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My Lords, is it not worth considering the following calculation? If every Chinaman eats one more chicken a year and it takes something like 10 pounds of grain to produce one chicken, that 10 pounds multiplied by 1.3 billion people is an awful lot of grain. Does that very simply not show why there is a terrible pressure on the grain market?
My Lords, is it not worth considering the following calculation? If every Chinaman eats one more chicken a year and it takes something like 10 pounds of grain to produce one chicken, that 10 pounds multiplied by 1.3 billion people is an awful lot of grain. Does that very simply not show why there is a terrible pressure on the grain market?
Asked by
Earl of Onslow
(Conservative)
Oral questions - Supplementary
Status
Answered
Answered on
25 March 2008
My Lords, yes, and indeed those calculations have been done. If you then combine them with two bad harvests in both Europe and Australia, you get the doubling of prices which we have seen in the past year. Those have not all come through in food prices at the retail end of the market; there are still quite a few more. At present, the world stocks of wheat are at less than 70 days of consumption and the world stocks of maize are at less than 50 days of consumption. A lot of people around the world are looking at these figures in order to form a plan to deal with the issue.
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c444
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, to what extent do the Government see pressure on grain supplies as a permanent shift? There is increased demand for livestock products worldwide, a drive to biofuels, and a refinery to be opened in the north-east of England shortly that will take over 5 per cent of our wheat crop in 2009. Does that mean that grain production will be at a premium in future? Other than the set-aside proposals, what policy changes do the Government have in mind to deal with that?
My Lords, to what extent do the Government see pressure on grain supplies as a permanent shift? There is increased demand for livestock products worldwide, a drive to biofuels, and a refinery to be opened in the north-east of England shortly that will take over 5 per cent of our wheat crop in 2009. Does that mean that grain production will be at a premium in future? Other than the set-aside proposals, what policy changes do the Government have in mind to deal with that?
Asked by
Lord Taylor of Holbeach
(Conservative)
Oral questions - Supplementary
Status
Answered
Answered on
25 March 2008
My Lords, the noble Lord is right in terms of policy changes. The basic reason has been the last two harvests. Three years ago the grain stocks were 330 million tonnes, so 80 million tonnes have gone in three years, generally speaking as a result of those two poor harvests. That caused the Ukraine and Russia to stick on export controls, which had an adverse effect as well. There will be volatility regarding animal feed stocks for some time. Relatively speaking, all livestock producers will be similarly affected, although pigs and poultry are obviously more dependent on the crops than cattle and sheep. The difficulties will all be treated the same, because this is a world commodity with world prices.
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c442-3
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, what impact has the move to bioethanol in the United States had on the availability of grain? Has the subsidy by the US Government had a major impact on the amount of grain going out of food production and into bioethanol?
My Lords, what impact has the move to bioethanol in the United States had on the availability of grain? Has the subsidy by the US Government had a major impact on the amount of grain going out of food production and into bioethanol?
Asked by
Lord Redesdale
(Liberal Democrat)
Oral questions - Supplementary
Status
Answered
Answered on
25 March 2008
My Lords, there is no doubt, there have been some issues, particularly the effect on the harvest in the European Union and Australia. So far as the use of grains for biofuels are concerned—although the question relates to America—the EU has not been affected; some 2 per cent of production has been used for biofuels. The American situation is slightly different in the sense that in 2007-08 it used 80 millions tonnes of maize for biofuel and that is projected to rise to 110 million tonnes in 2008-09. There is some doubt as to whether that is sustainable, but it is not being done just to create fuel, there are other reasons. The subsidy, of course, is quite unacceptable.
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c442
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, does the Minister agree that, although there is no need to panic, we need a thorough examination by government and officials of the consequences of the extremely high world prices for wheat and, even more significantly, world record prices for rice, the principal food of the human race? Does he also agree that some countries have imposed export bans or intervened in the market already, and others plan to set up emergency stockpiles, so clearly the issue goes wider now than UK food prices and supply and is likely to affect food hunger, food aid and possibly political stability in some countries?
My Lords, does the Minister agree that, although there is no need to panic, we need a thorough examination by government and officials of the consequences of the extremely high world prices for wheat and, even more significantly, world record prices for rice, the principal food of the human race? Does he also agree that some countries have imposed export bans or intervened in the market already, and others plan to set up emergency stockpiles, so clearly the issue goes wider now than UK food prices and supply and is likely to affect food hunger, food aid and possibly political stability in some countries?
