John Dennehy (Cork South Central, Fianna Fail)

I welcome the opportunity to contribute on this Bill. It is a topical issue, as we have already heard with references to the price of petrol in the House this morning. The Bill will address all-Ireland markets, electricity interconnection, gas and electrical safety, full gas market opening, greater powers of policy direction for the regulator and safety measures.

With the rapidly changing situation in China and former Soviet states, and the general problem of diminishing supplies of oil and gas, it is important that all energy users examine their own use of fuels and that we examine in a logical fashion with the national interest to the fore all possible sources of energy.

Without wishing to interfere, the difficulties that have arisen in Mayo concern me. In the past, we found offshore gas fields at Kinsale and managed the supply and use of that gas and I welcome the renewed interest in offshore exploration by a number of companies. People who claim we should spend money on exploration ourselves, however, are asking us to do much the same as putting the State's money on a horse. Oil and gas exploration are among the costliest commercial exercises in any area and we do not have the wherewithal to get involved directly with them. It is easy after the event to say how much a company has made from a find but the exploration costs show that we would not have been able to get involved.

We begin to appreciate the value of any commodity at a time of shortage, we never miss the water until the well runs dry. At a time of shortage we get the best proposals for alternatives. During the last major shortage, there was action on combined heat and power projects and it is a pity we grew lazy. I recall a combined ESB and Bord Gáis heat and power project in Cork University Hospital. I would have seen those groups as competitors in the past but they got together and did a good job that repaid the money invested in a short time.

Energy conservation and the maximisation of our natural resources have never been so much in focus with the continuing fluctuation in the world's energy markets. There are increasing demands on fuel resources, the majority of which are totally outside our control. This need to develop an all-Ireland electricity market and liberalise the gas market demonstrates the importance of this legislation.

Section 3 of the Bill will allow for the all-Ireland approach. It is 16 years since we held discussions at the British-Irish Interparliamentary Body on a unified, all-island approach to energy supplies, particularly electricity and natural gas. We discussed the interconnector gas pipe from Scotland and a North-South electricity connector. The greatest impediment we faced was not engineering or commerce, but the real possibility of such links being blown up during or after construction. Thankfully we have moved from that situation to one where we can do what is needed for people North and South and, by working together, minimise the wholesale cost of electricity and offer alternative gas supplies. It will allow users to shop around and encourage value for money driven initiatives among energy providers. We saw the value of this approach in the telecoms market, with the increased competition and cheaper prices when the market was opened up.

The energy debate in Ireland is framed within the context of the need for a common European policy, availability of supply and the control of such supplies. Those are among the serious concerns being addressed by the Minister in this Bill. The recent stand-off between Russia and the Ukraine over gas supplies demonstrates the potential seriousness of this issue and shows how those with supplies can control matters for those who remain dependent on them.

Under various sections of the Bill, the Commission for Energy Regulation will be equipped with increased powers. The independent regulatory body will play a significant role in implementing the provisions set out for the gas market and the facilitation of competition in the electricity market. The CER will be responsible for the registration of electrical contractors and gas installers and will be empowered to inspect works carried out by these registered members, review training procedures and suspend or revoke membership for unsafe or unsatisfactory work. It will also have greater powers in the area of public safety, an important aspect of the Bill.

I recall the change-over in Cork city from household gas to natural gas. There were dangerous incidents, with footpaths glowing as a result of flames burning underneath because full engineering consideration had not been taken of the cleansing power of natural gas, which wiped away the old lagging used in lower specification household gas pipes. I am glad there is now total control over safety. The commission will have some say over the level of gas in the Mayo pipeline. We need a permanent, independent governing body to monitor such situations.

The British and Irish Governments are committed to achieving a market that allows for mutual advantage in terms of pricing and security of supply. We must ask if the two energy markets on the island are better off operating as two small entities or should they come together and operate together. Many of us have argued for years that health, tourism, fisheries, agriculture and energy would benefit enormously from the latter approach. I co-chaired the interparliamentary committee which dealt with the energy issue in the early 1990s. It was obvious that great benefits could accrue from such co-operation. Studies would have been carried out for our benefit and we would have received information which was not released to the public. It showed how crazy the situation was, involving as it did the detouring of the gas interconnector, which involved putting elbows into it to take it away from the danger zone and moving it miles at considerable cost, as well as pylons which could not be constructed at the time. There are considerable benefits to be had from working closely on an all-island basis.

Effectively, this Bill also means that domestic users of gas will benefit from the liberalisation of the market, which has, to date, been enjoyed solely by industrial and commercial agencies. I can draw on my previous experience in Irish Steel, which saved more than £100,000 per week by simply shutting down for ten or 15 minutes by agreement with the ESB at a given time. This shows the type of benefits enjoyed by industry but not by ordinary households. The Bill also affords us a platform on which to look at the energy market in Ireland more closely and gives us a chance perhaps to widen the debate and look at alternative energy sources to counter our dependence on imports.

