Paudge Connolly (Cavan-Monaghan, Independent)

I also welcome the opportunity to contribute to the debate on this Bill, which gathers together and updates the existing strands of legislation as regards our oil reserves. Growing oil costs and political instability in the Middle East make it increasingly urgent that alternative sources of energy must be explored. Every time there is a war in the Middle East, oil prices soar. That has become a regular feature. Seldom do we see oil prices falling when peace follows.

Oil prices have recently gone through the $80 a barrel barrier before stabilising somewhat. Apparently there is no peak is in sight. It is a very unsettling time. Crude oil costs have rocketed by 60% in the past year alone, creating a knock-on effect of increased domestic gas, electricity and central heating costs. Two days ago I spoke to a lorry driver who delivers various goods throughout the country. He said that he could fill his tank last year with €300. This year it costs him €400 to do so. He said we should be raising the issue, particularly for the domestic market, of allowing hauliers to use green diesel. His argument is that they are probably using green diesel already, which has been washed to become white diesel, and that very little revenue would be lost. That is a matter I intend to revisit, namely, that we should allow domestic hauliers some leeway. I am sure, however, there might be difficulties at EU level if green diesel were to be used in different countries. It is something we should look at, though, and it possibly could have beneficial effects in terms of reducing the costs of goods and services.

Escalating oil costs have triggered gas and electricity price rises of between 45% and 25% respectively, which totally belies the rate of inflation. Everyone one meets talks about the rising ESB and gas bills. These are ordinary domestic issues which are hitting people in their pockets. They must be controlled in some way or other. The cost of a tank of home heating oil now approaches €1,000, which amounts to an increase of €400 on last year's price.

The ordinary individual has been hard in the pocket in respect of living expenses. Fuel price increases will also percolate down to the cost of bus, train and air fares, which cannot be immune from rising energy costs. These price increases will eventually hit the consumer. A person who walks into a shop to buy a loaf of bread will pay the increased price in getting that loaf of bread into the shop in the first instance.

Ireland remains particularly vulnerable to these spiralling oil costs, with imported fossil fuels accounting for almost 90% of our energy needs. Every second year, the International Energy Agency publishes an outlook that forecasts the development of the world's energy consumption over the next 20 to 30 years. The last World Energy Outlook in 2004 forecast a strong increase of energy and oil consumption with a growth rate of about 1.6% per annum. We could revisit these figures on a weekly basis because of increasing demand in China and India and the pressure that will put on our reserves. It is scary when one thinks of the increasing population and demand in those countries. They want the same kind of lifestyle as that we enjoy, which involves the use of fossil fuels.

The IEA has published an additional outlook for 2005, covering the period up to 2030. The reason for this unexpected extra publication was probably the unprecedented rise of oil prices during the past year, which caused much public concern. The recent increases in oil prices had not been forecast. The publication depicts the most probable development of energy markets until 2030, as seen by the IEA. Two additional scenarios are considered, one of which is a low investment scenario where investment in upstream activities is much lower than expected. It also covers an alternative scenario if policy measures are introduced to cut energy demand. These scenarios include renewable energy.

Solar, wind and geothermal energy will increase their contribution in the reference scenario until 2030 to provide 2% of primary energy supply. People in the building industry should be considering alternative sources to heat homes, such as solar energy. The grant which has been made available for solar panels is very welcome, as is the grant for geothermal heat, although that will cost a lot to operate. These ideas should be part of housing schemes. We should not leave things up to individuals and councils should encourage developers building housing estates. These concepts should be taken on board and made a part of our lives. Countries further north than Ireland make much greater use of solar energy. It is criminal not to be making full use of such energy. Solar panels could be a prerequisite for every new house so that dependency on oil and gas could be reduced.

Middle East and north African countries still hold very considerable reserves, but further growth will depend on new discoveries. If these discoveries fail to materialise, world oil production could peak before 2030. This aspect of the report is a wild guess because nobody knows exactly how much oil lies beneath the surface or what type of demand will exist in ten years' time.

Now is an opportune time for the Government to invest in renewable energy sources. There should be support for more research into alternatives such as hydrogen, solar and wind energy and biofuels, to reduce our dependency on fossil fuel imports. Recent excise tax relief measures for eight biofuel projects throughout the country are to be welcomed. It is a step in the right direction. The development of a sustainable, long-term biofuels processing industry in Ireland assumes greater urgency by the day. This is also consistent with our Kyoto Protocol obligations and our responsibilities under the 2003 EU biofuels directive. This requires a 2% minimum biofuel component in our fuel complement by the end of this year. Our current 0.06% biofuels target falls considerably short of this. Biofuels are renewable transport fuels, which result in significantly less CO2 emissions than their fossil fuel equivalents. Biofuels are available in three forms, namely: pure plant oil from the rape seed crop; biodiesel, which is consists of rape seed oil, recovered vegetable oil, tallow and diesel blend in a 5% mix; and bioethanol, which is sugar beet or wheat blended with petrol in a 5% mix for standard petrol engines, or up to 85% mix for use in flexible fuel engines.

Biofuel has not got off to a great start because it reduces performance in cars. It also leads to a decrease in the number of miles achieved per gallon. However, we should think of it as the beginning of an era of biofuel in cars. It has not got the right press at the moment, because it takes much energy to develop the biofuel.

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