HC Deb 30 October 1974 vol 880 cc2-4W
Mr. Sillars

asked the Secretary of State for Energy whether he will make a statement about the international energy programme.

Mr. Varley

Over several months Her Majesty's Government have been participating in discussions in the Energy Coordinating Group, set up at the Washington Energy Conference, which have now resulted in an Agreement for an International Energy Programme. The Government, along with the Governments of Belgium, Denmark, the Federal Republic of Germany, the Republic of Ireland, Italy, Japan, Luxembourg, the Netherlands and the United States of America, have now notified their approval of the agreement, which will shortly be signed and put into provisional operation from 18th November, to the extent that it is not inconsistent with the legislation of the participating countries. At least one other Government which took part in the discussions leading to this agreement is expected to notify its approval very soon.

Signatory States have until 1st May, 1975 to signify their definitive consent to be bound by the agreement; this will give time for Parliament to consider it. I will arrange for the text to be deposited in the Library. The agreement will run for 10 years but will be subject to a general review after five years. There is provision for any participant to withdraw from the scheme, on 12 months' notice, after it has been in operation for three years.

Successive British Governments have strongly supported the concept of international co-operation to deal with world energy problems, because it is clear that these can be effectively tackled only on a multinational basis. This is no less true for us in this country than it is for our partners, even though we hope to be self-sufficient in oil supply by 1980.

The International Energy Programme aims to reduce dependence on imported supplies of oil. Traditional oil producers have themselves repeatedly expressed their own interest in seeing the world conserve energy and develop alternative sources.

In the discussions which led up to the agreement, the importance of promoting harmonious relations between the oil-consuming and oil-producing countries was constantly emphasised. Accordingly the agreement provides for a standing group on relations with producer countries and other consumer countries to be set up, which will be charged with keeping under continuous review all political and economic developments in the energy field, with a view to identifying opportunities for a purposeful dialogue as well as other forms of co-operation.

The programme is to be administered by an international energy agency which, subject to the agreement of the Council of the Organisation for Economic Co-operation and Development, would be established within that organisation. It will be open to other OECD countries to apply to join the scheme later if they wish.

The programme's most important features include a scheme for sharing oil in an emergency, co-ordinated efforts at energy conservation, longer-term co-operation on matters such as research and development related to alternative supplies, and arrangements for monitoring the international oil market.

The immediate practical part of the agreement is the oil-sharing scheme. This —subject to the agreement of a majority of the participating States voting under the arrangements defined in the agreement—will be activated when supplies of oil to any participating country or to all the participating countries are reduced by a given proportion. If the oil emergency arrangements are activated they will involve sharing a defined proportion of the available oil, both domestic and imported, not exceeding 10 per cent. in normal circumstances. This would be combined with measures of demand restraint and the use of oil stocks on an agreed basis.

Arrangements for dealing with a major shortage of oil supplies in an orderly way, by sharing available oil on an equitable basis in times of crisis and avoiding intense competition for supplies, are in the interests of all countries. The arrangements proposed envisage a minimum of economic sacrifice on the part of all participants and provide them with equal ability to withstand the effect of major shortages for a very long period.