difficulties we have had with them have now been identified and if we were to build further Magnox stations we should not make the mistake of using mild steel components in a high temperature CO2 environment, which is the reason why their output at present is reduced. There are unresolved doubts, as the noble Lord, Lord Kennet, said, about the safety of light water reactors, and these have been given a hearing at the A.E.C. Bethesda meetings. Transcripts of those proceedings are unobtainable in the United Kingdom—I have actually tried to obtain them. I do not believe that the C.E.G.B. observers who went to the United States earlier this year went into the safety considerations thoroughly enough; and certainly they did not visit the A.E.C.'s Idaho safety facility when they were there.

The fourth point I want to put to the noble Lord is very serious. It follows on what the noble Lord, Lord Kennet, said about had science and bad decisions thriving on secrecy. The decision that the Secretary of State for Trade and Industry is about to take at the end of January or the beginning of February is going to be based on confidential advice given to him by the Nuclear Power Advisory Board. I want to ask whether there is any conceivable reason why that advice should not be published, in the same way as when the C.E.G.B. first made the decision to go for the A.G.R. programme there were comprehensive figures made available to the House—I still have a copy of them at home—showing why they chose A.G.R. in preference to the alternatives that were then available. So we went a step backwards when we changed to a so-called "open Government" which is now refusing to give us the background information on which we can judge whether the decision taken by the Secretary of State is a reasonable one or not.

Some people say, "Let us think about coal as a potential replacement." They forget that it takes ten years to bring a new coalfield into operation. If they talk to the National Coal Board and the Electricity Council they will find that the rich seam which has now been discovered in Yorkshire will probably be just about sufficient to counterbalance the pits that will go out of operation during the same period. We shall be extremely luck if we can maintain the output of coal over the next ten years at the level of something like 130 million tons a year. Certainly we should explore with the National Coal Board whether there is any possible means of increasing the output by fresh exploration, subsidised, if necessary, by the Government so as to lessen our dependence on oil.


My Lords, could the noble Lord tell me where he is going to get the miners from to produce the coal from the new coalfields?


My Lords, I certainly could not tell the noble Lord from where we are going to get the miners under the present conditions. I think we ought carefully to consider whether the maintenance of this country's energy supplies is more or less important than the preservation of the Government's face over Phase 3. In my personal opinion, of the two problems we now face the energy situation is much more serious. The noble Lord, Lord Windlesham, shakes his head; I was about to give a reason for my assertion. If you do not have the energy, whether it be in the form of oil, coal, gas or electricity, then millions of people are not going to be able to work on production, and we might have, as I have said, a million people out of work by the end of the winter. Then Phase 3 will be of no use to the Government or the people of this country, because there will be a real decline in their standard of living as a result of that shortage of energy. I would think that this was an overriding consideration, and far more important than controlling inflation, vital though that may be.


My Lords, I wonder whether the noble Lord thinks, in all honesty, that before he comes to this House and advocates an increase in coal production, and deplores the fact that our production is 100 million tons, he should tell the House what he said on behalf of the Liberal Party on July 18, 1967. Speaking as spokesman for the Liberal Party, he said: In so far as it is socially and economically practical the coal industry should be run down as fast as possible. In order that he may check the reference, it is volume 750, column 1940 of the Commons Hansard.


My Lords, I am not ashamed to admit to the House and to the country that I have changed my mind.


Then the noble Lord should say so. My Lords, I agree any man has a right to change his mind; I have changed mine on occasions, and I have often backed a loser in that way. This House is a platform. What we say here goes out to the country as a whole, and one of the reasons why the Liberal Party are prospering is because they do not tell the truth. They say one thing here and a different thing in every constituency in which their speaker speaks.


If the noble Lord is still saying the same things that he said six years ago—and I am not surprised if he answers me that he is—that, I would say, is not a very good advertisement for his acumen or flexibility of mind. If we all thought precisely the same to-day as we did in 1967 we should have made no progress since then. I am perfectly happy to admit that the situation we were looking at in 1967 was very different, and that if we had not changed our minds since then we should be culpable. I hope that the noble Lord, Lord Wigg, does not still think the same on energy policy in 1973 as he did six years ago.