Asked by
Lord Williamson of Horton
(Crossbench)
Oral questions - Supplementary
Status
Answered
Answered on
25 March 2008
Yes, my Lords, to a greater or lesser extent, all the factors that the noble Lord mentioned will be relevant. There is no question about that, but there is no easy answer. The countries that have imposed export restrictions, including some in South America as well as the Ukraine and Russia, have done that for domestic purposes, trying to keep inflation down in their own countries. That has had added effect because of the adverse weather conditions; we have volatile weather conditions, as everybody knows. However, the actions taken will probably bring more land into production. So far as the EU is concerned, I mentioned set-aside. There will be a need to look at using land for biofuels. An inquiry was announced during the passage of the Climate Change Bill, in which the chairman of the Renewable Fuels Agency will have a look at the environmental impact and the impact on food prices of using food crops for biofuel. That is important, no doubt. Also, diets are changing round the world, especially in Asia and India, requiring more of the crops. Therefore, there will be more pressure on prices if we do not supply more crops. Clearly, no one Government can deal with that matter, but it is being looked at in the EU and on a world basis.
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c443
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, has any estimate been made as to what contribution set-aside can make to resolving the problem?
My Lords, has any estimate been made as to what contribution set-aside can make to resolving the problem?
Asked by
Lord Campbell-Savours
(Labour)
Oral questions - Supplementary
Status
Answered
Answered on
25 March 2008
My Lords, I do not know the full figures at present. It was a late decision last year; by and large, farmers had set their cropping plans for this year before the EU announced zero set-aside for one year. Long term, our aim is to abolish set-aside. It was 10 per cent, but not all of it will go back into production. The estimate is that about half of it has gone back into production this year. Do not hold me to the last 10th of a per cent, but about 5 per cent extra land will be for crops. We want to take account of that, but not to lose all the environmental benefits that came from set-aside. However, one has to remember that set-aside was not an environmental measure in the first place, but a production measure. Now that we need more production, it makes sense to question why set-aside is there.
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c444
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, yes, and indeed those calculations have been done. If you then combine them with two bad harvests in both Europe and Australia, you get the doubling of prices which we have seen in the past year. Those have not all come through in food prices at the retail end of the market; there are still quite a few more. At present, the world stocks of wheat are at less than 70 days of consumption and the world stocks of maize are at less than 50 days of consumption. A lot of people around the world are looking at these figures in order to form a plan to deal with the issue.
My Lords, yes, and indeed those calculations have been done. If you then combine them with two bad harvests in both Europe and Australia, you get the doubling of prices which we have seen in the past year. Those have not all come through in food prices at the retail end of the market; there are still quite a few more. At present, the world stocks of wheat are at less than 70 days of consumption and the world stocks of maize are at less than 50 days of consumption. A lot of people around the world are looking at these figures in order to form a plan to deal with the issue.
Answered by
Lord Rooker
(Labour)
Asked by
Earl of Onslow
(Conservative)
Type
Oral answers to questions
My Lords, is it not worth considering the following calculation? If every Chinaman eats one more chicken a year and it takes something like 10 pounds of grain to produce one chicken, that 10 pounds multiplied by 1.3 billion people is an awful lot of grain. Does that very simply not show why there is a terrible pressure on the grain market?
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c444
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, I do not know the full figures at present. It was a late decision last year; by and large, farmers had set their cropping plans for this year before the EU announced zero set-aside for one year. Long term, our aim is to abolish set-aside. It was 10 per cent, but not all of it will go back into production. The estimate is that about half of it has gone back into production this year. Do not hold me to the last 10th of a per cent, but about 5 per cent extra land will be for crops. We want to take account of that, but not to lose all the environmental benefits that came from set-aside. However, one has to remember that set-aside was not an environmental measure in the first place, but a production measure. Now that we need more production, it makes sense to question why set-aside is there.
My Lords, I do not know the full figures at present. It was a late decision last year; by and large, farmers had set their cropping plans for this year before the EU announced zero set-aside for one year. Long term, our aim is to abolish set-aside. It was 10 per cent, but not all of it will go back into production. The estimate is that about half of it has gone back into production this year. Do not hold me to the last 10th of a per cent, but about 5 per cent extra land will be for crops. We want to take account of that, but not to lose all the environmental benefits that came from set-aside. However, one has to remember that set-aside was not an environmental measure in the first place, but a production measure. Now that we need more production, it makes sense to question why set-aside is there.
