Bernard Durkan (Kildare North, Fine Gael)
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Question 82: To ask the Minister for Communications, Marine and Natural Resources if, in view of the heightened concerns regarding continuity and security of supplies of oil, gas and other fuels, escalating prices and the potential negative for the consumer and the economy, he will provide increased incentives in line with those on offer in other leading European countries for the production of alternative fuels with the dual objective of meeting Kyoto principles, thereby reducing the cost of fines or carbon trading, and the production of clean energy alternatives; his proposals to improve the regime in respect of oil, gas and other mineral exploration with the intention of maximising the benefit here; and if he will make a statement on the matter. [28335/05]

Noel Dempsey (Meath, Fianna Fail)
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It is becoming clear that increased concerns regarding global security of energy supply puts the challenge of finding sustainable alternatives top of the energy policy agenda. With regard to promoting the production of clean energy, in April this year we launched a scheme for mineral oil tax relief for biofuels. Under the scheme eight projects were awarded excise relief valued at €6 million over a two-year period to 2007. The number of applications in the pilot scheme clearly indicates the strong interest in a biofuels industry in Ireland. I have had contact with the Minister for Finance about the possible scope for scaling up fiscal support for biofuels.

The promotion of renewable energy technologies in electricity production is a key priority of this Government and we are working to achieve our EU target of increasing the amount of electricity from renewable energy sources to 13.2% of total consumption by 2010. This will mean that approximately 1,400 MW of capacity from renewable sources to be connected to the electricity network by 2010. This is a challenge which will require us to more than double existing capacity within five years. This is the minimum target I am demanding and I am confident it will be achieved. In this context I recently announced a new support mechanism to be known as the Renewable Energy Feed In Tariff, REFIT. This revised system will move away from competitive tendering to a fixed price proposal.

In July my Northern counterpart, Angela Smith MP and I published a preliminary consultation paper on an all-island vision for renewable energy to the year 2020 and beyond. This is aimed at developing a long-term strategy for renewable energy on the island as a whole.

The terms governing petroleum exploration and development are kept under constant review by my Department. These terms are attractive by international standards and are designed to encourage exploration in the Irish offshore. I have no immediate plans to reform the terms at this time.

Exploration and development of minerals is undertaken by private enterprise and regulated under the Minerals Development Acts 1940 to 1999. All extraction of minerals under the Acts is subject to payment of royalties to the State. While it is my intention to consolidate and update those Acts in a new Minerals Development Bill currently in preparation, I do not propose to change that policy.

Bernard Durkan (Kildare North, Fine Gael)
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Will the Minister indicate, in light of what he correctly identifies as the need to depend less on fossil fuels and more on alternative energies, how he might keep pace with other European countries such as Austria, Scandinavian countries and Germany, that have pioneered activity in this area? Notwithstanding what he said in his reply on the Kyoto principles, if the Minister accelerated the programme in line with best practice as shown in other European countries, could he revise his projections with a view to achieving the objectives set in Kyoto?

In regard to exploration and royalties accruing from finds either on or off shore, is it not a fact there is some public concern about the extent to which the State can benefit directly from royalties from any such finds and that now might be a good time to review this issue, while giving sufficient incentives to those involved in mineral, oil or gas exploration while at the same time giving the State a fall-back position whereby it gets the best deal possible in those circumstances?

Noel Dempsey (Meath, Fianna Fail)
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In regard to the Deputy's last question there has been no change to mineral developments and the specific regime of licences for on land and offshore. The reason the scheme is designed to be attractive is because of the particular conditions and so on for prospectivity off the Irish coast. The scheme has been revised three times since 1975, the reason on each occasion being that the numbers seeking to explore and drill wells were diminishing. Even with the attractive terms since the last revision in 1992 there has been no increase in the number of firms applying for licences. There has been no update on the drilling of wells this year. This is the first year for a considerable period when no wells will be drilled off the Irish coast. I do not consider the time is right for a change in those terms. There are some who would argue that if the terms were to be changed, they should be made even more attractive. However, that would not be feasible.

With regard to achieving our targets for Kyoto, our target of 13.2% for the generation of electricity by 2010 is near enough to the limit of what we can do in that short period. I agree with the Deputy that we need to be more ambitious into the future. For that reason I have ordered a review of energy policy which I hope will be completed by mid-2006. I hope Members on all sides will contribute to that review. In the area of alternative energy we need to plan for a 20 to 25-year period rather than the short term as at present. The point the Deputy made about being more ambitious and catching up with some of our European neighbours is covered in that response also.