Michael Collins (Cork South West, Independent) | Oireachtas source

I wish to make some comments on the National Oil Reserves Agency (Amendment) and Provisions of Central Treasury Services Bill 2020. The National Oil Reserves Agency, NORA, exists in its present form to ensure that Ireland maintains its minimum stockholding requirements for oil and petroleum products. It is there to ensure our national security of energy supply in case of global disruptions. As stated by the website of the Department of Communications, Climate Action and Environment, and in the principal Act, the main purpose of the NORA levy is to fund the maintenance of Ireland’s strategic oil reserves.

In respect of the proposed amendments to the principal Act, the Minister wishes to redeploy the levies on oil and petroleum products to establish the climate action fund and he has advised that it is not envisaged for there to be any significant cost to the Exchequer. In the explanatory memorandum, it is advised that the provision of central treasury services by the National Treasury Management Agency, NTMA, to NORA and Irish Water provides for efficiencies in the financial management of both agencies. I think we all know the state that Irish Water is in financially and now it looks like our Government is going to toy with our energy security of supply. I would therefore like to ask the Minister specifically how the National Oil Reserves Agency will be funded going forward if it is to share its funding with Irish Water, given that there will apparently be no increase in cost to the Exchequer. Does it mean that we are now going to transfer the disgrace and shambles of Irish Water to our security of energy supply?

We have all witnessed the severe disruption that Covid-19 has brought upon us. The failure of our Government to invest in our health system and hospitals created a security of supply issue for our healthcare. Do we now want to jeopardise our security of energy supply by redeploying the money to the climate action fund? The climate action fund will hopefully be a positive development for our country’s transition to cleaner energy sources but can the Minister explain how we will maintain an adequate security of supply going forward when the funds allocated to the National Oil Reserves Agency will now be significantly reduced?

I spoke at some length last week about our security of supply situation regarding our current energy supplies. While I welcome the fact that we will give clear support to the development of renewables and clean energy, I fear that it might not be enough to underline our security of energy supply while keeping energy prices competitive for our citizens.

Renewables are highly volatile due to periods when the wind is blowing or not, or when the sun is shining or it is overcast. As we move towards cleaner energy, the most likely realistic solution will require a combination of renewables with natural gas. As renewables will also take time to develop into the major source of energy for our country, once again, I raise the critical issue of the security of our natural gas supply, which is dire. The Minister wishes to increase energy efficiency under the recently proposed amendments for the climate action fund, and has now received approval for state aid for renewables. This is a great achievement, and we are on our way to reducing emissions, but we need to get our house in order first. While we have great news about the future, it has become increasingly clear that Ireland is severely exposed to security of supply issues in relation to our natural gas supply.

The Minister may have seen on the news recently that the Kinsale gas platform, one of our few indigenous sources of natural gas supply, was recently turned off. This will result in a loss of local jobs in Cork but it also means that we are now in an extremely vulnerable position with regard to our national security of supply for gas. Ireland currently produces more than 50% of our electricity from gas and we import gas via interconnectors from the UK. We have no existing gas storage on the island of Ireland, Corrib gas field will be gone within ten years, and we are now fully reliant on the UK for gas imports. The UK is also reliant on gas imports and is experiencing its own declining gas production in the North Sea.

The UK is also exiting the EU, which means new risks to our economy. The UK and Ireland are good friends now, but the same cannot exactly be said about the EU and the UK who are going through a messy divorce. If trade talks between the EU and the UK were to take a turn, not much would prevent the British national grid operator from increasing tariffs on the interconnectors between the EU and the UK which would in turn directly hurt the Irish economy. I strongly ask the Minister to improve our security of supply situation for natural gas and I propose that, at minimum, the Minister considers a floating liquefied natural gas, LNG, import terminal which can guarantee our security of supply while developing offshore wind power and renewables.

I support our move towards renewables in the coming years but it is clear that it will take time and we must be realistic. Gas can and will play a key role as a transition fuel and in balancing power production from renewables in Ireland. Once offshore wind power production and other renewables are in a position to replace fossil fuels, we can either use a floating LNG terminal as a pure security of supply option or disconnect it entirely if it is desirable for our country. A floating terminal will allow this and we will not be left in the lurch while we make our move towards renewables. This will help to put Ireland's energy transition and economic competitiveness first instead of outsourcing our energy needs to the UK and other countries. I am also aware of a proposal from a company owned and located in Ireland which is ready to put in place world-class LNG infrastructure and commit to importing conventional LNG, not fracked gas. I also have proposals for offshore wind power projects in the County Cork area. These projects can complement each other as well as being truly supportive of our energy transition.

We are in very challenging times and higher energy costs will hurt our economy. I ask, therefore, that the Minister seriously considers both offshore wind power as well as a floating LNG terminal as viable options to support our economy with competitive energy, to diversify and ensure our security of supply of gas, and to ensure a practical, cost-efficient and just implementation of the energy transition in Ireland.

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