Tuesday, 20 April 2010
Energy Security: Motion.
Simon Coveney (Cork South Central, Fine Gael)
I will share time, with the agreement of the House, with Deputies Clune, Doyle, Deenihan, D'Arcy and McHugh. Perhaps the Acting Chairman will let me know when I have used approximately 18 minutes of my time.
I am glad the Minister for Communications, Energy and Natural Resources, Deputy Ryan, has arrived. This motion attempts to put the issue of energy security squarely on the Government agenda. There has been a significant emphasis from this Minister and the Government on trying to shift the focus from carbon-emitting fuels to more sustainable ways of powering the economy. The main driver for the Minister has been climate change and I want to attach equal, if not more, importance to energy security issues. They are at least of equal importance as an issue looking to change the way we power Ireland from a transport, energy generation and heating supply perspective.
The Minister will be familiar with two of the most recent reports which sum up the potential crisis that may hit Ireland because of our reliance on imported oil in particular, along with imported gas. The first is Energy Security: Ireland on the Edge, produced by the Ecology Foundation in January 2010, and the other is The Oil Crunch - A Wake-Up Call for the UK Economy, which was produced by the UK industry task force on peak oil and energy security.
The report produced in the UK makes it quite clear that they are predicting and anticipating a dramatic price increase in oil over the next three to four years to well over $100 a barrel. If this is combined with the Ireland on the Edge energy security report, one can see how vulnerable and ill-prepared we are for that type of oil spike in the not too distant future. It can also be combined with our almost complete reliance on imported gas, as our gas fields off Kinsale are running out and we do not yet have gas coming ashore from Corrib. We are perhaps the most exposed country in the OECD in our reliance on the import of fuel to power our homes, businesses and economy.
We need to make plans today to ensure we address the risk that exists and slowly turn the ship around in changing our reliance on fossil fuels in order to move to a more sustainable future. I know the Minister believes in that but my difficulty is that we have not seen a viable roadmap to get us there. I hope that by 2025 there will have been a massive increase in renewables, along with interconnection and the required storage capacity. There must be a bridging solution between now and then which will ensure that the Irish economy will not be exposed to supply or pricing concerns which are a real threat.
We can examine the storage capacity which Ireland has in case of a disruption of supply in oil or gas. We must reflect on the fact that 95% of all fuel used in Ireland is imported. We have 55 days of oil stored, although the majority of it is not held on the island but in Britain. We are reliant on Dublin Port being constantly open, as well as Whitegate refinery in Cork Harbour, should there be a crisis. We must seriously consider increasing the capacity of oil storage on the island of Ireland so we can counteract the effects of a reduction in imported oil supply.
The gas position is far worse as essentially, we have no strategic gas reserves in Ireland. Bord Gáis or any other gas supplier imports what is needed and can increase the pressure on the pipeline, giving a little extra supply. Bord Gáis keeps a small amount of reserves in small disused gas fields off Kinsale and it is estimated we have approximately 11 days of gas stored should the interconnectors between Ireland and Britain, which pipe gas into Ireland, shut down for a political or geological reason. Many people would say we do not even have that much of a supply and Ireland's gas supply probably would not even last longer than a week if the import of gas were halted for any reason. This is a very vulnerable position when one considers that more than 60% of our power generation in Ireland comes from gas.
The day in the past five years when Ireland used most power was 7 January. For the first time in a long time we used the second gas interconnector to approximately 30% capacity, along with the first interconnector to its maximum capacity, because we were importing so much gas. It was a cold day and there was no wind so there was no generation capacity coming from wind turbines. We were heavily reliant on gas, coal and peat in powering the country. We are entirely reliant on imports for practically all that gas.
What should we do as a result? I hope the Minister will take my suggestions on board. We must put financial incentives, or regulation, in place to require the industry to broaden risk. We could be much more proactive in using disused gas fields and other storage potential that is available in Ireland should we choose to use it. Ireland can use the gas pipeline infrastructure off the south coast of Ireland which feeds the Kinsale gas field for this purpose; it is happening already to some extent. In the summer months Bord Gáis pumps gas into some of the smaller gas fields in order to increase pressure and allow usage in the autumn as more gas is required. We need much more of this thinking.
We must require electricity generators to increase back-up stocks. Every gas powered station in Ireland - most of the newest, modern and most efficient electricity generators now operate on gas - should be required to hold oil reserves in case gas runs out. They are required to so do for a five-day period, but this must be doubled to ten days.
On the Corrib gas field, my clear position is that we need to bring gas ashore from off the west coast. It is a resource for Ireland and issues such as the taxation arrangements some criticise or the amount of money Ireland as a country is making from the exploitation of its own gas resources, its relationship with Shell and so on can be debated on another day. This debate is about energy security and the ability to bring large volumes of gas to the Irish market from a major gas field which I understand is approximately two thirds of the size of the Kinsale gas field and good for energy security in Ireland. Its exploitation must be supported and encouraged and facilitated as quickly as possible.
As for liquid natural gas, for the first time in living memory there has been a complete divergence in pricing between oil and gas. Gas no longer is priced depending on oil prices because huge new shale gas reserves have been discovered in the United States and Europe. This has resulted in an oversupply of liquid natural gas globally and, consequently, cheap gas. Moreover, it is likely that gas prices will fall even further in the next six months as oil prices increase beyond $85 per barrel towards $90 or $100 per barrel. Even though this is good in respect of the security of supply, the State must do all it can to encourage the liquid natural gas storage facilities being proposed for Tarbert. I note my colleague, Deputy Deenihan, is highly supportive of the project and will speak about it later.