Answered by
Lord Rooker
(Labour)
Asked by
Lord Campbell-Savours
(Labour)
Type
Oral answers to questions
My Lords, has any estimate been made as to what contribution set-aside can make to resolving the problem?
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c444
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, it is not national as the noble Earl accepts. As I have said, removing set-aside, for starters, should stimulate grain production and we hope help to contain prices. The EU has taken other measures, including the temporary suspension of import duties on feed grains until the end of this growing season in June and the reselling of all the remaining intervention public stocks of grain. In the longer term, we expect set-aside to be abolished. As for as the UK is concerned, the Home Grown Cereals Authority—one of the levy boards—has been conducting, with the Cereals Industry Forum funded by Defra, risk-management training, so that all parts of the food chain can understand their particular role in that part of a very volatile situation, and one which we expect to remain volatile for some years to come.
My Lords, it is not national as the noble Earl accepts. As I have said, removing set-aside, for starters, should stimulate grain production and we hope help to contain prices. The EU has taken other measures, including the temporary suspension of import duties on feed grains until the end of this growing season in June and the reselling of all the remaining intervention public stocks of grain. In the longer term, we expect set-aside to be abolished. As for as the UK is concerned, the Home Grown Cereals Authority—one of the levy boards—has been conducting, with the Cereals Industry Forum funded by Defra, risk-management training, so that all parts of the food chain can understand their particular role in that part of a very volatile situation, and one which we expect to remain volatile for some years to come.
Answered by
Lord Rooker
(Labour)
Asked by
Earl Attlee
(Conservative)
Type
Oral answers to questions
My Lords, I thank the Minister for his reply. Does he agree that, while the situation is serious, the origin is not national? Is there a blueprint for managing this situation or will there just be a scramble for this vital commodity?
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c442
Chamber / Committee
House of Lords chamber
House
House of Lords
Yes, my Lords, to a greater or lesser extent, all the factors that the noble Lord mentioned will be relevant. There is no question about that, but there is no easy answer. The countries that have imposed export restrictions, including some in South America as well as the Ukraine and Russia, have done that for domestic purposes, trying to keep inflation down in their own countries. That has had added effect because of the adverse weather conditions; we have volatile weather conditions, as everybody knows. However, the actions taken will probably bring more land into production. So far as the EU is concerned, I mentioned set-aside. There will be a need to look at using land for biofuels. An inquiry was announced during the passage of the Climate Change Bill, in which the chairman of the Renewable Fuels Agency will have a look at the environmental impact and the impact on food prices of using food crops for biofuel. That is important, no doubt. Also, diets are changing round the world, especially in Asia and India, requiring more of the crops. Therefore, there will be more pressure on prices if we do not supply more crops. Clearly, no one Government can deal with that matter, but it is being looked at in the EU and on a world basis.
Yes, my Lords, to a greater or lesser extent, all the factors that the noble Lord mentioned will be relevant. There is no question about that, but there is no easy answer. The countries that have imposed export restrictions, including some in South America as well as the Ukraine and Russia, have done that for domestic purposes, trying to keep inflation down in their own countries. That has had added effect because of the adverse weather conditions; we have volatile weather conditions, as everybody knows. However, the actions taken will probably bring more land into production. So far as the EU is concerned, I mentioned set-aside. There will be a need to look at using land for biofuels. An inquiry was announced during the passage of the Climate Change Bill, in which the chairman of the Renewable Fuels Agency will have a look at the environmental impact and the impact on food prices of using food crops for biofuel. That is important, no doubt. Also, diets are changing round the world, especially in Asia and India, requiring more of the crops. Therefore, there will be more pressure on prices if we do not supply more crops. Clearly, no one Government can deal with that matter, but it is being looked at in the EU and on a world basis.
Answered by
Lord Rooker
(Labour)
Asked by
Lord Williamson of Horton
(Crossbench)
Type
Oral answers to questions
My Lords, does the Minister agree that, although there is no need to panic, we need a thorough examination by government and officials of the consequences of the extremely high world prices for wheat and, even more significantly, world record prices for rice, the principal food of the human race? Does he also agree that some countries have imposed export bans or intervened in the market already, and others plan to set up emergency stockpiles, so clearly the issue goes wider now than UK food prices and supply and is likely to affect food hunger, food aid and possibly political stability in some countries?
