§ 4.5 p.m.
§ Debate continued:
§ Lord TANLAW
My Lords, I wonder whether this is the appropriate moment to attempt to pick up the threads of our energy debate started earlier this afternoon. I, for one, am extremely grateful—as I know are other noble Lords—for the opportunity to discuss this topic again in this Chamber. I had the honour of instigating a similar debate nearly five years ago and the noble Lord, Lord Wynne-Jones, and the noble Earl, Lord Lauderdale, played an active and constructive part in the debate at that time, 1316 the primary objective of which was to make warning noises about future supplies of energy to this country and to the world.
Since those days those warnings have been heeded, but only to some extent. I find it depressing to hear the noble Lord, Lord Wynne-Jones, and the noble Earl, Lord Lauderdale, having to say the same things as they did five years ago, and indeed the same things as I did, about conservation, about the role that coal has to play in our energy future, and about the need for a constructive energy policy. It seems that we have not come very far forward from the last occasion on which we discussed this very wide topic. This leads me to ask whether perhaps the time has not come for us to focus in more detail on some of the individual aspects of our energy problems. We have so much expertise in this House that it seems to be rather a waste to dissipate it in a debate with such wide horizons and such wide parameters.
For my part, I want only to look at one side of the subject of energy; namely, that of motor fuel. In the other areas which have already been touched on by the first speakers, the noble Lord and the noble Earl found themselves running up against the same problem as I do with this subject. There is an excess of information, there is an excess of forecasts and tables, all of which, to the likes of myself, sometimes appear confusing and, more often than not, conflicting. The trouble with forecasts about energy requirements for both supply and demand is that they nearly always turn out to be wrong. The figures available for this debate, which have been given in the EEC energy policy document, are no exception. In fact, so much is admitted in paragraph 28 on page 5 where it is stated, in line 2, that:Indeed the forecasts in R/2275/76 are indeed recognised by the Commission to be 'highly tentative'.The repetition of the word "indeed" seems to underline those uncertainties.
We are no better informed by the Central Electricity Board in their latest document entitled Corporate Plan (1977), where here at least the Board try to overcome these difficulties by making out two different scenarios—Energy Case I and Energy Case II—which are based on two different percentages for gross 1317 domestic product up to 1995. The first shows the GDP at 3.3 per cent. per annum, much in line with the trend for the 20-year period from 1953 to 1973. The second (Case II) allows for only minimal enonomic growth coupled with low productivity, thus electricity demand has been calculated on an average 2 per cent. per annum for GDP. This last figure, incidentally, is more in keeping with the Department of Energy's estimate of 2.2 per cent. given to the European Select Committee in January, and matches the 2 per cent. per year growth of energy demand anticipated in the United States of America by President Carter.
My Lords, you pay your money and take your choice as to whether the GDP will be nearer 2 per cent. or 3 per cent. per annum by the year 2000, but no amount of table-studying or statistical analysis of energy supply and demand can achieve very much at this stage. In my opinion, the variable nature of the inputs in such equations make output statistics virtually meaningless in percentage terms. However, we can be quite certain of two common factors; the same factors have brought about this interesting debate. They are that supplies of raw energy will be more scarce in 20 years' time, and that the price of all fuels must rise dramatically as supplies diminish or become more difficult to extract and deliver to the consumer. In this debate I want to concentrate on only one of these supplies, motor fuel, and I will try to show how, in the years after 1984, when the price of petrol and diesel grows unacceptably higher, major social and political changes could occur which may not have been allowed for by any Government so far.
However, before doing so, if noble Lords will bear with me, I want to refer to one more long-term forecast. I believe it to be relevant mainly because of where it has miscalculated. I am referring to the Unilever forecast written by Ronald Brech in 1959 and entitled Britain 1984. It is quite remarkable that the author managed to anticipate accurately and in considerable detail the material changes in all aspects of our daily life over the intervening years. It is, therefore, reasonable to suppose that his assumption is mainly correct; that is, that by 1984 Britain, unlike George 1318 Orwell's scenario, will become a prosperous place to live in and its citizens more comfortable than ever before. Indeed, the Prime Minister himself said recently that this period would be a golden age, and on the whole I am inclined to agree with him.
There is, unfortunately, just one snag which prevents me going all the way with these assumptions. It is, of course, inflation. The Unilever calculations, believe it or not, over the 25-year period were based on an inflation rate of only 1 or 2 per cent. per annum. No allowance had been made for the fall in sterling or the massive increase in fuel prices, but the predicted production and consumption figures remain still very much in line with the current statistics available today. However, the Prime Minister, who must live daily with inflation rates, can still predict a golden age. Did he, therefore, ignore inflation, or did he merely omit to mention the price of putting the gilt on the gingerbread? My Lords, prophets and seers have a special place in history, and perhaps Mr. Callaghan will be included among them.
The point I wish to make to the noble Lord the Minister this afternoon is the same as was made on the banks of the Nile in Biblical times, when Joseph interpreted the Pharaoh's dreams of the seven cows and the seven ears of corn. The Minister will recall that they represented seven years of plenty to be followed by seven years of famine, and indeed they came to pass. If I interpret aright what the two noble Lords have said so far in this debate, and what many noble Lords will no doubt emphasise later, the current statistics before us are proclaiming much the same message, which is that until 1984 there will be energy in abundance but thereafter the predictions are those of diminishing returns, particularly for motor fuels.
If this is accepted, then we must assume that, some radical rethinking will be necessary on the future life of the internal combustion engine, which is, of course, entirely dependent on refined oil products for its variety of functions. I therefore wish to look at oil and gas supplies, like Joseph, in seven-year periods—the seven fat years until 1984, followed by the seven lean years to 1991, then by seven leaner years until 1998.
1319 I think we are all agreed, regardless of whatever growth scenario we might choose for the future, that there will be a steady increase in vehicle registrations until 1984. The totals given by the AA, the Department of the Environment, the Economist, and the Unilever forecast, all indicate a figure in the region of 20 million registrations by 1984. When we consider that the basic costs of owning a motor car today, according to the most recent AA figures, total £25 per week—which, incidentally, are more than the average householder pays for his building society repayments—then by 1984 this figure may have reached £56 per week, if the current rate of inflation of 16 per cent. persists over this period.
Even if the rate of inflation is actually less than 16 per cent., it is unlikely that the cost of car ownership will fall below £50 per week by 1984. Nevertheless, by that date the motor car owner should still possess the same freedoms as he does today, and no doubt he will continue to be prepared to pay for them in much the same way. The reason I believe the private motorist to be so long-suffering is that the motor car is the only practical means of transportation left to modern man that is truly liberal; I mean that no Government have yet dared to restrict the motorist as to when, why or where he is going. I hope that will never come about, but I am afraid it will, and I think this perhaps explains the emphasis Liberals have placed recently on the increases in petrol tax; we take the motorist's freedom seriously.
However, in the seven lean years after 1984 caused by diminishing fuel supplies, the motorist may find himself increasingly restricted, not directly by Government but indirectly through the high price of fuel and fuel taxes; that is, if his car is still powered by an internal combustion engine, which would seem to be the likely assumption from current forecasts of the big motor manufacturers. Therefore, by 1991, at the end of this period, it is not unreasonable to suppose that motoring will once again become an occupation only indulged in by the super-rich, just as it was in the early 1920s. My noble friend adds, "and by Government officials". He may well be right.
I see the next seven leaner years after 1991 witnessing the end of the private 1320 motorist and consequently his freedoms. The reduced fuel supplies and their excessive cost must surely allow essential services only to use the internal combustion engine for their work. The private motorist will have little or no priority after military, agricultural and other Government uses. Travel of all kinds may be restricted, or confined to public transport which uses mainly electrical propulsion. People in rural areas will most likely be forced into conurbations where such services exist, while the motorways, I predict, will remain empty and silent.
My Lords, perhaps this situation was anticipated 2,500 years ago by Tao Te Ching, when he wrote what could prove to be the most accurate long-term economic forecast in recorded history. The translation of what he said is as follows:A small country has fewer people.Though there are machines that can work ten to a hundred times faster than man, they are not needed.The people take death seriously and do not travel far.Though they have boats and carriages, no one uses them.Though they have armour and weapons, no one displays them.Men return to the knotting of rope in place of writing.Their food is plain and good, their clothes fine but simple, their homes secure.They are happy in their ways.These words coming from the distant past may appear to noble Lords to have little or no relevance in a futuristic industrial society forecast for the next century. I have called on them today because of the strong similarities to the conclusions reached in a report prepared by a special energy task force at the request of the United States Department of Commerce, a copy of which I received just before the debate, and about which my noble friend Lord Avebury will no doubt have further points to make.
The conclusions drawn in this report are that by the year 2000 AD American domestic production of petroleum, together with imports, will not suffice to meet demand. By then some 26 million cars will have to be powered by something other than petrol. Before the turn of the century the report predicts. "potential disarray in the transport sector". It goes 1321 on to emphasise the crucial importance of the motor industry finding a non-petrol using engine that is both efficient and pollution-free by the end of the 1980s. If such an engine is not found to be ready by then, the report predicts radical changes in American transport habits with consequent major social and political upheavals. Some experts have already criticised this report as being far too conservative in its conclusions, and they suggest that the time-scale for the crisis should be shortened to the early 1990s. I am aware that in Britain, we believe that we are in many ways better placed to meet such a crisis than the United States. However, the European Economic Community as a whole is not, and the situation in the transport sector will almost certainly become seriously disrupted by 1994 if no replacement is found for the internal combustion engine.
That leads me to ask the noble Lord the following questions. I gave him, I agree, fairly short notice—albeit some notice—of the questions which I intend to ask him. What funds, if any, have been allocated for this purpose by the Government or by the motor industry as a whole? Does the noble Lord agree with the conclusions reached by myself, but, more correctly, by the United States Department of Commerce? Finally, is there any possibility that the Government are unwilling to allocate funds for a replacement of the internal combustion engine in order to accelerate the advent of a Socialist society in which people have no other choice but to use public transport?
Assuming for the moment that there is nothing sinister about the Government's apparent lack of research into a replacement for the internal combustion engine, into which area of technology should the funds—supposing that they are made available—be directed? Without any question I would suggest to the Minister—as I did previously in this House on 14th June 1972—that the answer must lie in the re-introduction of a modern external combustion engine. Since the early 1960s a few people throughout the world have been working on designs to meet the requirements for a noiseless, multi-fuel prime-mover that would be acceptably pollution-free. I have made it my business—or, to be more precise, my hobby—to keep in touch with these developments. So far as I know, I was the only foreigner 1322 to be asked to give evidence to a United States Senate Committee on Urban Transportation in the early 1970s.
The situation today is that there are approximately three prototype designs in the world that could fulfil these conditions. One is in the United States; another is in Australia, which is being strongly backed by the Government; and, finally there is a British design which could turn out to be the most promising of all. I am endeavouring to put the inventors of this engine in touch with a Government agency with a request that enough funds—approximately £50,000—be made available to build a working prototype for proper assessment. If this particular project proves to be impractical, I would hope that the search for a non-petrol using pollution-free vehicle will continue with renewed vigour by both the public and private sectors in Britain.
§ Lord IRONSIDE
My Lords, can the noble Lord, Lord Tanlaw, say whether this new engine is a brand new engine cycle or something that has been invented previously but is now being worked on again?
§ Lord TANLAW
My Lords, I thank the noble Lord, Lord Ironside, for his intervention. I did not wish to become more technical than I needed to be in this debate. Basically, it works on well-tried principles and well-proven methods of engineering. There is nothing too problematical about producing such an engine provided that it can fulfil the functions which I have roughly outlined.
It goes without saying that the first country to build such a vehicle in commercial quantities in time to meet the situation which I anticipate in the late 1980s and early 1990s must surely bring considerable benefits to the economy of that country during a period when motor-orientated industries would be in irreversible decline.
I want to conclude where I begun by warning of the dangers of reading too much into statistical forecasts. So much can be extrapolated in the energy business but no more. As a country and a Member of the EEC we should make it our business to keep as many options open as possible in order to maintain an energy programme that has the maximum inbuilt flexibility. 1323 I believe that this is the view of those whose business it is to bear the burden of responsibility for formulating an energy policy and I trust that they will not be deflected from this aim.
The main object of this, I hope, rather short intervention is to draw attention to the very great dangers that lie ahead beyond the life of one Government or two, and beyond the projections of most boardrooms, be they in the private or public sectors. A solution to the transport problem which will start 14 years from today must be found within the next five years if we are to prevent quite unnecessary political and social upheavals created by lack of foresight in the late 1970s and early 1980s.
If I were to sum up my intervention in one sentence it would be as follows. It would be a tragedy of the greatest order if George Orwell's allegorical Socialist State of 1984 became a reality 10 years later than he predicted—not as the outcome of military or ideological struggle, but simply because the free world had run out of gas!
§ 4.26 p.m.
§ Lord STRATHCONA and MOUNT ROYAL
My Lords, I cannot follow the noble Lord, Lord Tanlaw, into his visions of the Liberal tendencies of our country being protected by a "Dagenham" or "British Leyland" occupied in making exotic vehicles from Chinese instructions conveyed by knotted ropes. However, I should like to echo the warning issued by the noble Lord, Lord Wynne-Jones, in introducing this debate against Micawberism in the energy field. I must also compliment my noble friend Lord Lauderdale and indeed the noble Lord, Lord Wynne-Jones, on the work of Select Committee F, which, I am told, is presided over by its draconian chairman Lord Lauderdale. I believe that it is setting certain important precedents in the ways in which the European Parliament, its Members and this House could be related. I often wonder how it is that they digest the sheer volume of information which passes through these various committees. Well may the noble Lord, Lord Tanlaw, say that there is an excess of information in this area.
1324 Of course, energy forecasting is futurology, and it has been said many times that the only certainty about it is uncertainty. Indeed, the forecasts of exponential growth of 3 to 5 per cent. were invalidated by the oil price crisis of 1973. The first conclusion to be drawn is the overriding need to keep open all possible options. This is made more difficult, as has already been said, by the fact that the time-scale, even for a conventional power station, is of the order of seven years—although I never know quite why—whereas the demand can change in something like half that time. I do not want to suggest that keeping open options is merely a policy of drift or non-decision. Nor is it necessarily a policy of backing every horse. However, it is important to ensure that we place our bets each way without becoming irrevocably committed to one line of development, of which one can already see alarming signs.
Not only are energy forecasts subject to uncertainty. The important point is to recognise that they can be influenced or managed to a significant extent. I do not believe in the sort of fatalism which says that an improved standard of living is inevitably linked to an ever-increasing consumption of energy. Indeed, I believe that if we look a little further ahead there is some evidence to show that a course of unchecked consumption could seriously threaten living standards through increased pollution, visual intrusion, and indeed, even threats to individual liberty.
So I am sure that one of the first objectives of any energy policy, either national or international, should he to find ways of reducing consumption per head of the population without impeding the steady progress towards improved living standards. That, at its simplest, might mean concentrating on insulating and draught-proofing houses and factories, and installing more efficient rather than simply bigger and bigger energy-consuming units.
It may seem a little pretentious to talk airily about energy policy in the light of the uncertainties which I have already talked about. Any useful energy policy must have built into it a high degree of flexibility and an ability to adapt to changing circumstances, ideas and knowledge. But I believe that we need a common framework of assumption and 1325 forecasts which can be extended to defining objectives for the years ahead. Then, against this background, we can build up detailed strategies for the various component parts of the overall plan.
I suppose in industrial terms one would call this an energy budget within which detailed plans can be worked out and then performance monitored against the plan. I have no doubt that if the noble Lord, Lord Kennet, were here, at this juncture he would be advocating an Energy Commission. Of course it has many attractions, particularly in view of the multi-disciplinary and multi-Ministry nature of energy decisions which affect, and are affected by, environmental considerations, transport problems as has already been said, and security problems, as well as all the extremely highly technical issues about which scientists very properly love to dispute.
I can see that there would be great advantages in trying to focus this information and make it available for public discussion so that the public and Parliament were aware of the considerations that need to be taken into account when a Minister reaches a decision. But this would be a complicated and time-consuming task, and it would be important to guard against the danger of setting up some enormous bureaucratic edifice which might be needed to support this advisory function. This leads me to wonder whether the Department could funnel technical information into such a body, or could produce it on request from such a body, or indeed could even commission work on their behalf.
Would it, for example, be feasible to contemplate a kind of continuous running Flowers Commission, which I think is what it would really boil down to; or would this duplicate, and possibly conflict with, the activities of the chief scientist at the Ministry of Energy who, incidentally, has made noble efforts to inform the public by issuing his various reports on the choice of scenarios? I should be interested to know from the Minister when he replies, what is the Government's view of the usefulness of the small scale Oil Council in Scotland, which I think was set up by my noble friend Lord Campbell, and how they think this has worked out in practice.
1326 It is right to give credit to the Minister for his real desire to have public discussion on energy matters, provided that this does not become a substitute for leadership, guidance and decision making. A recent example of this I heard about. About a year ago the Energy Technology Support Unit, "ETSU", hosted a heat pump symposium, yet the results of this symposium have not yet been published despite the fact that there existed highly important information which would have been invaluable to those working in this field. It is a curious fact that the Minister, who, shall we say, is not exactly noted as being a passive Minister, has in fact not taken a number of major decisions which have faced him during the two years he has been in his present post. There is the choice of the thermal reactor; there is the matter of the fast breeder; there is the matter of the reprocessing, and a number of other major decisions awaiting the Minister.
§ Lord AVEBURY
My Lords, would the noble Lord give way? Is it Conservative policy that these decisions should be taken now, despite the fact that we do not need any further reactors at the moment and we do not need the reprocessing?
§ Lord STRATHCONA and MOUNT ROYAL
My Lords, I would suggest that the answer to that would in fact be taking a decision. I should also like to suggest that in three months the American Administration has shown a willingness to face unpopular decisions which possibly we have been running away from over some considerable time. The medicine that the President has proposed may yet be declined by the patient, even though it would be to the long-term benefit of his health. It is of course true to say, as the noble Lord, Lord Wynne-Jones, said, that in these terms the American patient is a great deal more sick than we are. He is much higher up the cliff of energy consumption than ever we are in this country. But it is also a fact that sooner or later, in energy terms, the industrialised world will have to face a major adjustment in its style of living, and I would suggest that it will be better made sooner and gradually rather than later and traumatically.
I used to twit the noble Lord, Lord Lovell-Davis, that the Government had not demonstrated a passionate commit- 1327 ment to energy saving, though they paid lip service to it. I often suspected that he personally agreed with me, so I am very glad to see that he is following me in this debate. But I still believe this to be the situation, although I think that the Government must be given credit for not running away from facing up to a high cost fuel environment. I still believe that a lot more could be done to encourage insulation and all other energy saving techniques by using tax credits and grants to pensioners, I have suggested this so often in debates in your Lordships' House. I would suggest that the quarter of the additional need, which the noble Lord suggested was possible here, is modest indeed.
This leads me to question the balance between the research funds allocated to nuclear research as compared with research into what are known as the alternative sources. I think that the figure is £180 million on nuclear against £1.8 million on the alternative sources; a disparity of 100 to one. The noble Earl, Lord Lauderdale, said that nuclear power had been disappointing. I think that this underlines the point. There are several skeins that run through this argument. The potential contribution of the alternative sources has, I think, consistently been underrated, and some of the problems and possibilities are not always appreciated by the high technology orientated scientists; and we shall shortly be seeing, I understand, an interesting report which puts forward this concept.
We are inclined to be mesmerised by what one might call the macro-technical approach to energy problems. In the conventional power stations, in seeking for a 1 per cent. or 2 per cent. improvement in efficiency, we are going to ever larger and larger stations, such as the much discussed Drax B power station. I shall not go into any of the other considerations, but this happens to be a name that is in our minds. These, like nuclear power stations, have to be sited, for technical and amenity reasons, well away from the area where their products are to be consumed.