There is a huge opportunity, albeit untapped in Ireland as yet, to produce what is called biogas, primarily methane, from farm waste. I refer, in particular, to slurry which is perceived to be a problem and methane which is a far more potent and damaging greenhouse gas than carbon. We should begin to perceive such waste as a resource rather than as a pollutant. There is much for the Minister to do to kick-start an industry that is a billion-euro industry in Germany where more than 4,000 anaerobic digesters on farms produce methane from slurry, grass and other farm produce and waste. We should be doing this in Ireland because we grow grass better and have a capacity to do it more efficiently. This constitutes an opportunity to give farmers a new source of income and wealth creation. The Minister is familiar with the work under way in UCC, particularly that of Professor Jerry Murphy whom I consider to be Ireland's leading expert in this area. I hope the Minister will be forthcoming with funding for a new pilot project on the Cork city landfill site for a planned new biogas anaerobic digester. Moreover, I understand it will be co-sponsored by Bord Gáis if approximately €4 million can be found by the Government to make the project happen.
This is an exciting potential income generator for farms nationwide because if there is one thing Irish farmers are good at, it is growing grass efficiently. They have been doing it for years and continue to do so in the dairy and beef industries. There is now an opportunity to generate new income from this crop. Ireland has a natural competitive advantage over other countries in the European Union that are generating huge sums of money and income for rural communities by dealing with waste in a far more environmentally-friendly way than spreading it on land, which is what happens with most slurry. I strongly encourage the Minister to promote and support through taxation, financial incentives and export tariff mechanisms, in particular, efforts to make this industry a reality in Ireland as it already is elsewhere in Europe in countries that are not as good at growing grass. This could pertain to selling biogas to the gas network or generating electricity from biogas and selling it back to the network.
I wish to shift the focus slightly onto Ireland's fuel mix and discuss briefly the need, from a security point of view, to move from spending money on imported oil, gas and coal to spending it in Ireland in a far more effective manner to create jobs, support rural communities and, most importantly, shift the risk away from reliance on imported fossil fuels to generating our own indigenous fuel in Ireland. I welcome the new legislation that Members probably will be debating tomorrow or on Thursday in respect of the obligation scheme that after July will require all petrol and diesel in Ireland to have a 4% bio-fuel mix which may be ethanol or biodiesel. However, much more must be done to promote the indigenous production of such bio-fuel on the island of Ireland because, as the Minister is aware, even though a market is being created for bio-fuel in Ireland by introducing this welcome obligation, it is being filled with imported bio-fuel to an unacceptable extent. We must be much more aggressive and proactive about supporting the industry in Ireland which is waiting to take off. Moreover, this does not simply pertain to agriculture either. We must also consider waste much more constructively to ascertain how methane or ethanol can be produced from it. Some of the projects I have studied, as I am sure has the Minister, have exciting potential.
Biomass has even more potential than liquid bio-fuel. I spoke at an energy conference in Cavan last night at which the viability of growing miscanthus and willow for wood biomass burners in the county was considered, with an expert from Teagasc. The exciting point about this is that willow and miscanthus grow on wet land that otherwise is difficult to farm and, consequently, there is no threat to food supplies. There is much that can be done in respect of bio-fuel and biomass crops in Ireland without affecting food supply because of the types of lands suitable for this purpose. Moreover, there are good examples of this happening in Ireland. For example, Johnson & Johnson which I often cite as a good example in my constituency receives trailer-loads of willow wood biomass which is grown in west Waterford and supplied on a weekly basis to a combined heat and power plant in Johnson & Johnson using a very competitive pricing model that should and can be replicated nationwide. The State has a central role in providing the market a guaranteed price for crops such as miscanthus and willow, as well as thinnings from forestry, to make wood biomass a huge industry in Ireland. A total of €400 million of taxpayers' money is spent per year in importing fossil fuel to heat public buildings in Ireland such as schools, libraries, this Chamber, hospitals and many others. We should enter into a roll-out programme for combined heat and power generating plants in all these buildings and source the fuel material from Irish farms to make this happen.
The big idea from the Government in moving away from reliance on fossil fuels pertains to wind energy, in particular. I acknowledge the wave, solar and other technologies but as my time is running out, I wish to concentrate on wind power. We have a fundamental problem in meeting our target of building enough turbines to generate approximately 6,000 MW, which is what we will require if we are to achieve the 40% target set by the Minister in terms of the renewable proportion of energy generation. Gate 3 is a flawed way to deal with grid connections. Under our current system, if an investor already in Ireland or coming to Ireland finds the ideal site for a wind farm, he or she has no chance of getting a grid connection within six to seven years because he or she would need to join a queuing system. We need to switch over to a model whereby every proposed wind farm is assessed on its merits alone rather than on how long it has been in the system. Its merits should be judged in terms of wind speed, proximity, cost, bankability, technology and so on. These should be the sole criteria. I appeal to the Minister to consider this matter.
The Government needs help in rolling out the grid infrastructure that will be necessary to make the new energy future a reality. We in this party will try to give the Minister that help as long as he considers the technologies and potential other solutions with an open mind in respect of discussions on whether infrastructure should be underground or overground, the costing implications of that and so on. My time is up, so I will raise my other issues at the end of the debate tomorrow night.