Martin Ferris (Kerry North, Sinn Fein)

I welcome the Bill as a contribution to increasing the capacity of one of the most successful public enterprises in this State. It is also hoped that the increased activity of Bord Gáis in the energy sector will provide a much needed boost to the economy and to employment in general at the current time. There are, however, a number of points that need to be made on the whole issue of energy in this country, and in particular with regard to the gas reserves which lie, for the greater part unused, off our coast.

There are estimates, including one from the petroleum affairs division of the Department, that 10 billion barrels of oil are lying off the west coast of Ireland, valued at an astonishing $700 billion dollars at the price of $70 per barrel. That is in addition to a natural gas reserve, estimated to be 50 trillion cu. ft., sufficient to supply the whole of western Europe for some time. Some 200 km off the coast of Kerry lies the Dunquin gas field, which is estimated to contain 25 trillion cu. ft. of natural gas and 4.13 billion barrels of oil. The gas alone would meet our gas needs, at present consumption levels, for the next 62 years. Dunquin is licensed to Exxon and partners, who estimate it will come on stream after 2013.

Off the coast of Clare there is the Spanish Point field with known reserves of 1.25 trillion cu. ft. of gas and 206 million barrels of oil, valued at €30 billion. That is hoped to begin production in 2011 with the gas piped ashore. Off the coast of Mayo is the Corrib field, which has an estimated value of anywhere between €12 billion and €100 billion. That does not include the Porcupine Bank, where exploration was carried out a number of years ago and other fields off the west and east coast of the country.

Although this is good news, particularly at the present time of economic uncertainty and concerns over energy supplies, we need to be concerned over the manner in which this huge resource will be developed and the benefits that it will bring to the Irish people. Unfortunately, because of the ludicrous and indeed dubious deal handed to the multinationals in 1992 the people of Ireland would gain very little from our oil and gas wealth under the current arrangements. Tax rates are extremely low and most of the current 25% tax on profits can be written off against exploration and operating costs.

I appreciate that the Minister was successful in having a new rate of tax of 40% introduced but this rate only applies to new exploration licences and does not cover the existing oil and gas licences over which most of our reserves are currently held. It should be extended to all licences to ensure that when the gas and oil comes on stream, it provides, as it can, a huge revenue boost to the country with all the implications that would have, especially during an international economic downturn. It is possible to renegotiate deals that were carried out in the 1990s up to the latest tax increase to 40%, and this should be proactively pursued.

With regard to offshore development, there are knock-on effects, particularly to employment in supply ships from shore taking supplies to rigs, stand-by vessels for safety issues, on-shore drilling supplies, transport and equipment taken to and from ports. This affects the local economy and there would be a long-term benefit when the line is brought onshore. This is very significant and should not be lost as we pursue our objectives.

We have many benefits for those looking to offshore exploration. There is the significant advantage of political stability, particularly compared to places which house most of the energy reserves such as the Middle East, which can be very unstable. We have a highly educated and trained work force and many people in our coastal communities have in the past or currently work in offshore exploration. We have the necessary ports. This could generate significant revenue in local economies and be beneficial for Irish industry and domestic holdings.

There is also the potential that the development of oil and gas can have to establish security of supply. At present we import 85% of our energy needs, and we are also at the end of a supply line that extends all the way from Russia across western Europe, Britain and Ireland. This makes future supply dependent on all sorts of factors which are outside of our control. Our oil and gas reserves are a factor which we can control if we wish to.

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