We should, if it is feasible, aim at increasing the coal burning of the Central Electricity Generating Board to the 90 million tons which they have said they could achieve if it was available at the right price, and if they could be certain of delivery.

Oil shales and tar sands have also been mentioned by the noble Lord, Lord Kennet, and theoretically there are enormous quantities of these. But the recovery rate would be low, and there are formidable technical problems in getting them out, particularly as I understand that in the case of the shales large quantities of water are required to process them, and they are located unfortunately in arid regions of the United States, such as Colorado. In the case of the tar sands the biggest deposit known is in Athabasco. It has been worked out that to extract 250 million tonnes a year from Athabasco, which is about the same amount we might expect from the North Sea in 1985, would require a work force of 100,000 men to work in the inhospitable wilds of Northern Alberta. I am not at all sure that they could be persuaded to go there. It would be a slightly more difficult problem than getting miners and would require an investment of 50 billion dollars.

To sum up, my Lords, it is useless to think of making up any shortfall of crude oil by expanding the other sources of primary energy, and the only sensible policy we can adopt is strict economy in consumption. Whereas in the United States considerable thought has been given to this problem, as exemplified by the Report of the Office of Emergency Preparedness, The Potential for Energy Conservation, which contains a enormous list of things that could be done to reduce consumption in the United States, we in this country are totally unprepared. The reason for that is an organisational one: we have no body charged with the responsibility of looking at the energy scene as a whole and then coming up with recommendations on the lines of the U.S. study to which I have referred. I suggest that we begin to look at the idea of setting up an Energy Commission, along the lines of Lord Kennet's proposal. The idea of such a Commission was in fact put forward by my noble friend Lord Tanlaw in the debate to which the noble Lord, Lord Kennet referred. I suggest that it should be a Royal Commission; and I do so for several reasons. One is the it would be set up immediately by Royal Warrant, and I believe that the matter is of such urgency that we cannot wait for legislation. Secondly, there are precedents for a Royal Commission operating on a semipermanent basis, but if it were thought desirable, then a statutory body could replace it later on.

I know that Royal Commissions have been said to be a device for taking minutes and wasting years, but if in the terms of reference there were a requirement that the Royal Commission should report at regular intervals, then I think that point could be taken care of. Such a Commission would certainly have, as the noble Lord, Lord Kennet, suggested, adequate professional staff and it would have powers to instigate research by industry, Government research establishments and universities. And the Commission should be, I suggest, independent of any of the fuel industries and of any Government Department, so that its advice would not be parti pris, as is much of the advice given to the Government at the moment by the fuel industries themselves.

Lastly, I would suggest that, if agreement could be reached between the Parties, regular debates on the Reports of the Royal Commission on energy could be fitted into the Parliamentary timetable in much the same way as the Defence Estimates and the Agricultural Price Review are at the moment. I make it clear that in suggesting the formula of a Royal Commission I am thinking of a body that will be purely advisory, rather than one having any executive responsibilities; and in this I am at one with the noble Lord, Lord Kennet. I will not go into the suggestions as to how the Commission's terms of reference ought to be drafted, because I have already spoken for long enough; but I hope the House will accept the suggestion which the noble Lord, Lord Kennet, and my noble friend Lord Tanlaw have put forward. There seems to be growing support for the idea. If we do nothing else but send out a message from this House that we need a national body to give urgent consideration, not only to the situation we face now but to the long-term difficulties which will persist until the end of the century, then this debate will have been extremely useful.

4.1 p.m.


My Lords, in recent weeks your Lordships have devoted a considerable amount of time on several occasions to issues in the field of energy, and in the present circumstances that is understandable and absolutely right. We should be grateful to the noble Lord, Lord Kennet, for bringing the subject before us to-day crystallised in such succinct wording: his Motion really covers the whole of our problems in a few words. It opens up issues which must be uppermost in the minds of many of us—questions such as: How bad is this winter going to be? What are the implications for the future? Above all, what ought the Government to be doing about the present about the medium-term and about the long-term problems, and what indeed can be done?—which is something we must always bear in mind.

