Simon Coveney (Cork South Central, Fine Gael)

It is appropriate that we, as legislators and policy-makers, try to respond to the mistakes that have clearly been made in that ongoing saga, in respect of which everybody is unhappy. The developers are very frustrated and have spent huge sums of money trying to push their project forward. The local community felt betrayed at times and is very angry. Individuals have gone to prison. In many ways, it is a case study on how not to develop this type of infrastructure. As a result of the mistakes made on all sides, Ireland has developed an unfortunate reputation abroad as a country in which it is very difficult to turn exploration to production, or as a country in which it is difficult to bring oil, gas or other natural resources ashore. This is regrettable.

Ireland has a huge sea area, encompassing 40,000 square miles. There is much encouraging evidence that there is potential for finding very significant quantities of oil and gas in the Irish sea-bed. The numbers of expressions of interest in spending the large sums required to exploit the resources indicate that many exploration companies have chosen to go elsewhere because of the difficulty they perceive to be associated with the development of projects in Ireland. It is ironic that despite much of the criticism of the Government, Minister and former Ministers, centring on their being far too lax with regard to licensing, and the accusations that the Government has not secured a sufficient dividend for the State from gas and oil exploration, expressions of interest in drilling offshore in Ireland are diminishing rather than increasing.

While it is important to continue to reflect on and review the appropriateness of our licensing arrangements in terms of getting a return for the State from a natural resource owned by the State, we must also ensure we provide an incentive for developers and exploration companies to spend the enormous sums of money required to find what natural resources may exist. It costs between $60 million and $70 million each time there is an exploration drill. This is a considerable amount. Those who make the case that the State should be doing the drilling and that private sector companies should not be allowed to come from abroad, potentially to exploit our natural resources, show a lack of understanding of the industry and of the capacity of the State to generate, in a State-owned or semi-State company, the required expertise in extremely expensive exploration work .

It is important that licensing arrangements, in terms of taxation and royalties, be kept under constant review to ensure we strike the right balance between obtaining a return from the State where there is a very valuable find and offering an incentive sufficient to ensure companies will come to Ireland and spend enormous sums of money in anticipation that they will make a very attractive return should they strike oil or gas in sufficient quantities. This is a simmering argument, particularly in the west. People ask, correctly, if we have the balance right to ensure that if there is a big find, the State will get the benefit or whether it is a case of a company coming from abroad, bringing its employees from abroad, and making huge profits from Irish resources. That is an ongoing debate we must continue to have in an honest manner. The issue is not as black and white as some of the critics of Government policy sometimes like to portray it.

With regard to the mistakes that were made with Corrib, first and foremost, the correct principle is that the licensing authority should be separated from the regulatory authority, rather than the Department trying to do everything from licensing to undertaking safety studies, monitoring and so forth. Certainly, international practice suggests there is much sense in separating the regulatory functions, relating to giving a safety permit to a developer who wishes to lay pipeline or to undertake exploration activity, from the Department, which is responsible for giving a licence for exploration in the first place. That separation is good and, from that point of view, the Minister is correct in principle in what he is attempting to do. That is my view at this stage unless I hear arguments to the contrary.

The Corrib field is an exciting discovery. Its estimated size is approximately 30 billion cu m of gas, which is about 70% of the size of the Kinsale field. The Kinsale field was originally discovered in 1973 and has been a huge contributor to the Irish economy in terms of security of gas supply. It also resulted in the opening of a gas pipeline infrastructure which probably would not have happened at that time without that discovery. There are the same opportunities with the Corrib field. Despite the mistakes that have been made and the upset caused in communities, I am a very strong supporter of the principle of bringing gas ashore from off the west coast as quickly and efficiently as possible.

