Dáil debates

Tuesday, 20 April 2010

8:00 pm

Photo of Martin FerrisMartin Ferris (Kerry North, Sinn Fein)

I thank Deputy McManus and the Labour Party for allowing me ten minutes to speak. I support the general thrust of the motion, but have tabled an amendment regarding a crucial area that must be addressed if this country is to benefit to the maximum extent from any oil and gas that comes on stream in the future. Irrespective of what side of the House we are on, we are all conscious of how vulnerable we are for energy security and of how we are hostage to energy costs. We have seen this in the past, particularly in my part of the country where hundreds of jobs have been lost in the Tralee area due to energy costs.

My amendment introduces changes in the revenue system that applies to oil and gas companies in order to bring them into line with what pertains in other countries. I am aware the Minister has introduced some changes and commend him on these and am also conscious he inherited bad decisions of the past. However, I do not believe the level of change is adequate and the changes only apply to new rather than existing projects such as the Corrib project.

Norway is an example often cited with regard to the proper taxation and supervision of energy exploration. The role that state has played in the development of its natural resources and in accruing revenue through taxation and royalties has laid the basis for a strong economy outside of the European Union. It will be argued that Norway's offshore exploration sector has been well developed over more than 30 years, but the fact is that its system was in place from the beginning, and contrary to what some people here say, its tax regime and state oversight did not frighten away foreign companies. That fear was the excuse given here for the decisions to change the tax and royalties regime. I remember when the Minister was on this side of the House raising these issues and being told by the then Government we could not do as Norway had done because it would frighten off exploration. However, that has not been the international experience even in countries where multinationals have exerted considerable influence over the local governments. Obviously, a certain influence has been exerted here, given the ridiculously easy terms which have been handed to companies like Shell and others. Neither did the companies involved in exploration in Norway refuse to enter into partnership with the Norwegian State exploration company. It is ironic that because of the involvement of the Norwegian State company Statoil in the Corrib project, when that comes on stream, the Norwegians will benefit more than the people of this State.

The recent announcement that a substantial deposit of oil has been located in the Irish Sea, off Dalkey, underlines both the potential that exists and the need to change the regime pertaining to oil and gas exploration. The deposit there is estimated to be 860 million barrels, which at current prices would have a market value of €60 billion. On the issue of exploration, I worked on the Porcupine Basin for Phillip's Exploration 32 years ago. While I was there a number of finds were made at a depth of 1,600 feet, which at the time made the finds unviable and almost impossible to bring to the surface and to shore. I understand that technology has advanced so much now it would be capable of doing that. The resources are there. Am I correct that the changes the Minister made with regard to revenue will be retrospective in the case of any oil brought to the surface from the Porcupine Basin? We were led to believe at the time that there were substantial quantities of oil in the two finds made, but the wells were just capped and left.

The potential benefits from the Dalkey oil coming on stream, both in terms of meeting future requirements and revenue, do not need to be underlined, particularly at a time when ordinary people are paying a huge price through being forced to shoulder the burden of meeting the financial shortfall brought about by the economic downturn and compounded by the Government's bailing out of the banks and failed property speculators. This motion partly recognises the need for the State to take a closer hands-on approach in its reference to the National Oil Reserves Agency. However, the logic of that is that if the State is involved in the development of gas revenue reserves, it should also have a direct stake in the area. That has been the experience of all other developed countries, where the state, whatever its ideological complexion, recognises that exploration of expendable natural resources such as oil and gas are of a different character to multinational involvement in other parts of the economy. Finds should be regarded in some way as part of the agricultural land and fishery waters of this country, although the manner in which our fisheries have been handed over to external control would not be a good example to follow. There would be no question of the developed sovereign State allowing its agricultural land and food production be handed over totally to foreign companies. The same should apply to managing our natural resources.

The motion puts forward some good points with regard to future energy requirements and the need to ensure the country has a secure supply of the necessary fuel. A huge step could be taken in that direction when the oil and gas off our coast come on stream. However, the current situation does not guarantee this. If, for example, the Corrib field was to begin production, there is no strategy to ensure the gas is used to supply our needs or to ensure it is distributed and priced properly to ensure economic benefits here rather than allow distribution and price be dictated by the market and the companies involved, which will wish to sell their gas to the most attractive market. In light of the current revenue structures, the directing of the gas to overseas markets would constitute a double negative.

The motion also refers to renewable energy and the development of biomass as an alternative means of meeting future requirements and lessening our massive dependence on fossil fuels, which comprise 96% of our energy mix. When in Opposition, the Green Party used to highlight these issues as primary concerns, but in Government it has failed to create the pace of development it promised. Alternative energy sources are being developed, but not on the scale required to meet the targets set. Apart from biomass, there is massive potential in wind and tidal energy. Far more could be done in these areas to develop these sources, particularly along the western coast. Some excellent and ambitious projects are under way, but far more must be done if the potential is to be realised. I refer in particular to the Shannon. I have spoken in the past with regard to the use of reversible turbines in places with an eight knot tide, which offers huge potential. From Helvick Head in the south east to beyond Youghal there is also a strong tide that offers huge potential. I know some exploration work is being done in this regard. It is a way to develop clean energy for the future.

There have also been some interesting proposals, including from farmers' groups, on micro generation. There is potential, but the proper structures and incentives must be put in place. On one level, such projects only represent a drop in the ocean, but if there are sufficient numbers of such projects and they take off, the country would have the potential to meet a small but significant part of overall energy needs. These projects would also represent an environmental plus and provide a boost to the economy on a local level, both in terms of construction and where the energy created aids the development of local enterprises.

Planning is an issue which has raised some disquiet with regard to wind farms and there have been complaints that these are an eyesore. Much of these concerns could be addressed if the proper structures and guidelines were in place and if local communities were kept aware and fully informed of plans and provided with accurate information regarding these structures. It is essential that such communication with local communities exists to ensure the planning process can be delivered in a speedy way to the benefit of communities.

It should also be ensured that certain areas are not overburdened with wind farms just because they are believed to be particularly suitable due to their geographical location and incidence of regular wind speeds sufficient to ensure high levels of production. It has also been suggested that local produce could be encouraged at community co-operatives rather than being left to the initiative of private companies. Again, this would not only help to address the problem of meeting energy requirements but would also contribute to local economic development.

I support the overall intention of the motion and reject the claims made in the Government's amendment that all of the issues referred to are being adequately addressed. Clearly they are not and, as I stated in my amendment, there is the broader issue of the structure imposed on revenue that needs to be addressed and which a future Government needs to do if the full potential of our national mineral resources are to be realised to the benefit of the Irish people.


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