The two noble Lords who have spoken so thought-provokingly and interestingly so far will forgive me, I hope, if I propose not to deal in detail with the points they have raised, which I know my noble friend Lord Drumalbyn will be doing later in the debate. They have both concentrated, absolutely rightly, on the long-term problems rather than the immediate situation. At the same time, before I come to that your Lordships would probably like me to give an account up to date of our immediate energy position and of the Government's thinking and proposals on the situation we face at the present time. Just to recall what has happened already, it was on October 26 that my right honourable friend the Secretary of State for Trade and Industry announced controls on oil exports. On November 14 orders were made under the Emergency Regulations curbing electricity demand by restricting space heating in certain premises and prohibiting display and advertising lighting. On November 19 he announced measures of oil allocation to secure a 10 per cent. reduction on last year's consumption; and other similar measures were taken.

In general, oil stocks are holding up and deliveries of crude oil to the United Kingdom in November were equal to the deliveries expected before the crisis. But as the House knows my right honourable friend had yesterday to announce the diversion of additional supplies of fuel oil to the power stations. This was made necessary by the short-fall of coal production as a result of events in the mines. This decision will of course provide greater insurance for electricity supply. But it must cause concern for fuel oil stocks in the future, and demand even greater economy in the use of electricity.

The Government have decided on a series of further economy measures. There will be new restrictions on the level of heating in all commercial premises and offices by any fuel. An Order regulating temperatures will be laid. The existing restrictions on space heating by electricity in commercial premises and offices will continue. Lighting in shops and commercial premises will also be controlled. Further savings will be achieved by switching off a proportion of light on all highways and streets, except where reduced lighting could lead to an unacceptable risk of increased accidents. Substantial savings have been made in the use of oil for shipping and aviation. My right honourable friend the Minister for Aerospace and Shipping will be making a Statement later this week on specific measures for aviation, including private flying.

Except when a lower limit already applies, a 50 m.p.h. speed limit will be imposed by Order on all roads including motorways. Various Government Departments will be approaching distributors to ensure the greatest economy in the use of petrol for commercial deliveries. In some areas, garages have been running out of petrol or restricting purchases. This is because some motorists have not made the economies appealed for to match the reductions in deliveries. Indeed, some motorists have increased demand for topping up at every available opportunity. Again, my right honourable friend asked everyone once more to make a special effort to economise and, in particular, not to add to the present difficulties by selfishly trying to keep tanks full to the last drop. This appeal must be heeded to enable garages to look after the needs of essential customers such as doctors, disabled drivers, and those involved in social work. The Government will continue to watch the situation extremely closely. They will take whatever further steps may be needed.

Useful savings can be made by those involved in regular deliveries of goods by reducing the frequency of their deliveries, and Government Departments concerned with distributors will be approaching them to discuss what economies can be achieved. With the present levels of our stocks of motor spirit together with the cut that has taken place of 10 per cent. on last year's consumption figures, there is no need at the present time for rationing to be introduced. In most parts of the country there have been no serious difficulties in the period since the cuts were introduced. And with a combination of both the compulsory and voluntary efforts that are made a reduction of supplies to the present levels should cause no serious problems.

The South-East of the country, in particular, as your Lordships are probably aware, has created a problem. Two fac- tors emerge. Adequate supplies of petrol are available, if people will make limited cuts in their motoring and stop panic filling up of their tanks whereby people have queued for ages and then bought only one or two gallons. This has created unnecessary problems for filling stations.


My Lords, before my noble friend leaves that point, may I ask whether he is aware that some garages are now getting a delivery of two tankers a week, whereas they were getting in normal circumstances five tankers a week? This is not a reflection on the motorist; this must be a reflection on the distribution system, and it is a little unsatisfactory to say that a 10 per cent. cut is all that is necessary. In fact, garages are having a 60 per cent. cut in the supplies they receive. Might we have an assurance that this is not being done until the price of fuel goes up and the petrol distribution people will make a larger profit?


My Lords, I am grateful to the noble Lord for drawing this matter to my attention and I will certainly pass it on to my right honourable friend responsible.

The Oil Industry Emergency Committee are now operating with their own control centre. They have the task of balancing demand against available supply. I suspect it is with this body that my right honourable friend would discuss the kind of problem that has just been raised. The Committee have assured my right honourable friend that deliveries to petrol stations have been, and will continue to be, maintained to 90 per cent. of last year's figures; and action is being taken to see that petrol stations spread their opening hours so that petrol is available from 7 a.m. to 8 p.m.