This makes it difficult to use the two-thirds of the thermal content of the fuel which is rejected as waste heat. Smaller stations could be sited nearer to the point 1328 of consumption and with relatively easy use of waste heat, which could be upgraded by heat pumps if need be. The efficiencies could he doubled, at least at the peak periods of consumption in the wintertime. Furthermore, a nuclear economy is likely to be an electrical economy and the imagination boggles at the kind of intrusion into the countryside which a grid four or five times the size of the present grid would inevitably create, and by comparison I suggest that a few windmills, which are often said to be visually intrusive, on hilltops would be nothing compared with the sort of distribution grid we might need for such an electrical economy.
But there is a slightly more philosophical point, which is the scale. In this country we excel in what I might call ingenuity at the local level—and the noble Lord, Lord Wynne-Jones, went back 300 years to talk about the encouragement of ingenuity. I have many times proclaimed my belief in small business, which I think has been neglected and repressed by Governments, if I may say so, perhaps particularly by Socialist Governments; but I would not by any means absolve Conservative Governments, though I believe the light is beginning to dawn at least in my Party and possibly the same is happening in the Party opposite.
What I am suggesting is that the technology of energy saving and of power producing in smaller units near to the point of consumption fits in well with the philosophy of the small business, and in the process I believe we should have a chance to establish a useful export industry to the underdeveloped countries, which would be much more valuable in helping them with the systematic exploitation of the possibilities of removable sources like the sun, wind, tides, and tackling the problem of storing energy which is associated with them.
I must here put in a plea for a device which I have twice referred to before, the heat pump. This is not an energy source in itself but it has great possibility in making use of the alternative energy sources and a good installation can achieve the apparent miracle of producing three to five kilowatts of heat for every kilowatt of electrical input. In the past the electrical undertakings were against this because they wanted to sell the electricity, 1329 but what they failed to see was that by making electricity competitive with other forms of heating like coal, oil and gas, potentially the use of electricity could be greatly increased. And in spite of what I said earlier about the electrical economy, there have to be certain advantages in the use of electricity, which is pollution-free and, once the grid is there, it is easy to transport.
It is because I believe there is great potential in the aggregate contribution of small users that I am in no haste to see fast breeder reaction proceeded with with indecent haste. As has been said, we are fortunately placed in that we have before us the prospects of supplies of oil and coal if we proceed steadily to exploit them. However, the extraction of coal is neither cheap nor agreeable for those who do it and at least one noble Lord thinks that the social and environmental consequences are unacceptable. I do not happen to agree with him.
As regards oil, we have recently had an example of the hazards of working on the frontiers of this technology, and in this connection I have a specific question for the noble Lord, and I am glad that the noble Lord, Lord Strabolgi, is sitting beside him. I hope he will be able to set at rest the misgivings that have been created by some, what I think were probably casual, remarks by the Minister, and the noble Lord, understandably, was unable to commit himself in our debate on the Ekofisk blow-out last week.
The Minister's comment that his Department would have to look into the implications of cleaning up costs being allowable against profits before corporation tax have been interpreted in some quarters as implying that such costs might be disallowed for tax purposes. On the other hand, we have all accepted the philosophy that the polluter pays, and it may even be that more stringent precautions are required. I should have thought it was obvious that any suggestion of disallowing expenses would have precisely the opposite effect from that which we wish to convey, and furthermore the implications in terms of potential intrusion by Government and Revenue into commercial decisions that would follow from any decision of that kind would really be beyond all possibility; I hope the noble Lord will be able to 1330 reassure us. I said I did not think we should rush into the development of the fast breeder. I understand our wish to keep a toehold in the high technology, but I suggest that it should be only in partnership with our international friends, and then only on a basis which has a chance of our earning a good commercial return.
I started by questioning the fatalistic assumption that rising standards of living inevitably compel us to plan for a continuous exponential growth in energy demand. I have said that resolute and far-sighted decisions could have a significant influence in controlling such growth and I have mentioned one or two examples of the ways in which I believe this could be tackled, and I am sure noble Lords will have other ideas. It seems to me that our energy prospects are the one bright spot in an otherwise rather gloomy prospect facing this country. I think we can afford to be magnanimous with our friends in the energy field and I seriously hope that we will use the 20 or 30 years of breathing space which nature has vouchsafed to us to give full rein to the national ingenuity which I think will benefit not only us but all mankind in general.
§ 4.48 p.m.
§ Lord LOVELL-DAVIS
My Lords, I should like to apologise in advance to my noble friend the Leader of the House and to your Lordships for the fact that a speaking engagement made two months ago will prevent me from being present at the end of the debate. I shall read my noble friend's summing-up and other noble Lords' contributions in the Official Report with great interest. My Lords, at a time of change and rapid progress on our domestic energy scene—when it has become possible that we may be self-sufficient in oil in 1979, ahead of schedule, and last year the economic benefits from oil and gas were worth about £3 billion to our balance of payments—it may be hard to accept that one thing has not changed and that no one should be deluded into thinking that we can afford to ease up on the need to conserve energy. That is what I propose to talk about this afternoon, as the noble Lord, Lord Strathcona and Mount Royal, anticipated.
The facts are these. The slight recovery from the recession last year led to a bigger 1331 jump in energy consumption in Europe than elsewhere; a rise in energy demand bigger than the rise in gross domestic product. President Carter has stated that in the United States demand for oil is rising to the point where, within five years, it will begin to outstrip supply. Even Sheikh Yamani has bluntly warned that if current consumption trends are not checked, Saudi Arabia and other producers will not meet all American demands beyond 1982; and as my noble friend Lord Wynne-Jones emphasised, Britain has only a limited time of energy self-sufficiency before we shall again need to import oil. It has been estimated that by the year 2000 natural gas production in the major consuming countries will probably decline to about two-thirds of the 1972 level.
What are we to do? One solution proposed is to turn to alternative sources of energy such as the sun, the tides, the wind. It is important that we should press ahead with research in this field, but it is unattractive economically and, in global terms, it is unlikely to have a significant effect this century.
One fuel we have in abundance in Britain, although it too will eventually run out, is coal. Economically recoverable reserves have recently been put at the equivalent of 3,000 billion barrels of oil, and potential reserves at possibly four times this figure. The sums have changed and coal now figures much more significantly in the equation. It is clear that we must develop and make greater use of it. Previous speakers, including my noble friend Lord Wynne-Jones and the noble Earl, Lord Lauderdale, have emphasised this and I have no doubt that my noble friend Lord Taylor of Mansfield will have something to say on this subject from his great experience of the industry. The inescapable conclusion, however, is that to meet our future demands nuclear energy is needed in a big way.
But, whatever we do so far as coal and nuclear energy are concerned, we are coming to the point where decisions have to be made quickly because of the long lead times and we are heading for the energy gap possibly much more rapidly than is generally assumed. Nations are not only running out of oil and gas but, 1332 whatever happens, everyone agrees that they are also running out of time in which to cater for future energy needs.
We can gain time only by turning to the alternative of conserving the fuels that we have. I have become distressingly aware, in travelling about this country, that we do not seem to be getting this message across. One of the reasons, of course, is that, after an excellent start in 1975, we let the drive go out of our energy conservation programme. At the beginning of 1976, I tried to obtain an estimate of the amount that had been saved by the campaign on which, by then, £5.l million had been spent, and managed to winkle out a tentative figure of £150 million. I thought that 3,000 per cent. was a fair return on the investment and a help to our balance of payments, but now I see that a Department of Energy report indicates that we may have saved far more in 1975, perhaps even as much as £600 million. Not all of this was the result of the "Save It" campaign; there were other factors such as price increases, but the point is that then there was a massive drive to conserve energy. It was not kept up during 1976 and only this month has there been a positive commitment by the Government to the continuation and development of the "Save It" campaign over the next three years. £1.93 million has been allocated for the current financial year, which is an indication that the Treasury, who originally cut off the appropriation, have been made to see the sense of expenditure that leads to great savings and is important evidence of the higher priority in energy policy given to conservation since the London Summit agreement.
It is more than a pity that we lost the world lead we had in energy conservation, but we now have the chance to take it seriously and be seen to take it seriously again. Incidentally, it is disappointing to see that, the noble Lord, Lord Tanlaw, notwithstanding, our Liberal comrades, as usual through inadvertence, seem to have come out against energy conservation. By opposing the projected increase in the tax on petrol they may have helped their rural voters, but they have not helped the cause of energy conservation.
In my view, we must as a matter of urgency create a wider understanding of the role energy conservation has to play 1333 in our overall energy and economic policy. It is not an optional extra against the energy background I have described. It is a vital necessity now—and for a long time to come. The efficient use of energy has to be built into our way of life, and not least our industrial life. Not only must we not treat conservation as an optional extra, but we must recognise that it is an integral part of the larger problems that we face. We can not divorce it from the many other decisions to which it is linked.
President Carter has taken a courageous and imaginative step in going for a tough energy plan. He is in for a bitter fight from less far-sighted and more selfish interests, as Lord Strathcona and Mount Royal has said and, politically, energy conservation is not a very sexy subject. But he has accepted the problem and given it a complete rethink. He has related the energy problem to the overall national scene, calling for increased taxes on petrol linked to increased national consumption, and on thirsty, inefficient cars—the so-called "gas guzzlers"; on domestically produced oil and natural gas, to encourage coal burning; for tax credits to house-owners, to encourage insulation; and tax breaks for utilities switching from oil to coal.
I believe that we, too, have to rethink our whole approach to the subject. In the crazy Whitehall system we depend upon, all decisions with an energy conservation content are split between various sponsoring Departments, which may not themselves be energy-conscious. This makes it difficult to achieve a co-ordinated, progressive policy designed to curb energy demand effectively. So, when I was a Minister with responsibility for energy conservation, I set out to get closer liaison between the various Departments of State and to encourage each Department to have one Minister with specific responsibility for ensuring that energy conservation policies were applied within the field covered by that Department.
A vitally important part of conservation is the insulation of buildings to adequate standards, particularly new buildings, and it is the Department of the Environment that sets the standards, not the Department of Energy. And if the building is an industrial building, for which higher standards are also badly needed, then this has implications for the Department of 1334 Industry. Transport and the efficient use of fuel is another instance of split decision-making. So it is essential that there should be the closest inter-departmental co-operation and that energy conservation be seen, not as a sort of hobby-horse of the Department of Energy but as a vital part of our national economic planning.
In 1975 and the beginning of 1976, we were taking the message out to industry and getting an encouraging response from many companies. The Department did not just state the national need for conservation but made some effort to put over the fact that cutting out waste—and there has always been massive waste of energy throughout industry—meant a more efficient company and better profits. But it is clear that in the interim many companies, particularly small and medium sized companies, have simply done nothing about energy conservation. A greater effort is required to make sure that they do take it seriously, and more should be done to persuade them to introduce good practice in the use of energy.
It has been suggested that the Government should offer extra financial inducements, but I do not see why they should do so to encourage companies simply to do themselves a good turn. Surely, industry can be expected to see to its own self-interest. As it is, the Finance Act of 1975 offers a first year tax allowance on expenditure on insulating certain types of existing industrial buildings, and it is depressing to find that the vast majority of companies are simply not bothering to take advantage of a scheme which would benefit them not only in terms of the tax allowance itself but by cutting their fuel bills.
One of the suggestions that was being considered was, I remember, one to ensure that companies applying for selective assistance would first have to show that they were taking steps to devise and implement an energy conservation programme, including an energy audit as part of the firm's accounts. I am sure other ways can be found to put pressure on lazy companies to go in for what is no more than good business practice in their own interest. Many of the schemes that will yield savings in energy are simply matters of good housekeeping and vigilance which cost little, or have a fast pay-back 1335 in terms of money saved. There is very little other investment that offers such returns.
There are many ways of conserving energy and of carrying conservation into all levels of our national life. Given the will within the Department of Energy, support from the highest levels of Government, co-operation from other Departments of State, and the invaluable advice provided by bodies such as the Advisory Council on Energy Conservation, I know that the Department of Energy can produce the ideas and extend energy conservation as an integral part of overall economic policy.
Your Lordships will be pleased to know that I have no intention of trying to cover all the possible areas that should be investigated. However, there are several proposals, some of which were discussed when I was in the Department, that I should like to refer to before I sit down. I do not know how far we can go in following President Carter's lead in proposing a tax credit for house-owners who insulate their homes; some other countries give these concessions, and we should certainly look carefully into the scheme, its costs, and the savings that might accrue. But it does seem an anomaly, and one which scarcely encourages people to believe that the Government are taking energy saving seriously, that VAT is still charged on all insulating materials. Surely this is absurd, and an example of the kind of inflexibility that we need like a hole in the head, for it will defeat our purpose.
Another important aspect of conservation lies in the adequate training of energy managers—those people responsible for implementing a company's energy policy—and I have met many who have very effectively improved their companies' profits through energy saving. Here, I feel, there is something positive and immediate that can be done. I have put the suggestion forward before now. There is in Solihull an excellent, but possibly under-utilised trainingestablishment known as the British Gas School of Fuel Management—and all credit to British Gas for taking conservation so seriously. I have visited the school several times, and it has always struck me that wider use could be made of this facility. Would it not be possible, under Government auspices, 1336 to expand and develop it or, if that is not possible, to set up somewhere else a school of fuel management that could teach efficient management of all fuels—gas, electricity, oil, solid fuel and so on? The school could enjoy much better success and contribute more if it was better known and covered a bigger field, and it would be one of the most cost-effective schemes that the Government could undertake.
We should also be doing more to help domestic consumers, for it is clear—not least from the contribution the Consumers' Association made to the Energy Conference last June—that the advice and help people receive is too often general and unrelated to their own personal situation and need. At the conference they called for more information for the individual through local advice centres—citizen advice bureaux, consumer advice centres, and so on. A special service could be established to provide this help and advice, quickly and easily, to meet individual need, domestically and, I suggest, in industry, too. I have already referred to building standards so far as insulation is concerned, and it is clear that a great deal has to be done here. We should also look more closely at the kind of homes that are planned for the future. Houses should not be built without flues, for example, so that their occupants become trapped into using one fuel only—in most cases today electricity—with no possibility of changing from one fuel to another.
At the international level there should be the closest co-operation, not simply at a formal level through international agencies and at conferences, but informally, to exchange ideas and practical experience, particularly with other members of the EEC and the United States. There is so much that can be done, once we accept energy conservation as an essential constituent of our social and economic policy, as we must. For we have no alternative in the short run, or even in the long run until we have developed sources of energy which are as near infinite as we can imagine.
We are all surely convinced of the need to save energy. This country has pledged itself, together with six other nations, to meet the need for energy conservation. What must happen now is for Government to translate the welter of recommendations 1337 into a practical working programme, which is not simply confined to the Department of Energy, and which recognises the need from now on to build energy saving into all levels of our social and economic planning.
§ 5.6 p.m.
§ Lord SHERFIELD
My Lords, the noble Lord, Lord Wynne-Jones, to whom we are indebted for this debate, is very persuasive and he persuaded me (or perhaps I should say nearly twisted my arm off) to take part in it. But I was as impressed by his excellent speech as I was by his arm-twisting. He asked me to deal with some economic aspects of the energy crisis, and my first thought was to look at the recent literature. I will make a remark or two on the economic side, though they will not make headlines. But I think that I may do some of your Lordships a greater service if I review for a few minutes some of the documents—and I am sure that the list is not complete—which have appeared in the past few months alone and which really are required reading for anyone who wants to make a speech on the subject. Unfortunately, I have not been able to do more than skim these documents and I wish I had had more time to digest them thoroughly.
There is the World Energy Outlook, published by the OECD in Paris early this year—a closely-packed 100 pages. There is the very interesting Nuclear Power Study, sponsored by the Ford Foundation, and published in March. This was closely followed by the paper by the Combined Intelligence Agency, published in April, on the International Energy Situation—Outlook to 1985. This was followed in turn almost immediately by President Carter's energy programme, briefly summarised for the Press in 28 closely-typed foolscap pages. Finally, last week the most recent authoritative and complete study of them all was published in the report of the Workshop in Alternative Energy Strategies, to which the noble Lord, Lord Wynne-Jones, referred. This was sponsored by the Massachusetts Institute of Technology, and directed by that most eminent of American scientists and scientific administrators, Dr. Caroll Wilson. Compared with the studies in depth of the Workshop or the OECD, the EEC papers, introduced by the noble 1338 Earl, Lord Lauderdale, are more limited—the noble Earl was less than kind, no doubt with reason, to the Commission's work and statistics—though they antedate the more deeply researched reports which I have mentioned.
But, my Lords, the Commission in Brussels does not in substance come to any different conclusion to that of the other studies. These nearly all take slightly different assumptions, with varying and often multiple scenarios—I am glad that the noble Lords, Lord Wynne-Jones, and Lord Strathcona and Mount Royal, have accepted the use of this slogan word. They take rather different approaches, and cover rather different timescales. Yet all the literature comes to the same general conclusions. The noble Lord, Lord Tanlaw, might be right in suggesting that there is rather too much literature, and also that all these documents may be quite wrong; but Governments can hardly assume that such a wide consensus is mistaken, nor can they ignore it.
The general conclusions are that even on the most pessimistic forecasts of economic growth, including the low rates mentioned by the noble Lord, Lord Strathcona, demand for energy will continue to rise. None of the scenarios shows a decline in energy use, or even a severe flattening of the rise in demand. All of them show that there is enough energy in the world to meet all the scenarios—at a cost. To quote the MIT report:The long-range energy problem is one of higher costs rather than one of absolute limitations on energy availability".But, the report goes on:Rapidly rising energy prices could increase inflation, exacerbate balance-of-payments problems, produce low or negative economic growth rates, and increase unemployment".Or take OECD:Failure to act courts the danger of considerable economic dislocation, slower growth, and higher unemployment".Or MIT again:Failure to act"—identical words—could lead to substantially higher energy prices with depressant effects on the economics of the world and the consequent frustration of the aspirations of the less well-developed countries. The major political and social difficulties that 1339 might arise would cause energy to become a focus for confrontation and conflict. Time has become the most precious of our resources".For the discussion of action there are almost as many forums as there are documents: yesterday, the IMF meeting in Tokyo; today, an OECD meeting in Paris; there is the International Energy Agency; the rather mysterious energy commission of the Conference on International Economic Co-operation, and so on, almost endlessly. But what action is emerging is less than clear, at least to me. Indeed, while the clock ticks it is difficult, as this debate may well show, to find much that is new to say about the problem until something is actually done about it.
The first task, as all the authorities agree, is to reduce dependence on oil. What is being done about that? Take the EEC. In December 1975 the Commission proposed a balanced package of measures to help towards such a reduction. However, the report before the House tells us that the Member States have declined to accept the general outlines of the package as a basis for later decisions on the individual measures contained in it. Perhaps the Minister can say whether there has been any improvement in this gloomy state of affairs in the last few months. I think the energy Ministers have met at least once since it was made. Did they make progress; and what are the prospects for June 14?
The United States has, in the few months since Mr. Carter took over the White House, produced with characteristic vitality a comprehensive energy plan which is now before Congress. It may not be ideal. On certain aspects of the nuclear proposals it is open to serious objection, particularly from the United Kingdom, France and Germany; it may not all get through. But it is a carefully worked out comprehensive policy and, if I may comment on what the noble Lord, Lord Strathcona, said about it, given American determination, I expect most of the recommendations, if not all of them, will probably, in time, be adopted. We have not succeeded in doing this sort of thing in the EEC, or, so far as I know, in this country. The Secretary of State for Energy often refers to his open system of formulating policy, but, accepting the complications of the task before him, 1340 so far it seems to be no more than a recipe for putting off decisions.
