OIL SUPPLIES TO POWER STATIONS (Hansard, 17 January 1974)

§ LORD BESWICK
My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.

§ THE SECRETARY OF STATE FOR ENERGY (LORD CARRINGTON)
My Lords, during the 1972 mining dispute 1058 oil was plentiful. Oil-fired power stations were operated to the maximum, and burnt about 10 per cent. more oil than had been planned earlier. Conditions are different now. Oil is in short supply, and the Board are making the fullest possible use of the quantities allocated to them. The Government have taken special steps to increase the supply of fuel oil to the power stations to the maximum practicable extent.

§ LORD BESWICK
My Lords, I am obliged to the noble Lord for that Answer. While accepting the fact that there are of course differences between oil supplies in 1972 and those now, may I ask him whether it is not a fact that the C.E.G.B. could burn more oil if it were made available to them; and is it not a fact that at the present time they are getting only 75 per cent. of the oil which they had in January of last year, whereas in fact they could burn 112 per cent. of what was made available to them last year? While the noble Lord may still say that that additional amount has to be found, could it not be found by reducing the amount now made available to the private motorist?

§ LORD CARRINGTON
My Lords, it is not really quite as simple as that. Because of the plan made by the C.E.G.B. for this year, because of the agreement reached about coal and the extra coal to be burnt at power stations, the C.E.G.B. had planned to use, in 1973–74, 30 per cent. less oil than in 1972–73; and so we were faced not only with a shortage of oil but also with the fact that there had been no plan to bring in oil on any basis other than a 30 per cent. lower burn in the C.E.G.B. oilfired power stations. Consequently, what we have tried to do is allocate them more oil and at the present time we have managed to supply them with 87 per cent. of the amount of oil that they burned last year. If one tried to do more it would be at the expense of somebody else, and it would really be robbing Peter to pay Paul. Although it is possible to a certain extent to alter the mix in the refineries, it does not add more than a few per cent., and one has to take account of the economies and the use to which the other products are put.

§ LORD BESWICK
My Lords, I am aware of the plans which, in a sense, the noble Lord has inherited. But does it 1059 not still remain the case that even though, as the noble Lord now tells us, the allocation has gone up from 75 to 87 per cent., the C.E.G.B. could within a day or two, if required, burn 112 per cent. of what they were burning in January of last year? Although I accept what the the noble Lord says: that the oil has to be found from somewhere, may I again put to him the question why is it not taken from the amount now allocated to the private motorist?

§ LORD CARRINGTON
My Lords, power stations do not burn petrol; they burn fuel oil: and there is a mix that comes from the refineries. The position is that there is not enough fuel oil in this country, however the capacity of the refineries is varied, to give the oil-fired power stations enough oil for them to use the capacity that they have. The Government have to make a judgment as to how far they allocate the oil available in the country between power stations and industry.

§ LORD BESWICK
My Lords, may I ask the noble Lord to accept that I know what is burned in the generating stations? Would he not also say that the C.E.G.B. could, if they were so required, so adjust their jets that they could burn lighter oil—although, of course, not high octane motor fuel? Is it not the fact that the oil companies, if so required, could produce more heavy fuel oil and less of the high octane motor fuel? If either of these two courses were adopted, could we not make more fuel oil or more burnable oil, available to the power stations, and thus make it unnecessary to have the present rate of cuts?

§ LORD CARRINGTON
My Lords, to a very small extent that is true; the mix can be altered to a small extent. But one has to take into account the general economy of the country and the general proportion of the fuel that you get from your refineries.

§ LORD DERWENT
My Lords, can my noble friend explain to the noble Lord, Lord Beswick, exactly what is petrol for private motorists? Is a car used for essential business purposes a private motor, or a business motor?

§ THE EARL OF LAUDERDALE
My Lords, is it not the case that from a given barrel of crude a massive amount of fuel 1060 oil could be obtained; and that also there is an inevitable balance of middle distillates, and that you cannot raise the one and get rid of the other at a stroke?

§ LORD CARRINGTON
My Lords, that is the point. You can adjust it up to a point, but you cannot adjust it all that much. This is a decision which the Government have to take.

§ LORD HALE
My Lords, can the noble Lord, Lord Carrington, say whether we were exporting very large quantities of crude and fuel oil in October and November, 1973, mainly because of the Esso Company's policy, and that there was a very great shortfall in deliveries by Esso to the C.E.G.B. in December, 1973? And can he say whether or not that was due to the domination over Esso policy by the American principal company?