Regardless of the royalties and taxation issues, Ireland is hugely exposed at present in terms of security of supply. The Irish economy effectively runs on gas. It is the most important fuel source in terms of electricity. We import 95% of our gas from the UK, which in turn imports all its gas from Russia and Norway, although the Norwegian resources are running out. The reality is that Ireland is at the end of a pipeline. Should international gas prices or gas reserves be affected, Ireland is hugely vulnerable in terms of electricity prices and the capacity to generate power in our power stations, the majority of which, certainly the modern ones, are driven on gas. What people must understand about Corrib is that it is not just a matter of how much money the State can make from the developers in terms of taxation but it is also about energy security and ensuring the Irish economy can continue to be fed with gas into the future. Energy security in Ireland is not given the type of political priority that is necessary. Ireland is the most exposed country in Europe and in the OECD in terms of reliance on imported fossil fuels, such as gas, oil and coal. The discovery in Corrib and, hopefully, other discoveries that will be brought ashore in the future under the new model, which will facilitate local communities in a more effective way than happened in the Corrib case, will reduce the exposure of this State to reliance on imported fossil fuel.

To return to the specific provisions in the Bill, the Minister is on the right track with regard to the principle of having a separate licensing authority and safety regulatory authority. In essence, the Bill asks the CER to do on the upstream infrastructure what it already does on the downstream infrastructure in terms of safety. When a developer decides to undertake an exploration project, be it offshore operations such as wells and sub-sea activity, offshore pipelines along the seabed or onshore pipelines going to a processing plant, that infrastructure is currently outside the responsibilities of the CER. We are changing that in the Bill. All the petroleum infrastructure, from the well upstream to further downstream, will be the responsibility of the CER to monitor and permit from a safety perspective.

The most important part of the Bill is section 13M, which requires anybody who wishes to undertake activities relating to petroleum exploration and provision to submit a safety case to the CER within six months of starting any work. This makes sense. Essentially, it is an extra permit that is required and which deals with safety. Obviously, processes such as an environmental impact statement, EIS, a licensing process and probably a planning process will be required. Having a safety case or safety permit process which the CER is responsible for designing and implementing will, I hope, reassure local communities that there is an independent regulator to monitor and decide on the safety of a proposal before any development takes place. That is a positive development.

However, the Minister has not catered for some matters with regard to putting together an application for a safety case. At this point, I thank the Minister's officials for taking the time to brief the Opposition spokespeople. It was very useful. They are not required to do it and I appreciated it. An issue that was raised in the Seanad and which we discussed in the briefing was the participation of the public in the preparation and improvement of the safety case. In other words, if we could rewind the clock and ask the developers in Corrib to start again under the new mechanisms we are putting in place, they would be required to approach the CER, put together a safety case from a safety point of view and seek approval for it from the CER under the guidelines that will be drawn up under the safety framework, which the CER has been asked to put together.

The Bill proposes that the developers will be able to put their safety case to the CER and ask it for its view as to whether it is sufficient, if it requires amendment, improvement or change and, if so, how the developers can do that. I expect the CER will take a very proactive approach and say, for example: "You are 75% there but we would need you to do X, Y or Z to improve your case before we can give approval." The problem is that there is no opportunity for the public to have an input at that stage. The Minister has made a conscious decision to allow the public to have an input when the CER is putting together the safety framework, which is a generalised framework and not site specific. There will be no public interest in that. Nobody from Mayo would have contributed to a generalised safety framework 15 years ago if the CER had been putting one together for future potential exploration in Ireland.

Local communities interact with regulatory or planning bodies only if it impacts on their environment. That is why it is necessary to allow for some public input into the safety case process before it is given approval and a permit is granted. I can understand the reticence and caution of the Minister on this issue because we do not want a long, drawn-out process with appeals, court challenges and so on which will create major delays when, ultimately, if one has a sound project which should proceed, we want to see that happen. There is a balance to be struck. Perhaps there could be a period of three weeks or a month for the public to make comments on the safety case, to ask questions and to have an opportunity to raise concerns. In many cases, communities will raise money to pay for experts, perhaps from abroad, to come in and test the safety case being considered by the CER. That is a good thing.