My Lords, I do not want to interrupt, but this is really the point that is at issue and I think this is what the House wants an assurance about—that is, what actual deliveries are taking place?—because some garages are saying that they are being so under-supplied that the problem is not created by them but by lack of petrol.


My Lords, in the light of what both noble Lords have said about individual cases, I will ensure that this point is brought to the attention of the Committee who have given this assurance about the 90 per cent. overall.


My Lords, would the noble Lord give way again for one moment? Would he make an appeal to the Members of your Lordships' House who come here in large cars, and particularly those Members of your Lordships' House, one of whom is present, who caused me to get only 50p worth of petrol? The garage proprietor told me that that particular noble Lord had stowed 200 gallons away in cans and was then reverting to a small car.


My Lords, I should think that allegations of that kind should be brought to the attention of the proper quarter. All I would say is that I am sure your Lordships are very well aware of the need to set a good example in economy in the use of petrol.

My Lords, if motorists will show moderation, the discomfort of queues and the difficulties of obtaining petrol should be greatly reduced. These problems are nothing compared to the personal difficulties which will arise if rationing has to be introduced. Our reserve position does nothing to suggest that the Government should now take action to ration petrol. It is vital that all concerned should continue to exercise the maximum economy in the use of all our energy resources.

So much for the immediate situation. I should like now just to look at the situation in a wider perspective. Two months ago there was very little reason to expect that we should this winter face the troubles which we are now facing. Compared with the start of previous winters the country was well placed; our stocks of coal and oil were high, coal production was beginning to level out after years of decline, the electricity supply industry was ready to meet the country's needs during the winter. On the more general level the policies of successive Governments and the decisions of consumers over the years had given us a fairly balanced four-fuel economy, with petroleum supplying just under half our needs, coal a little over a third, natural gas just over a tenth, and nuclear and hydro-electricity the remainder. In contrast with, say, 20 years before, when coal supplied nearly 90 per cent. of our energy needs, this represented a fair measure of diversification and, therefore, of security.

Against this background, I do not think our present situation was to be expected, nor do I think it could reasonably have been avoided. It is essentially the product not of one factor but of a series of adverse factors: the war in the Middle East and the decision of Middle East producers to use oil as a weapon in their political struggles; the simultaneous decision of the miners to ban overtime and challenge our Phase 3 policy—and I totally differ from the noble Lord, Lord Avebury, as to the relative importance of these matters; we consider that the Phase 3 policy is vital—and also the industrial action by the electricity power engineers. Any of these factors on its own would have proved difficult. Taken together their cumulative effect is extremely serious.

Even if one is wise after the event, if one looks back over the events leading up to our present situation it is hard to see what policies could have been followed (short of giving in to the pressures upon us) to protect us more against the difficulties we now face. The alternative to diversity is concentration. But suppose earlier Governments had concentrated much more on a particular fuel, should we be better off? If the chosen fuel had been coal, the oil difficulty would now be less but the effects of the miners' overtime ban would be worse. If we had decided on a large crash programme of nuclear power then, with the difficulties that we know and of which we have heard we should still have problems, so we should not necessarily be better off. We should of course have been considerably exposed on whatever was the chosen fuel.


My Lords, will the Minister give way? Is he suggesting that after years of propaganda by the miners to the effect that too much was being put in the "oil basket" the Government are justifying their decisions now that we are being blackmailed and our foreign policy is being dictated by the oil sheikhs?


My Lords, that was not what I was suggesting. I believe that the flexibility and security which have been sought through diversity—and this has not been the policy of only one Government—have been the right objectives. That diversity does not and cannot insure against the consequences of several things happening at once. For the same kind of reason, any policy for the future must necessarily leave the country with some degree of vulnerability to pressures of one kind or another. We cannot legislate or plan this fact of life away. What we can and must do is to find our way wisely through the present difficulties, guard against the risks of repetition for the future, and make sure that if difficulties do arise again we shall be able to do everything possible to minimise their impact on our way of life.

