HL Deb 11 July 1979 vol 401 cc873-5

2.45 p.m.

The Earl of LAUDERDALE

My 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 what incentives they propose to offer to encourage exploration for natural gas on the United Kingdom Continental Shelf.

The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie)

My Lords, as the House will know from the answers I have given my noble friend recently, Her Majesty's Government recognise the importance of encouraging exploration for oil and for gas. The rate of exploration is kept under review and if appropriate the Government are ready to consider whether additional steps are needed to encourage exploration.

The Earl of LAUDERDALE

My Lords, I thank my noble friend for that reply. May I ask him whether he would agree that a lower domestic price for natural gas has been a disincentive to exploration for it, and, likewise, constitutes a disincentive for the development of those marginal fields of which the production of gas could form a part?

The Earl of GOWRIE

My Lords, I rather agree with my noble friend. But the fact is that we have a surplus in gas stocks at the moment, so I think it would be quite wrong in those circumstances to take any immediate steps to interfere with the price.

Lord STRABOLGI

My Lords, may I ask the Government to confirm that they do not intend to sell off the North Sea assets of the British Gas Corporation, and that they will continue to encourage a British presence in the North Sea?

The Earl of GOWRIE

My Lords, it would be impossible for the British not to have a presence in the North Sea. The first part of the noble Lord's question is a matter that is being reviewed by my right honourable friend the Chancellor of the Exchequer.

The Earl of LAUDERDALE

My Lords, may I ask my noble friend whether he has any confirmation of the report that something like 10 per cent. of the known recoverable reserves of North Sea gas have already been used up? If so, would he not regard that as rather a profligate use of a scarce natural resource, which could be countered by adjustments in the price?

The Earl of GOWRIE

My Lords, it would indeed be profligate if that were true, but my information is that it is not.

Lord LEE of NEWTON

My Lords, will the noble Earl agree that the Government are doing far too well already in increasing the price of other things, without doing it with gas?

The Earl of GOWRIE

My Lords, is the noble Lord asking for information, or making a political point?

Lord WYNNE-JONES

My Lords, would the noble Earl confirm that our production of North Sea gas has continued to increase and that there is no need for alarm, except at the astonishing wastage which is encouraged by the oil companies in flaring off gas, because they have not taken the trouble to develop the proper methods of separating gas from oil?

The Earl of GOWRIE

My Lords, I am grateful to the noble Lord for allowing me to draw attention to my earlier point again, that we are in surplus on gas stocks. On the point about flaring, my right honourable friend the Secretary of State for Energy announced on 5th July a new study of a major gas gathering scheme in the Northern Basin. It would further our objectives of maximising hydrocarbon recovery from present and future fields, and maximising the quantities of gas available to the United Kingdom. So that we are in considerable agreement with the noble Lord. Unfortunately, what he is suggesting is very expensive.