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c443
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, the noble Lord is right in terms of policy changes. The basic reason has been the last two harvests. Three years ago the grain stocks were 330 million tonnes, so 80 million tonnes have gone in three years, generally speaking as a result of those two poor harvests. That caused the Ukraine and Russia to stick on export controls, which had an adverse effect as well. There will be volatility regarding animal feed stocks for some time. Relatively speaking, all livestock producers will be similarly affected, although pigs and poultry are obviously more dependent on the crops than cattle and sheep. The difficulties will all be treated the same, because this is a world commodity with world prices.
My Lords, the noble Lord is right in terms of policy changes. The basic reason has been the last two harvests. Three years ago the grain stocks were 330 million tonnes, so 80 million tonnes have gone in three years, generally speaking as a result of those two poor harvests. That caused the Ukraine and Russia to stick on export controls, which had an adverse effect as well. There will be volatility regarding animal feed stocks for some time. Relatively speaking, all livestock producers will be similarly affected, although pigs and poultry are obviously more dependent on the crops than cattle and sheep. The difficulties will all be treated the same, because this is a world commodity with world prices.
Answered by
Lord Rooker
(Labour)
Asked by
Lord Taylor of Holbeach
(Conservative)
Type
Oral answers to questions
My Lords, to what extent do the Government see pressure on grain supplies as a permanent shift? There is increased demand for livestock products worldwide, a drive to biofuels, and a refinery to be opened in the north-east of England shortly that will take over 5 per cent of our wheat crop in 2009. Does that mean that grain production will be at a premium in future? Other than the set-aside proposals, what policy changes do the Government have in mind to deal with that?
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c442-3
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, there is no doubt, there have been some issues, particularly the effect on the harvest in the European Union and Australia. So far as the use of grains for biofuels are concerned—although the question relates to America—the EU has not been affected; some 2 per cent of production has been used for biofuels. The American situation is slightly different in the sense that in 2007-08 it used 80 millions tonnes of maize for biofuel and that is projected to rise to 110 million tonnes in 2008-09. There is some doubt as to whether that is sustainable, but it is not being done just to create fuel, there are other reasons. The subsidy, of course, is quite unacceptable.
My Lords, there is no doubt, there have been some issues, particularly the effect on the harvest in the European Union and Australia. So far as the use of grains for biofuels are concerned—although the question relates to America—the EU has not been affected; some 2 per cent of production has been used for biofuels. The American situation is slightly different in the sense that in 2007-08 it used 80 millions tonnes of maize for biofuel and that is projected to rise to 110 million tonnes in 2008-09. There is some doubt as to whether that is sustainable, but it is not being done just to create fuel, there are other reasons. The subsidy, of course, is quite unacceptable.
Answered by
Lord Rooker
(Labour)
Asked by
Lord Redesdale
(Liberal Democrat)
Type
Oral answers to questions
My Lords, what impact has the move to bioethanol in the United States had on the availability of grain? Has the subsidy by the US Government had a major impact on the amount of grain going out of food production and into bioethanol?
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c442
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, I thank the Minister for his reply. Does he agree that, while the situation is serious, the origin is not national? Is there a blueprint for managing this situation or will there just be a scramble for this vital commodity?
My Lords, I thank the Minister for his reply. Does he agree that, while the situation is serious, the origin is not national? Is there a blueprint for managing this situation or will there just be a scramble for this vital commodity?
Asked by
Earl Attlee
(Conservative)
Oral questions - 1st Supplementary
Status
Answered
Answered on
25 March 2008
My Lords, it is not national as the noble Earl accepts. As I have said, removing set-aside, for starters, should stimulate grain production and we hope help to contain prices. The EU has taken other measures, including the temporary suspension of import duties on feed grains until the end of this growing season in June and the reselling of all the remaining intervention public stocks of grain. In the longer term, we expect set-aside to be abolished. As for as the UK is concerned, the Home Grown Cereals Authority—one of the levy boards—has been conducting, with the Cereals Industry Forum funded by Defra, risk-management training, so that all parts of the food chain can understand their particular role in that part of a very volatile situation, and one which we expect to remain volatile for some years to come.
