HC Deb 04 April 1979 vol 965 cc724-6W
Mr. Campbell

asked the Secretary of State for Energy what action is required to offset the shortfall in oil supply.

Mr. Benn

The world is currently experiencing a difficult oil supply situation stemming from the cutback in Iranian production in recent months. The International Energy Agency has forecast a shortfall in oil supplies in the non-Communist world over 1979 as a whole of about two million barrels a day, or 4 per cent. of consumption. This does not amount to a serious supply crisis. But there is a need for all consumers to cut down their use of oil. The world cannot count on oil supply rising to match whatever level of demand consumers choose to set.

Member States of the International Energy Agency have agreed to reduce their demand for oil on world markets by 5 per cent. and EEC member States have agreed to cut back oil consumption in 1979 from 525 million tonnes to 500 million tonnes. Her Majesty's Government have been a whole-hearted participant in these decisions. While North Sea oil is an asset of great value to the United Kingdom economy and our security of oil supply, it would be a mistake to regard it as insulating us from the effects of a world shortage. We are a trading nation and the economic wellbeing of our trading partners, which depends on an adequate supply of oil, is vital to our own prosperity.

The Government have decided upon the following specific measures as an immediate contribution to the international effort to save oil.

First, the capacity of our coal industry enables us to make a substantial saving in the amount of oil used in the generation of electricity, by increasing coal burn. The Central Electricity Generating Board has undertaken to save up to two million tonnes in the next six months by this means, and there will be some scope for further saving thereafter.

Second, there will be a further determined drive to save oil in the public sector, both in all Government Departments and agencies and in the nationalised industries, local authorities, the Health Service, the police and prison services and other parts of the public sector. My right hon. Friends and I are in touch with the various sectors about the part they have to play.

I also count upon serious voluntary efforts, both by private industry and the public at large, to economise in the use of oil. The cutback in Iranian production has demonstrated the vulnerability of world oil supply and reinforces both the importance of the Government's policies on production from the United Kingdom continental shelf and the need for energy conservation, both now and in the long term.

Everyone who uses oil products has a responsibility to make a conscious effort now to limit consumption and to cut out all waste and then to build on this achievement by making a lasting and continuing saving. In the months ahead, we must all ask ourselves whether or not we are being extravagant in our energy use, particularly of oil, and how we can manage by using a little less.

The measures now announced will enable us to go a long way towards meeting our obligations and progress will be kept under review.