The documents from which I have quoted are clear and unanimous about energy sources alternative to oil. Conservation is very important. The noble Lords, Lord Wynne-Jones and Lord Strathcona, referred to it, and the noble Lord, Lord Lovell-Davis, has given us the fruits of his great experience on the subject. But the authorities to which I have referred—may he they are all wrong—do not think that, at its most successful, it will make more than a small percentage contribution to the problem. Renewable sources of energy—solar, tidal and geothermal, on which I know some research is going on here, in the United States and no doubt in other countries—cannot make a significant impact before the turn of the century. Fusion may come in, as noble Lords have said, if at all, even later.
The only effective alternative is therefore to press on with the development of coal and nuclear energy; and, as noble Lords have said, the long lead times make early decisions imperative. Of course I do not underrate the difficulties. The public reaction to the development of either of these resources is either hostile or indifferent, not to say complacent. As an example of complacency, take the tax on petrol, to which reference has already been made. As a selfish consumer, I was, of course, delighted to see it withdrawn. As a contributor to an energy debate, I consider that it was a thoroughly justifiable and indeed a necessary measure. What the noble Lord, Lord Tanlaw, said was very relevant to this, but he seems to have drawn a different conclusion.
This complacency may be put down to two things. First, the relative ease with which the international financial system has coped with the monetary and financial consequences of the upsurge in oil prices. But this may not go so well as prices rise further, as they undoubtedly will. Secondly, the complacency may be due to the thought that, as a beneficiary of North Sea oil, "I'm all right, Jack". But—and I do not underrate these benefits—this is an illusion. A world shortage of energy leading to rapidly escalating prices will adversely affect us in the United Kingdom in all kinds of ways of which, at the moment, we have little conception. A warning to this effect, 1341 in more muted terms, is contained in the Select Committee's report.
At the moment, the public attack is concentrated on nuclear power at every level, from the high emotionalism of the Friends of the Earth to scare journalism. But a switch to the development of coal would be met with equally vociferous opposition, as it has been in the United States. Indeed, I predict that no substantial progress will be made here or elsewhere until some Government have the courage to stand up to the more extreme environmental lobbies, whose political pull seems out of all proportion to their numbers, and take firm decisions to develop both nuclear and coal resources. After all, we are rich in both. We have huge reserves of uranium in depleted form which can be reprocessed; and noble Lords have already heard enough about the availability of coal. A sober and balanced evaluation of the respective merits of nuclear and coal power is contained in the MIT report which, incidentally, concludes that, so far as safety and health hazard is concerned, nuclear power has the advantage over coal. But how to get this conclusion across? Let me give a small example of the double standards from which nuclear power is suffering.
Last week a vehicle transporting uranium hexafluoride overturned on the Winchester by-pass. The container was properly designed, and there was no radioactive health hazard or danger to anyone; but the incident made the front pages and had, for some reason, to be specially reported to the Secretary of State. Four years ago a tanker carrying industrial chemicals overturned on the same road, a few miles further North, and killed the fish in the River Loddon all the way down to the Thames. The incident made the local papers but, as far as I know, was reported to nobody. There is an emotional content in all this which seems to make rational action very difficult.
My Lords, the MIT report sensibly identifies three stages of nuclear choice: one, to proceed with existing types of thermal and convertor reactors; two, to go on to Reprocessing and Plutonium Recycle; and, three, the fast breeder. It makes a further significant comment that the viable nuclear industry which would be needed to supply and fuel 1342 future nuclear power plants may not survive widespread moratoria or long delays in nuclear power construction. But I do not intend to develop the nuclear power debate further today. I will only say that even Mr. Carter is content to press on with stage one; that is, the development of existing types of reactor.
I have only one question on the matter, or rather a question in duplicate, to put to the Minister now. Is it the case that the first generation Magnox reactors of this country are operating ever more efficiently? Is it the case that the advanced gas cooled reactors now finally commissioned are proving very economical and reliable in operation? If the answers are, "Yes", should not the fullest publicity be given to these facts? My Lords, this is a vast subject. I have asked the Minister a couple of questions and perhaps directed some noble Lords' attention to essential documents. It is not much; but there is no time for more.
§ 5.22 p.m.
The Earl of BESSBOROUGH
My Lords, I am most grateful to the noble Lord, Lord Thomas, for having allowed me to speak in his place in this debate because, as I can assure the noble Lord the Leader of the House, I have very good reason for having to leave; in that I am meeting his right honourable friend the Secretary of State for Energy tomorrow at one of the various meetings mentioned by the noble Lord, Lord Sherfield, a meeting of the International Energy Agency, which indeed will go on for two days. I hope that he will forgive me, therefore, if I leave before the end.
It is a great pleasure to follow the noble Lord, Lord Sherfield, who as usual has made a most important contribution to this debate, a philosophical one as well as one which shows great knowledge of the atomic energy industry. We must thank the noble Lord, Lord Wynne-Jones and my noble friend Lord Lauderdale for having opened this debate. I shall speak now largely for the European Parliament and its energy committee, but also, to some extent, expressing some views of the European Commission and the Commissioner himself Mr. Guido Brunner with whom I am in constant, close touch. I should not like to say that all the remarks emanate from those particular sources but some certainly do; 1343 and I hope your Lordships will bear with me if I have a few things to say this afternoon.
These complex problems of energy supplies continue to torment us. They torment us by our having to read so many of the documents that the noble Lord, Lord Sherfield, mentioned. The leaders of the great industrial nations recently met in London against the knowledge that 15 millions are unemployed in these and allied nations and that the leaders of the developing nations are struggling to bring hundreds of millions to a better life.
Her Majesty's Government require an energy policy and a Secretary of State prepared to take those bold decisions which are necessary to the lifeblood of the material existence of our peoples in Britain and in Europe. There is no evidence yet that the largest single decision of the present Administration, in establishing the British National Oil Corporation, has resulted in a greater rate of discovery of oil and gas than has historically occurred. The fundamental problem, as I think the noble Lord, Lord Wynne-Jones, indicated at the outset, is that the increase in demand for oil and gas, at least in the non-Communist world, is greater than the rate of discovery of new reserves.
It is essential that the United Kingdom should aim not only at self-sufficiency in energy generation as soon as possible but that it should aim to secure self-sufficiency for the long-term; and, in the world context, this country must play its part not only with the European Communities, as has been indicated, but also with other industrial nations and developing countries in order to provide the means of energy generation and conservation which will enable material existence to be sustained.
Time erodes the memory. It erodes the memory of the effect on oil supplies of a succession of Middle East wars. Each one was worse in its effect than the preceding one. The recent fire in the Abuquaiq oilfield in Saudi Arabia resulted in large losses on the Japanese stock exchange. The Ekofisk Bravo accident demonstrated the ease with which North Sea oil installations might be rendered useless by an accident—or by an enemy. The long supply lines for European oil continue to pass through geopolitically 1344 sensitive nations and waters. Changes of political authority in the supplying States can occur suddenly. In Iraq, the Government of Nuri es Said was supplanted overnight by a revolutionary military command. In Libya, King Idris's Government was replaced by a President Gaddafi's military command council. Overnight, assumptions based on generations of co-operation and friendship become void. These memories are apposite. For, Saudi Arabia is the linchpin of the economic survival of not a few nations until such time as they individually acquire a greater indigenous energy generation. President Carter has drawn attention to the calamitous dependence of the United States for 50 per cent. of its oil from outside sources. The OECD report, which has already been mentioned, and more recently the report of the Workshop on Alternative Strategies, highlighted the trend, namely, that by 1985 the industrialised world will be largely dependent on one nation—Saudi Arabia—for an increase in that nation's productive capacity to meet the incremental demands of the oil importing states. But Saudi Arabia has served notice that unless its customers are seen to be taking positive measures to increase energy generation and to conserve energy, then its customers may not count on its good will to supply. The oil will remain in the ground.
I believe that we are most fortunate to enjoy the indulgence of Saudi Ministers. It would be an abuse of friendship not to heed the warnings, and it would be foolhardy not to take an appropriate course of action mindful of contemporary Arab history. According to the OECD, the oil importing countries will require 35 million barrels per day in 1985 compared with 28 barrels a day in 1974—a statistic that takes account of both North Sea oil and Alaskan oil. Let us recall that the OECD assumes slower than historic levels for the economic growth of the industrialised nations. In the case of the United Kingdom a growth rate of 2.5 to 3 per cent. between now and 1985, assumed in the OECD Report. That is not the desirable growth that will reduce high unemployment and bring inflation under control. Even the Federal Republic of Germany must cope with 1 million unemployed, with an expected growth of a little under 5 per cent. in the current year. Inaction by the present Government, 1345 or any other Governments with whom we are allied in the area of energy policy is a tacit acceptance that high unemployment and high inflation are here to stay. I deeply regret to have to come to this as one of my conclusions.
We are debating the energy objectives of the Community as well as the nature of United Kingdom energy policy. In December 1974 the Council of Ministers, in which this Government was a participant, agreed that the Community's energy dependence on external sources should be reduced from 63 per cent. in 1973 to 50 per cent. in 1985. This objective implied the fulfilment of 35 per cent. of global energy needs by electricity in 1985 and that 40 per cent. of electrical power would be generated by nuclear plant. The target for installed nuclear power was 160 geigerwatts. It is in the Benelux countries and France where national contributions to this target are more likely to be achieved, the shortfalls occurring in the United Kingdom, Italy and, to a certain extent, in the Federal Republic of Germany.
It should be noted that President Carter's energy programme calls for an additional 600 nuclear power stations by the year 2000 compared with the 227 plants, representing 224 geigerwatts, currently in operation or under construction. This might be compared with the 20 plants in the United Kingdom which represent 11.9 geigerwatts out of a total of 71.2 geigerwatts in the European Community as a whole. Is the United Kingdom, is Europe, less ambitious and less determined than the United States of America to safeguard the material existence of its people? A decade from now the British people will hold today's Ministers for Energy responsible for the energy that is not available to meet their demand. One cold winter in 1988 and then what?
§ Lord AVEBURY
My Lords, the noble Earl is talking about electrical energy by 1985. He must surely be aware that even on the CEBG's own projections we do not need any new installed capacity over and above that which has already been ordered by 1985.
The Earl of BESSBOROUGH
My Lords, this was a point which the noble Lord made earlier. I am talking about the future, further ahead. We have to 1346 look ahead and meet possible contingencies. If the present British Government can be indicted—that is too strong a word, perhaps—for the lack of a British energy policy within the European Community, we must admit that most Member States have been dilatory. Investment programmes are less than target on account of the enduring recession, and the reduced energy consumption which has resulted. The present Administration and future Governments in this country ignore at the economic peril of their energy-consuming industries the nuclear electricity targets of France and Benelux.
The European Community has taken important initiatives to implement the Community's energy objectives. It is the singular failure of the British Presidency of the Council—again, I am sorry to say this—that a dynamic programme to achieve these objectives has not yet been put in hand. Cumulatively the Commission's proposals will do a little to pave the way towards greater Community energy production. More is the pity that successive Commissioners have had to struggle with or indeed fight, the Council of Ministers to achieve their approval of these measures, even though they enjoyed support in the European Parliament and are broadly supported, as the noble Lord, Lord Sherfield, said, by many authorities in the world.
It is a tribute to Commissioner Brunner that at long last the go-ahead has been given to Euratom loans for the construction of nuclear power plant amounting to 500 million units of account, and we hope that the Council will agree at its next meeting on 14th June to the financial aid to promote the use of coal amounting to 500 million units of account over 15 years—a matter on which, as has been pointed out, I was rapporteur. I hope, too, that substantial financial aid to support cyclical stocks of coal will also be agreed as well as direct and indirect research to harness novel sources of energy and improve the safety of nuclear plant. The Commission and the European Parliament's Committee for Energy and Research are also studying measures to rectify the overcapacity—and I agree it is overcapacity—in the Community's refinery industry.
The inability of the British Presidency to obtain agreement on the siting of the joint European Torus—and I agree it is 1347 not solely the President, but the Council itself—JET machine has been deplored unanimously in the European Parliament and your Lordships' House. There has been unanimous agreement that the project should have been given the go-ahead by now. May we expect the present Council to achieve a satisfactory decision on JET by the next meeting? I hope the noble Lord can give us some indication on this. May we hope that the Secretary of State for Energy—and we shall certainly be questioning him about this in Paris tomorrow—will encourage British Energy undertakings to take advantage of these Community incentives?
The Select Committee under the chairmanship of my noble friend, which examined the Community's energy objectives for 1985 cast doubt on the statistical bases of the Commission's recommendations. But these are only the sum of Member States' consumption and forecasts. Would it not be more appropriate for the British Presidency and the Commission to lay down a standard for the collection of energy data so that doubts, real or imaginary, may be removed with the application of the right methodology?
I am glad that generous support has been given to research in harnessing the novel sources of energy. But, however warm our approval may be, I must note the succession of reports from around the world which state that commercial quantities of energy from these sources are not achievable in the coming decade. I will not go further into that point, since it has been well dealt with already in the debate. Also, conservation is a long-term programme but every fiscal encouragement must be given now, as witness President Carter's proposals, and also the remarks made by the noble Lord, Lord Lovell-Davis, earlier today.
As I stated quite recently in the European Parliament, the United Kingdom and Germany are endowed with substantial reserves of coal. The decision to install additional generating capacity at Drax is to be welcomed and, if it leads to excess generating capacity, then why not export more electricity, using the Channel cable—or perhaps even putting down another cable? Perhaps the noble Lord the Minister might care to comment on that 1348 when winding up. It has not yet been mentioned.
A policy to order additional nuclear generating capacity is, of course, frustrated by the argument over which reactor. There are three: the steamer, the gas-cooled and the light water. Those, like Sir Brian Flowers, who are agnostic about the safety of nuclear plant, must be given the assurance that all measures will be taken within human technical competence to achieve operating safety and safe waste disposal. The House must take good heart from the fact that there has not been a single loss of life from radiation at any nuclear plant operating in the non-Communist world. As to those environmentalists who advocate delay or even cessation of nuclear construction, let them be reminded that engineering of a product is a series of step-wise improvements, which are obtained with experience of succeeding models. If you suspend construction, you forbid the necessary experience. Here is another thought, my Lords: the more uranium that is not used for peaceful purposes will always be there for warlike purposes, and environmentalists cannot now remove the human knowledge which enables nuclear weapons to be manufactured. I believe that environmentalists may actually increase the risk of nuclear conflict—a paradoxical goal for those who are certainly motivated by the very best intentions.
I have spoken quite long enough but there is, of course, a good deal to be said on this matter. I think it is an extraordinary fact that if the public are prepared to accept the risk of flying in aircraft the day after 562 people died in Tenerife, they must with the same conviction accept the increasing and continued generation of electricity from nuclear plant. And, of course, it is equally important that full public support should be given to the proving of fast breeder reactor systems. The United Kingdom must set itself a target of something like 40 per cent. electricity generated by nuclear plant. That will imply an increase in the number of sites, each having possibly four plants. The effort which is required is large, but I believe it can be done and it is necessary.
The disposal of nuclear waste, which has been mentioned, is an acute problem, particularly with the increasing number of conventional reactors. Rarely can a technical, commercial problem have 1349 offered such a rich prize. If the ensuing business is not accepted by British Nuclear Fuels, then the French (whose plant I have visited), the Germans and the Belgians will be poised—indeed, are poised—to take advantage of this new market. Noble Lords should also note that the Federal German Government have now given high priority to the KEWA project, using the gas centrifuge process, to fulfil the triple task of reprocessing, plutonium fuel manufacture and final disposal of radioactive waste. It is essential that reprocessing capacity in the European Community should equal the need, which is estimated at some 7,500 tonnes per year by 1986. I hope that British Nuclear Fuels will expand to meet a fair share of this and of world markets.
There must be further investment in expanding processing facilities and we must remember that in France nuclear plant—and this is a matter of investment—is only 25 per cent. self-financing and in West Germany the figure is 40 per cent. In other words—and I would stress this point to the noble Lord the Leader of the House—a political rather than a commercial investment will have to be made on behalf of the British people. Let us take advantage of the Community's Euratom loans, and let us play our part in the Council of Ministers as fully as possible. The present Secretary of State, as chairman of the Council, is a man of tremendous ability and intelligence and I believe that even in the last weeks of his presidency he may be able to achieve something.
I should like to ask only two very brief questions. Have the Government placed sufficient orders for the supply of uranium ore to meet the nation's needs for the next decade? As I have to leave, perhaps the Minister would prefer to give me a written reply about that. Secondly, has the British presidency of the Council considered initiating "two-way street" agreements between the Member States of the Community and the United States and Japan on fast breeder and fusion techniques, on the harnessing of novel sources of energy, and on the employment of new energy conservation methods? Such "two-way street" agreements could be of great use.
Our Governments—not only our own Government but the other Governments— 1350 must now take steps to relieve the citizen and the managers of industry of their anxiety over tomorrow's energy supplies, and I ask the House to note particularly the conclusion of the Select Committee's Report, that it would be unwise to assume that coming self-sufficiency will render the United Kingdom immune to shortages elsewhere. I thank the two noble Lords for having brought these problems before us.
§ 5.49 p.m.
§ Lord TAYLOR of MANSFIELD
My Lords, I should like to join noble Lords in their expressions of appreciation to my noble friend Lord Wynne-Jones, who has initiated this debate. It is an important topic, as all the speakers up to now have shown, and it has international complications. Even President Carter very recently gave to the world his ideas of what the energy problem was and what it was likely to be in the immediate and in the long-term future. I think we owe a debt to my noble friend for initiating this debate and for deciding on such an important topic. There are three matters to which I should like to direct my observations. The first is, in this energy field, what was; secondly, the new and changed situation; and thirdly, the attitude and the proposals of the Trades Union Congress over this very important matter.
What I have to say about what was—and maybe this will be expected of me—is in the form of a tribute to the many generations of coal miners, going back to the first Industrial Revolution, who, throughout that long period of time, have supplied the life-blood to the arteries of the economy of the nation. For generations, until, possibly, not more than 20 years ago, the source of energy was very much restricted. In fact, in the main, coal was the only fuel. For that long period of time, the whole economy was dependent upon an abundant supply and, as my noble friend Lord Wynne-Jones indicated, the coal miners of this country, gave it, too. More often than not, the supply of this precious mineral exceeded the demand. For domestic heating, factories, steelworks, manufacturing processes, electricity and even gas, at that time, coal was the fuel upon which this country and other countries were dependent. History books will tell us that this was universally recognised.
1351 With your Lordships' indulgence, I should like to mention two matters. The first is a personal memory, while the second is a recorded fact which is now part of our history. While preparing this oration, I was reminded of what happened to me almost 70 years ago as a pony driver working underground in one of the pits in Nottinghamshire. At that time, some words—I do not know whether they were a poem, a rhyme or doggerel—were regarded by somebody as important, and they were set to music. There were 12 or 20 of us, and we used to lead our ponies in-by to the place where we had to limber them up to transport this precious mineral from the working place to the haulage head. These were the words:Coal, precious coalWhat would the world be without it?What would become of our ships on the seas,Our railways, our workshops,And big factories?So you see, my Lords, that this idea of the preponderance of coal in meeting our energy requirements at that time had even percolated into the minds of us young boys, and we used to sing that song.
The other matter is a more national one, but each in its different way indicates and recognises the truth of what I have said about coal being, for many generations, a fuel for meeting the energy requirements. In 1913, the total output from the deep mines of Britain was 287 million tons. That figure has never since been equalled. Perhaps more importantly, 95 million tons of that output was exported to other countries. The manpower at that time was more than 1 million. There was no sophisticated machinery. The tools of the trade were a mere pick and shovel, and the brawn and brain of the men employed. In the sphere of providing fuel to meet energy requirement, who would dispute that coal was king? Fortunately, in these islands there was plenty of it, and all the evidence that one can accumulate from those who go into the statistics shows that we still have plenty of it. In fact, as my noble friend Lord Wynne-Jones said, we have 300 years' supply.