Subjects
Cereals; Production; Stocks of commodities
Date
25 March 2008
Reference
700 c442
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, I thank the noble Earl for this Question, which I think is the first time that this matter has been raised in either House at Question Time.
The current situation is that world grain stocks are forecast to decrease to 247 million tonnes this year, as a result of two successive lower wheat harvests and the increased demand for cereals from the food, feed and fuel sectors. The main impact on the United Kingdom and globally has been sharply higher prices, which, combined with policy changes such as the removal of the set-aside requirement for the 2008 harvest, will undoubtedly stimulate grain production in the UK and, we hope, elsewhere.
My Lords, I thank the noble Earl for this Question, which I think is the first time that this matter has been raised in either House at Question Time.
The current situation is that world grain stocks are forecast to decrease to 247 million tonnes this year, as a result of two successive lower wheat harvests and the increased demand for cereals from the food, feed and fuel sectors. The main impact on the United Kingdom and globally has been sharply higher prices, which, combined with policy changes such as the removal of the set-aside requirement for the 2008 harvest, will undoubtedly stimulate grain production in the UK and, we hope, elsewhere.
Answered by
Lord Rooker
(Labour)
Asked by
Earl Attlee
(Conservative)
Type
Oral answers to questions
What assessment they have made of world stocks of grain and their implication for the United Kingdom.
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c441-2
Chamber / Committee
House of Lords chamber
House
House of Lords
What assessment they have made of world stocks of grain and their implication for the United Kingdom.
What assessment they have made of world stocks of grain and their implication for the United Kingdom.
Asked by
Earl Attlee
(Conservative)
Answered by
Lord Rooker
(Labour)
Oral questions - Lead
Status
Answered
For answer on
25 March 2008
Answered on
25 March 2008
My Lords, I thank the noble Earl for this Question, which I think is the first time that this matter has been raised in either House at Question Time.
The current situation is that world grain stocks are forecast to decrease to 247 million tonnes this year, as a result of two successive lower wheat harvests and the increased demand for cereals from the food, feed and fuel sectors. The main impact on the United Kingdom and globally has been sharply higher prices, which, combined with policy changes such as the removal of the set-aside requirement for the 2008 harvest, will undoubtedly stimulate grain production in the UK and, we hope, elsewhere.
Subjects
Cereals; Stocks of commodities
Date
25 March 2008
Reference
700 c441-2
Chamber / Committee
House of Lords chamber
House
House of Lords
To ask the Secretary of State for Trade and Industry (1) what the statutory basis is for maintenance of strategic stocks of (a) petroleum products, (b) natural gas and (c) coal;
To ask the Secretary of State for Trade and Industry (1) what the statutory basis is for maintenance of strategic stocks of (a) petroleum products, (b) natural gas and (c) coal;
Asked by
Stephen Crabb
(Conservative)
Answered by
Malcolm Wicks
(Labour)
Answering body
Department of Trade and Industry
Type
Written questions
Status
Answered
Tabled on
6 October 2006
For answer on
18 October 2006
Answered on
18 October 2006
[pursuant to the reply, 9 October 2006, Official Report, c. 569-70W]: The figure for UK held oil stocks of 11.2 million tonnes reported in the last paragraph should be ““13.5 million tones””.
Notes
Correct information given on 09/10/2006 at 450 c569-70W in Daily Part and 450 c575-6 in Bound Volume.
Subjects
Fossil fuels; Stocks of commodities
Date
18 October 2006
Reference
92232; 450 c1192W;450 c1198W
House
House of Commons
(2) what estimate he has made of the current levels of the UK’s strategic stocks of (a) petroleum products, (b) natural gas and (c) coal, broken down by (i) Government stocks and (ii) privately-held stocks.
(2) what estimate he has made of the current levels of the UK’s strategic stocks of (a) petroleum products, (b) natural gas and (c) coal, broken down by (i) Government stocks and (ii) privately-held stocks.
Asked by
Stephen Crabb
(Conservative)
Answered by
Malcolm Wicks
(Labour)
Answering body
Department of Trade and Industry
Type
Written questions
Status
Answered
Tabled on
6 October 2006
For answer on
18 October 2006
Answered on
18 October 2006
[pursuant to the reply, 9 October 2006, Official Report, c. 569-70W]: The figure for UK held oil stocks of 11.2 million tonnes reported in the last paragraph should be ““13.5 million tones””.
