Brendan Ryan (Labour)

It is a pity that Senator Minihan decided to make unnecessary party political points. I am really not interested in what happened in the Dáil, which can be a place of irrational confrontation and perhaps not the right setting to discuss political or other major strategic decisions.

Energy is not the only issue about which we should concern ourselves. There has been a great surge in the price of a whole range of commodities. The British Royal Mint is in something of a tizzy, since any penny or two pence piece made before 1992 is now literally worth twice its nominal value. The copper content of a twopenny coin made before 1992 is worth approximately three pence or four pence, and the mint is genuinely worried that millions of its coins will be melted down and sold for the sake of the 100% profit to be made from them. It has warned people of the illegality of the practice.

However, that is only a symptom of a problem. Owing to the welcome spectacular economic growth of China — and India, which we sometimes forget when we discuss the former — there is surging demand for oil commodities. What we are going to say about energy and the need to identify new sources could be said of copper, aluminium and all other commodities. The idea that even an ounce of any of the basic metals could go to landfill is economic nonsense, and it is time for us to face up to that.

There are two issues regarding hydrocarbon fuels and the apparently permanent fact of higher prices, the first being the environment, as this is not the cleanest way to supply energy. There are few people, even in the White House, who do not accept that human activity has caused a potentially catastrophic increase in global temperatures, the outcome of which we are far from clear about. No one disputes the fact of the problem.

The second question is not directly related, although there are overlaps. It is the strategic issue of our extraordinary dependence on one form of energy. Ironically, that oil has become more expensive does not mean that it is about to run out. I saw an advocate of nuclear energy on "The Late Late Show" trying to give people the impression that, some Monday morning in 2049, someone will announce that there is no more oil. It will never be like that. Rather, there will be a gradual transition to an ever higher price.

Questions arise regarding existing sources of poor quality hydrocarbon fuels and at what price they become economically attractive. One need not envisage an absolute end to hydrocarbon oils on any foreseeable horizon. It is a matter of relative and comparative choices, and the price alone is what should trouble us. Oil will become more expensive but will not disappear. Some people say that if the price of oil settles at $50 per barrel and people can be guaranteed that it remains there, Venezuela will become the biggest oil producer in the world, since it has enormous supplies of heavy oil that it is currently uneconomic to break down chemically in order to produce lighter, commercial oil. However, it would become economic if the price surged and stabilised sufficiently to justify the long-term capital investment.

That issue is more complicated, but there are good environmental arguments against taking that route, as well as profoundly important strategic reasons for not relying on it, in addition to its becoming extremely expensive. There is a great need for the Government to develop a strategy, and I am more than a little disappointed in its failure to deal with it. In this country of all places, there has been toing and froing regarding biofuels in recent years. We all know that the huffing and puffing about alleged problems with the EU originated in the Department of Finance's resistance to moving away from traditional sources of revenue through taxing petrol and diesel. There had to be an economic incentive, and because oil was unnaturally, artificially and unrealistically cheap we delayed when we could have been world leaders. We are failing ourselves strategically in becoming excessively dependent and in not becoming the innovators and leaders of change.

The same is true of wind and wave power, seen in the saga of problems that generators of wind energy have had with the regulator regarding cost and instability. The storage of energy is a very important issue. Energy is difficult to store, and the electricity that we use is not stored, except in Turlough Hill. It is generated, transmitted and used. However, those problems are not insurmountable, since they all depend on the economic choices that we make.

It is worth mentioning for all of us who are profoundly hostile to nuclear power that, were it not for the ultimate nuclear power of continuing fission in the sun, we would all be dead. The sun is a source of nuclear energy on which, together with gravity, we rely for all our energy. Gravitational and nuclear energy are our two primary sources of energy. Hydrocarbons store solar energy from millions of years ago, while wind, solar and wave power are influenced either by gravity or by the sun. We have only a limited number of choices.

We must make choices and to do so we must make alternatives economically attractive. If that means restructuring the tax system so that biofuels become as attractive as traditional petrol and diesel, let us do so now. Sooner or later, we will need to do it. We must accept that, despite what is being said, there is no guarantee that oil prices will remain at current levels. If there were an outbreak of stable democracy in Iraq, a resolution to the crisis in Iran, and a recession in China or India, it is conceivable that oil prices would fall considerably, before inevitably rising again. If we do not create a climate in which those who take the risks of beginning to move to alternatives are secure, there will be a great move away from alternative energies and into what is stable and reliable. We need to build a strategy based on the best estimate of where oil prices are going. Is it our strategic belief that a barrel of oil will cost $50, $70 or $100 in five years time? Until recently, our strategy was based on the assumption that oil would cost $20 per barrel and only three years ago, I read a lot of nonsense from commentators who assumed that oil prices would remain low and stable forever.

It is a matter of regret that, when the European Council decided to reopen the issue of nuclear energy, our Government remained silent. Only the German and Austrian Governments raised concerns about the issue. Given the passion with which the Taoiseach and Ministers have denounced the idea of nuclear energy, it is a pity they sat silently in Europe. We could be put under considerable pressure from France, in particular, to make greater use of nuclear power. I have no problem with living next door to a nuclear power plant because the background radiation is probably higher from Moneypoint than from a nuclear facility but I have significant concerns about the ethics of producing waste which will remain dangerous for 50,000 years. In addition, the economics of nuclear power are false because the development costs are not considered.