Professor Pat Shannon:

I thank the committee for the invitation to present and discuss our views on the Bill. I am chairman of the IOOA, a role I took up four years ago when I retired as professor of geology at UCD. I am joined by my colleague Dr. John Conroy. Dr. Conroy is project manager at Providence Resources and chair of IOOA's safety sub-committee. IOOA's members are a mix of large, medium and small international and Irish companies. They have delivered four gas fields offshore of Ireland which have helped economic growth and jobs by providing the security of affordable energy over a long period. It should be noted that exploration and production is carried out with no financial risk or exposure to the State.

Our detailed documentation has been circulated to members of the committee. I will highlight some key points from that documentation which are particularly pertinent to today's discussion. The IOOA recognises the need to move to a lower carbon future. However, we believe, as is reflected in national policy, that this transition must be realistic, carefully planned and fully costed, and that gas and oil will play an important role in energy supply throughout that transition. Overall, we believe the Bill, which proposes banning the granting of any further licences, undertakings or leases off Ireland's shores, would have no positive impact on Ireland's greenhouse gas emissions.

As a global backdrop, oil and gas provide 57% of the world's energy. Forecasts suggest that by 2040, oil, gas, coal and the non-fossil fuels will each contribute approximately 25% of global energy. In Ireland, the reality is we are hugely dependent on imported fuel resources. The Bill would further increase our dependence on imported oil and gas and would threaten the security of Ireland's energy supply. Its geographical location at the very edge of Europe makes Ireland extremely vulnerable to potential interruptions in energy supplies. Some members of the committee may remember the impact the 1973 and 1979 oil shortages had on Ireland, with long queues for petrol and difficulties transporting goods. The 2009 Russia-Ukraine gas dispute cut off gas supplies to south-eastern Europe for 13 days.

The risk has been highlighted in recent times by political instability and increasing uncertainly in both the Middle East and Russia, as well as by Brexit. It is vital that we keep open all available energy supply options, especially indigenous oil and gas supplies, a view also recommended by the International Energy Agency. Some 45% of our gas supplies is imported and this figure will rise if we do not find more gas. The potential for gas supply interruptions will further increase when the United Kingdom which is a net oil and gas importer leaves the European Union. During the cold spell earlier this year the United Kingdom, our only external source of natural gas via the gas interconnector came close to being unable to meet its own demand for gas. Europe imports three quarters of its oil supplies and half of its gas requirements, with one third coming from Russia. Interruptions of these supplies would be extremely damaging and costly for Ireland. The Economic and Social Research Institute, ESRI, estimates in a report that the cost of losing one day of gas-fired electricity in Ireland could be up to €1 billion. The cost of losing three months of gas-fired power could be up to €80 billion, or 50% of Ireland's GDP. These effects would be felt in all homes, schools, hospitals and throughout industry.

The Kinsale Head gas field which has stored strategic gas supplies will be decommissioned soon and Ireland will then hold no contingency gas reserves, further increasing the exposure to supply interruptions. This highlights the vital role of an active exploration sector to provide indigenous supplies. If the Bill proceeds, Ireland would lose the opportunity to have a significant revenue stream that could be used to support energy transition and job-creating opportunities in rural and maritime parts of the country. It would undermine industry confidence in Ireland, both within and beyond the oil sector. The use of Irish natural gas has transformed the energy and economic landscape of Ireland, being the catalyst for the creation of the national gas grid and making major contributions to regional and local economies. Approximately €30 million annually is spent in the local Cork economy as a result of the Kinsale Head gas field. During the worst period of the recession in Ireland, the Corrib gas project provided more than 1,000 full-time jobs, while over €1 billion was spent directly with over 300 Irish contracting companies.

Petroleum exploration and production can bring substantial benefits, foreign direct investment, jobs and income, to coastal regions away from the main urban centres. Banning exploration will not lower greenhouse gas emissions, either in Ireland or globally. They will probably rise owing to the need to import oil and gas from other countries, mostly outside the European Union. Indigenous and European oil and gas resources emit 30% less CO2 than oil and gas imported from outside Europe owing to a combination of greater production efficiency and lower transport energy costs. For Ireland, replacing such imports with indigenous gas and oil resources could result in significant emissions reductions. The Irish Offshore Operators' Association, IOOA, believes it would be foolhardy to ban exploration when we have no realistic and reliable alternatives to the use of gas and oil. Annual gas demand in Ireland is rising by approximately 10%, with gas being supplied to more than 26,000 businesses and over 650,000 homes throughout Ireland. Many renewable energy forms such as wave energy are at an early stage of development, while some such as wind energy are inherently intermittent and must be supplemented by more reliable forms such as gas and oil. Globally and in Ireland, there is clearly a requirement to replace high greenhouse gas emitting fuels such as coal with a range of cleaner natural resources and renewable energy forms, together with the deployment of technologies such as carbon capture and storage, CCS, to capture greenhouse gas emissions on a large scale. Natural gas, in particular, has a major role to play in substituting for higher greenhouse gas emitting energy forms, while oil will continue to be important for international transport, including aviation, shipping and haulage, and in non-burning uses such as petrochemicals and feedstocks.

It is essential for Ireland which has a small and relatively isolated energy system to identify the appropriate energy mix that will guarantee reliability, security and affordability, while minimising damage to the economy or society. Natural gas and oil will be required to play a key role in the security of affordable energy supplies, in addition to providing the necessary base load backup for intermittent renewable energy sources. We are best placed to do this with indigenous gas and oil resources. We often look for examples of countries from which we can learn to do things better. Norway has one of the lowest low carbon economies in the world. It is a good example of how to embrace a low carbon society, while also continuing to explore for and develop its own offshore oil and gas resources. Revenues from oil and gas resources have played a crucial role in creating a modern Norwegian society which is a world leader in electric car sales, with continuous and significant investment in hydropower generation.

At a time when the outlook for Irish offshore exploration is excellent, with real momentum in investment in exploration, the IOOA believes that, by enacting this Bill, Ireland would be turning its back on the potential to have energy independence. We would be embarking on a policy that would increasingly make us isolated from our European neighbours and more dependent on politically less stable countries to supply a significant proportion of our energy needs for the foreseeable future, in all likelihood causing an increase in greenhouse gas emissions by forgoing the opportunity to find and develop Irish natural resources to replace imports. As Ireland's gas reserves deplete, it makes no sense to stop exploration and the opportunities and benefits that come with it. Instead of banning exploration, we should, like Norway, encourage and support it.