Liz McManus (Wicklow, Labour)

That is all very fine as long as the controls are in place to ensure that it is not seen as an unlimited cash cow to which we can return and build up a little empire, making sure that whatever the authority may be it will live up to its brief. I do not have a problem with the CER taking on this role but I urge caution about what can happen so easily.

In this regard one might look at the complaints I received and the paucity of applications for licences. One of the complaints we received concerned the cost to people in the industry, small players, who are taking a very high financial risk by getting involved in exploration in the first place. They see an opportunity and hope it will work out and if it does they will sell out to a big company. I am not worried about the impact on big oil or gas companies. That is not an issue. However, we seem to have a problem when it comes to the small innovative company that may be willing to take a significant risk. Already it is feeding back the view that the licensing regime is inimical to that kind of approach by comparison with the British licensing or regulatory regime.

I do not know how much this is the industry having a bit of a moan or how much of it is a block to our exploiting our natural resources but it is telling that only two licences were applied for in the last round. That needs to be analysed. One can blame many causes - technical problems, recession, whatever, but that is the reality. When we go again we need to be armed with an understanding of the impact that cost, whether of licensing or regulation, has in terms of limiting innovation. The Minister of State, Deputy Conor Lenihan, is especially interested in innovation. We share that interest.

We have an issue with regard to transparency. Again, this is something that always must be balanced against commercial considerations. We understand that but I ask that in so far as we can we make regulation as transparent as possible. I am loath to raise this issue on the day that is in it, with what has just happened with the former Minister of State, but we did not have a very happy experience with the appointment of the new commissioner of energy regulation. Normally, one would expect a proper appointment system and interview process whereby people would come forward to present themselves for a job of this nature. It is a very highly paid job but that is not the point. I do not criticise in any way the person who got the position because he is eminently qualified. However, I do not know if he was the best person and that is my worry. There are Irish people living abroad working in energy regulation who might have wished to apply for the job. They might have brought back the kind of expertise that we do not have in this country because of its small scale. It was a pity it was not a more expansive and transparent process. The Minister, Deputy Ryan, is always talking about transparency. I do not think this was a happy experience and I hope that lessons can be learned from it. I do not believe it was a happy experience and I hope lessons can be learned from that too.

When one considers the original source of the legislation in terms of it being identified by the technical group that examined the whole issue of the laying of the pipeline, we need to remember that another report was prepared by the mediator, Mr. Peter Cassells, who raised issues other than safety which should be acknowledged. I visited Mayo to look at various issues, including the terminal. The impression I got from talking to local people was that much of the damage in terms of the breakdown in trust occurred before Shell got involved. There was a legacy of bad faith and it must be acknowledged that much of this is about people feeling powerless and helpless in regard to decisions being made in which they felt they had no involvement and by which they felt extremely threatened. Obviously, safety concerns are central to that.

The other issues which Mr. Cassells noted in his report as genuine concerns of local people included safety concerns, the terminal, the location, water pollution and discharges, lack of concrete benefits for the local community, financial compensation for some landowners, gas distribution, given that some towns did not benefit, monitoring of the project in the sense of who was to look after the interests of the local community, and relations with Shell. While the tax regime did not come into that, it was certainly an issue that arose in the wider community. I appreciate that many of these concerns have been taken on board.

It was amazing that the towns in Mayo that could benefit from this new development were not part of the strategic plan by the Government. This should not have been an issue. We should have seen this in terms of ensuring that, strategically, every town along that line would benefit. Thankfully, that will now happen but it showed up a failure in strategic planning and it was hard to understand how it could happen.

Of course, it is not over yet. We still have the issue of An Bord Pleanála querying the pipeline itself. In a way, although I can understand it must be extremely frustrating for the developer, this shows that the system is working in a monitoring role and that the planning appeals board is carrying out its functions. I would hope this inspires a certain amount of confidence and that this measure will add to and build that confidence because, if we are lucky, we will have to go through this again - if we are very unlucky, we will not. Either way, however, it would be a great benefit to Ireland to see that kind of find into the future, whether gas or oil.

For all the great plans we have to replace fossil fuels with renewables, the cost of energy imports, which is currently €6 billion, will grow. The International Energy Agency concluded that the growth in energy demand worldwide, for oil in particular, is unsustainable. Our imports of fossil fuels at over 90% are in a particularly vulnerable position. It is not as if we will have a major change in terms of growth in demand. Growth in demand will continue and we have to allow for and manage that. Moreover, we have to recognise that the whole issue of energy security must be central to Government policy in terms of economic planning for the future.

In other countries, when the original oil crisis took place, it drove a change towards renewables which is now set as a model for all of us. If we take the Scandinavian countries, Germany and France, the oil crisis caused such a reaction within Governments that they were able to plan out a totally new direction in terms of future fuel needs. It still took them about 30 years to do that, so we must do the same. We must recognise that we will have significant fuel needs. While we will have to do things differently, one of the factors we have to keep cognisance of is the reality that we are on the edge of Europe, at the end of the gas pipeline in terms of provision from central Europe and in a very vulnerable position.

While I am on the subject, I previously raised an issue to which I felt I did not get an answer, namely, the question of oil stocks in Ireland. While it is slightly off the point, perhaps the Minister of State could take the opportunity to reply to my query. This goes back to last year, when there were questions about Ireland's obligation under the EU directive on emergency oil stocks. We are obliged to maintain 90 days of strategic oil stocks, and we do this through NORA, the National Oil Reserves Agency. However, issues were raised by the European Commission because our stocks were being used as collateral, which means they were not immediately available, and this was in breach of Community law. What is the situation in this regard? While we may have oil stocks, and 90 days does not sound like much, it was the issue that this oil was being used as collateral which the Commission was most unhappy about. The Minister of State might clarify whether this issue has been resolved because it has implications not just for our relationship with the EU but also domestic implications if those stocks were, for any reason, unavailable.

The Sustainable Energy Ireland report, Energy Forecasts for Ireland to 2020, projects that in its baseline scenario the total primary energy requirement will grow by 2020. It states that oil will remain the dominant fuel, accounting for 58% of energy supply by 2020, while dependence on gas is also expected to grow. The International Energy Association's World Energy Outlook set out a context which is certainly challenging in terms of energy security and cost. So far, we have not seen the response in terms of public consciousness. People can see the price going up, for example, because of the carbon tax on petrol, but the actual extent of the issues that have to be addressed has not penetrated public consciousness in the way that is needed. The World Energy Outlook makes the point that we need major decarbonisation of the world's energy system and that the present economic worries do not excuse backtracking or delays in taking action to address these energy challenges.

We have the challenge. I also believe we have the innovative capacity, if it is enabled to be unleashed, to ensure we can make real progress. However, it seems very often that, on the one hand, we have that kind of potential for growth and development and, on the other, we have an out-of-date system of management, whether in terms of the Foreshore Act in regard to offshore wind or the fact there is no geothermal legislation - I wish the Minister well in that regard. The State apparatus is not moving fast enough or in a streamlined fashion to meet the need and to give that chance of real growth in those innovative areas in terms of energy challenges.

This Bill is part of the modernisation of the State apparatus. While I am glad of that, I am conscious that when one talks to people in the renewables area, very often one comes back to the problem that we have a silo mentality within Departments and between Departments, and that legislation is often out of date, clumsy, inoperable and sometimes impenetrable. It is a big task for the Ministers in this Department to ensure that, with regard to energy, at least we are getting things right. I acknowledge that this Bill represents a step forward, but there is still a long way to go. Perhaps it is a case of "a lot done, more to do", although not all that much has been done.

See this speech in context