I have already dealt with the first half of this task, namely, our present difficulties. I should now like to turn to the future and to begin by considering what our objectives should be. I think the long-term objective of the Government could be stated specifically as follows: to make the best use of the United Kingdom's indigenous resources and, where imports are needed, to do everything possible to ensure that they are obtained on satisfactory terms as to both price and security. Clearly there is a lot to be explained in that, but before I go on to elaborate it—


My Lords, will the noble Lord allow me to intervene? He has given a definition of the Government's policy which is concerned entirely with supply. Is he saying that the Government's policy still completely ignores the factor of demand and that this need not be taken into account in the long-term future?


No, my Lords, of course the pattern of demand must and will be taken into account. But may I stress some of the key factors which have to be taken into account in formulating future plans? The most important element is the sheer uncertainty within which we are working. As some of your Lordships have already pointed out, the timescales involved are very long. We could not reasonably be expected to know, two months ago, how things would go: how can we hope to know now what the situation will be 20 years hence? I am not arguing that we should not make forecasts or economic analyses or undertake technological research—far from it; these are essential—but I am pointing out that we must be prepared for the unknown. Before the present difficulties arose we were indeed prepared for some contingency of the kind by our policy of diversification, our stock-building and our contingency planning; and just in the same way our decisions for the future must allow us to cope with whatever turns up.

Above all, as has often been pointed out, we must be prepared for the fact that having made our best predictions we shall very likely be proved wrong. That is the lesson of the past. It is not particularly pessimistic and it does not mean, "Do nothing". But it does, I believe, rule out of court the proposals of those who would like us to make nice, neat plans for energy supplies, with fixed targets years ahead and a precise description of how we are going to get there. We probably all long for something of the kind, but in realistic terms it is "not on", as I am sure any of your Lordships know who have experience of planning investment in industry and the great difficulties of forecasting the needs in the long term ahead.


My Lords, will the noble Lord forgive me? In case he is implying that suggestions of this kind in regard to forecasting and predictions have come from these Benches, may I say that that is not true. All we have asked for is that the Government shall consider the establishment of an Energy Commission, and we still ask the Government seriously to consider that and to give us an indication in the course of this debate.


My Lords, I fully accept what the noble Lord has said and I shall come to that point a little later on. There are those who have been representing that we can deal with this matter by nice fixed plans ahead, but I am not suggesting that it was noble Lords on that Bench.

What, however, is feasible is that we should build as much flexibility as possible into our policy making: flexibility as to the fuels we use and their sources, flexibility as to how we deploy them once we acquire them, flexibility in our decisions and their timing. Policy making in the field of energy must be a continuous, rolling programme which never finishes. There is no point in cutting off options needlessly. The development of our own indigenous resources is central to the Government's policy. Long before the present difficulties we had taken great steps to achieve it. In the United Kingdom we are very used to comparing our position with that of other industrial countries and in many fields, and coming to the conclusion that we are worse off than the rest. Whatever the truth of that may be in other things, our position on energy resources certainly does not justify such a comparison. On the contrary, we are considerably better off than most other industrialised countries.

North Sea oil is probably the most dramatic example of that. I ask your Lordships to remember that it is only two years ago that we knew we had oil in commercial quantities and—who knows?—we may still not know the full extent of our good fortune. But the Government are determined to make the most of this very valuable asset. We may regret that the discoveries were not made a few years earlier so that oil was flowing now; nevertheless, the benefits in creating jobs, in saving foreign exchange, in orders for our industry, in revenue to the Exchequer, will be very great.

Secondly, we should not overlook or underestimate the very great technological feat which bringing this oil ashore represents. We sometimes hear North Sea oil being discussed as though all that was needed was to go out to sea with a bucket and haul it up. It is not a bit like that. Getting oil from water of this depth, in these weather conditions, has never been achieved before. I should like to pay tribute to what is being done, not least by those working on rigs 100 miles and more out in the North Sea in Force 10 gales such as we have been experiencing in the last few weeks. This is a vast technological problem, and it is straining our resources to the full, but we are determined that any removable obstacles to the speedy arrival of the oil ashore will be removed. We have asked the companies to let us know of every impediment to the speedy arrival of the oil so that we may do what we can to help them.

There is also North Sea gas. The House knows well what has happened in the short space of 10 years. The reserves are substantial, particularly if we take into acount the British Gas Corporation's agreement to buy gas from the Friggfield. So far as the Norwegian part is concerned, this is still subject to the consent of the Norwegian Parliament. Still further finds of gas may be made there, either as a result of the exploration for oil in the North Sea or in the Celtic Sea where exploration has just begun.