My only reason for mentioning those two matters is to focus attention on the change that has taken place, in the past few years, in the sphere of fuel for our energy requirements, and every speech in your Lordships' House today has indicated 1352 what a substantial change it is. At present, there is coal, oil, natural gas, nuclear and water power, and the comforting and cheerful fact about them is that all those fuels are now indigenous, whereas, as I stated at the beginning of my speech, the only indigenous fuel that we had many years ago was coal itself. I should here like to pay tribute to the scientists in the laboratories, the geologists and the engineers who are co-operating together in different spheres. As a consequence of their collective efforts, the scene has been transformed in the sphere of fuel to meet our energy requirements, which is so important.
What of the future? What might be revealed in the form of solar and tidal power? I do not know the answer. Who else really knows? I know least of all, because I know so little about science that it would be wrong of me even to speculate. However, there is some evidence that, at some time, the sun and the sea may make a contribution to meet the energy requirements of mankind. I trust that this brief reminder of what was until recently has been of interest to your Lordships. I am absolutely certain of this. Reflections on the past, and on the sometimes painful way in which man has discovered nature's storehouse of treasure and used it for improvements in his standard of living, provide a remarkable and fascinating story. As I have already indicated, the scene has changed and has been completely transformed. Put in simple language that I can understand, those changes mean that we have more than one string to our bow so far as our fuel for energy requirements are concerned. The scientists, the engineers, the platform constructors and the men who man them have brought good fortune to Britain. Britain is on the way towards being Europe's richest nation in indigenous fuel supplies.
What about the new coal discoveries? We have Selby, and in the hat at the moment is the Belvoir coalfield. I hope that this will result in as successful a conclusion as Selby. However, one reads that there are inhibitions and protests about the possibility of coal in the Vale of Belvoir. However, all of these sources of coal are necessary. The National Coal Board has already begun its operations to mine coal in the Selby coalfield—all this is outlined in the Plan for Coal—so as to make a bigger contribution to our energy requirements.
1353 Turning to the trade unions, Mr. Len Murray was this morning described by one of our newspapers—completely unjustifiably, I think—as arrogant. Recently he published an article in which he said:The temptation to the public to be euphoric about the nation's energy requirements must be enormous. Many people see the pipelines in the North Sea as lifelines rescuing them from the risk of running short of fuel and power, or falling victim to hyper-inflation prices, keeping motor cars on the roads, their homes and offices warm and ships, factories and railways running.The fuel at the nation's disposal for energy requirements in the immediate future is a justifiable reason for jubilation. However, the evidence is that there could be an energy gap by the turn of the century, a point which has been referred to by more than one speaker today. I should like to emphasise that it would be a mark of wisdom if jubilation were to be tempered by caution. Energy wealth is not for squandering. One of our tasks is to avoid prodigality. Fossil fuels, whether liquid or solid, should not be merely for burning. We should make the most of the opportunity to process and obtain derivatives from coal and oil.
May I turn to the approach of the TUC to this new situation. The TUC is an important body which represents many people. It deals not only with wages and conditions but also with many other questions. It has not only power but responsibility. According to the evidence at my disposal, the TUC and the individual unions in the fuel and energy industries are displaying a positive and realistic approach to this new, transformed situation. In the same article Mr. Murray said:Entranced by the news of the oil flowing more and more copiously from around our Island in the next few years, too few people yet know and do not expect to find an energy gap by the 1990s.It is this gap that the unions have their eyes on.
In the first place, there has been a streamlining and unification of the unions in the fuel and energy industries. Instead of the 14 unions concerned with those industries advancing their own energy plans in isolation, the TUC has its own fuel and energy committee. The leading spokesmen of the 14 unions meet regularly. What is more, since 1973 they have given their comprehensive view of 1354 what the energy policy should be, in the interests of the nation, to both this and the previous Government. To achieve this aim, they say that the first prerequisite and proposal, with which I agree entirely, is that there should be co-ordination and planning by the Government and the fuel industries.
Surely there is nothing wrong or outrageous in co-ordinating the fuel and energy industries, planning for the present and the future, making the most of what we have and, in the process, making it last as long as possible. I believe that there is sagacity, determination and good will on the part of the TUC in deploying the idea of the co-ordination and planning of fuel resources.
My experience in coal mining over many years was that it was void of planning and higgledy-piggledy; anything would do. I know that in Nottinghamshire there are the most modern coalfields. But what did the old coalowners do? They worked first the best and the most profitable seams. They took the plums and left the stones. In those days, millions of tons—that is not an exaggeration—of this precious fuel were thrown into the waste, or into what we in mining circles call the gob, and never saw the light of day. It can never be recovered. For generations coal was treated with prodigality. I trust, hope and almost pray that we do not make the same error with both the old fuel and the new discoveries. The next proposal of the TUC was how to achieve coordination and planning. It could best be done by having an Energy Commission which should be given the task of devising a long-term integrated plan.
Your Lordships will be aware that last June an important conference was held. It was a representative meeting of the energy industry, the consumers, the trades unions, academic and professional bodies, political parties and environmental pressure groups and there was general agreement on the need for planning and co-ordination procedures and that the setting up of an Energy Commission was the best way of fulfilling that requirement. The only question I wish to put to my noble friend who is to reply to the debate is this: I understand that, since the conference, discussions have taken place between the Minister and the TUC and I should like to ask whether a Ministerial decision has 1355 been made in regard to the Energy Commission; and, if so, when will an announcement be made?
In conclusion, I should like to repeat that my own trade union, the National Union of Mineworkers, has welcomed the move for an integrated energy policy. There are many facets to the energy question. I have spoken of only three: conservation, co-ordination and planning our resources. Fuel for energy in Britain has a bright prospect and one of our tasks is to avoid squandering the wealth of the fuel that we possess and to plan its delivery and use for the benefit of the nation as a whole.
§ 6.12 p.m.
§ Lord BAKER
My Lords, it was originally my intention to speak on only two minor subjects: alternative sources of energy, and what I thought of as the rather dull and humdrum subject of energy conservation; but when the noble Lord, Lord Wynne-Jones, included that in his opening speech I realised that I need not be apologetic. I should like to join in expressing gratitude to the noble Lord for introducing this important debate.
The purpose of alternative sources of energy is to save fossil fuel. Even in modern times we have never been absolutely dependent upon them. Hydro-electric power has always been fed into the national grid, and there are other major undertakings, such as the Severn Barrage, which could have been exploited for the same purpose when the need arose. What we have neglected in modern times are those basic sources of energy, the sun and the wind.
When the oil crisis broke on us some years ago I worried because I wondered what my grandchildren would do in their old age, but I ceased to worry soon afterwards when, travelling in a small ship, I had the exhilarating experience of 48 hours of a full Atlantic hurricane. There was all the energy that the world needed; all we had to do was to harness it. That is the engineer's job, and my confidence in the skill and courage of the engineer is such that I have no fear of the world grinding to a halt. Of course it had nothing to do with my experience in the hurricane, but it was delightful to see, some time ago, that the Department of 1356 Energy is supporting a number of developments of methods of trapping the energy of sea waves. I believe that has great promise and I hope that industry and the City will see that these contributions, which have come in the main from workers in the academic world, do not lack vigorous support.
I was much cheered to hear that the noble Earl, Lord Lauderdale, had an interest in this activity. Here is the making of a new industry. It is essentially a British concept. It will help not only to supply our own energy needs, but will give us a new export trade. It is a remarkably well-timed activity because it will provide further employment to the outstanding civil engineering skills which we have developed for North Sea oil development; as this falls off the wave power needs will come forward.
Then there is the sun, the source of our fossil fuel. It is still there. We are slowly facing the problem of its immediate use, but too slowly. There are many in British Industry who consider that anybody tapping solar energy for anything more ambitious than heating a swimming pool is a crank. That is a short-sighted policy. Other countries, notably the United States of America and France, are working hard on solar energy projects and there are great possibilities, even in our latitudes. No doubt many of your Lordships will have seen a thoughtful article by the Astronomer Royal in the periodical Nature of 12th May. He dealt fully with many energy problems and he included with the two items, wave power and solar energy, the use of windmills or wind turbines, and he foresees there—and I agree with him—the possibilities of a new industry and more export trade.
All these methods are complementary. In fact the whole subject of alternative sources of energy, although they may be only marginal, is a great challenge to our engineers and to our industry. I say "engineers" advisedly. In all the discussions we have had here today, although it has not always been mentioned, running through the speeches has been the need for engineers, not only for developing alternative sources of energy but in connection with atomic energy or the getting of coal.
In the last many years there has been much damaging confusion—damaging 1357 to our economic life—in the minds of the people about who does what, so I intend to define my idea of an engineer. He is a person who conceives and creates new machines, structures and systems; creates new things that work, and work within strict economic constraints. He is not afraid of making new investigations when they are essential, but he does not cultivate them for their own sake in the name of that overworked activity, research. I do not care what his background or initial education was; whether he set out to be a classical scholar or a physicist. It is the final product and the final aim which counts. I go back to the great days when one could accept an open classical scholar to read for an engineering course. I am afraid those days have gone and it is very sad.
However successful these paragons of mine are in producing new devices for alternative energy, as has been mentioned many times today, this takes time. Twenty years is nothing in the full development of a new engineering product. If we attempt to do it more rapidly, as during the war, it is very costly. So there is likely to be an energy gap and that must be bridged, and bridged by conservation. There is scope for enormous saving of all kinds of fuel right across our activities in industry, commerce and the home. But here I must admit that the noble Lord, Lord Lovell-Davis, has covered all the points that I was proposing to make. He has a great deal more knowledge of this subject than I have and I will touch on it only very briefly.
I was going to ask the Minister what results have we been obtaining from the very great efforts, the comprehensive circulars from the Department of Energy and so on, to encourage people to save energy. It is surprising to find that such a large proportion of our national consumption of primary energy goes into buildings and such an appreciable proportion into heating private houses. The steps that we can take seem so simple: improvements of thermal insulation can save so much energy that it is remarkable that we seem to be so unsuccessful. But when you realise that, though the cost of thermal insulation in a new house is a small portion only of the total cost of the house, in these inflationary days it is not surprising that young people who are 1358 buying new houses should economise and raise as small a mortgage as they possibly can. It is pathetic, since they could not find a better investment than money spent initially on producing a high standard of insulation in their house. We really must find some way of encouraging them. We waste energy so easily, and the practical steps, the physical steps, for stopping that are not difficult. One can see that in rented property the cost of insulation is liable to be a discouraging factor, because the cost is borne by the landlord and the benefit goes to the tenant. I am no expert in these things, but I am quite certain there are those ingenious enough to produce schemes to correct this.
In existing buildings other than houses, again much can be done, and I know it is being done, particularly in Government-managed buildings, by the fuel economy unit of the Property Services Agency. They do it by upgrading existing controls and other modifications. I should like to ask: Have we any information on the economies being achieved, particularly in industry, both private and nationalised? In new buildings—and let us hope we are soon to have a spate of new factories—we should be able to achieve much greater economies by integrating all energy factors, as it were. But I must not say any more on this because it is a problem in which I am engaged myself. I only hope that others, including Government laboratories, are giving it their attention, too.
My Lords, while preparing notes for this debate I had the uneasy feeling that I had experienced all this before, and I think it was the analogy between energy conservation now and civil defence in the Second World War. Before the war anyone advocating action in civil defence was considered a depressing crank. Even during the war civil defence was hardly considered a glamorous service, though I may remind your Lordships that it had its moments. Civil defence unaided could not have won the war, any more than energy conservation now will turn the great generators in our power stations. But if we had not learned—and it was at the twelfth hour—how to give effective protection to the people, and in particular how to safeguard our industrial production against bombing, the outcome of the war might have been very different. Let us 1359 ensure that we deal as effectively, and before the twelfth hour, with this rather similar problem of the conservation of energy.
§ 6.25 p.m.
§ Lord THOMAS
My Lords, my noble friend Lord Bessborough is no longer in his place but, for the Record, I should like to say how very much I appreciated his warm thanks for changing the batting order. It was not a difficult request to grant. It fortified me in my determination to be very short in speaking this afternoon, and also it enabled me to hear two more very important speeches, as well as his own, which I thoroughly appreciated.
I do not propose to go over the same word-sodden ground that we all seem to be treading this afternoon. When your Lordships come to read Hansard tomorrow you will find that most of us have said very much the same thing in a variety of very well chosen and well delivered words. I might add that what we want nowadays are facts rather than words. As one who has spent most of his working life in engineering—and I would thank the noble Lord, Lord Baker, for his reference to engineers—I must point out that whichever form of imptoved energy production we embark upon we shall require machinery, whether it is machinery for more effective getting and utilisation of coal, whether it is machinery for producing nuclear energy generators; it is the production machinery that we are going to need.
As an engineer, I can assure your Lordships that what engineers need is time; they want decisions, and this is what we are lacking at the moment. As the noble Lord, Lord Sheffield, pointed out, the number of words and the written matter that has been made available on the question of nuclear energy production, for instance, is really terrific. What is needed is for someone to make up his mind as to what type of coal utilisation and coal extraction is going to be decided upon, and decide also what type of nuclear reactor is going to be made, and then give the necessary orders.
I remember once during the war having to go to a Minister and say to him, "I am sorry, Minister, but you have lost 1360 20 tanks this week". He said, "What do you mean?". I said, "Well, I should have had the order for 20 tanks a week ago. The production rate is 20 a week. The order was a week late, so you have lost 20 tanks". It did seem to have some effect and I got the order quite quickly. This is the kind of thing we are short of in the energy field. No one has given the decisive go-ahead to have the machinery produced or to have the research done, and so we have lost that much time. Whoever delays his decision is doing a very anti-social act in these days.
We all know that coal and oil are finite in their supply, so in the years to come we shall be forced to use nuclear energy, about which our scientists know enough already to have production devices made. We can talk about solar energy and wave energy and that sort of thing, but for real solid power I think we shall have to go to nuclear energy and make up our minds what should be done. My practical suggestion for a programme is that there should be accelerated research into the getting and utilisation of coal, the kind of research that the National Coal Board under Sir Derek Ezra is doing so well and effectively, and parallel to that a decision should be taken as to which kind of nuclear device we are going to have. I can assure the noble Lord, Lord Taylor of Mansfield, who paid such an emotive and well-deserved tribute to the miners, that we owe a great debt of gratitude to miners of the past. In the future the miner should be a white-collared technician who works a push-button control device and earns more money for less human effort.
§ 6.30 p.m.
§ Lord BOWDEN
My Lords, so much has been said already in this important debate that I am sure we all feel a very great sense of gratitude to the noble Lords who initiated it and to some of those who have spoken with such enormous authority and a very great deal of personal experience and knowledge of the topic with which we are concerned. It is difficult for me to follow them. However, if I may, I should like to make two or three points.
First, it seems to be obvious to all of us that through our great good fortune we shall have at least a few years of affluence before the night descends upon 1361 us again and before we finally run out of North Sea oil. We have made enormous use of its promise. But let us remind ourselves that there is more energy in the Selby coalfield than there is in all the oil in the North Sea. Let us remember that we may have it for a period of, perhaps, 15 or 20 years. During that time we have the chance—it is the only chance we may ever have—to reconstitute and revitalise our industry and reorganise it so that when we no longer have oil as a source of revenue we shall become competitive again, as we no longer are, in world markets.
It seems to me that this is almost our last chance and if we fail to take it we shall have been using a precious capital resource as revenue and spending it for ordinary day-to-day purposes, as I am afraid we have so often done in the past. Therefore, my first plea to the Government is that they will seize the opportunity afforded by the respite from pressure to use revenue derived from North Sea oil as a capital resource rather than treat it as if it were an ordinary source of revenue. It will come and go far too quickly for it to be abused in that way.
Secondly, there is no doubt that sometime we shall need more energy than we at present have and I suspect that we shall be unable to rely entirely on coal. As the noble Lord, Lord Taylor of Mansfield, made clear, it is scandalous that coal should be used merely for burning. It should be a source of raw material of all kinds, as it used to be so regarded before oil took its place as a feed stock for so many chemical processes. This means that sooner or later we shall have to rely quite heavily on nuclear power.
I remember the beginnings of the nuclear power industry in this country and the enormous enthusiasm with which it was hoped to tame the power of the atom and make the world prosperous and rich, and life easy for all of us. In those days few of us doubted that the promise would be fulfilled quite quickly. It has been a source of continuous and bitter disappointment that it has taken so long to achieve nuclear power; so many have been disappointed and so many men have been ruined during the course of its development.
I have said more than once— and I think it is true—that the development of 1362 nuclear power in this country has in some ways been the biggest national industrial disaster that has ever befallen us. That may seem an extraordinary statement to make, but, nevertheless, it has a real foundation in truth. Many firms lost all their working capital trying to develop nuclear power stations on which they lost enormous sums of money. It is also true that many of our best engineers were diverted from what might have been more profitable enterprises into the building of nuclear power stations. There was an enormous amount of duplication of effort. There was a time when there were five consortiums each independently trying to design nuclear power stations—none of which was ever used as a model for the next because every successive order was placed before anyone had time to learn the lessons of the last installation.
Then, of course, there was the disaster which befell the nuclear power industry as a result of Suez. That is a long time ago now, but it is true to say that we are still paying the ultimate price of the Suez affair, and we are paying it in the present difficulties and in the virtual disappearance of much of our heavy industry. At the time of Suez it was thought that oil would cease to be available because it could never get round the Cape. Orders for nuclear power stations were doubled. They were doubled again; they were doubled for a third time. Then oil came round the Cape and the price of oil dropped. The number of orders was halved and then halved again. Finally, because of the growing efficiency of the stations themselves the number of orders was halved for a third time, almost abolishing the order book completely.
Then came Mr. George Brown and his astonishing plan to revive the industry. More orders were placed in one year than have ever been placed in 10 years since. There was a sudden peak demand and then a total collapse. No industry anywhere in the world could have survived the treatment from successive Governments with which the electrical power industry has had to cope. I saw the collapse of what had been the proudest factory in Europe in Trafford Park. It lost £5 million or £6 million on an order for a nuclear power station which it regarded at the time as an investment in the confident expectation that it would be able to recoup its losses on successive 1363 orders for the same design. It never received a second order because the Government changed their policy.
In effect, through the constant fluctuations in demand for power stations, the Government have gone far to destroy much of the greatest asset that England had; namely, its industrial power and the capital which made it possible for great firms to embark on new enterprises. All their efforts were made almost as acts of patriotism; they were told that they must divert their resources to the creation of nuclear power. They did so, and as a result some of them were ruined.
So we have this astonishing story of the disasters of nuclear power. When the original development was initiated just after the war it was thought that there would be a tremendous shortage of fossil fuels and then a tremendous shortage of uranium. As a result the breeder reactor was devised because it makes it possible to use the same uranium over and over again and get 60 or 70 times as much power out of it as it yields in a simple reactor. It now turns out that there is no shortage of uranium and that the cost of processing the spent fuel from the breeder reactor is much more than was thought to be likely. Furthermore, it turns out that the best estimates that can now be made for the capital cost of a breeder reactor are considerably greater than those for a more conventional reactor which does not breed. In other words, breeder reactors are no longer necessary; they are extremely expensive and, much worse, they are a most potentially disastrous source of danger. If they were to be used on a large scale the plutonium which would be needed would be a danger to those who use it and—and more particularly—it would be a potential source of disaster were it to be commandeered, captured or seized by terrorists or anyone else.
It is that more than anything else which has perturbed people, and for that reason the Americans have concluded that their own efforts to build a breeder reactor should cease. I believe that President Carter will cancel contracts which have been proposed for the building of breeder reactors in America. I wonder what will happen to the programme in this country? Vast investments were made in Dounreay 1364 which was held up for years as the bright hope for the future. It now turns out that Dounreay is unnecessary, that the design based upon the original concept will be expensive and, of course, that the process of refining the plutonium will be disastrously hazardous and, if at all possible, it should be stopped. That is my next point.
