Thursday, 19 January 2023
Oil Emergency Contingency and Transfer of Renewable Transport Fuels Functions Bill 2023: Second Stage (Resumed)
The Bill is about the security of supply of oil. Members will be aware of the continued importance of security of oil supplies. While we continue to transition to the increased use of renewable fuels and electrification in both the transport and heating sectors it is vital that we maintain our oil supplies.
It is worth highlighting that the main purpose of the Bill is to strengthen the Government’s ability to manage stocks in the unlikely event of a curtailment of oil supplies. There is no such concern or risk at present. International oil supplies and prices have been steady over recent months. Motorists have seen a fall in prices for petrol and diesel at retail forecourts of late.
From the onset of the Russian invasion of Ukraine and the resulting impact on global energy markets, the Government has sought to address the negative impacts of higher energy prices on consumers, society and the economy. In budget 2023, the Government announced a suite of measures to help people with high energy prices, while the energy poverty action plan, published last month, provides further support for people at risk of energy poverty this winter.
While higher energy pricing overall remains a key concern, there is also an onus on the Government to provide confidence to households and businesses with respect to the security of Ireland’s energy supply. Energy security is enhanced by having in place a multitude of robust emergency plans that seek to mitigate, offset, or prevent supply issues emerging. The Department of the Environment, Climate and Communications has been testing emergency plans in recent months with relevant Departments and agencies. Work is ongoing to ensure plans can be operationalised at speed, if required, however unlikely any such scenario may be. Part of that work highlighted the need for an oil emergency plan to have a statutory basis, hence its inclusion in the Bill.
Likewise, emergency exercises run by the Department of the Environment, Climate and Communications, in conjunction with other key Departments and agencies, highlighted the importance of robust and reliable data as a key aid to decision makers in choosing how to respond to an oil emergency. Precise data on oil movements within the State are maintained by the Revenue Commissioners. This data is helpful in the context of an oil emergency where Government would be trying to ensure that fuel can be assigned quickly to the most critical services and sectors of society and the economy. The provision in the Bill with respect to Revenue data is tailored for that purpose.
The Government’s approach is in keeping with that of other EU member states, where emergency preparedness plans have been sharpened in response to the ongoing energy implications of the war in Ukraine. I am confident that the legislation will strengthen the statutory provisions available to Government to respond to a severe or prolonged oil emergency, thereby ensuring adequate supplies for the emergency and critical services, including for the use of oil to generate electricity, if necessary, in the event of a major gas shortage.
I note the particular welcome from Deputies for measures in the Bill that establish a register of oil suppliers to ensure fast communication to retailers, and the measures that allow Revenue to share data on oil movements to enhance the responsiveness of the State in an emergency. These provisions will really sharpen up the capacity for the Government to respond very quickly in an oil emergency.
While a suite of initiatives, including this legislation, are being developed by the Department of the Environment, Climate and Communications to ensure the security of Ireland’s energy supply in the near future, our long-term priority, and the best approach for Ireland, is to insulate consumers from volatility on international wholesale energy markets by investing in energy efficiency and renewable energy, expanding interconnection with European markets and deepening internal market integration. In that regard, the Climate Action Plan 2023, published before Christmas, sets out how Ireland will accelerate the transition to renewable energy sources. This shift brings with it many rewards, not least greater energy security and stable prices. At the same time, the Department continues to closely monitor the security of energy supplies to Ireland, particularly since Russia’s illegal invasion of Ukraine. In that regard, latest updates from industry are confident about the supply position in the months ahead.
The Bill also effectively transfers the statutory functions relating to renewable transport fuels, from the Minister for the Environment, Climate and Communications to the Minister for Transport, in line with the change in policy responsibility that took place in 2021. In addition, provision has been made for the Minister for Transport to make regulations to effect an increase in the use of renewable transport fuels, in line with the renewable energy directive and with climate policy. These provisions will further drive the use of renewable transport fuels, including the introduction of the E10 petrol standard and will contribute to the State’s climate goals.
I will respond to issues raised by Deputies in respect of section 31. They expressed the views that the section grants wide new powers to the Minister under section 3 of the Act of 1971 to provide for the “acquisition, supply, distribution or marketing” in an emergency, of fuels.
However, these powers are already available to the Minister under the Act of 1971, and have been used by Ministers from time to time from the 1970s onwards in response to oil shortages in the domestic market.
What is new in the Bill is that the Minister will also, on foot of a Government order under section 1 of the Act of 1971, be able to control the use of fuel in an emergency. The new power is provided to ensure, as far as is possible, that fuel prioritised in an emergency for critical services or to a critical worker is in fact used to provide critical services.
The amendments to section 3 of the Act of 1971 contained in the Bill also allow the Minister to have the power to issue directions to oil companies or to relevant other persons to control the supply of fuel, or to compel them to provide fuel on a priority basis to emergency or critical services or for power generation. These powers of direction are required now, as oil supply chains have evolved in recent years to be very much "just in time" by nature, and Government intervention could be required quickly to prioritise supply for the emergency or critical services in response to what could be a dynamic supply situation. These powers of direction also provide for the Minister to quickly prioritise fuel for power generation and to protect the stability of the grid if there is a major gas emergency, requiring fuel switching at power generation plants from gas to oil.
I thank Deputies for their interest, and I look forward to discussing the Bill in further detail on Committee Stage. I commend the Bill to the House.