Paul Connaughton Snr (Galway East, Fine Gael)

Last September Bord Gáis sought and was granted a 20% price increase. It later sought a further 8% increase. We were told at the time to consider ourselves lucky it was not seeking a 10%, 15% or 20% increase, which was of little comfort to the people using natural gas. I do not blame the company for this increase as it was tracking the ESB which in turn tracked the price of oil on the world market.

However, I cannot understand — this matter was referred to by almost every speaker — why the current cost of gas, while it has decreased a little, is based on the cost of a barrel of crude oil last July, which was $147. I heard a commentator say on the radio a week ago that at that time the price had decreased from $147 to $50 a barrel, although it is slightly higher now.

Given the Government's objective of providing value for money and to ensure the industrial and economic wheels of the country continue to turn and, above all else, given our commitment to take care of the elderly in terms of home heating, one would expect a dramatic decrease in the cost of fuel at the pumps and for home heating oil. I paid €1.10 a litre for the last tank of diesel I purchased. This was not much less than I paid for a litre of diesel six or eight weeks ago. All of the experts say that we should not be paying more than €1 or 95 cent for a litre of diesel. We are a long way from that price. I raise this issue to draw attention to the correlation between all fuels irrespective of source in that as soon as oil prices on the world market increase, the cost of all other fuels increases.

We have a regulator for everything nowadays. The Government appears to be throwing its hands in the air and saying it cannot by law interfere in these matters. Surely, there exists an over-arching system that will ensure various sectors of the economy benefit when the base price is low, as is currently the case. I am not an expert in regard to what should be the cost of gas when crude oil prices are low. I cannot do that and do not know if there are many Members in this House that could do so. Surely, there must be a relationship between the two. I cannot understand why when crude oil on the world stage is cheap, we must pay dearly for electricity, gas, petrol or diesel. It is about time this matter was examined.

We speak about value for money. I believe people are being ripped off every day. I cannot understand the level at which current prices are set. Natural gas is a clean fuel from an emissions point of view. It is a fuel we should be utilising more. I am told — I assume this is correct — that potentially, from an exploration point of view, it is likely there will be other major finds of gas off our shores during the next few years, although experience tells me this is much easier said than done.

The find off the Mayo coast is a major national asset and will make a huge difference when it is plugged into the national grid. Deputy Ferris accused us of making billionaires out of oil magnates but, if the potential was as good as he claims, I would be surprised that so few gas and oil wells were bored. We all know, however, it is not that simple. While mistakes were made over the years in terms of allowing the profits from mines and oil fields to be exported, we need to do whatever it takes to identify offshore gas resources and pipe them to households at the earliest opportunity. It is a big world in some respects but a small one in others. Russia's gas supplies are situated far from Ireland and the pipeline is vulnerable to a wide variety of interruptions. I will not waste the House's time in setting out the importance of having our own national supply. I hope our offshore gas resources come on stream.

I could not think of a better company to manage distribution than Bord Gáis. I note that none of my colleagues on either side of the House has a bad word to say about the company and, having watched its progress, I concur with them. However, I am concerned about a number of issues. Although we are lucky in counties Galway and Mayo in that most of our towns and smaller villages have access to gas supplies, from a regional and spatial perspective I find it difficult to understand why Sligo and Letterkenny will not be linked to the gas network. I understand evaluations are ongoing but it appears that the spur pipeline which would have to be built to these towns does not meet the economic criteria laid down for Bord Gáis. These criteria are business oriented, in other words, the commercial viability of connecting a town to the network is greatly enhanced if it hosts a large company.

Bord Gáis is now becoming a dual fuel supplier. It will be supplying residences as well as ESB generating plants. Somebody will have to pay a hefty bill to connect households to the network because Bord Gáis does not have the wherewithal to do so. Given that connections could cost as much as €2,500 per household, it would be far cheaper to supply alternative forms of power. It is unfair that areas such as Sligo, Letterkenny or Longford are unable to attract natural gas. Several years ago, many towns in counties Galway and Mayo were ruled out for gas supply, even though the pipeline originated in County Mayo. It was a sore point that gas from one of our biggest finds, the Corrib gas field, would pass through the two counties for economic reasons. However, a way around the problem was found by putting several towns and villages into groups of a sufficient size to make a connection economically feasible.

The north west comprises a huge area and both Sligo and Letterkenny are crucial to the development of the region. If Galway city is taken out of the equation, no heavy industrial hitters are left other than in Dublin, Limerick, Cork and Waterford. For obvious reasons, therefore, it is important that we replicate the Galway model in Sligo and, to a lesser degree, in Letterkenny. It will be impossible to achieve that goal unless these towns have access to natural gas at an affordable price.

I am delighted that Bord Gáis is involved in the supply of electricity because competition is important. It recently purchased a large wind farm in my county. I wonder how this will work out in practice because while we understand the ESB's role in this, the need for alternative energy is increasing. Although I have amassed a fair degree of knowledge on how wind farms work, I cannot understand why it is apparently as difficult to get a contract to sell wind electricity to the national grid as it is to get into heaven. We all want more wind energy but it seems to be beyond the bounds of possibility to supply it even where people have developed projects in good locations. I hope the entry of Bord Gáis into the electricity market will not make it more difficult for wind farm operators. I do not refer to huge companies but to individuals and community based operations. Wind farms are vital for our future, so the impediments placed in the way of connecting them to the national grid will have to be resolved.

I am not sure how far down the road Bord Gáis has proceeded with its dual fuel supply project. I hope it will be as good on the electricity side as it is in its core business. There is need for great competition in that market. I am not saying I have a bone to pick with the ESB group of companies as such. However, we all know what happens with a dominant player in the market and we do not need to spend time on that here.

I hope the passage of the Bill will allow Bord Gáis to carry out its plans over the next ten or 20 years. I wish it well. It has the managerial capacity to deliver. It should always have an eye on value for money irrespective of how big it grows. Whatever it does it must always be remembered that ultimately it is the people who are trying to make a living who are its customers. If for any reason it is not able to supply a service at a price that the consumer can afford that would be the day it would go off track.

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