Finally, during the brief interval we have the most important single decision, as has already been said by the noble Lord, Lord Thomas; that is, that we choose a good design to build. It is acutely important that this design choice should not be dictated by commercial considerations. Very recently, we were saved from the embarrassment which might have befallen us had we copied the Americans and made the lightwater reactor which was at one time recommended for our adoption by Sir Arnold Weinstock. It is this reactor which has so aroused the very reasonable fears of many people, and it is this reactor which has now been "sat-in on" by protesters in America, Germany, France, and, I saw recently, in Alsace. The reason is that it is not intrinsically safe; in other words, if things go wrong with it it can blow up in a manner which is not possible for certain other designs.
Since I have been rather gloomy so far, I should like to tell your Lordships what I regard as the most remarkable success story of the atomic energy business known to me. When Dr. Lewis went to Chalk River in 1950, or thereabouts, he found in the files at Chalk River a document in the handwriting of John Cockcroft identifying and detailing a design for a type of reactor using heavy water both as the coolant and the moderator, and using ordinary unenriched uranium. This idea was seized on by Lewis and adopted as the official programme of the Canadians in spite of considerable opposition. It finally resulted in the enormous power station in Pickering near Toronto using what is now called the Candu reactor. I think this reactor is the best of its kind anywhere in the world. It is certainly the only reactor of substantial size—in other words, about 500 megawatts—which has been built in five years from start to finish, and commissioned in 18 days after it first went critical.
This is an achievement quite without parallel elsewhere in the world. It was 1365 finished in five years. Our own standard time for completion is seven years, and we have never been less, except on very rare occasions, than three years late. So our own design takes twice as long to build. This machine has been costed and has been compared by the Ontario Hydro people, who own it, with a very large coal burning plant which was built about the same time. They estimate that the cost of the nuclear generated power is about half as much as the cost of power generated from coal, which of course is quite cheap in that part of Canada; this, in spite of the present rate of interest, which is very substantial.
The American Ford Committee Report on nuclear power finally concluded that one should keep one's options open because the uncertainties in the proposed development in both nuclear power and coal burning stations are so large, and that possible errors in estimates for the cost of various components, and particularly the cost of money, are so great that it is not possible to say without doubt which will be the cheaper in the long term. They conclude that in some parts of the United States nuclear power will be cheaper, and in other places coal fired power will be cheaper. But this does not seem to me to pay regard to the enormously efficient machines which the Canadians have built.
I was talking to one rather depressed American nuclear scientist who told me the other day that so far as he could see they would end up by persuading the Canadians to build half a dozen Candu machines and buying the power from them because it would never do, he said, to accept in America a design produced in Canada. I rather fear that the same attitude has influenced very powerfully and undesirably the policy decisions taken in this country.
About a couple of years ago I introduced the chief scientist responsible for Candu to some of our own people and they all said, "No, we must develop our own. Ours are better" and so on. In fact, ours has not proved to be better. Our own development seems to be running into all sorts of minefields and their machines are still working, they are still making them, and the last prediction they made is that by developing them in what seemed to be a perfectly reasonable way; changing the coolant and switching to thorium instead 1366 of uranium, as they can do, they can produce power at about half the present cost of power in Canada for several hundreds of centuries. For several tens of thousands of years they can produce power at a price about half as great as the present going rate of power in Canada, which of course includes a great deal of power from the Niagara River as well as power from other sources.
It is difficult to make strict comparisons in terms of American cents and British pounds, but certainly the power that they can produce is cheaper than any we have in this country. It seems to me, and this is a point I should like to bring to the attention of the Minister who is to reply, that this design has already been so successful and has such enormous potential for future development that it must not be neglected. If all went well in a very complicated arrangement I made on the telephone last month I hope that Mr. Benn saw Dr. Lewis last week, but I do not think that, of itself, is sufficient to persuade a very voluble Minister of a case presented by a man who is sometimes a little taciturn.
§ Lord STONE
My Lords, having elaborated, no doubt, is there any chance of a risk just as great in this or not?
§ Lord BOWDEN
My Lords, it is probably one of the safest of designs. This is a complicated issue but of all the designs I think with one exception it is probably the safest. The problem of disposing of the waste is a difficult one, but it is nothing like so difficult as it would be if we once embarked on the processing of plutonium which would be necessary for British breeder reactors.
Again, the calculations that have been made suggest that all the power which the world can need, if the population increases to four times what it is at the moment, and if everyone has power as great as the power now available to an ordinary American, which of course is about 100 times as great as is available to most, could in fact be provided from the known ores of thorium for many hundreds of centuries. The disposal of the waste products will be difficult, but by no means insuperable.
So all is not lost. The point I make is we have power at the moment. We shall not have as much power as we need in 1367 10 or 20 years' time. It is essential that the nuclear power industry should be preserved. It is vitally important that we do not deal it any more mortal blows such as have been inflicted on it so often in the course of its checkered career, and that somehow a decision to make reactors of a type suitable for ultimate development to supply the demand of the world shall be taken, and that the decision should be based on technical merit and not on either commercial or political pressures. I believe that we have every chance, if we take it, of surviving until the oil runs out. Thereafter, the future is ours to make and we make it today.
§ 6.48 p.m.
§ Lord ENERGLYN
My Lords, like the remainder of your Lordships, I have been completely spellbound by the noble Lord, Lord Bowden, and I hope that the Minister, if he takes no notice of any other speech, will look at the observations of Lord Bowden and Lord Thomas as very important points to bear in mind in reaching some realistic conclusions regarding what is called by the politicians a crisis. The politicians love this word "crisis". They live on it. Is there a crisis? I am not very convinced, because if there is a crisis, it is really a crisis of having a surplus of thermal energy, just like the mountains of butter in Europe about which we do not know what to do. At the same time, I am reminded by the remarks of the noble Earl, Lord Bessborough, that we must keep in our memories the lessons of the past, because on the other side of the energy picture we have over 1 million pair of idle hands, over 1 million units of human energy for whom we have not yet found useful or dignified sources of employment. To my mind, if there is a crisis that is it, and, like the noble Earl, I would remind your Lordships that the principal ingredient of the birth of the Third Reich was unemployment. We should keep that in mind.
I support the observations of the noble Lords, Lord Sherfield and Lord Thomas, in their vivid expressions of opinion regarding the surplus of paper pulp, vocal gas and political power generated by the politicians and environmentalists. If it were not for that very strong team in the last decade we in this country should have got off the ground a number of new 1368 ventures which would have done a great deal to absorb the nation's unemployment, but at every turn any new venture is strangled at birth by the environmentalists or politicians.
Probably the most peaceful period on earth for horno sapiens was his first 1 million or so years, when he was quite content to live by the use of his hands and two pieces of stone. He used fire only to keep himself warm or to cook his food. Then he discovered that he could smelt metals by using fire, and that is when it all began, because then he discovered the wheel. Ever since he has been trying to find additional sources of energy to fabricate the minerals of the earth and turn wheels. If I may be a little philosophic, this arouses all the normal ingredients of human nature, of greed and lust for power. So one can say that the advent of the wheel may have been the beginning of the interrelationships that fail to exist between nation and nation; but perhaps that is not a part of this debate.
The point I would re-echo is that made by our newly acquired distinguished engineer, the noble Lord, Lord Baker, who pointed out that whenever there was an energy need, the engineer had never failed to solve it. We could tell your Lordships about minerals which, even when held in the hand, can emit direct currents of electricity. These minerals can now be synthesised, but at the moment there is no real need to use such miniature sources of energy. I could remind noble Lords also that in the early days of the battery, coal was one of the ingredients used; one could therefore romantically ask why we should not turn our coal seams into batteries. That we shall do in the future, and, as the noble Lord, Lord Taylor of Mansfield, said, coal will remain king for a very long time to come.
Nevertheless, like all other sources of fuel which create thermal energy, they are wasting assets. We must therefore, as many noble Lords have pointed out, always look to the future, to the time when these resources have been consumed. As Lord Baker pointed out, we must look for supplementary sources of energy and we should look very closely at those which are eternal. The two major such sources are the earth's interior, about which I will not elaborate, the sun and the sea; 1369 we have the prospect of harnessing the tides of the sea in the hollow of our hand if we only look intelligently at history.
The simple problem is to create a barrage to withstand the tidal motion of the sea. The French have designed tidal turbines which they have installed at the exit of the River Rance, which proves beyond doubt that if one incorporated them into a barrage one would have the power of the sea at one's service. It really now comes down, as an engineering problem, to the question of constructing barrages swiftly and economically. If we look back four or five centuries we find the greatest barrage builders the world has ever seen, the Dutch. They wrested the whole country by pushing the North Sea back by one barrage after another.
The Dutch built their barrages long before cement was invented, and they have practically no stone in Holland. Their dams are made of clay. They discovered that the sea would not erode clay, and so they put clay in wickerwork baskets and built their dams. The sea glides over the dams and does not smash them to pieces as it does any concrete or stone pier that is projected into the sea. We should therefore take that empirical evidence of success and convert it into modern technology. The sea does not erode clay because clay is water repellent, so any substance that is water repellent will be unmoved by the motion of the sea.
If one takes a plastic bag, which is water repellent, one can fill it full of water and it will drop to the sea floor and never move again. If one fills the same plastic bag with any rubbish imaginable, ties it up and drops it to the sea floor, one there has the beginnings of an embankment. I declare an interest when I say that in our laboratories we have carried out researches on the bearing capacity and durability of plastic bags, and we have found that the strength of these plastic bags is equivalent to an equal volume of reinforced concrete, but it has the added advantage of being one-third of the cost and, even more important, of being able to withstand the movement of the sea.
With this evidence in mind, we have carried out a desk exercise on the use of such plastic bag embankments and we have incontestable evidence to show that if a barrage could be put across the River 1370 Severn, enough marine electricity would be produced to service the whole of the South-West of England and South Wales. Thus, if instead of impeding the shipping of the Bristol Channel by projecting a pier across it, we put a loop 12 miles long between Cardiff and Newport and made that loop a barrage composed of plastic bags filled with the coal refuse of all the tips within 30 miles of Cardiff, we calculate that within five years we should have created a barrage one-quarter of a mile wide and 12 miles long. We calculate that that would provide employment for about 500 men. In this barrage we could incorporate all the characteristics of the Rance barrage, which has proved a success. It has two rivers feeding the area that would be impounded by the barrage. It has maritime areas which would become desalineated and provide a new area for horticulture. It would have an acreage big enough to create an aerodrome almost as big as Heathrow and within two hours of Paddington. It would have, on the seaward side, deep water in which large ships could anchor. It would have a surface area on which new factories and new ventures could get off the ground because they would have available to them hydro-electricity—the cheapest of all types of electricity.
This kind of operation could be carried out in a large number of other places. We could swallow up the tips of Pen Maen Mawr and do the same thing in the Menai Straits. We could go into Morecambe Bay and to many parts of the West Coast of Scotland and do the same thing. In other words, what I am saying is that those countries which have access to the sea are the countries which are blessed with the biggest source of eternal energy available to us in this century.
§ 7.2 p.m.
§ Lord RITCHIE-CALDER
My Lords, that is a speech very difficult to follow. I should have liked to follow my noble friend, Lord Wynne-Jones, in his global appraisal of the energy problem because, in our quite proper preoccupation with national needs, we tend to forget that our energy problems are indeed global and, cumulatively, concern not only our livelihoods but our lives. All life is energy and all living things depend upon energy. When we are talking here about energy, we are talking not about the future of 1371 our industries but, in the end, about the fate of homo sapiens. I apologise to my noble friend, Lord Wynne-Jones, for the fact that I was otherwise engaged during the early part of the debate. I decided that I would be economical and unambitious in my contribution tonight. Indeed, I have almost been compelled to be so by the speeches that have preceded mine.
What we are talking about in some senses is a reassessment of where we stand not just in terms of disappointments and failures. I followed my noble friend Lord Bowden with great sympathy in his study of the catastrophes that overtook the engineering side of the British nuclear programme, but we are looking—and, I hope, looking afresh—at the kind of things that have been fairly self-evident for a very long time.
The noble Lord, Lord Energlyn, has dealt magnificently with the question of tidal power. We know that the French have done it and that we could have done it with a Severn barrage and elsewhere. The noble Lord's proposals are of course fascinating, but there is also the question of wave energy which was raised by the noble Earl, Lord Lauderdale—and I apologise to him for not having heard his speech—and by the noble Lord, Lord Baker. This seems to me—and I believe that both noble Lords will agree with me—one of the most exciting, accessible and, I believe, immediately achievable ideas that I know of. I have been fascinated because I am aware of the work of the University of Edinburgh and of Dr. Salter and his "duck" system. This seems to me to have everything to commend it. First, the essential tidal science is known. Dr. Salter has developed this system, in which a line of duck-like sections bob and, in the process of bobbing, pump energy into a system. The system is delightfully simple because, in this rocking process that generates the energy, one can have a series that is the equivalent of the vertebrae of the spine. The sections are articulated in a loose, spinal system which means that there is no solid barrage to be broken up, no fixed resistance. Therefore, one can have this on the surface, coping entirely and immediately with the tidal forces.
What fascinates me here is that I can see nothing required for this process— 1372 and I hope that the noble Earl, Lord Lauderdale, and the noble Lord, Lord Baker, will agree with me—that does not already exist. We only need the imagination and the engineering resources to put it into operation. In this case we cannot really complain because behind this is some £2½ million of research and project money. It will need a great deal more if it is to be extended into either the Pentland Firth or the Outer Hebrides, but the fact is that I reckon that we could have a very effective pilot system in a few years and I am quite certain that this method of wave generation of energy could certainly be operated in magnitude by the turn of the century.
We keep on—quite rightly, I believe—looking at the turn of the century as the critical point in our discussion, but I reckon in an off-the-cuff calculation that we could produce the equivalent of almost a third of the electricity that this country might require by the turn of the century, in 30 years or so. This is a tremendous challenge because we are not looking at a speculative idea, or, at least, it is speculative only in the sense that it calls for the imagination and the engineering resources that we may not have. I agree with the noble Lord, Lord Baker, that we have squandered our engineers in the sense that we have allowed them to be misused or attracted away, but also we have squandered the tremendous fascination and attraction which engineering used to have for the younger generation. We may have difficulty, though I do not think we shall, but we certainly need far more engineering students for the development of this kind of scheme than we have now.
We need far greater imagination in high places and we need a great deal more recognition that the simple facts of life—that is, nature itself—can still produce for us much more than we have so far asked of it. We have been shutting our eyes to that. Therefore, we ought, in my opinion, to be concentrating on solar, tidal and wave energy, on geothermal energy and on the potential biochemical production of power—the photosynthetic development of consumable power. These things are there. We have looked at them hard and we should look at them harder.
There is one other point that the noble Lords, Lord Sherfield and Lord Bowden, 1373 have prompted me to follow up. The noble Lord, Lord Sherfield, was talking about the difficulties with which we have been confronted in terms of the breeder plants and the noble Lord, Lord Bowden, has followed, as I should have done, with the emphasis that the breeder is now, to put it mildly, suspect in the sense that we have grave misgivings about its application.
Twenty-five years ago I was writing on the breeder reactor and I called it the pixilated pile, on the analogy of the pixies refilling the coal scuttle every time you stoke the fire. The reactor, then as now, would produce as much fissile material as it would consume. The nuclear furnace of fissile material would radiate a blanket of uranium, or uranium waste, from conventional reactors and convert it into fissile plutonium, which at the moment is the preferred principle. This raises the question of the dangers of too much plutonium—liable, as we have been told, to fall into the wrong hands—or difficult to cope with because plutonium is indestructible and remains active for hundreds of thousands of years. It is a man-made element, and nature has no contrivance with which to deal with it at the moment, and it is indeed the most dangerous poison known to man, in the most microscopic quantities. That is why the breeder programme is viewed with concern and why the "plutonium economy" is contemplated with totally justifiable—and I insist upon that term—alarm.
However, 25 years ago, when I was writing about the pixilated pile, we were considering a feasible and alternative option which seems to have been overlooked in the obsession with the needs for military plutonium. That alternative was to use thorium. I was delighted to hear my noble friend Lord Bowden bring us back again to thorium. Those of my generation may recognise thorium as the glowing coating on the old Welsback gas-mantles. Natural thorium could be used as the blanket in the conversion stage of the breeder reactor. The radiation from the nuclear "furnace"—that is to say, the core of the reactor—would convert the thorium 232 (that is natural thorium) into uranium 233, a fissile material. This could be substituted for most of the uranium in the blanket and the fissionable uranium 233, from thorium, would be 1374 mixed with enough uranium 238 (that is to say, natural uranium) to "denature" it: that is, to make it unsuitable for use in a nuclear weapon without a process as complicated as the original production.
I am reinforced in my support for the thorium alternative by an article in the May issue of the Scientific American by two Princeton University professors, Harold Feiveson and Theodore B. Taylor, arising from a study they prepared for the Council of Foreign Relations. It is a carefully tempered article, which concludes:We wish to make a case that, given certain alternative reactor engineering characteristics of a thorium cycle and the fact that uranium 233 and uranium 238"—uranium 233 being a by-product of thorium—can be denatured whereas plutonium cannot, the present world-wide momentum towards a uranium-plutonium breeding cycle in preference to the thorium option should at least be thoroughly re-examined before irreversible commitments are made to a plutonium economy".My Lords, I would subscribe to that.
I was delighted to hear what my noble friend Lord Bowden had to say not only about the Pickering reactor—the heavy water reactor in Canada—but also about the possibilities of the thorium process being developed in the safe systems existing in Canada today. I recommend very strongly to my noble friend the Leader of the House the prospect of rethinking the breeder reactor on a thorium cycle, and I commend to him that article in the May issue of the Scientific American.
§ 7.16 p.m.
§ Lord IRONSIDE
My Lords, I have listened with very great interest to what has been said by the noble Lord, Lord Ritchie-Calder, and I should like to say that there is another very interesting project which is being undertaken in the United States on extracting the thermal energy from the oceans. I think that there is a great similarity between that initiative and our own initiative on wave motion in this country. I think that in due course probably both projects could be integrated in some way. In this energy debate we are considering what I think is man's most valuable asset next to food. If there are any two commodities—energy and food—which are more important to 1375 survival, they would be difficult to find; I do not need to emphasise that most of the world's population is short of one or the other, or both.
At present, according to the Food and Agricultural Organisation of the United Nations, 40 of the 48 black and Arab States are unable to feed themselves and have to depend upon imported food to survive. Only nine countries of the African Continent as a whole produce more food than 10 years ago, and the rest declined, notably Algeria by 59 per cent., Niger by 54 per cent., and Burundi by an incredible 82 per cent.—all of this while the populations of Africa increase at a runaway pace and food production declines at an average 2 per cent. per annum.
On the other hand, the energy situation in some of these countries is different, and where natural and strategic energy resources are available it is generally found that the food situation is also better. Luckily for ourselves we are not in a situation which others are in, where we have to rely heavily on imported fuels. If we did, I doubt whether we could sustain the present population, and we certainly could not sustain anywhere near the present standard of living. All of us now realise the importance of energy and the need to use it effectively.
The Select Committee report which is now before your Lordships covers three Commission documents which attempt, in a statistical way, to focus the Community's attention on the problems. From this rather mixed bag, nothing positive emerges, except the dire warnings referred to by my noble friend Lord Lauderdale; but I want to make one or two points which I think are relevant to our own situation and interests in this country.