Notes
Correct information given on 09/10/2006 at 450 c569-70W in Daily Part and 450 c575-6 in Bound Volume.
Subjects
Fossil fuels; Stocks of commodities
Date
18 October 2006
Reference
91450; 450 c1192W;450 c1198W
House
House of Commons
(2) what estimate he has made of the current levels of the UK’s strategic stocks of (a) petroleum products, (b) natural gas and (c) coal, broken down by (i) Government stocks and (ii) privately-held stocks.
(2) what estimate he has made of the current levels of the UK’s strategic stocks of (a) petroleum products, (b) natural gas and (c) coal, broken down by (i) Government stocks and (ii) privately-held stocks.
Asked by
Stephen Crabb
(Conservative)
Answered by
Malcolm Wicks
(Labour)
Answering body
Department of Trade and Industry
Type
Written questions
Status
Answered
Tabled on
6 October 2006
For answer on
9 October 2006
Answered on
9 October 2006
EU member states are required by Directive 2006/67/EC (a codification of previous legislation dating from 1968 and 1998) to hold oil stocks equal to 90 days’ average daily national consumption during the preceding calendar year.There are no similar such EU Directives relating to natural gas or coal and consequently no compulsory stocks for either natural gas or coal.As a net exporter of oil and oil products the UK currently has no obligation to hold stocks through its membership of the International Energy Agency but has an obligation to take part in any collective response to a major international supply disruption, as happened following Hurricane Katrina.The UK has always met these international oil-stocking obligations by directing companies to hold stocks. Section 6 of the Energy Act 1976 allows my right hon. Friend the Secretary of State for Trade and Industry to give directions to businesses producing, supplying or using petroleum products within the UK market, requiring them to hold minimum levels of oil stocks.The Directive (2006/67/EC) provides that as a crude oil producer the UK has a derogation which reduces our obligation by 25 per cent. to 67.5 days’ consumption.Latest figures for July 2006 show that the UK held oil stocks of 11.2 million tonnes, equivalent to 81 days of consumption. Other than military stocks that are excluded from strategic stockholding, all UK oil stocks are held by industry.
Notes
Information corrected on 18/10/2006 at 450 c1192W in Daily Part and 450 c1198W in Bound Volume.
Subjects
Fossil fuels; Stocks of commodities
Date
9 October 2006
Reference
91450; 450 c569-70W;450 c575-6W
House
House of Commons
To ask the Secretary of State for Trade and Industry (1) what the statutory basis is for maintenance of strategic stocks of (a) petroleum products, (b) natural gas and (c) coal;
To ask the Secretary of State for Trade and Industry (1) what the statutory basis is for maintenance of strategic stocks of (a) petroleum products, (b) natural gas and (c) coal;
Asked by
Stephen Crabb
(Conservative)
Answered by
Malcolm Wicks
(Labour)
Answering body
Department of Trade and Industry
Type
Written questions
Status
Answered
Tabled on
6 October 2006
For answer on
9 October 2006
Answered on
9 October 2006
EU member states are required by Directive 2006/67/EC (a codification of previous legislation dating from 1968 and 1998) to hold oil stocks equal to 90 days’ average daily national consumption during the preceding calendar year.There are no similar such EU Directives relating to natural gas or coal and consequently no compulsory stocks for either natural gas or coal.As a net exporter of oil and oil products the UK currently has no obligation to hold stocks through its membership of the International Energy Agency but has an obligation to take part in any collective response to a major international supply disruption, as happened following Hurricane Katrina.The UK has always met these international oil-stocking obligations by directing companies to hold stocks. Section 6 of the Energy Act 1976 allows my right hon. Friend the Secretary of State for Trade and Industry to give directions to businesses producing, supplying or using petroleum products within the UK market, requiring them to hold minimum levels of oil stocks.The Directive (2006/67/EC) provides that as a crude oil producer the UK has a derogation which reduces our obligation by 25 per cent. to 67.5 days’ consumption.Latest figures for July 2006 show that the UK held oil stocks of 11.2 million tonnes, equivalent to 81 days of consumption. Other than military stocks that are excluded from strategic stockholding, all UK oil stocks are held by industry.
