Dáil debates

Thursday, 3 July 2014

Oil and Gas Fiscal System Review: Statements

 

12:10 pm

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

I welcome that. The Minister has done a good job. I welcome his willingness to take on board the report, and not let it gather dust, because it proves, if we work together, if we follow a process and if we do the tedious work, we can get results.

One point fascinated me because of all the talk over all of the years about decisions. At the committee, I asked one of the officials had any government gone against official advice on the low terms. There had been Deputies from various parties, including from Deputy Rabbitte's party, previously as Ministers for energy and they had gone along with these terms. The official confirmed it occurred once only. I could see all the ears pricking of the few members who were present that day. Then he went on to say that it was during the term of the previous Government, the Government in which I sat. When we adopted the 40% marginal rate, which was recommended by the then Minister, Mr. Eamon Ryan, the civil and public service were opposed to the decision, as I am sure Deputy Rabbitte has found out since. We went for the higher rate. I was proud that we were the only ones who had gone against the advice and that we had done so by changing the rate to a higher figure than they had recommended but it would now appear that we did not go high enough and the Minister's report by Wood Mackenzie states that we could have gone another step. I hope that would put some of the allegations that have been made to bed because my experience over a long period in dealing with the officials is that they took a very conservative view. In my view, they recommended rates much too low. The idea that these rates were not recommended officially was put to bed in the work of the committee.

There are other issues in the report worthy of examination. One of the issues was recommendation No. 11, the setting up of a forum of all of the stakeholders to be there on a continuous basis. I believe that if the Minister wants to get buy-in and get people to accept that the way we are doing our work is open, we need much more transparency and involvement to ensure that the stakeholders, including, for example, unions and workers, are much more involved.

The second issue is public consultation and community gain. When the history of the development of the Corrib gas line is reviewed, it will show that there was quite a defensive non-interactive process involved. By consultation, I do not mean the advertisement in the newspaper and the following consultation process where it is only when things begin to happen that ordinary people become fully aware and get involved in the system.

I hold strong views on the recommendation on community gain because there are many major infrastructural developments taking place that are needed for the national good but where often the host community is not the direct beneficiary or might not even benefit significantly. For example, to my knowledge, there is no plan to make the gas available to the people of Erris, even into the town of Belmullet. It is important that we have a statutory system, not by the grace and favour of the exploration companies, and where in major developments such as this there would be a requirement to provide some of the money for both infrastructural and social development in the host community. If that was done, it would add considerably to the acceptance of such developments in the future.

There was another recommendation that the Norwegians made that I found interesting. They liked to give the licences to consortia rather than to individual exploration companies. The reason for that was they believed that if they did it that way, there would be a much greater certainty of the data being made fully and properly available to the state because the same data that would go to the different partners would be the data that would go to the state. It would be unlikely that they would cheat on the partners and in not being able to cheat on the partners, they would be in a position of much greater certainty that the state would be fully aware of all of the seismic data. The Department will argue that it gets all of this information anyway. They argued that when I was a Minister, and we had endless arguments with them. It is interesting, when one reads the report that the committee produced, that it reflects on what the Norwegian authorities told the committee, that they are not as sure as the Department, they are aware of these possibilities and they ensure that they narrow the angle on the information deficit.

In general, this is an important step forward. I hope some of the drilling taking place is successful, that we manage to land more oil and gas, and in the not too distant future this island will become energy independent rather than being a major net importer of both oil and gas.

Comments

No comments

Log in or join to post a public comment.