Paddy Tipping enquires into coal mining subsidies
Paddy Tipping has received a written answer on coal subsidied
Malcolm Wicks (Minister of State (Energy), Department of Trade and Industry) replied:
A further £35.7 million remains available, of which we expect to pay claims of about £24 million in 2005–06
In general, I oppose the use of public money to perpetuate unprofitable businesses, but energy is one of the few areas where it is possible to make the case. There is growing global pressure on the earth's energy resources and the UK will no longer be self-sufficient in oil, gas or coal. Therefore there are national strategic considerations as well as financial ones. Given the rising cost of energy, we should be conserving UK reserves as far as possible. Unfortunately most of the North Sea oil reserves have been used at the point in time at which oil was at its cheapest in real terms. Now with soaring oil prices, we are being forced to import at much higher prices than we sold our own for. Will the same occur with coal?
The DTI have produced a report UK Coal Production 2004-2016.. This projects UK coal use as being likely to fall or at most stay steady. The key behind this is the high sulphur content of the UK coal - which makes it unsuitable due to emissions targets. However, North Sea gas production is depleting rapidly (more so than expected), and worldwide supply is struggling. I suspect that this report (written in March 2004) significantly underestimates the likely rise in gas prices. They offer two scenarios, one in which gas remains at the same price in real terms in 2016, in the other it has increased by 30%. In actual fact since March 2004, gas has gone up nearly 25% already, in less than 18 months.
With this in mind, we are probably going to be digging up every last scrap of coal and burning it, regardless of sulphur content. It would therefore seem prudent to keep the UK coal industry running, and to invest in clean coal technologies. That said, the longer the finite coal reserves can be eked out, the better. We are sitting on a resource which will only grow more valuable - to ourselves and to others.