First, the most valuable step towards creating an energy-dependent society (that is what we are moving into now) is to take stock of what resources we have and to deploy these in the most beneficial manner. Of course, conservation of energy, or the avoidance of waste, is an essential for every nation, and it can produce spectacular results within a very short time. It makes people realise the value of energy. and encourages them to 1376 use it sensibly, provided it is priced realistically. However, if we relied entirely on conservation policies to take us into the industrial future, we would get nowhere very fast because national progress depends very much upon the increased use of energy, and all the forecasts show energy consumption is rising, not falling. Maybe it will not rise so fast as in recent years, but certainly it will rise at probably the 2 per cent. rate as mentioned several times in the debate already, and as forecast in many places. Of course, I think we have to secure energy supply for ourselves. The other Member States of the Community will in future become increasingly concerned about energy supply because they are not so well endowed as we are, so these EEC energy documents obviously tend to reflect the Continental situation more than the United Kingdom situation, and they should therefore be recognised as such.
But that is not to say that we are immune from all the difficulties in the future because of our newly-found reserves. Adverse conditions may build up in the rest of the Community, as well as in the rest of the world, and pressures will be put upon us. For example, the world market for uranium is soft at the moment, but it is likely to harden considerably by 1985. In fact, it is a buyer's market now, and I think that perhaps the Government should take account of this, as my noble friend Lord Bessborough suggested earlier on in the debate. Fast breeder reactor and fusion reactor technology may not develop according to plan, and renewable energy sources may not live up to expectation. All of this could precipitate a crisis for us, which we do not want in the critical nineties and early in the next century. There will be covetous eyes, as my noble friend Lord Lauderdale drew to our attention, on our energy resources, and we must be sure that they are not depleted at a rate which is against our interests. This, I think, is most important.
I should now like to turn to transport. The Government are about to produce a White Paper on transport policy which, judging by the tangerine-coloured consultative Paper which we have already seen and debated, is going to be more concerned, perhaps, with social needs than with the economic needs; yet the economic needs are in practice, I think, very much more important to the nation 1377 as a whole, because this provides the basis for prosperity. No one would deny that the social needs in transport are important, but I believe they can be defined perfectly well within the framework for the economic need.
One of the critical factors in transport is that 25 per cent. of oil-based energy goes into the vehicle sector as petrol and diesel oil. This is a substantial fraction, and we can see just by looking at the traffic outside here on any ordinary day that to replace this with an alternative energy source as efficient at the present time would be a mammoth task, I think, and virtually impossible. Because we are so dependent on petroleum and because of the massive investment in the internal combustion engine, we are bound to continue using petrol for a very long time in the future, and into the period when supplies will have to be derived from synthetic crude, or what is generally known as Syncrude, based on coal conversion.
There will come a point, therefore, when coal will assume great importance in our travel needs. If one looks more closely at this situation, one immediately appreciates that the cost of producing petrol will rise, and, assuming the same tax incidence, there will be a proportionate price rise as well. As natural crude supplies diminish, petrol prices will rise anyway, but the total demand will be satisfied only by the production of Syncrude from coal. Not only that, in terms of overall energy efficiency the conclusion has been reached in the Department of the Environment's recent report on future transport fuels, prepared by the energy research group of the Open University, that in the transport sector electricity derived directly from coal-burning power stations would provide a more efficient deployment of United Kingdom fuel resources than through the use of Syncrude to replace petroleum products derived from natural crude. This is also borne out by the US Department of Transport studies, and if one wants to put figures to this it can be shown that the drop in overall energy efficiency of the petrol-driven vehicle through using fuel derived from Syncrude is nearly 42 per cent.—and that is quite a high figure. Also, although the overall efficiency of the electric vehicle is seen to be the same as the internal combustion 1378 engined vehicle in the case of the natural crude economy, which we have at the moment, it is seen to be 71 per cent. more efficient in the case of the Syncrude economy.
The case for the electric vehicle and, incidentally, the hybrid, grows stronger, and I think that the noble Lord, Lord Tanlaw, has helped me to advocate this. In saying that, I must declare a two-fold interest in that I am president of the Electric Vehicle Association and my company, IRD, has just carried out a world-wide study of hybrid vehicles. The hybrid vehicle is a strong contender in the more immediate future, as it does not involve new technology and can be seen to have the double advantage of giving substantially more performance in terms of overall energy efficiency in the average stop-go conditions encountered on most daily journeys, together with unlimited range facility if needed. As nearly 50 per cent. of all daily journeys in this country are less than 40 miles, there is a strong case to consider the role of electric and hybrid vehicles in this country, and to further their development; yet the Transport Policy consultative document dismisses the electric vehicle in one sentence. Perhaps I may read it out:Research into sodium sulphur batteries or into various kinds of electrically-powered vehicles could have long-term implications for alternative energy sources".It does not discuss the role of electric vehicles, or even suggest that there is a role for electric vehicles. That is all that is said in the document. I find this strange, especially when the GLC think that the electric vehicle is sufficiently important that it has initiated a £400,000 study, supported by the Department of Industry, to study its use over the next three years.
The US Congress regard the development of electric and hydrid vehicles as so important that they have secured the passage of an Act against presidential veto to enable the Administration, through the Energy Research and Development Administration, to spend 160 million dollars over five years to demonstrate and develop electric and hybrid vehicles. While we have 25,000 licensed battery electric vehicles on the roads in this country, we should not overlook the fact that, through Government support, the United States is likely to develop second 1379 generation electric vehicles within five years, and that these will be competing directly with British designs in overseas markets.
The US attitude to energy problems is summarised in President Carter's statement, the cornerstone of which is the reduction of demand through conservation; in other words, the elimination of waste. The presidential statement is of course a long one—it is 28 pages—but I think it is a convincing one. I have just recently spent three weeks in America, following the statement, and I was interested in gauging the reaction of Americans to it. I was speaking on the same platform as Congressman Mike McCormack, who piloted the Electric Vehicle Research Development and Demonstration Act through Congress, and he estimated that, by 1990, there would be 10 million electric vehicles on the roads in America, and by the year 2000, 20 million vehicles.
I think this gives an answer to the point made by the noble Lord, Lord Tanlaw, when he said that the United States were looking for vehicles with alternative engines and were looking for 20 million by 1990—or something like that, I think he said. So far as I can see, they are all going to be electric and they are not going to have external combustion engines. Having talked to many Americans in all walks of life, I did not find one who was against the policy. Implementation will apparently involve 26 pieces (or thereabouts) of legislation, which will be hard going all the way, rather like a Grand National course. If there are any points that I would pick out they are that there is a welcome emphasis on the greater deployment of coal and more vigorous research and development into renewable energy sources, coupled with incentives in the transport sector. In the transport sector, the proposed vehicle sale taxes and scale of rebate makes the most immediate impact, with a maximum rebate for electric vehicles on a very generous scale indeed. It can be argued that the United States deserves this legislation because of its attitude to energy in the past; but the scope of the programme is not greatly different from what is being advocated in Europe. It is the extent of the programme which is perhaps 1380 the most startling thing to the US people and to outsiders.
There is one point which I should like to raise with the noble Lord the Leader of the House, who will be replying to this debate. It is to do with the gas guzzler tax scheme and the economy rebate scheme, and will affect the electric vehicle industry in the United Kingdom in particular, as well as a good many British gas guzzlers, such as Rolls-Royces and other models—and there are plenty of these about. In an unqualified statement President Carter specifically states that rebate schemes will be available for vehicles manufactured in the United States and in Canada. But, in the case of vehicles manufactured in other countries, they will be available only on the basis of treaties or executive agreements entered into between these countries and the United States; and the United States will work towards negotiating equitable rebate agreements.
My Lords, if this means what I think it means, then rebates will not be available on British vehicles exported to the United States unless rebates are negotiated on United States' vehicles being imported into the United Kingdom, and the basis for reckoning will be on fuel consumption rather than on size. From our point of view, this would be inequitable and I hope that the Government will examine this matter very carefully—and as we all know, the export of Rolls-Royces to America is a very valuable factor. I think it can have serious repercussions on our export position when it comes to vehicles and, in particular, electric vehicles. This is an industry in which the United Kingdom is paramount at the moment and in which the United States is fighting hard to build up one if its own.
My Lords, what lessons can we learn from the Carter initiative? There are many lessons, but one of the principal ones seems to me to be that energy waste is taxed and that energy thrift is rewarded through incentives. It is interesting to note how the incentives are to operate; in most cases through tax credits at point of sale with the object of stimulating the markets served by the industries involved, whether it be motor cars, power generation or solar energy. This has the added advantage of introducing innovative techniques.
1381 Attention is given to the problem of small businesses—and in this country I think we know of all the pressures which are suffered by the small businesses at the moment. A drive is being made on the development of renewable energy sources and the alternatives for the future. For a country which is prosperous and blessed with resources, the US energy programme is a bold initiative and it shows how much the maintenance and improvement in standards of living depends upon energy development and application, even in a wealthy country like the United States. I think that there are lessons for Europe as well as for this country, and I hope that the Government will consider carefully the implications of the US energy initiative both in its approach to United Kingdom energy policy as well as to European Community policy.
§ Viscount HANWORTH
My Lords, before the noble Lord sits down, if there is a very large increase in electric vehicles and if they have to rely upon lead acid batteries, could he tell me whether there is, in fact, a sufficient supply of lead at the moment to meet this demand?
§ Lord IRONSIDE
My Lords, I can say to the noble Viscount that the market for electric vehicles in this country is 2,500 and that this is largely a replacement market, but first-time buyers are now coming along rapidly. The industry has to depend on lead acid batteries. Improvements are being made on the design of that battery and considerable improvements in design of the vehicles as well, which will lead to a substantial improvement even in the short term. I think that in due course it can be expected that sodium sulphur batteries will be developed successfully and will come into production so that vehicle performance can be increased by something like five times.
§ Viscount HANWORTH
My Lords, I do not want to press the noble Lord, but he has not quite answered the question. What I said was that if we vastly increase the number of electric vehicles and have still to rely upon lead acid batteries, is there sufficient lead available on a world basis to meet this demand? I appreciate that with any luck we shall move over to another kind of battery, but I still think that this question ought to be answered.
§ Lord IRONSIDE
My Lords, I appreciate the noble Viscount's point. So far as I am aware, there is sufficient lead in the world available to meet the demand of the lead acid battery producers.
§ 7.34 p.m.
§ Lord AVEBURY
My Lords, may I just take up that point before going on to what I have to say. I think that the noble Viscount, Lord Hanworth, will find, if he looks into it, that lead is one of the metals which is found in concentrations of 4 per cent. or 5 per cent.; but at the edge of the ore bodies there is a sharp drop to crustal abundance where we are talking about a few parts per million. This is unlike copper where there is a gradation of the concentration as you go outward from the centre of the ore body. If there is a substantial increase in the number of vehicles powered by lead acid batteries, I agree with the implication in the noble Viscount's question that we should probably run into a shortage and that research is needed into alternatives, such as the sodium sulphur battery, which would be particularly suitable for commercial vehicles and buses where the high temperature at which it has to operate would not be a disadvantage. With respect to the noble Lord, Lord Ironside, I cannot see that the sodium sulphur battery will ever be useful for domestic purposes because it would be difficult to keep it at the temperatures required for it to operate while it is standing overnight in a garage. But that would not apply to commercial vehicles which were in constant use.
The noble Lord, Lord Ironside, I think, is the first speaker in this debate to mention the aspirations of the Third World—a not insignificant factor in calculating the availability of energy supplies to Great Britain, Europe, the OECD countries generally and the rest of the nations which will be competing in the 1980s and 1990s for diminishing supplies of fossil fuels. I think that unless we take their aspirations into account, we are likely to find that there is conflict developing between the parts of the world which are already industrialised and those who would like to share in the standard of living that we already enjoy. I shall return, if I may, to that point a little later. He says, and I agree with this, that we are not going to be immune from the problems facing the world in the 1980s and 1990s because of our indigenous 1383 reserves, that covetous eyes may be cast upon them; and no one has said yet whether, in the long term, there is going to be a sharing of resources among the Community. I know that it is not the existing policy of Her Majesty's Government; but when we do come to face the shortages, I dare say there will be considerable pressure on the British Government of the time to export some of the surplus oil, gas and coal at our disposal to keep the industrial machine turning in the rest of the Community.
That is not to say that I agree with the proposition of the noble Lord, Lord Wynne-Jones, at the start of the debate—and that seems a long time ago—when he remarked that during the 1980s the world supply will fail to keep up with the demand for oil. But this does not happen in the real world. What is more likely is that if supplies are restricted the price would tend to increase, as it did in 1973 and thereafter, until there is again a balance. The law of supply and demand operates in respect of energy resources as it does with any other commodity.
My Lords, that is why I find it hard to believe the assumption made by the Department of Energy, in a document entitled Energy Policy Review which has been drawn to my attention, that oil prices are expected to rise only by 50 per cent. to 100 per cent. in real terms between now and the end of the century. I should have thought that that was a gross underestimate and likely to invalidate many of the conclusions to which this document comes, including the estimates of total inland consumption of primary fuels between now and the year 2000, which are the centrepiece of the study. The Department of Energy is discussing an increase from 324.7 million tonnes of coal equivalent consumption in 1976, according to the provisional figures, to a band somewhere between 500 million and 650 million tonnes of coal equivalent in the year 2000. If we do some arithmetic on this, we find the lower of the two estimates implies a compound rate of growth of primary energy demand of 1.8 per cent., and the higher, 2.9 per cent. Somewhere in between those two figures would satisfy the noble Lord, Lord Ironside, who thinks that we should be discussing a rate of growth of something like 2 per cent.
1384 If one looks back in history over the past 24 years, to make the period the same as from now until the end of the century, one finds the compound rate of growth was in fact 1.4 per cent., which is considerably lower than the lower of the two figures that I have quoted; this in a period when, as I have said, oil prices are expected to rise substantially, even on the Department's own estimates, 50 to 100 per cent. That is probably wrong by something like an order of magnitude.
They say also that uranium is likely to become scarcer and dearer, and no one can disagree with that. The quantity of gas available to us in Great Britain and Western Europe will be declining by that time, and I certainly do not find it easy to see how one can expect coal production to be expanded much beyond 135 million to 150 million tons although I understand that the NCB have made a study which is based on a target of 165 million tons by the end of the century.
The point I am making is that, if all primary fuels are going to become scarcer and dearer—and no one disagrees with that, although there is perhaps room for argument about the exact arithmetic—why should consumption he expected to rise at a faster rate in the next 24 years than it has done historically over the past 24 years for a good deal of which period fuel crises were either declining or static right up to the events of 1973?
In the very interesting study which has already been quoted and which was referred to the other clay in the Financial Times—and I have not read the full document—Professor Carroll Wilson of MIT is quoted as having said:Petroleum demand could exceed supply as early as 1983 if the OPEC countries maintain their present production ceilings because oil in the ground is more valuable to them than extra dollars that they cannot use".Of course. I would not accept that demand will exceed supply because the price mechanism will come into play: but the underlying thought that Professor Wilson is enunciating here must obviously be that the sensible strategy for the OPEC countries—that is, to limit their production so as to extend the revenue from their oil so far as possible into the future and by creating artificial scarcity—is to raise present-day market prices.
Therefore, I would think that from the mid-1980s, at the latest, oil prices are 1385 going to be taking off, and the Department of Energy's assumptions are going to prove absurdly low. So far as Western Europe is concerned, there is an extremely interesting study by Robert Belgrave of BP, who shows that, if there is a 3 per cent. growth in primary energy demand from now until the end of the century, then the balance of oil imports into Western Europe as a whole would be no less than 70 per cent. of the estimated total amount of oil available in world trade. He says of course that that is barely credible bearing in mind that this would take place in the face of United States and Japanese competition for the same supply.
I would add, along with the noble Lord, Lord lronside, that the Third World is going to want its share of the available oil as well. So Mr. Belgrave concludes that if a growth rate as high as 3 per cent. is postulated, some of the results, including the level of oil imports, fall outside the range of credibility. He therefore constructs an alternative strategy in which growth falls to zero by the end of the century. Even so, that shows that we should be importing 615 million tonnes of oil by that time as well as large amounts of coal and gas.
For comparison, the study which my noble friend mentioned, which he obtained from the United States, the forecast of likely US energy supply/demand balances for 1985 and 2000 and implications for US energy policy prepared by the US Department of Commerce, shows that on the basis of very drastic policies for conservation the United States might be importing as little as 305 million tonnes by the turn of the century, but on historical trends the amount could be four times as large as that, or 1,220 million tonnes. That of course also falls outside the range of credibility. Mr. Belgrave suggests—and I think it is quite an understatement:…that it is imprudent, to put it mildly for Europe—or the UK—to plan on obtaining a greater share of what is available in the future than they did in the past".I want to make a simple suggestion; that is, that we should be considering carefully the implications of the United Kingdom and European primary energy consumption levels being no larger at the turn of the century than they were in 1976; and what this means in terms of the standard of living of our peoples, how we 1386 can accommodate their aspirations within a zero growth scenario. I suggest that since the Department of Energy has already taken a look at a fairly wide range of assumptions in the document which was presented to Mr. Benn's conference, called "Energy R and D in the United Kingdom"—a discussion document which contained no less than seven scenarios—to accept one more, to include zero growth postulated as one further scenario, is not to imply any political endorsement of zero growth which might alarm Ministers and be thought to be a difficult proposition to sell to the public. It has only been looked at for the sake of discovering what further steps would have to be taken in the light of that assumption.
What one would like to know is how the dependence of the United Kingdom and Western Europe on imports of energy could be minimised. The noble Lord, Lord Taylor of Mansfield, reminded us that in 1913, when we reached the peak of our domestic coal production, we were exporting 95 million tons—and how we could have done with that later on! If we had kept the broad seams which, as he said, were mined first because of the relative economy of operation in the larger seams—if these had been available in the immediate post-war period, we should have been so thankful.
I hope that we are not going to make the same mistake again by exporting oil in a period of temporary surplus that we may find ourselves in during the 1980s and then regret it much less than 50 years afterwards, as we did in the case of coal. Surely, it must be a sensible assumption on which to base our policies that we are not going to face solely American, Japanese or solely Third World competition, but also—another point that has not been made—the OPEC countries themselves will have used the enormous revenues they are now deriving from the export of oil to industrialise. A substantial proportion of their domestic production will therefore be required to fuel their own industries in the 1990s, and the share of oil in world trade will be that much lower.
So I suggest that one takes Scenario I from the Department's R and D document which is entitled Low Growth. I should like to put that to the noble Lord the Minister, although I do not expect him 1387 to answer the point immediately. It provides for 2 per cent. per annum growth in GDP until the early 1990s, declining to 1 per cent. by the year 2000. Then it goes on for the next 25 years at half of 1 per cent.; and I suggest that from the turn of the century onwards we should have to think in terms of zero growth. I would suggest that we build into that the alternative energy strategy from Scenario 2; that is to say, we maximise the contribution which could be expected from the sources mentioned already, such as wind, waves and tidal power; and we also build in the estimates of conservation from Scenario 3, which is the high energy cost scenario. These are matters of policy, and I would disagree with the assumption made in the document that if we have depressed economic conditions with low growth, there is not the incentive to spend money on conservation. I would say that was not really a political decision, and that if we are looking at the longterm, as the document does, then conservation would be equally necessary in any circumstances that you like to imagine.
That in fact gives us, I think, a very small nuclear component. I do not agree with the suggestion made, I believe by the noble Lord, Lord Thomas, that we need to make a decision on the next type of reactor in the near future. That is a very controversial decision. I would agree with the noble Lords, Lord Bowden and Lord Ritchie-Calder—who both referred to the dangers of plutonium—that the public are not satisfied on this matter. I think the Secretary of State himself would agree that there is need for further discussion before any decision is made. I would endorse their proposition that we should look carefully at the thorium cycle, though that is not without its problems and, in particular, no one has yet built a plant for re-processing spent thorium fuel and extracting Uranium 233 from it. The Gulf Oil Company began to do this in the United States but I believe have abandoned their efforts. There are severe engineering problems in making that cycle work.