If there is one lesson we have learned from Corrib it is that we cannot allow conspiracy theories to develop or local communities to be under the impression that something is being hidden from them or that there are ulterior motives and they are being hoodwinked in some way or other. All of those feelings have been felt in communities in Mayo at various stages which has built further resentment and anger, and has resulted in the project getting stalled, demonstrations being held and all the rest. From a very early stage, in terms of safety concerns, there should be at least an opportunity for the public to observe, in a transparent way, what is happening, to see a safety case being put forward and how the CER considers it and to have an opportunity to make a comment if they wish to do so. Ultimately, the CER must make the decision.

It is up to the Minister whether he wants to include a provision in the Bill to allow for objections, or simply to allow for comment or observations. He may decide to do what he is currently doing, that is, offering the public no input into the safety permit application process, or whatever it is called. I ask the Minister and his officials to examine the matter between now and Committee Stage and try to find a way to ensure we can streamline the process, while at the same time ensuring we do not allow the public to develop a resentment on the back of not being given the information or facts, in particular the safety elements, of a project which will impact on the local community. If we could do that it would be a good day's work. Otherwise, we are not learning the lessons from Corrib. We should not try to put in a slick process and ask people to trust the CER. That is what we are saying. We are telling people we will not show them the safety case application because we need the CER and the company involved to figure it out first and when they produce a safety permit which has been approved, the public can see the finished product. That is not good enough. The Bill should set time limits.

I am not sure if there should be a long appeals process or an appeals process at all. However, we should let local communities see the detail at each stage. When a developer or exploration company is putting its safety case to the CER for permission to proceed, the public should be allowed to view the case. If they are sufficiently organised and financed to be able to have their own expertise to comment on the case, so be it. If they want to comment, there should be a facility for them to get answers. When a company then starts digging trenches in order to lay pipelines through people's fields, the public at least know they have had the opportunity to participate in the safety audit or application process for the project concerned. That is the main issue which is of concern to me on Second Stage. We can examine individual sections on Committee Stage.

I wish to make some points regarding staffing implications. The Bill asks the CER to do a considerable job. It asks the CER to work with the Health and Safety Authority, the EPA and other Government agencies, authorities and the Department during the construction and application process when a safety case is made and a permit is required. After that, if there is an accident the CER will be expected to investigate it and produce a report for the Minister. There are all sorts of safety monitoring procedures which will need to be put in place when gas comes ashore at high volumes and pressures, which is a significant responsibility to pass on to the CER. It will need significant staff to be able to deal with that.

If we are increasing staff levels in the CER, are we making the corresponding staff reductions within the Department? If we are transferring one responsibility from the Department to the CER, that should happen. Are we taking on new people and retaining all the staff who did this work in the Department in the past? From a public finance point of view, we need to ensure we are getting value for money. Most importantly, we need to ensure the CER is given the resources and staff, even in these tight times, to do this job properly because significant pieces of infrastructure are involved which can be dangerous if a proper safety framework which is functioning, monitored and enforced by the CER is not in place. I wish to raise that flag at this stage because there is no point in transferring responsibilities to the CER if we do not give it the capacity to be able to the job comprehensively. It does not currently have the capacity, staff or expertise to be able to do the job.

I will return to what I said at the start of my contribution. This Bill is about learning lessons from a fiasco which happened off the west coast, where we have a very valuable and important resource for the Irish economy which has not been brought ashore in a timely manner because of repeated mistakes, in terms of how the concerns of the community were dealt with and a series of other issues. I hope the next time there is a major find off the south, west or east coasts and we apply new legislation we will be able to allay the fears of local communities in order that we can bring gas, oil, coal or power ashore in a way which treats local concerns with the respect they deserve, while at the same time doing a job for the country, in terms of national priorities regarding energy security and the very important issues which revolve around the new role for the CER in this process.

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