Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

This is an entirely new experience for me.

I thank Deputy Noel Harrington for raising his concerns which I am sure are shared by many people about the somewhat unexpected announcement made last week. Security of oil supply is central to the economy and our economic and social development. Oil is imported either in the form of petroleum products or as crude oil. The crude oil imported into Ireland is refined in Cork. The refinery supplies about one quarter of the petroleum product on the domestic market. Some 75% of Irish oil supplies are imported in product form from neighbouring markets. Oil comprised 59% of total final energy consumption in Ireland in 2011. While significant efforts are under way to improve energy efficiency and increase renewable energy levels, it is clear, particularly in the heating and transport sectors, that oil will continue to play a pivotal role in the economy in the medium term. For this reason, ensuring a robust oil infrastructure on the island is an essential part of our security of supply strategy.

Ireland is a committed member of the International Energy Agency, IEA, and was one of its founding members. As part of our IEA and EU obligations, we hold 90 days worth of strategic oil stocks for use in a supply disruption. The National Oil Reserves Agency, NORA, holds 88 of Ireland's 90 days of strategic reserves of oil. The remaining two days worth are held by large oil consuming companies. In recent years NORA has been increasing the proportion of stocks held on the island of Ireland in line with Government policy to improve accessibility and the availability of oil stocks during an oil supply disruption.

At the end of December 2008, NORA held 46% of its stockholding obligation as physical stocks on the island of Ireland, 38% as physical stocks abroad and 16% as stock tickets. By the end of April 2013, NORA had made significant progress and now holds 71% of strategic oil stocks as physical stocks on the island of Ireland and 29% as physical stocks abroad.

To underpin this development, NORA has opened three new oil storage facilities, in Antrim, Dublin and Kerry, which have considerably enhanced oil security on the island of Ireland. NORA will continue to seek out new storage facilities on the island, subject to value for money considerations. Reducing energy consumption through energy efficiency measures is the first pillar of energy policy. We are also working hard to ensure that we meet our 2020 renewable energy target of 16% of all energy consumed across the economy coming from renewable sources. Discussions on the oil-refining sector in Europe have been ongoing at EU and IEA level in the last two years in view of how the sector has been developing internationally. My Department has been following these discussions closely.

Phillips 66, the current owner of Ireland's oil refinery in Cork, recently confirmed that it had commenced a process to market the refinery, storage terminal and associated business. The company has confirmed that it intends to continue operating the assets as usual during the marketing process, which is expected to last for several months. The refinery was in State ownership for some years and was operated by Irish National Petroleum Corporation, INPC, which sold the refinery together with the Bantry terminal in 2001 to a private company known as Tosco. Tosco subsequently sold on the refinery. The day-to-day operation of the refinery and terminal is a matter for the current owners, Phillips 66. Under the terms of the sale from INPC to Tosco, the refinery and terminal must continue to be operated until 2016. This obligation applies also to Phillips 66 and any subsequent owners.

My Department recently commissioned a review of the strategic case for oil refining requirements on the island of Ireland. The report has been finalised and was recently considered by the Government. I plan to publish the report shortly. My Department is also continuing to engage with Phillips 66 regarding its future plans for the Irish business.

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