In conclusion, I think we have to recognise that energy demand is equally to be determined by Government policy as are questions of supply and that the kind of "technological fix" approach, 1388 of which we have heard much this afternoon, is not going to get us out of the wood. We can examine all the alternatives that have been proposed: the use of Syncrude, the barrages, solar, biochemical, Drax, the thorium fuel reactors, external combustion engines, and even, if you like, the breeder. When you have done all these things, you will still find that the simple laws of arithmetic prevent growth from being indefinite and that sooner or later you will come up against constraints. The adjustments to a steady State economy will be that much more painful the longer it is delayed. So, although I do not hope to persuade anyone to adopt this as a matter of policy, I would at least hope that as a result of my plea to the Minister the scenario for zero growth by the year 2000 should be examined.
§ 7.55 p.m.
§ Lord WOLVERTON
My Lords, I too should like to thank the noble Lord, Lord Wynne-Jones, for opening this debate today on energy, the very important problem facing this country, and to congratulate him on a very able speech. Also, I should like to congratulate my noble friend Lord Lauderdale on a very good speech on the EEC aspect of energy. I wish to address your Lordships for only a very short time tonight, and the main point I wish to make concerns the possibility of further large-scale electrification of our railways in the next 10 or 20 years, which I do not think has been mentioned so far today. That would save a considerable quantity of oil which is now being used by the railways on their diesel engines. As we well know, oil from our own resources will be getting scarce in the late '90s. My only excuse for speaking in this very important debate today is that I was a director of an electric power company for a number of years before nationalisation, and I have some knowledge of the industry. Also, I have been keenly interested in railway development, as my noble ancestor, the first Lord Wolverton, was the first chairman of the old London and North-Western Railway, and he took his title from the town in Buckinghamshire where the railway works were. British Rail still have a very large works there.
I asked British Rail yesterday if they could give me some approximate figures of the cost of electrification of the highly 1389 successful Euston to Glasgow line, with branches to Birmingham, Manchester and Liverpool. As your Lordships know, it was opened in sections, and this great scheme took approximately 13 years to complete, at a cost then of £190 million. I fully realise it was a very large investment, but it has been well worth while. I should like to see an urgent study made, if possible, of the possibility, if the economic position of the country improves, to electrify the line from Kings Cross to York, Newcastle and Edinburgh in the next 10 or 12 years. From my studies, aided by the kind assistance of the generating board, there seems to be plenty of power available from modern stations using coal in Nottingham, Yorkshire, Durham and South-East Scotland.
I should like to quote one or two figures to justify my statement. The generating board now have eight new stations being built, which should be completed in the next five years—some of them, I am told, before—with a total capacity of 13,360 megawatts. There are also four atomic stations being built, three oil and one pump storage, and it takes approximately seven years to build these great stations. During the last six years the generating board have brought into production 16,000 megawatts of new plant when expectation of economic growth was higher. The demand for electricity during that period has grown by only about 2,000 megawatts. So I think there should be plenty of power available in the next few years, but of course we may not have the oil and the coal to run those stations. I should also like to say at this point—these are the latest figures given to me by the generating board—that 75 per cent. of electricity in this country is generated by coal, 11 per cent. by oil, 11 per cent. by atomic energy and 3 per cent. by hydro and gas turbines. So coal is still king for electricity generation in this country.
In conclusion, I should like to quote one short paragraph from an address given by Mr. Ray Buckton, General Secretary of ASLEF, last January to the Metropolitan section of the Chartered Institute of Transport. He said:Of all the modes of transport, railways could be equipped to make the best use of electricity. Indeed, it is the ideal fuel. For the nation's prosperity, our future transport policy must be centred around this product of so many fuels. Money must be made available for the eventual 1390 total electrification of the whole railway system, because experience has shown that lines that have been electrified provide a clean, efficient, fast and well received service. The success story of the Electric Scot is well known and, although the initial investment costs may be high, the dividend is well worth while".In conclusion, I would say that that quotation from Mr. Ray Buckton's address makes much better the point which I have attempted to put before your Lordships, that further electrification of the railways would save fuel in the future. I hope that this will take place.
§ 8.1 p.m.
§ Lord TEDDER
My Lords, the hour is late and I will endeavour to be brief. But, first, I must join with other noble Lords in expressing my appreciation to the noble Lord, Lord Wynne-Jones, and to the noble Earl, Lord Lauderdale, for the initiation of this debate at the present time. At long last, the public and our political masters are beginning to realise the seriousness of the present situation.
It was just before Christmas that we debated nuclear power in the light of the Flowers Report. Much of our discussion dealt with problems concerned with safety and the environment, but the underlying need for alternative sources of power was appreciated by almost every speaker. Since then, President Carter has started his campaign to conserve fuel. Whether or not he is successful in persuading his countrymen to abandon their large cars is doubtful, but he has done more than almost anyone else to bring the problem to the world's attention. There have been many suggestions as to how we should meet the energy crisis, and many in your Lordships' House this afternoon. Some of them are ingenious; some are fanciful.
As distinct from important schemes to utilise the energy supplies that we have with the minimum waste, there are only two long-term sources of energy—the sun, from which all fossil fuels are derived, and nuclear power. Of these alternatives, I am afraid that I do not share the confidence of the noble Lord, Lord Bowden, in nuclear power. The difficulties remain enormous, and the waste problems are not simple to solve. On the other hand, solar energy is converting carbon dioxide from the atmosphere into potential fuels all the time. Every green plant is a demonstration that solar energy can be used to make fuels. 1391 A most obvious potential photochemical process is the decomposition of water into hydrogen and oxygen. The hydrogen can be burned as a fuel, or the two gases together can be used in a fuel cell to drive the electric car of the noble Lord, Lord Ironside. There are many alternative potential photochemical processes, a most attractive one being the conversion of atmospheric carbon dioxide and water into methanol and oxygen. Methanol would be burned as a fuel regenerating carbon dioxide.
The importance of these processes is that they return to the environment exactly the same species as are removed in their synthesis. A second important point is that they provide a fuel which can be used to power motor cars and aeroplanes, as well as power stations. I do not wish to belittle the use of wind, waves or tides, but I do not consider that these intermittent sources can ever be as completely satisfactory as a permanent alternative to fossil fuel. So long as the energy from the sun remains constant, photosynthesis will be possible. If solar energy varies greatly, no amount of research will solve our problems.
As well as being Her Majesty's Jubilee Year, this is also the centenary year of the Royal Institute of Chemistry and, if I may, I should like very briefly to sing the praise of chemists. One of their first achievements was in the field of dyestuffs. Originally, almost all dyes and colouring matters came from natural sources. Now they are almost all synthetic, and are of very much better quality. Intensive farming led to a depletion of nitrogen and phosphorus in the soil. The crop yields are now far higher than they were before synthetic chemicals were employed. When there was insufficient fat for soap, synthetic detergents were developed; when increasing affluence led to an impossibly large demand for silk, nylon was developed. One could go on and on with other examples.
The important point is simply that, if there is a natural product, chemists can make a synthetic one. The synthetic product may be the same as the natural one; often it is better. Similarly, if there is a natural process, chemists can develop a synthetic one. The photochemical 1392 production of fuel is not a wild speculation, but a certainty. At present much of our oil comes from Arabia; in the future, it will continue to come from the arid deserts of the world, for in the deserts the absence of cloud cover makes solar photochemical synthesis on a large scale practical. We will need all the land we can cultivate for food production. It is particularly fortunate that land which is useless for farming should be the most suitable for photosynthesis.
We do not have much time, my Lords! Although I am certain that we can, and will, achieve solar synthesis of fuel, its development may prove very difficult. All the time, as the noble Lord, Lord Todd, emphasised during the debate on the Flowers Report, we are using up our stocks of hydrocarbons on which we depend for our nylon, our synthetic detergents and so many of our other 20th century products. Although the photochemical production of fuels using solar energy will, I believe, have reached a practical scale by the turn of the century, it will, I am sure, take longer to match nature in the production of hydrocarbons. After all, nature takes several million years and we do not have that amount of time. So we must conserve our oil as the raw material for chemical synthesis, and get our energy by the combustion of a fuel which we can replace as fast as we use it.
In the debate on the Flowers Report, I gave some brief figures of the scale of the undertaking and showed that it was a practical possibility. I will not repeat those now. I will, however, reiterate that, while I am not advocating massive sums for solar photochemical research, I advocate most urgently that some further provision is made for research into the use of solar energy for the photosynthesis of fuel. During the debate on the Flowers Report, I drew attention to the enormous sum of £80 million spent annually on nuclear fusion research, compared with the sum of less than £500,000 spent on all other sources of energy, of which solar energy is only one. I repeat that I am against spending massive sums, but I am sure that some additional money should be allocated for photochemical research. I do not believe in a single panacea and, like other noble Lords, I do not believe that we should put all our eggs in one basket. At present, we have coal, oil, gas, water and wind. In future, our supplies 1393 of many of these will be dwindling, but we will also have nuclear energy and, I hope, tides and photochemical synthesis of fuel.
Finally, as the noble Lord, Lord Wynne-Jones, emphasised at the beginning of this debate, let us all remember that this is an international problem which will have to be solved by international collaboration. I do not think that we should regard North Sea oil as Scotland's oil, or indeed as Britain's oil, but we should treat it as part of the world's dwindling supplies of hydrocarbon. Undoubtedly, the first task is to control population growth. No technology can hope to cope with the exponential growth of population. Even when this is controlled, food and energy for a static population will still be critical. We can solve these problems only on a world basis and, as I have indicated, I anticipate that fuel will come from the great deserts of the world. But our science and our technology must play their part in its development.
There is much for us to do and little time to do it. However, now that everyone is aware of the problem I am sure we shall succeed in overcoming it. At one time I saw in the dwindling supplies of oil the seeds of the ultimate nuclear holocaust as the super Powers struggled for the diminishing supplies. I believe that this danger remains but, thanks to the wide awareness of the problem, it has become less critical. We can, and I am confident that we shall, solve the problem of fuel production, but the funding of the necessary research and development must not be pushed too far down the list of priorities.
§ Lord ENERGLYN
My Lords, before the noble Lord, Lord Tedder, sits down, may I ask him whether he is prepared to expand a little on his view that chemists can make synthetically anything that occurs naturally? The noble Lord may not have noticed that one of the flippant phrases I used related to the photosynthetic processes he has spoken about; namely, the production of electrical current without dynamos. I was referring to the occurrence of natural substances; namely, minerals. One of them is hemimorphite which emits electricity by a slight rise of temperature. In the context of his speech, upon which I congratulate him because I think nobody has put before the House 1394 so eruditely as he, his plea for research money to be spent upon the fundamentals of photosynthesis, which is the most subtle of sources but which yet could be the most lucrative, does the noble Lord agree that we should devote more research money to the synthetic production of silicates which can emit electricity?
§ Lord TEDDER
My Lords, I thank the noble Lord. Of course, this is another way of using solar power, and obviously it is equally important. I did not mention it, for this reason. Although chemists can make a pure silicone and get it with the correct deformities in it so that it will work efficiently, I feel that the production of fuel which can be burned in aeroplanes and cars is a more immediate priority.
§ 8.12 p.m.
§ Viscount HANWORTH
My Lords, first may I apologise to the House for my name not appearing on the list of speakers. I thought I had put it down, but it seems I did not. I shall be extremely brief. The first part of my speech re-emphasises a number of points which other noble Lords have made. If, however, I stick to what I intended to say I think it will take less time than if I refer to each speaker by name and say how much I agree with him. I am, in broad terms, taking a worldwide rather than a purely national point of view.
Despite the praiseworthy initiative of the noble Lord, Lord Wynne-Jones, in sponsoring this debate, I am sorry that again it should be necessary to discuss this subject in a wide context. The issues have for a long time seemed to me to be fairly clear cut. Nuclear energy from the fission process is not an ideal solution to the energy problem. Nevertheless, no alternative can meet the expected energy gap during a period of 20 years or so around the turn of the century. We should make all possible economies in the use of energy. It is sad that we still do not seem to be capable of vigorously pursuing the great potential savings possible by better heat insulation of houses and factories. However, world energy requirements are bound to rise substantially, if only because of the increased needs of the developing countries. We must urgently try to produce more acceptable means of energy generation so as not to have to rely on the nuclear fission 1395 process longer than we must. But whatever extremists may say, there is nothing else in the short term. In this context I am not optimistic about what coal can do even in England, let alone on a world basis. The really pertinent question is the extent to which breeder reactors should be used. In the remainder of my speech, which will not take very long, I am going to put forward a few thoughts about this.
I am glad that the accent on the disadvantages of nuclear reactors seems to have moved away from the reasonably acceptable dangers of possible "incursion" and the disposal of nuclear wastes to the much more disturbing possibility of nuclear blackmail. Whatever we can do now in terms of practical politics, nuclear blackmail will occur some time in the future, simply because we cannot prevent the smaller nations acquiring some nuclear capability. India, and undoubtedly Israel, have atom bombs, and other nations will do so. The question, therefore, is not whether they or anarchist groups do so, but the extent and the scale on which the threat develops. Sooner or later we shall have to face this, with the lives of perhaps even 10,000 people at stake. My hope is that, as in the last war, we shall be able to do so. Judging from the Western world's initial reactions to hijacks, I cannot help wondering.
If noble Lords seriously believe that the future of developing nations and world humanity are important, I wonder whether morally we can, in effect, deny their energy requirements by curbing the Western development of nuclear reactors and, maybe, the breeder reactor. To see the problem in perspective, let us remember some of the World Health Organisation statistics. I have not been able to check them against the latest figures, but the ones I want to quote are roughly as follows: 12 million people suffering from preventable blindness; 5 million suffering from leprosy; one-quarter of the world's population suffering from serious malnutrition, affecting the future intellectual and physical capability of their children. I therefore ask the question, which is not rhetorical, are we morally right in denying developing countries the energy they need in the future, simply because we, or our populace, are frightened by the risks involved? Have we too great a regard for 1396 our own skins and the importance of human life in our Western society? In part I think that we have, but I leave this as an entirely open question, particularly to organisations such as the Friends of the Earth, who present a rather extremist point of view on this issue.
I have raised that point because although it has not been stressed in today's debate, there has been very strong reaction from the public to the dangers which may occur. I give this thought to noble Lords: that whereas we should do everything we can to lessen the dangers and not press ahead, regardless, with a nuclear programme, we must nevertheless go forward with such a programme and, sooner or later, accept the risks which I have outlined.
§ 8.19 p.m.
Lord CAMPBELL of CROY
My Lords, the debate so far has been a very wide one and I think it has been deliberately so arranged by its initiators. This breadth reflects the host of matters affecting everyday life which are involved. We have been greatly assisted by the noble Lord, Lord Wynne-Jones, and by my noble friend Lord Lauderdale in the way in which they introduced the subject. I shall limit myself to three or four main points and after such a long debate I shall be even briefer than I usually aim to be. I must again first declare an interest as I act as a consultant to the oil industry.
The first proposition I should like to put to your Lordships is that in energy policy the United Kingdom and the EEC should be giving more time, attention and higher priority to the subjects we have been discussing. The reports before us all agree that there will be an energy shortage after 1990 in Europe and in the industrial countries as a whole unless decisions are taken to forestall that shortage. When so many interests are involved and when there are so many considerations to be taken into account and so much consultation is necessary there is a great danger that decisions tend to be postponed. In the meantime the situation never ceases to change and there is a temptation to drift. Of course, final decisions on some of the matters discussed today are not immediately necessary but work should be authorised, keeping the options open. What is needed is the adoption of flexible 1397 policies with continuing co-ordination. These policies should be made known to all concerned and the public encouraged to co-operate.
My second proposition is that British Governments over the next few years have vital decisions to take on nuclear energy and we shall need to take those decisions and cannot dismiss nuclear energy as an unnecessary part of our programme, but I shall come to that later.
On present energy uses and conservation, in Britain the Government appear to be waiting still for the results of the public debate to which the Secretary of State for Energy has referred. In the United States of America President Carter has put some definite proposals and in that way has initiated a public debate, because some of them impinge closely on everyday life, particularly the Americans' large automobiles. But I submit that guidance certainly is needed by the public since, unless one is an expert—and I certainly am not—one can be blinded, or bored, by the technicalities. There are two reasons why I believe that high priority should be given to energy policy: the first is that it cannot and should not be separated from economic and other policies and, secondly, it so closely affects the life of the citizen.
Perhaps I may give two examples. First, on nuclear policy, as several speakers in the debate have indicated, including the noble Viscount, Lord Hanworth, we find this raises defence questions of a most serious nature and the dangers which could ensue if material of a nuclear nature got into the wrong hands. Then on conservation, and especially on the conservation of oil products, this affects the use of the motor car and it affects taxation; it affects taxation on domestic uses in the household as well as in transport, and as I mentioned just now this is being felt particularly by the American public.
To turn to the reports that are before us relating to the EEC, the Select Committee on coal has drawn attention to what it has described as the progressive deterioration in recent years of that industry. A great deal of the EEC's coal is here in this country and we know that in this industry investment and effect are expensive and they take time, but coal must surely 1398 remain an essential part of our electricity supply in this country for a long time to come. I ask the noble Lord if he can give us the view of the Government on the EEC's reflection upon the coal industry within the EEC, and I hope he will be able to give us a more optimistic view where this country is concerned, if not this evening then in some other way. It is clear that within the EEC we are having to buy more coal from outside the EEC than had been foreseen, and that is worrying.
To turn to oil and gas, until about 1980 we in Britain—the largest producing country, as we shall be—should be trying to win as much as we can from the sea bed. I understand it is Government policy that we should go as fast as we can until 1980. When we reach self-sufficiency in petroleum we intend as a country to bring in a depletion policy, and that policy of course would depend upon the circumstances as regards ourselves and the EEC and the price of oil in the world at the time. But I should like to draw attention to the uses of offshore oil and gas. In particular, gas is probably more valuable as feedstock for industry rather than as fuel, and to a great extent petroleum is also. Once it has been burnt it has been destroyed and it is more important as a raw material for many chemical products, fertilisers and other goods, where it can be recycled and not wasted.
I should like to draw attention to one of the items in President Carter's energy saving programme which shows how seriously the Americans are considering this. That item is this:Prohibit industry and utilities from burning petroleum or gas in new boilers".That is a drastic measure if it is to be carried out, but it underlines the more important uses which gas and oil have for industry rather than as a fuel.
While I am speaking of petroleum, I should like to draw attention to the EEC's comments on refinery capacity. Within the EEC it appears that there are 140 million tonnes of surplus capacity and we know that in 1976 (last year) in Britain only 67 per cent. of capacity in this country was used. The Commission are therefore proposing a standstill on new refineries. Without going into it in detail, this poses problems. Other things being equal, we would naturally wish to 1399 refine a large proportion of the oil coming from our own sector of the North Sea. In that way we add value to that product, but other producer-countries in various parts of the world are also trying to do the same thing and are building refineries. Given the over-capacity that exists, here is a subject which really requires co-ordination within the EEC, and in the world as a whole, in order to avoid wasted investment. The noble Lord, Lord Sherfield, spoke of the higher costs which were inevitable in future in the production of energy, and to have to go in for costs in over-capacity which could be avoided is something that we should try to ensure is sorted out.
By the early 1980s we in Britain shall be the only industrial country in the Western world which is self-sufficient in energy. I suggest that is not a pretext for opting out of this co-ordination. It is all the more reason why our voice should be heard strongly in the formulation of policies as to how the various forms of energy should be used. But our oil and gas supplies are likely to last for only 30 to 40 years, although of course more offshore supplies which are not yet known may be found off the shores of other countries. So we must consider the future of nuclear energy. It is clear to me that in the 1990s, despite what can be done in using energy from the sun, which has been spoken about today, from tides, from wind and waves and perhaps other sources, we shall still need a considerable amount from nuclear sources. Here there are long lead periods. So preparation and action are needed now in order to arrive at the best arrangements in the 1990s and later.
