§ 2.57 p.m.
§ Lord THOMASMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether they are satisfied that sufficient effort is being applied in the United Kingdom to the development of processes for the conversion of coal into oils suitable for use in internal combustion engines, especially those operating on the compression ignition (i.e. diesel) principle.
§ Lord STRABOLGIMy Lords, the Government are satisfied that sufficient work is being done in the United Kingdom on the conversion of coal into liquid fuels for internal combustion engines. The Department of Energy is to support the National Coal Board in design studies on two 25 tonne per day coal liquefaction pilot plants aimed at the production of the full range of transport fuels and chemical feedstocks. If the design studies are encouraging, the Government are prepared to provide up to £20 million towards the £30 million expenditure for the construction and operation of these plants.
§ Lord THOMASMy Lords, I thank the noble Lord for that helpful and courteous Answer. Is he aware that there is great development taking place in Japan, America and Europe in the manufacture 1103 of small-bore diesel engines which run on this kind of fuel? Would not an easement of taxation on diesel fuel, whether produced from coal or otherwise, be a helpful move in obtaining energy conservation in future years?
§ Lord STRABOLGIMy Lords, coal conversion processes, which we are dealing with now, generally produce a spectrum of products and present evidence suggests that it would be neither efficient nor economic to concentrate upon a single product.
§ Lord SHINWELLMy Lords, is my noble friend aware that there is no difficulty at all, so far as the technical aspects are concerned, in transforming coal into oil? There have been in the possession of various Governments since the First World War hundreds of schemes, some of them very efficient. The trouble is that it is so expensive, and therefore it does not possibly compete with oil that is produced in places such as Saudi Arabia, Iran and elsewhere.
§ Lord STRABOLGIMy Lords, the present position is that, using coal at £25 a tonne, the projected total cost of synthetic oil would be about £90 to £101 a tonne, including the cost of the coal. This is about double the present cost of natural crude oil, but if the crude goes up in price then the gap might be narrowed.
§ Lord HALEMy Lords, is my noble friend aware that the prospects of heavy increases in oil prices are apparently imminent, that the House has already committed itself on the Wynne-Jones Motion to a massive extra production of oil, and that all these proposals were included in the Lloyd-George programme upon which I fought my election exactly 50 years ago?
§ Lord STRABOLGIMy Lords, I am sure that is very interesting. The forecast submitted to the Energy Commission suggests that synthetic liquid fuels should begin to be required soon after the turn of the century.
§ Lord GLENKINGLASMy Lords, does not the noble Lord agree that the 1104 events of the last month have totally changed the outlook for oil not only for Britain but for the world as a whole, and that the price of light crude has gone up something like 50 per cent. in a very, very short period of time? If I am roughly correct about the price which the noble Lord quoted for the conversion of coal into oil, I believe he will find that it is almost exactly the same as the present price in this country of light crude from Arabia.
§ Lord STRABOLGIMy Lords, we are well aware of the need to press on with coal utilisation and conversion into transport fuels and also into feedstocks. What we are doing is outlined in full in the paper Coal Technology, and I shall put a copy of it in the Library. There is no dragging of feet here.
The Earl of HALSBURYMy Lords, can the noble Lord give an undertaking that when the time is ripe to advance from the pilot plant stage to a full-scale demonstration stage, costing not tens of millions but possibly hundreds of millions, the necessary finance will be forthcoming, promptly and effectively?
§ Lord STRABOLGIMy Lords, I should not like to commit the Government of the day, particularly in a House which is not responsible for finance. However, I can assure the noble Earl that it would certainly be this Government's policy to press on with this very important conversion.
Lord JANNERMy Lords, as one who also fought some 50 years ago on the same issue, would my noble friend give some indication of when we are likely to get an opinion on what is going to be done, if anything? It is an extremely important matter. Certainly in the days when we were fighting, people thought that there was a very fair possibility of something being done in that direction. And that, as I say, was 50 years ago.
§ Lord STRABOLGIMy Lords, meetings between design contractors and the National Coal Board are presently taking place. If the design phase is encouraging, the construction phase could begin in about 18 months' time.