Brendan Griffin (Kerry South, Fine Gael)
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I thank the Ceann Comhairle for allowing me table this matter on the Shannon LNG project. This proposed project is hugely important for the Ballylongford area of north Kerry, but it also has significant positive and economic implications for the entire south-west region. The proposed project is for a liquified natural gas terminal on the Shannon Estuary, near Ballylongford and it is to be operated by Shannon LNG, which is owned by Hess Corporation, and Poten & Partners, a 50:50 partnership.

Shannon LNG secured planning permission originally in 2008 to build on the 287 acre site at Ballylongford and it was to take four years to complete the project, which would be valued at €600 million. A €400 million power plant was also to be built on the site. This would be a total investment of €1 billion, with the potential for 650 construction jobs and from 50 to 100 permanent jobs. This would be a game changer for the region and we are crying out for such a project.

After years of delay, in 2011 the Commission for Energy Regulation, CER, pointed out that Shannon LNG would have to pay €50 million a year towards the use of interconnecting pipes that bring gas between the United Kingdom and Ireland, despite the fact the company has no plans to use that infrastructure. Bord Gáis is the main user of that infrastructure. On 11 December, the courts found against the appeal made in the judicial review by Shannon LNG against the tariff of €50 million per annum. That decision has completely jeopardised the future of the Shannon LNG project. The company has lost a huge amount of money, losing €51 million last year, which was an increase of €20 million on the previous year's losses. These losses have occurred before anything at all has been done with the project. Incidentally, a few days after the judicial decision on Shannon LNG, the sale of Bord Gáis went through.

Policy should incentivise and enable efficient new entry into the gas market here. It should not preclude new entry. If we want to become the best small country in the world to do business, the experience of Shannon LNG is not one we should hold up as a shining example. The idea of levying on a company €50 million to use infrastructure it does not intend to use is like charging me a levy for the use of the M50 while driving around the Ring of Kerry. This is not a sensible proposal for a project that will cost €1 billion in investment in the south-west region and provide hundreds of much needed jobs.

The Minister told me on numerous occasions, both orally in the Chamber and in writing, that it is not his place to give policy direction in individual cases and I accept that. However, the Minister has within his powers the scope to give general policy direction. That is where he could show some flexibility. I ask him to re-examine this issue and find a way to accommodate this huge investment in jobs and the south-west region. I call on the Minister to propose a plan to deal with this. Has he a plan for how to bring this project to fruition and how to reward this company for having faith in Ireland? Has he a plan to ensure that we can hold this project up as an example of how a company can overcome red tape and bureaucracy and do business here? I would appreciate hearing whether the Minister has a plan for that.

Pat Rabbitte (Dublin South West, Labour)
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I thank Deputy Griffin for giving me the opportunity to address the House on this important issue. I have already spoken on the issue in discussion with my ministerial colleague, Deputy Jimmy Deenihan, and with Deputy Arthur Spring, both of whom have consistently engaged with me on this issue.

At the outset, let me underline the Government's positive interest in the potential investment by Shannon LNG. While there is a great deal of misunderstanding of the role of the Minister, I want to express again my personal support to assist Shannon LNG in any way I can to construct an LNG terminal near Ballylongford, County Kerry. Such a facility, together with the bringing onshore of Corrib gas would provide important security of gas supply for Ireland. It would also create some badly needed jobs in north Kerry. However, the recent High Court judgment sets out very succinctly how the decision is not one for the Minister. Deputy Griffin says the decision of the High Court has jeopardised the project, but it was Shannon LNG which sought the judicial review.

Not all Deputies will be aware of the High Court ruling of 11 December last in regard to the judicial review taken by Shannon LNG against a CER decision of 29 June 2012 in regard to the regulatory treatment of the BGE interconnectors. The regulator's decision was a high level decision which set out the principles of a reformed tariffing regime, a regime not scheduled to come into effect before October 2014. In summary, the court upheld the decision of the regulator in regard to gas reform of the tariffing regime. The court rejected Shannon LNG's claims that the regulator's decision breached national or EU law, and that the decision of the regulator had effectively amounted to a State aid to Bord Gáis Éireann as the transmission system owner. The matter of an appeal of the High Court judgment is, of course, an issue for consideration by the company.