Notes
Information corrected on 18/10/2006 at 450 c1192W in Daily Part and 450 c1198W in Bound Volume.
Subjects
Fossil fuels; Stocks of commodities
Date
9 October 2006
Reference
92232; 450 c569-70W;450 c575-6W
House
House of Commons
To ask the Secretary of State for Trade and Industry how many days supply of (a) petroleum products, (b) natural gas and (c) coal were held in storage in the UK in (i) 1995 and (ii) 2005.
To ask the Secretary of State for Trade and Industry how many days supply of (a) petroleum products, (b) natural gas and (c) coal were held in storage in the UK in (i) 1995 and (ii) 2005.
Asked by
Stephen Crabb
(Conservative)
Answered by
Malcolm Wicks
(Labour)
Answering body
Department of Trade and Industry
Type
Written questions
Status
Answered
Tabled on
6 October 2006
For answer on
9 October 2006
Answered on
9 October 2006
For petroleum products, stocks at the end of the December 1995 were equivalent to 80 days of consumption. For 2005 the equivalent figure was 74 days. By July 2006 stocks had risen to the equivalent of 81 days’ consumption.For coal, stocks at the end of the December 1995 were equivalent to 96 days of consumption. For 2005 the equivalent figure was 93 days, but this falls to 77 days if the average rate of consumption during the first quarter of 2005 is used since consumption during winter quarters is higher than the average. By July 2006 coal stocks had shown a seasonal rise to the equivalent of 97 days' average consumption.For gas, indigenous gas fields connected only to the UK transmission system and in continuous production act in the same way as storage facilities for other fuels. However, gas demand is seasonal and storage capability is necessary to meet peak winter demand and daily demand fluctuations and to enable shippers to balance the gas they put into the network with their offtakes on a daily basis. Even in winter gas storage is unlikely to be used as a continuous form of supply, and stocks are replenished during periods of lower demand. Indicator 2 of the Sixth Report of the Joint Energy Security of Supply Working Group (April 2006), a copy of which is in the Library of the House, shows how gas storage contributes to gas supply over the 100 coldest winter days.
Subjects
Fossil fuels; Stocks of commodities
Date
9 October 2006
Reference
92243; 450 c570W;450 c576W
House
House of Commons
To ask the Secretary of State for Trade and Industry (1) how many times the UK has failed to meet its stock obligations of Category 2 petroleum products;
To ask the Secretary of State for Trade and Industry (1) how many times the UK has failed to meet its stock obligations of Category 2 petroleum products;
Asked by
Stephen Crabb
(Conservative)
Answered by
Malcolm Wicks
(Labour)
Answering body
Department of Trade and Industry
Type
Written questions
Status
Answered
Tabled on
6 January 2006
For answer on
9 January 2006
Answered on
19 January 2006
The UK meets its international obligations to hold stocks of oil for use in the event of disruption of supplies by imposing obligations on companies. We believe that stocks held by companies are, in the event of an emergency, likely to be where they will be needed and capable of being quickly processed into the supply chain. The release of stocks following Hurricane Katrina has shown that the UK system was able to respond well to the disruption which occurred.The UK is currently required to hold stock equivalent to 67.5 days annual consumption, both in total and also in each of the three categories into which the total is divided. Obligations are based on sales. Changes in the market, with small companies below the threshold for the obligation entering a supply chain previously dominated by oil companies, meant that between March 2000 and October 2004, although the UK met the total obligation in all but two months, in 41 of the 56 months we did not hold the full level of stocks necessary to meet that part of the obligation relating to category 2 (gas oil, diesel oil, kerosene and kerosene based aviation fuels). In order to return to full compliance with the UK obligations the Government agreed increases in company obligations with industry, and the UK has been fully compliant with the obligations since November 2004.We must, however, consider future needs. The UK's obligation will increase as our domestic production of oil declines. We have, therefore, consulted the oil industry and others about a new system which will ensure that the UK can continue to meet its obligations in future. We propose that this system should be based on products from refineries or entering the UK as imports. As we work with the industry to establish the system, we have agreed to explore the long-term potential of establishing an agency to ensure that stocking obligations are met.
Subjects
Petrochemicals; Stocks of commodities
Date
19 January 2006
Reference
40677; 441 c1516-7W
House
House of Commons