One need only look outside the front door most days to realise the potential of wind power. Spain is an EU leader in this regard and if it can use wind power, we can certainly harness coastal wind power in a better fashion and utilise it more efficiently. Apart from being a more environmentally friendly way of providing energy, wind power would allow us to play to our natural strengths. We must examine, as a matter of urgency, the objections to wind farms to see what can be done to ensure there is no valid reason for people to object to them. Many issues, some of which arouse emotions, such as the future survival of a species of bird, have been drawn into the argument. Many of these arguments have not been tested but we must test them to find out whether there are valid objections to wind farms.

Biomass, energy crops and tidal power are also alternatives which we should actively examine and consider for our future needs. There is a tendency for some critics to ridicule any suggestions in that regard. They usually say that these sources could only supply a fraction of any power required but if this is the case, we should utilise every possible source and unit of power to lower our dependence on other suppliers. These small numbers of units will mount up if they are properly utilised and put together.

Some years back, Cork City Council harnessed the outlet of methane gas from the former landfill site at Kinsale Road. This source now supplies the equivalent of the needs of approximately 1,500 houses. It is an old question as to whether we wait to curse the darkness or work to gain that one candlewatt of power. When looking for alternative sources of energy, we should concentrate on our strengths, whether they are the sources to which I have referred or any alternatives available to us.

When it comes to alternatives, some sectors are adding fuel to the fire by talking up the potential of nuclear energy. The fact that this year we are commemorating the 20th anniversary of the worst ever nuclear disaster in Chernobyl in 1986 means we should tread carefully in this regard. We should bear in mind that the Government is also battling to close down the reprocessing plant at Sellafield which itself has plans for expansion. Nuclear power does not appear to be the logical way forward and if we work hard at our alternatives, it should not be necessary.

People are now much more aware of their responsibilities towards the environment. This awareness is obvious from the high take-up of recycling and other such waste management schemes. There is also a growing consciousness of the need to be more efficient when it comes to the whole spectrum of energy sources, such as gas, oil, electricity or coal, which is why alternatives should be examined in the same way that recycling has overtaken landfill as the preferred way of dealing with waste.

One alternative which has become caught up in the question of large-scale incinerators is the option of converting waste to energy. Individuals who mention this option are almost demonised. Commentators, some of whom do not appear to be very knowledgeable about the issue, tell us that it would be an environmental disaster if any waste were to be burned. I admit to having a limited knowledge of the environmental and engineering aspects of the topic, although I worked for 20 years in steel-making which involved using the largest ever incinerators. However, I would not set myself up as an expert on the topic. I have tried to talk people down in respect of it.

I was interested to read in the Irish Examiner last week that Matt Murphy, of Sherkin Island fame, suggested such a course of action. I understand that he was not referring to massive multi-thousand tonne incinerators but that he believes there is room for waste-to-power projects. Of all of the commentators I have listened to or read on environmental matters, Matt Murphy is the one to whom I would listen most carefully. In addition to his excellent work at the Sherkin Island Marine Centre, Mr. Murphy was caring for our environment long before it became a popular topic. Those who would question the motivation or integrity of the rest of us would do well to listen to him when he puts forward such a suggestion and listen to his views on the subject. All his life, he has been willing to walk the walk rather merely talk the talk in respect of the environment. His commitment to the environment is legendary and his work speaks for itself. He is politically unbiased. When he gives an opinion on an environmental issue, it behoves people to listen to him.

I briefly discussed the topic with him at a social occasion and following the publication of his comments in the Irish Examiner. He told me of his grave concerns about the cost of transferring waste paper and other materials and the mountain of material on our hands and of his belief that there is room for a waste-to-energy facility and outlet in this country.

This issue should be teased out and discussed, particularly in view of Mr. Murphy's comments on it. He has never been known for floating topics simply to get a newspaper headline. He has always examined issues in depth. He believes the present method of recycling is unsustainable. The costs involved in transporting material, the considerable storage problems, the continued need to put much of the residue into landfill and the fact that the mountain of material now finds fewer sources for alternative use must be examined. We need an honest and open debate on the issue. There is a considerable range of possibilities but we must be honest about it and address any difficulties which arise.

It is easy to oppose everything but we must be honest about this issue. It is far better to examine any problems associated with recycling and related energy issues before they become insurmountable rather than ignore them on a point of principle. I stress that most Members from all parties in this House are opposed to super incinerators and super landfill sites. However, we must examine this question and some of our current practices.

On 4 April 2006, Forfás launched its oil dependency study. This is a baseline assessment of Ireland's oil dependency and key policy considerations in this regard. To put it bluntly, the report makes frightening reading. Ireland is one of the largest users of oil per capita in Europe. Obviously, it does not have any independent supplies and, as an island, must transport all its oil. I was involved in the construction of the original refinery in Whitegate and continued to take an interest in it. However, we do not appear to support early initiatives. We need to think 20 years ahead, an approach taken by the Minister in this Bill and in respect of this issue. The Minister has been willing to stand up and say what he believes is right rather than what is popular. It is essential that the Government does this. If I were in Opposition, I would take a different tack on various subjects and might take the populist route rather that the accurate or futuristic route. We must be honest about our needs and what we are doing. The Bill relates to one niche in the market and will stabilise some of the situations with which we have been dealing. I hope a better future in respect of energy will arise from this debate.

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