Decisions on the regulatory treatment of the gas interconnectors and tariffing are statutorily matters for the CER, under the Gas (Interim) (Regulation) Act 2002. Therefore, policy on tariff setting has been settled since 2002 when the responsibility for regulation of the gas market was conferred by law on the regulator. The regulator, as the independent energy regulator, has a remit to protect energy consumers, ensure security of supply and support competitiveness. The independence of the regulator in its decision making is expressly provided for in EU legislation as transposed into Irish law. The CER also has a duty to ensure that new sources of gas for the Irish market do not result in unwarranted increases in the price of gas to business and domestic consumers.

Tariff reform is being driven by new entry into the system, new sources of gas for the Irish market and the regulator's overriding concern that new sources of gas do not result in unwarranted increases in the price of gas. Tariffs are one consideration for gas and LNG investors, and investment decisions are commercial matters for developers taking account of a wide range of considerations, including suitability of location, international energy price trends, LNG price trends, LNG capacity issues, proximity to markets and a regulatory regime that has certainty.

I understand that subject to no appeal by Shannon LNG, the CER will be turning its attention to tariff settlement. In its decision making, the CER will be informed by EU and Irish law, in particular by developments at EU level in regard to framework guidelines on transmission tariffs that will be binding on all member states via network codes.

There is a need for all interested parties to have clarity on regulatory certainty at the earliest opportunity in regard to future pricing. I very much hope for all concerned, including business and residential consumers, that the constructive input of stakeholders will facilitate timely decision making by the CER. Shannon LNG has until 31 January to lodge an appeal and until then, technically, the CER, Department and Shannon LNG are still involved in a live court case. We need to be sensitive to this while they are still reflecting on whether or not to appeal.

Brendan Griffin (Kerry South, Fine Gael)
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I thank the Minister for his response. I wish to reiterate a point I made at the Sub-Committee on Communications, Energy and Natural Resources prior to Christmas and prior to the decision on the judicial review concerning the Minister's role. I want to focus on the Minister's role in regard to being able to give general policy direction, because through that role he has the flexibility to help accommodate potential new entrants to the market. What, if anything, has the Department done to accommodate this company that wants to invest in Ireland?

Has it done anything to accommodate this huge investment of €1 billion in the south west? It would be an unprecedented investment in the area and the feeling in County Kerry and the region is that the State has not done anything to assist and has only put obstacles in the way. What is also stated in the county is that there would be a public outcry if this amount of red tape was put in the way of a company which wanted to establish in Ireland and invest €1 billion and create 700 jobs in Dublin but because it is in a peripheral area - Kerry - no one cares. That is what is stated in the county. Its people need to hear an answer because that is their feeling. For every potential job that will not be created a young person will leave County Kerry or west Limerick because there are not a lot of other companies queueing up to come to the area. Has the Minister made contact with the parent company or Shannon LNG? Has he made any effort to facilitate it or make the path easier for it? We need to see Departments reaching out to companies throughout the world to bring them to Ireland. We do not need more red tape and bureaucracy.

Pat Rabbitte (Dublin South West, Labour)
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I do not regard County Kerry as peripheral and I assure the Deputy that if Shannon LNG proposed to build a terminal at Ringsend, precisely the same European regulatory framework would be applied.

In terms of my capacity to give a general direction, the Deputy is correct, I can do so, but I cannot give a direction that would aid a particular company. I am in a very unusual position, not because of any action of the Department or any agent of the State or the Government but as a result of the decision by the company to seek a judicial review. A distinguished, now retired, High Court judge weighed up all of the issues which the Deputy advanced. I entirely understand the Deputy's passion in the matter. I have had discussions with local representatives in County Kerry, including the Minister, Deputy Jimmy Deenihan, and Deputy Arthur Spring, and understand the compelling arguments about employment and the desirability of such a facility being built in north Kerry, but a regulatory framework is in place and part of the responsibility of the regulator is to ensure neither consumer nor business is subjected to higher prices as a result of any one operator getting a free ride on the system. If this were to happen in the case before us, it would also happen in the case of the Corrib project which will bring ashore gas in mid-2015 and which has the capacity to meet more than 50% of the needs of the domestic market at peak output.

The principles the Deputy is pursuing were subjected to great examination in the High Court and its judgment is there to be read. I do not believe the people of County Kerry are less able to read a High Court judgment than the people of Dublin and suspect some of those drum beating on Radio Kerry know better because they have been well able to read the judgment which was not brought by me but by the company. It obtained the judgment and has until 31 January to appeal it, after which date I will be available to it at 48 hours notice if it thinks there is any way I can help the plant to be established in Ballylongford. As the Minister with responsibility for energy matters, I certainly want to see the plant not only for the purposes of local employment creation but because of the added string it would give to our bow in terms of energy security and security of supply.