HL Deb 30 January 1989 vol 503 cc869-71

2.37 p.m.

Viscount Hanworth asked Her Majesty's Government:

What steps they are taking to preserve the United Kingdom's diminishing natural gas reserves and to discourage their use by new privately-financed power stations unless a corresponding amount of natural gas is obtained from Norwegian reserves.

The Earl of Dundee

My Lords, the United Kingdom has ample gas reserves to supply needs well into the future. The Government see no reason for discriminating against power station use of gas. Generation from gas is both environmentally more acceptable and thermally more efficient than generation from other fossil fuels. Any decisions to import gas will rest on the merits of doing so in the market circumstances of the time.

Viscount Hanworth

My Lords, I thank the Minister for that reply. However, he surely acknowledges that our own gas supplies are strictly limited compared perhaps with those of the Norwegians.

Noble Lords


Viscount Hanworth

This may be of great importance in the not too distant future to our balance of payments and to much else. Will the Minister confirm that the Government have powers to restrict the use of natural gas for generating power if it appears that it is becoming excessive?

The Earl of Dundee

My Lords, the Government certainly have powers to restrict the use of natural gas if its depletion became excessive. However, I can assure the noble Viscount that we have ample reserves. There is no need to embark on a depletion policy. Indeed, he will appreciate that the development of deep-sea oil and gas reserves requires large up-front investments. Making such an investment, with the possibility that the Government might limit flows from the development field, would add a substantial clement to the already considerable risks and therefore inhibit development prospects.

Lord Stoddart of Swindon

My Lords, does the noble Earl agree that energy conservation is still important and that it is not in the best interests of energy conservation to burn a premium fuel—which can be burnt directly at at least 80 per cent. overall thermal efficiency—in generators, turbines and boilers, which reduce the overall thermal efficiency to 35 per cent? I hope that he will consider that aspect.

The Earl of Dundee

My Lords, I am grateful to the noble Lord for touching on that theme. However, I should point out to him the environmental advantages of gas, which are substantial. Gas has a low sulphur content. Combustion can be controlled to ensure low emissions of nitrogen oxide. Carbon dioxide emissions per unit of electricity are below half the level for coal-fired stations.

Lord Peston

My Lords, does the noble Earl agree that although we have considerable natural gas supplies, natural gas provides a particularly important back-up to our country's long-term energy reserves? Is it the view of Her Majesty's Government that the current price of natural gas truly reflects its long-term value to the economy?

The Earl of Dundee

My Lords, I am grateful to the noble Lord. I do not think that it would be wise for any of us to attempt to look too far into the future in predicting how the price of gas will behave. Indeed, if we were to do so we might move from sensible discussions on the substance of gas to rather difficult, if related, deliberations on the subject of hot air.

Lord Ezra

My Lords, I accept that we must treat our valuable natural gas to best advantage. However, does the noble Earl agree that there is merit in diversifying to some degree the sources of primary energy for electricity generation; for example, to combine heat and power, to the use of waste materials and in other ways? If so, it is possibly difficult to discriminate against one particular fuel.

The Earl of Dundee

My Lords, yes. I wholeheartedly support what the noble Lord has just said. The more that we can diversify with fuels the better.

The Earl of Halsbury

My Lords, does the noble Earl's consideration include any work that is going on on the apparently enormous reserves of methane as methane hydrate in Arctic waters?

The Earl of Dundee

My Lords, I am grateful to the noble Earl. I shall pass on his remarks.

Viscount Hanworth

My Lords, what does the noble Earl mean by "ample reserves"?

The Earl of Dundee

My Lords, I believe that these are reserves which are considerably to be distinguished from those which might be regarded as minimal.

Lord Leatherland

My Lords, how will this matter affect our coal industry? Does it mean that many of our collieries will have to shut down?

The Earl of Dundee

No, my Lords. I can assure the noble Lord that he does not have to make a pessimistic inference.