Thomas Pringle (Donegal South West, Independent) | Oireachtas source

I welcome this debate on the report by the Oireachtas Joint Committee on Communications, Natural Resources and Agriculture on old and gas exploration in the State.

When this debate was scheduled, I had to think back to when the report was published because, much to my own discredit, I had forgotten when that happened. It is a full year since the publication of this report and that does not augur well for the debates that are needed on committee reports in this House. It reminds me of the commitment given two weeks ago in the House during a debate on Private Members' legislation that the upcoming report from the Joint Committee on Justice, Defence and Equality on prostitution will be scheduled for debate after publication. The Government did not say that it would be a year after publication.

Aside from the fact that this report was published a year ago, it is important that it is debated. I hope that the debate is intended to inform policy-making within the Department of Communications, Energy and Natural Resources and is simply not a filler of time in the House.

The former joint committee of which I was a member deliberated for a long time and took evidence from a number groups in drafting the report. One of the most useful discussions was with Norwegian representatives and experts on the policy decisions made in Norway on its oil and gas reserves. The point that came out of it was that they stated that they would not start from our position. In Norway, they decided the policy at the early stages of its oil industry, a policy that put the good of the Norwegian people at the centre of their decision making. Unfortunately, in this country the good of the oil and gas industry has been paramount in the development of the sector here.

There are three aspects of the report on which I will focus: the exploration, the taxation debate, the relationship between the oil and gas industry and the host communities which have the facilities imposed on them. There was much debate in the committee on the taxation aspect and how to get a return for Irish society from any resources that may be developed in the future. The guiding principle of this debate should be that the Irish people must be seen to get a fair return for allowing energy companies to exploit our resources.

As I have seen from the committee's deliberations, the exploration industry was keen to highlight how difficult the Irish exploration landscape is and how hard it is to get a return from exploration. I have discovered that this appears to be the theme that all industry vested interests take in giving evidence to committees, whether it is the oil and gas industry or the retail sector on which we in the Joint Committee on Agriculture, Food and the Marine are deliberating in regard to the code of practice for the retail trade. The oil and gas industry was keen to highlight the lack of success from their exploration wells offshore in Ireland, constantly going back 40 years and mentioning the number of wells drilled and the low instance of commercial finds, and always citing a one in 35 success rate. Interestingly, if the figures were analysed, in more recent times, from, for example, the late 1980s, the success rate rises to approximately one in 12, which would seem to be more attractive.

A key theme in the report is that the technology has improved and this can be seen from the improved success rate. The industry claims that it is not reduced to looking at old seismic data to try to locate finds, but it forgets to mention that looking at old data with modern technology has uncovered commercial finds, as in the case of Norway where the biggest field ever found has recently been discovered by looking at old data and re-drilling.

As improvements in technology continue and the need to rely on more politically stable areas for exploration grows, the potential for more commercial finds offshore increases. It is, therefore, timely that the committee's recommendations on taxation should be taken on board and amended by the Government. The committee recommended a minimum 40% tax take made up of corporation tax of 25% and phased profit resource rent tax. The profit resource rent tax should be at rates of 15%, 35% and 55%, depending the profitability of the find, so that the more profitable the find, the higher the tax take for the Exchequer.

Everything we do should be to maximise the return for the Irish people. We also should have a guarantee of supply at less than the market rate for the needs of the Irish people. Why should we have to pay the going rate to get the benefit of a resource that belongs to our people? I do not believe we should pay the same as consumers in England or Europe who will benefit from our resources. There must be a dividend for the Irish people.

The Minister stated that he agreed that there should not be any retrospective changes to the taxation rate, a recommendation with which the committee came forward. As we look to the future, now is the time to undertake such a review and change those rates, and implement the rates recommended by the committee. It will be too late, if there is not retrospection, when the commercial finds are found. Then the Minister will argue that he cannot go back and change the rates, and that the companies need certainty. Therefore, the Minister should introduce those new rates at this stage before any further licences are issued and any further finds are made so that the companies can enjoy such certainty but so that the Irish people can also enjoy certainty.

It should be a condition of any licence and commercial find that it should be refined, in the case of oil, in Ireland to ensure that we have control of the resource if conditions demand it. In the case of an oil find offshore, it should never be allowed that crude oil is shipped to refineries outside the State.

The way the host community in the case of the Corrib gas find has been treated by the Government and by the promoters of the terminal in Rossport has been highlighted.

The committee heard very good contributions from Pobal Chill Chomáin and Pobal le Chéile about the impact the development has had on their communities. The experience of these communities should not be allowed to be repeated anywhere on this island. The Government can clearly take action to ensure that does not happen.

Both groups recommended that future developments should not be allowed to be broken up into piecemeal consents. A fragmented consent process should not be allowed to happen at any stage. This is vital because the development should not and cannot be allowed to become more important than the proper consultation and community involvement. The splitting of the Corrib consent process has meant that once the site for the terminal was agreed, the pipeline had to reach it. This has meant that regardless of the valid arguments or concerns the community had, they had to be overruled because the gas had to get to the terminal. In future, the State needs to ensure that all aspects of the development process happen together and all consents are granted simultaneously.

It makes a mockery of the planning process to allow the piecemeal development of any infrastructure. Best practice in Norway has shown that, with proper consultation, the best results for communities can be achieved. There also need to be clear lines of demarcation between the promoter, regulator and health and safety authorities to ensure each element can do its work independently of others and not be concerned about other aspects of the project.

I believe there will be more commercial finds in Irish waters. The Minister, on behalf of the State, has responsibility to ensure they are used not just for the benefit of oil companies but also for the benefit of the people. Having a tax regime that ensures a return to the State is vital. Ensuring a supply is available to Irish society at a reduced rate, recognising that the people own this resource, should be an integral part of any policy. Ensuring the planning process reflects the concerns of communities and that consents for development are issued in an integrated way that respects the needs and concerns of those communities and respects best practice must be at the heart of any development policy.

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