May I now refer to the coal industry. I am sure noble Lords will agree that the Government can take considerable credit for what has been achieved as a result of the Coal Industry Act. We have arrested the run-down of the industry; we have made provision for financial reconstruction, for the write-off of past debt, and for grants which are large by any standard. We are now discussing with the National Coal Board the possibilities of obtaining extra output in the light of their exploration programme.


I am obliged to the noble Lord for allowing me to interrupt. In view of the statement he has just made, in which he said the Government were obviating the run-down of the industry, how does the noble Lord square that with the fact that, week by week, manpower has considerably been reduced?


Of course there are problems and difficulties. We know there are problems over manpower, but the fact remains that the industry is still recruiting effectively, even if the numbers leaving it in recent times have been greater than we would like. I think the noble Lord will be speaking later; he will then have an opportunity to develop his views, so perhaps he will allow me to finish my speech.

Finally, there is the nuclear power position, to which both previous speakers devoted their attention. This is indeed a complicated subject, on which they are both better qualified to speak than I am. This is a very complex field and I do not intend to go into it in detail. I know that later on my noble friend Lord Drumalbyn will deal with some of the specific points raised by the previous speakers. At present, I think nuclear power is providing some 3 per cent. of total energy requirements. It is of great and growing importance to our long-term position. From the mid-1980s on, it will become much more important as a source of energy. I think I will leave it at that for now.


My Lords, before my noble friend finishes what he has to say on the energy problem, could he tell us anything about hydro-electric power? After all, we are a country surrounded by water, and we have a lot of water in our country. I should have thought it would be possible to harness some of the tidal races that we get around our coasts. I am thinking particularly of the West coast of Scotland, where several tidal races come between two narrow points. There is tremendous free power in these tidal races. Could we not harness that power, and also power from similar waters?


My Lords, I am quite sure the North of Scotland Hydro-Electric Board will be looking at the possibilities for further hydro-electric schemes, although we must remember that water in Scotland can sometimes be scarce as well as plentiful. That we know only too well from last summer. Tidal power is one of the matters on which I am sure research is being done and will be done in future. But I will note my noble friend Lord Orr-Ewing's remarks and pass them on to the appropriate quarter.

I have outlined the position on the main fuels which we see meeting our energy demands in the next couple of decades. I have pointed out that in particular we are seeking to make the best use of our indigenous resources, and we are indeed fortunate in the extent of these. But I should not like noble Lords to think that this good fortune leads us into complacency. Like the rest of the world, we must always be looking to the long term. The suggestion of an Energy Commission has been made once more by both previous speakers. One noble Lord suggested that it take the form of a Royal Commission. I was interested to hear the noble Lord's change of view about the nature of such a body, and his present view as to whether it should be advisory rather than executive, a view held by the noble Lord, Lord Avebury, as well. This helps to guide us a little more as to what is in people's minds. All I will say now is that we should be interested to hear the views of others in this debate as to the function and form of such a body.

Looking ahead is always extremely difficult, but it is clear enough that the world must face a growing tightness in fossil fuels, especially oil. This must be so, even taking into account all the large "unconventional" reserves in the way of oil shales and tar sands which have already been mentioned, and in the deeper waters that are now being explored. Like the rest of the world we shall have to adapt to that situation. It is not one in which energy is running out and the world is running down—I am sure of that.

Beyond the world reserves of fossil fuels, there are, as we have been reminded this afternoon, other sources of energy such as thermal nuclear power which is already being exploited, whatever the difficulties. The fusion process, if it can be made a practical proposition, offers a virtually unlimited energy source. There are "renewable" sources, such as solar and tidal power, which have been mentioned by my noble friend behind me, and geo-thermal energy. Research is being carried on in many quarters, but we do not face an imminent crisis of the exhaustion of reserves. The world has the time and the technological resources to solve the problems of the long term future, but adapting to an energy base that does not include easily available oil is a human and political problem as well as a technological one, and will need much statesmanship. Again, this problem needs time to solve, but we can do it if we set our minds to it. The world is beginning to tackle it now as a result of the current oil difficulties and, with planning, this is something we must always keep firmly in sight.