§ LORD CARRINGTON
My Lords, that is rather outside the Question which has been asked. If I may seek to answer the noble Lord's supplementary question in very general terms, it is, as I have discovered in the last ten days, extremely difficult to get to the bottom of all oil figures. I am seeking at the present time to see the chairmen of the big oil companies of this country and to get to the bottom of what is happening.

§ LORD POPPLEWELL
My Lords, will the noble Lord, Lord Carrington, pass any comment on the observation which appears on the front page of the Daily Telegraph this morning, where it, says that members of the Electricity Council state categorically that there are sufficient supplies of raw materials to keep electricity going until the end of April? How does this compare with what his junior colleague has said—that we should brush our teeth in the dark? Is there not some need to make clear what is the true position?

§ LORD CARRINGTON
My Lords, that is going a very great deal wider than the terms of the Question on the Order Paper. If the noble Lord, Lord Popplewell, would put down a Question, I will willingly answer it.

§ LORD SHEPHERD
My Lords, is the noble Lord aware that we should contemplate going into March or April under the present difficulties? We recognise that 1061 the noble Lord has just taken over a new and heavy responsibility and that he is to have consultations with the leaders of the petroleum and oil groups in this country. Would he also look at what the Dutch are doing? As no doubt he will find, they are adjusting the refinery processes to ensure that the heavy oils are available for the generating stations, even though this is at the expense of lighter fuels, which means rationing for car owners?

§ LORD CARRINGTON
My Lords, of course I will do that. One must get one's priorities right.

§ LORD SHINWELL
My Lords, is the noble Lord aware that the C.E.G.B. have been "spoon-fed" for years on a certain category of coal? Would he make inquiries as to whether the Board could use other coal which is now available and being stocked at the pithead in various parts of the country? Would the noble Lord look into that question?

§ LORD CARRINGTON
My Lords, the noble Lord did not know about it. Now that the noble Lord, Lord Shinwell, has told me, I will look into it at once.

§ LORD BALOGH
My Lords, does the noble Lord realise that the difference between this country and America in the pattern of refinery is up to 20 per cent., and would he call 20 per cent. a very low figure?

§ LORD CARRINGTON
My Lords, would the noble Lord be kind enough to repeat that question? I am afraid I did not hear it.

§ LORD BALOGH
My Lords, I quite see that. I merely wanted to ask whether the noble Lord realises that the American pattern of refinery output and our own pattern differ by about 20 per cent.? Does the noble Lord call 20 per cent. a negligible figure?

§ LORD CARRINGTON
My Lords, it depends on what the refinery output is. I should like to look at the figures.

§ LORD SLATER
My Lords, could the noble Lord say how many of the dual-fired power stations in this country are running with a short supply of our own indigenous fuel, as against oil? Further, following the supplementary question of my noble friend Lord Shinwell, is the 1062 noble Lord satisfied with the figures that have been given to him as to the amount of coal lying on the ground at the moment waiting to be used? Can he say what is being done about it?

§ LORD CARRINGTON
My Lords, I am afraid I really could not answer the first part of that question without notice. The answer to the second part is, "Yes".

§ LORD BESWICK
My Lords, I ask the noble Lord to accept that I personally have very great faith that he will get to the bottom of these things. Might I ask him whether he is satisfied that the question of priorities was settled correctly in November of last year when the advice of the civil servants was that we should ration motor spirit and allocate additional fuel oils to the generating stations? Would he accept that the Government then made a serious misjudgment?

§ LORD CARRINGTON
My Lords, I really do not think that the noble Lord has any reason to suppose that he knows what the advice of the Civil Service was.

§ LORD DAVIES OF LEEK
My Lords, is the noble Lord aware that among the great mass of the public is a blind groping for the truth? We are grateful to the noble Lord for his statement that he will do his best to get to the bottom of these things. The public needs to be informed. May I ask the noble Lord whether he will ultimately be able to confirm that to convert an oil-burning power station to coal takes two months and, consequently, in this transition period whether to say that they are short of oil or coal is really an answer to the question?

§ LORD CARRINGTON
My Lords, I will of course look at all these things, but perhaps I might suggest to your Lordships that you should look at the Question which was asked on the Order Paper and ask yourselves—perhaps I might ask you myself with the greatest possible deference—whether or not one is not getting rather wide of the Question and entering into a debate on fuel and power.

§ LORD SHEPHERD
My Lords, may I ask the noble Lord to accept that we are now privileged to have the Minister for Energy in your Lordships' House? We are allowed only four Questions a 1063 day and no doubt other noble Lords take up other subjects. Therefore I would hope that the noble Lord will understand why, having got the Minister for Energy in this House, we do tend to go a little wider.