ABSTRACT
The nature of the cost problem in the gas industry was not difficult to identify. The carbonisation process had become fairly well developed by the twentieth century and was no longer labour intensive. Its costs were, however, almost wholly determined by the price of coal of an increasingly scarce type. The effect of doubling the price of gas coals during the 1950s was to raise gas making costs by more than 50 per cent and this was inevitably registered as a price increase. Increasing efficiency elsewhere could not, as with electricity, serve to mitigate significantly the effect of coal prices, because capital efficiency could not be improved and thermal efficiency was as high as it could be expected to reach.
An alternative to carbonisation as a gas-making process was therefore the only way of avoiding price increases, which were eroding the industry’s competitive position in the fuel market. But, although the nature of the problem was easy to agree, the direction in which the solution lay was problematic. The strength which the industry displayed was in the way it went about deciding on a development programme to change gas making techniques.
Underpinning the developments of the 1950s there was a background of research on the nature of the transformation of feedstock into gas; this research had been initiated in the 1930s as a result of the industry’s ties with the department of chemistry at Leeds University. Following up the early research, an institute had been set up by the industry as a whole some years before nationalisation to experiment with gas making techniques.
The development of new techniques was not, however, regarded as the preserve only of the research function. The industry before nationalisation was fortunate in having a number of relatively large companies, even though it was otherwise fragmented. The larger companies were forward looking enough to have technical programmes of their own. These threw up new techniques which continued to be pursued after nationalisation, and their existence gave the regional Boards of the gas industry an independent and authoritative standpoint from which to assess the other new techniques being put forward during the 1950s and 1960s.
The arrangements which were made for the administration of research under public ownership reflected the federal structure of the industry. The Research Committee of the Gas Council included a small number of academically qualified people, some Council members, the directors of the research stations and technically qualified senior personnel from the Area Boards. Thus there was a balance of the more theoretical approach, the141 practical gas engineering consideration and the commercial and financial constraints of operating gas undertakings.
Decisions about which processes to pursue did not prove easy to make, and work went on simultaneously in a number of directions. The industry did not make the mistake of determining a single direction at an early stage and failing to evaluate alternatives. In the earlier work new coal processes were favoured for base-load plant while oil-based techniques appeared to offer the best prospects of providing peak-load plant. But the economics of the complete gasification of coal were somewhat uncertain. Fortunately, the industry was not faced by growing demand pressure and so it was able to delay large-scale commitment to new processes. Experimentation, pilot plant installation and commercial test continued of a range of processes which emanated from the Area Boards, from sources abroad and from the research programme itself. In this research programme the choice of projects was subtly determined by a consensus established between the Research Committee, the research stations and representation from the production side of the Area Boards. The openness displayed by the industry to possible lines of development may be attributed to its federal structure and the method of administering the development programme. The strength of the professional association, the Institute of Gas Engineers, may also be regarded as useful in providing a forum for the disinterested and independent discussion of technical problems.
Most of the Boards in the industry firmly resisted the idea of building large coal gasification plants (of Lurgi design) for supply through a distribution grid; their grounds for not supporting the scheme were primarily economic. On the other hand, more than half agreed to participate in the methane importation plan. Its advantages were the low delivered cost of heat and the value of having the rich gas as a source of enrichment for other gas supplies.
When the oil-based continuous reforming processes became available from ICI and from the industry’s own research programme, the Gas Boards invested in them very rapidly. The main reasons for this were that demand for gas had started to grow and the oil-based processes were several times more efficient than carbonisation in terms of capital costs and labour costs, while the feedstock cost was marginally lower. The process was also independent of the market for by-products. Much credit is due to the industry for having developed the gas recycle hydrogenator (GRH) and catalytic rich gas (CRG) processes, in a classical demonstration of applying research to industrial problems. Additionally, credit must be given for the way the decisions were made. Decisions to invest were soundly based upon reliable cost information and the techniques involved were thoroughly tested, being based both upon pilot plant and commercial demonstration plant. There was therefore no uncomfortable dawning of disillusionment when the promises held out for new techniques failed to materialise. The industry experimented with a wide range of new processes for gas making and therefore was not lacking in alternative lines of development when setbacks were experienced with the coal gasification projects. Finally, the federal structure of the industry ensured that there was room for more than one view on technical and economic problems, making it necessary that experimentation with processes and evaluation of costs were used as a means to resolve potential conflicts about the direction in which technical policy should go.