The EEC report shows that the nuclear programme within the EEC has slowed down. This is largely due to doubts in Germany and France, for environmental reasons among others. In Britain we are facing the choice of the next generation of commercial reactors, and I understand that, in about two weeks' time, the report of the Nuclear Inspectorate is due to be received by the Government and that they have not been able to take decisions before then. I suspect it will still be a little time before decisions can be taken, because it is a very crucial matter. In the meantime the questions which the noble Lord, Lord Sherfield, put are 1400 extremely germane; that is, whether the present Magnox and advanced gas cooled reactors have been working even better than expected.
But the principle issue for the future, and the time when the oil and gas supplies run out, will be whether some other form of reactor, such as the fast breeder reactor, upon which our hopes had been pinned, will be the answer, and with that come the attendant risks of the use of plutonium. All the implications of the use of plutonium must be widely understood before a decision is taken. That was the recommendation of the Royal Commission chaired by Sir Brian Flowers. That report has already been debated by your Lordships; I am just reminding you of what the Commission said. The Commission did not reject the fast breeder reactor and what they termed the "plutonium economy", but did point out that these implications existed.
Speaking personally, I think we must still consider the fast breeder reactor, possibly with the use of thorium, as the noble Lord, Lord Ritchie-Calder, said. It has apparently become much more costly—so the noble Lord, Lord Bowden, said—than had previously been expected. There may be other doubts about it. But we are still far ahead of the United States in the fast breeder reactor. The United States do not themselves need it. They have indigenous uranium and they can use other types of reactor. But uranium could become scarce elsewhere, and the United Kingdom and other countries are likely to need it. So that, although some speakers apparently seem already to have decided that the fast breeder reactor must be ruled out, I hope that it will still be considered among other options for the major nuclear decisions that have to be taken before the end of the century.
On 7th April, President Carter referred to this subject. He referred to fast breeder reactors and the reprocessing of plutonium, and made it clear that the United States' policy was now to go in another direction. He also expressed concern about non-proliferation; that is, that it should be continued. The problem of plutonium and other dangerous materials getting into the wrong hands and being used for blackmail is one which already exists, and the noble Viscount, Lord Hanworth, referred to that. But 1401 no one should misconstrue the United States' official attitude. They are not frowning on our reprocessing or on that of other countries. They know that it will be needed. The key words of President Carter on this are:They feel that our unilateral action in renouncing the reprocessing of spent fuels to produce plutonium might imply that we prohibit them or criticise them severely because of their own need for reprocessing. This is not the case. They have a perfect right to go ahead and continue with their own reprocessing efforts. But we hope that they will join with us in eliminating in the future additional countries that might have had this capability".We in Britain should respond to that. I do not regard this as an objection to reprocessing or the use of plutonium. I regard this as a challenge. This is something which we should be able to safeguard against in working out our own future policy. The long-term implications are so great for the future and for the United Kingdom—for the United Kingdom perhaps as much as for any other country in the world—that energy policy, including the methods of saving it, should be given a very high priority, and I believe a higher priority than it appears to be receiving in this country today.
§ 8.36 p.m.
§ The LORD PRIVY SEAL (Lord Peart)
My Lords, first may I say what a fine debate we have had today. I feel very humble participating in it. We have had some really distinguished contributions from some very distinguished scientists, and indeed from other noble Lords who are engineers and who know the industry; but, apart from that, even from people who say that they are not specialists. I was thinking of the noble Lord, Lord Wolverton, and how right he was to remind us about electrification of our railways. I thought his speech was very refreshing, and I agree with him so much.
I should like to begin by congratulating the two noble Lords, Lord Wynne-Jones and Lord Lauderdale, on the timeliness of the Motions before the House. By taking them together we have had this afternoon a valuable debate, till nearly nine o'clock, surveying the whole field of United Kingdom energy policy, its place in the European Economic Community context and the Community's own developing energy policy itself. I say timely, because in recent months the publication of a 1402 series of independently conducted studies has once again focused world attention on the problem of finite oil supplies, and in particular on the prospect that, without concerted efforts to promote more efficient energy use and to develop alternative fuels, world demand for oil could, during the 1980s, put severe pressure on supplies from the producing countries.
Against this background the Government particularly welcome the proposals on energy policy which President Carter put to the United States Congress on 20th April. These are a positive step by the world's largest energy consumer and oil importer towards restraining demands on oil imports and lessening the gap between the United States domestic and world prices. Just over a fortnight ago, on 7th and 8th May, world leaders discussed energy issues at the Downing Street Summit and pledged themselves to further efforts to conserve energy and to increase and diversify production in order to reduce dependence on imported oil.
I come now first to the noble Lord's Motion: that is, to call attention to the energy problems facing this country, and to move for Papers. To some it may sound strange to talk of problems as Britain approaches the point of net self-sufficiency in energy and the prospect that self-sufficiency will endure for at least a decade. But our wealth in energy resources, while it places us at some advantage compared with others, is little cause for complacency, and there has, rightly, been little sign of complacency in this debate. Indeed, the Government have been prodded—quite rightly—here and there on particular aspects of energy policy.
We, in this country, face the same prospect as others: supplies of world oil will come under mounting pressure, and we face the same needs to ensure an orderly transition to a fuel economy in which energy conservation and other fuels will play an increasingly important role. Our reserves of offshore oil and gas are a welcome and much needed addition to national resources. But on present estimates our own oil is likely to fall short of home requirements in the 1990s and to run down before world supplies do. These valuable resources cannot be replaced and we have to make doubly sure that we use them responsibly and make the most of the opportunity they 1403 offer to provide for the country's longer-term well-being. The Government's approach to the United Kingdom energy policy has been very much directed to ensuring that we do.
Our approach does not take the form of a precise blueprint. We have all seen, even in the post-1973 energy era, what can be the fate of blueprints. Instead, we have been working towards something perhaps less clear-cut but certainly more robust—a strategy framework within which we can operate and which we can keep under review. My right honourable friend the Secretary of State for Energy over the past year and more has been engaged in a quite novel exercise. I realise that sometimes he has been criticised but no one would deny that the exercise which he is conducting is right. This exercise, in opening up the formulation of energy policy to the widest range of interest, is important. A number of noble Lords attended the National Energy Conference held last year. Before and since there has been an unprecedented flow of detailed studies from the Department of my right honourable friend—from a general survey on policies and prospects (that is, of course, the Energy Policy Review) to examinations of individual technologies. Few should now be ill-informed. The vigorous public discussion of energy matters has already done much to clarify the options open to us and the issues at stake.
The broad longer-term prospect is clear. The United Kingdom, like other countries—and this is partly a reply to the noble Lord, Lord Campbell of Croy, because he asked about coal and the Community—will become increasingly dependent on a combination of coal, nuclear power, energy conservation and renewable sources. A number of noble Lords have today declared in favour of varying combinations of these. The fact is that we cannot now settle precisely the desirable energy balance of the late 1980s and the 1990s. We need to pursue all four of them if we are to have a sound basis for future decisions about meeting our energy needs. That is what the Government are doing and will continue to do.
Let me take them in turn. First, coal. Coal is our most abundant fossil fuel resource. I was so glad that the noble 1404 Lord, Lord Taylor of Mansfield, who has long experience in the coal industry, defended coal so strongly today. I think that we all agree with him. It was right that he should do so and we understand how he feels about it. We have sufficient reserves of coal technically recoverable to support production at present levels for some 300 years. Plan for Coal is reversing the long decline of the industry and establishing a firm foundation for coal's important longer-term contribution. But coal alone cannot meet all our needs. There are also environmental factors to be weighed. It may well be that some of us in Government made the wrong decisions when we sought to run down the mining industry quickly. My former constituency once had six or seven pits; now it has none, and there is only one in the county of Cumbria, at Whitehaven. Therefore, we must all watch the future carefully.
I turn next to nuclear power, which has been an important area of accumulating British skill and experience for over 20 years. The Magnox reactors have been contributing attractively-priced electricity to the grid over that period and the advanced gas cooled reactors are now coming on stream. We face important decisions about the future of our thermal reactor programme and about development of the fast reactor. As in the United States and elsewhere in Europe, the environmental, social and safety implications—particularly of a significant future reliance on fast reactors—have, as noble Lords know, been the subject of active and increasingly informed discussion. Reference was made to a debate which we had in this House.
The importance of the fast reactor is that it uses uranium, which is in finite supply, some 60 times more efficiently than thermal reactors. The United Kingdom has stocks of depleted uranium which, if used in fast reactors, would yield energy equivalent to nearly our entire technically recoverable reserves of coal. But the many questions which have been raised have to be satisfactorily resolved. The Heads of Government at the recent Summit decided in particular to establish a study group to examine nuclear non-proliferation.
I defend our entry into the nuclear field, and always have done. I believe that we now lead the world in nuclear technology and it is a great asset to this country. 1405 Therefore, let us not underestimate it. I appreciate that there are dangers, but I believe that all noble Lords accept that fact, and therefore we must have proper safety measures. The noble Lord, Lord Sherlield, who was once the chairman of the Atomic Energy Authority, knows much about that side of the industry and I think will agree that we have always insisted upon high standards.
Conservation, which is another important matter, can make a significant contribution towards meeting our needs. The Government programme of measures is in its third year and we are constantly developing it. Our central estimate is that savings of about 6 per cent. in primary energy consumption were achieved in 1975. There are considerably greater savings to be pursued economically at present energy prices, and the Government will do all they can to encourage them.
Of the renewable sources, we have research under way into wave power, which was mentioned by many of my noble friends, solar energy and geothermal energy, and we have announced expenditure totalling some £10 million. The maximum technically obtainable contribution from renewable sources in the United Kingdom by the year 2000 is probably only about 40 million tons of coal equivalent, and we are trying to establish how far their development on that time-scale might be economically attractive. In the next century they could become considerably more important.
The work in hand on all four of these counts has its place in our programme. This broadly based approach is similar to that which is being followed by most other developed Western nations, although the emphasis varies with national circumstances. If there is a distinction in our case, it is that our medium-term self-sufficiency in energy and the economic benefits from North Sea oil provide a special opportunity for setting our economy and the energy sector of it on a sound longer-term basis. I can assure noble Lords that the Government intend to make the most of that opportunity and to proceed in as orderly a fashion as they can.
I now turn to the Motion in the name of the noble Earl, Lord Lauderdale:That this House takes note of the Twenty-eighth Report of the European Communities Committee on EEC Energy Policy".1406 First, I wish to thank the Select Committee of the House on the European Communities for their report. Members of the Sub-Committee on Energy have this time examined three general documents, none of which contains any legislative proposals. This does not, of course, mean that they are of lesser significance. On the contrary, it is only by examining the overall general position of the Community's energy policy that one can identify the important issues which need resolving, work out solutions for them and chart the course for future policy.
I believe that I am right in saying that it is about 18 months since this House debated European Economic Community Energy Policy. Some noble Lords may consider that a debate on EEC energy policy is overdue. None could protest that it has been given undue prominence in the business of this House. I am therefore grateful to the Select Committee for their work in examining these three Commission documents and their report on them which has given us the opportunity for this debate.
The Select Committee's report is, as I indicated earlier, timely in the context of world energy. I note that the Select Committee's report has referred to the OECD's report The World Energy Outlook, which I think the noble Lord speaking for the Liberal Party mentioned. The OECD's report rightly stresses the need for Government to instil an energy conservation conscientiousness in consumers and to promote the more efficient allocation of energy resources. It also gives a timely reminder of the long lead times involved in bringing on-stream new or alternative sources of energy.
Since the Commission's document R/2275/76 on Community energy policy, which was issued in October of last year, and which, as the Select Committee's report points out, drew the Council's attention to Member States' insufficient progress towards self-sufficiency in energy, a follow-on document has been issued, that is, R/477/77, dated 25th February this year. This drew the Council's attention to the worsening of the Community's energy situation and stressed the need for continuing co-operation within the Community (and indeed wider co-operation outside) to meet the difficulties of reconciling energy supply with demand.
1407 The Select Committee's report refers to different and differing figures of energy demand in 1985, and the growth rates of energy demand. But, whichever estimates and analyses are used, and however reliable or unreliable they may be, one clear theme is common to them all; namely, that even with moderate rates of energy demand growth, there is no certainly about how the Community will be able to meet all its energy requirements after the 1980s. Moreover, the Community will be competing for its share of world resources at a time when oil production will be declining and the demands of the less developed countries increasing.
To counter the apparent poor prospects for economic growth without significantly increasing oil imports, the Commission advocate, in document R/477/77, the increased use and economic home production of coal, action on nuclear energy, and an increased programme on new forms of energy. At the 29th March Energy Council, Ministers held a very useful and constructive discussion on the political aspects of the Community's energy situation. They emphasised the importance of doing everything possible to reduce dependence on imported oil and to save energy.
It was agreed that coal had an important part to play and that nuclear power should make a large contribution, provided that this was accepted by the public and that problems such as security and the disposal of waste would be overcome and the solutions accepted. It is probable that Ministers will have a fuller discussion on nuclear matters at the Energy Council planned for 14th June.
The penultimate sentence of the Select Committee's report states that it would be unwise for the United Kingdom to regard its coming self-sufficiency in energy as guaranteeing it immunity from the adverse effects of shortages elsewhere. As noble Lords will have gathered, I fully endorse that view. We fully support the Community objective of reducing dependence on external energy supplies. The United Kingdom has made a positive contribution to this international co-operation on energy conservation in the EEC and also in the International Energy Agency (IEA), and will continue to do so.
1408 The efficient use of energy and the elimination of waste are essential twin allies to the success of a national and international energy policy. But even with intensive conservation efforts and a reduced energy demand growth, the Community would still remain dependent upon external supplies of oil. It is therefore important that the Community's indigenous resources should be increased. The United Kingdom is, of course, making a good contribution towards this with its North Sea oil and gas production. Our coal mines too are playing an important part, and their contribution should become increasingly significant as we near the end of the century and our oil resources diminish.
The Commission's document R/3128/76 drew the Council's attention to the deteriorating position of the Community's coal industry. The Select Committee underlined this in their report and also referred to the Commission's concern about the decline in Community output, the rise in imports and the rise in stocks of coal. The Committee intend to examine further the situation in the coal industry. But since document R/3128/76 was issued, the Commission has issued further documents on the coal industry which contain some constructive proposals of assistance. For example, document R/478/77 of 25th February points to the effect which imports from third countries are having on Community coal, and suggests that if the trend continues productive capacity could be reduced owing to uncertainty about the future. It outlines ways of gathering full information about third country imports rapidly and effectively so that the situation can be kept under constant review and action taken, if necessary.
At the 29th March Energy Council Ministers agreed that arrangements should be made by each Member State for the surveillance of imports of coal from non-member countries. The Commission's proposals for these arrangements have yet to be discussed in detail, but we hope that all countries will be able to accept the small changes proposed by the Commission to establish an effective monitoring system.
The Select Committee's report refers to a second adverse development, namely, the rise in stocks of coal. The Commission's document R/686/77 of 22nd March proposes regulations for 1409 Community support towards the cost of stocking coal and coke. About one-third of the cost of excess stock would be met. This would mean, in practice, about one-third of stocks in excess of one month's production, up to a limit of 20 million tonnes for the Community as a whole. The proposal is under examination by experts in the Community and it may come up for discussion at the June Energy Council. The opinion of the European Assembly will be required, however, before any Council decision can be reached. The Community recognise that increasing attention will need to be given to the problems associated with the development of nuclear energy to enable it to make its contribution towards meeting energy requirements on a sufficient scale.
I share the Select Committee's concern, as expressed in their report, about the Community's energy prospects in the medium and long term. There is, however, a growing realisation in the Community of the need to overcome the Community's energy problems before they become insoluble. Member States recognise and accept the importance and need for collective action, whether this be individual Member States adopting different measures towards the same end, or joint implementation of uniform policies.
My Lords, may I say that I have carefully noted questions. The noble Lord, Lord Ironside, referred to "gas guzzlers". I was not quite sure what they were. It was the first time that I had heard of the phrase, but I understand that United Kingdom petrol prices are considerably above price levels in the United States and there is already considerable incentive here to use smaller and more economic cars. As noble Lords know, the very large models which are widespread in the United States of America have never been very popular here. I think the Prime Minister raised the question of the implications of United Kingdom exports to the United States at the time of President Carter's statement, and we are keeping a close watch on developments in this field.
I must say something about JET, having been asked about it. I have details of a whole lot of other questions I have been asked and, having spoken already for nearly 25 minutes, I am anxious to conclude; I want to set a good example. 1410 We had hoped that a decision on a site for JET would have been taken at the Research Council meeting on 29th March last. As noble Lords are aware, the choice was between Culham and Garching in Germany, but disagreement over the organisation of the project prevented a final decision being arrived at. It is hoped to reach agreement on a site, and of course on the organisation, at the next Research Council meeting, the date of which has not yet been fixed. The Government remain convinced that Culham is the best site for it and are doing their best to bring the project to this country.
The noble Lord, Lord Strathcona and Mount Royal, asked about the payment of costs in respect of oil pollution. In a good reply to a Question in the House the other day, my noble friend Lord Strabolgi mentioned that responsibility for clean up costs rested with the operator. That is the situation and my noble friend's Answer appears in Hansard in full, details of which I will give the noble Lord.
I wish to bring my remarks to a conclusion in the way in which the noble Viscount, Lord Hanworth, finished his short and concise speech, which was a very moral appeal. He said, in effect, "Let us watch out. After all, we will spend vast sums of money on energy, nuclear power and so on. Let us remember that we are living in a world in which millions of people are dying from malnutrition, poverty, starvation, and disease". We must always bear that in mind. That is why I have always believed agriculture and food supplies to be so important, and that was pointed out by the noble Lord, Lord Ironside. Food is important and that is why I have always supported FAO, one of the great agencies of the United Nations, and, linking with it, we have UNESCO, a body which fights against illiteracy. In the end, we can increase our standard of living only by the development of energy, by more production and by our manufacturing industry, which ticks because of energy supplies. While we are defending energy today, we are, therefore, being very moral as well.
§ 9.3 p.m.
§ The Earl of LAUDERDALE
My Lords, in the absence of the noble Lord, Lord Wynne-Jones, I have undertaken to apologise because he has had to leave 1411 for Brussels, where I have no doubt that energy policy will be one of the matters he is discussing. I undertook on his behalf to make a few comments in conclusion.
I know that he would wish, and certainly I would wish, to thank all noble Lords who have taken part in the debate. I also know that Lord Wynne-Jones and all noble Lords would like particularly to thank the noble Lord the Leader of the House for giving such a comprehensive reply, if a generalised one. As is commonly the case on what one might describe as an omnibus occasion such as this, many questions have been flung at the noble Lord, probably, as is usually the case, without warning. If he writes, as is commonly the case, to noble Lords who put questions, perhaps other noble Lords who took part in the debate might be allowed to have copies of those letters, or alternatively an arrangement might be made to table Questions for Written Answer after the Recess.
As many questions have been asked which are of interest to the House as a whole, perhaps the Leader of the House would help us in that way. The noble Earl, Lord Bessborough, asked about the cross-Channel power link and the noble Lord, Lord Energlyn, raised the question of the barrage scheme. I asked about the Government stance on the minimum support price at the forthcoming Energy Council and many other questions have been put, all of which will be of general interest to the House.
Having said that, and having received a sympathetic nod from the Leader of the House, it is fair to say that this has been a most instructive, informative and enjoyable debate. The comprehensive answers we have had and the particular answers we are promised will have served the purpose of the debate and, in the light of those two aspects, I wish, on behalf of Lord Wynne-Jones, to beg leave to withdraw the Motion.
§ Motion for Papers, by leave, withdrawn.