Fergal Browne (Fine Gael)

I welcome the Minister of State and his officials to the House. I will deputise for Senator Finucane who cannot be here.

Fine Gael welcomes this Bill. However, we note it was originally mooted for October 2004. It ironic to have an energy Bill which is already three years behind schedule. The Bill seeks to establish the National Oil Reserves Agency as a stand alone non-commercial State body under the aegis of the Minister with responsibility for the maintenance of strategic supplies of oil in line with the State's oil stockholding obligations to the EU and the International Energy Agency. It also seeks to transfer the Irish National Petroleum Corporation shareholding in NORA to the Minister for Communications, Marine and Natural Resources; to provide for a variable levy on disposals of petroleum products to be imposed on oil companies and oil consumers; to make provision for the furnishing to the Minister of regular returns regarding oil purchases, sales, consumption, imports and exports by oil companies, oil consumers and NORA; to provide for monitoring of compliance with provisions for the application of penalties in the event of failure by oil companies and oil consumers to comply with provisions; and to revoke the European Communities (Minimum Stocks of Petroleum Oils) Regulations 1995.

This is a structural Bill designed to put the National Oil Reserves Agency on a sound footing. Fine Gael has no problem with the Bill itself. However, as with the Energy (Miscellaneous Provisions) Bill 2006 it is astounding in the midst of a serious energy crisis that we are faced with such a dearth of meaningful proposals from the Government in this area.

At present, Ireland fulfils its EU commitments to the holding by NORA of up to 108 days of oil reserves. The Minister of State mentioned 129 days in his speech. While this is as it should be, it should be noted only 38 days supply is wholly owned by NORA. It might be worth considering increasing the share owned by NORA in the event of a major international emergency. We are a rich nation but we are very vulnerable when it comes to oil and fuel. It is important that we can afford to improve the mix in order that we are less reliant on industry-held stocks.

Bio-fuels have the potential to provide major benefits to our farmers, environment and economy. I am extremely annoyed and angry with the Government, not because of the closure of the sugar beet industry, which I feel was inevitable but which could have been kept operational for at least one more year, but because the Government let down everyone badly by failing to develop the sugar beet industry into a bio-fuel industry. It is clear this could have been done and that we are vulnerable as an island nation with no natural oil reserves. We failed to develop this area, even though special funding was available from the EU towards such activity.

Many European states began the process of kick-starting the bio-fuel industry by using set-aside land for the growing of bio-fuel crops. It is interesting to note that in the US, President Bush and the Republicans now take seriously climate change. This presents a unique opportunity for us. If I am correct, approximately 20 million tonnes of maize are exported from the US at present and it is felt this will stop if the US further develops its bio-fuel industry. This will present an opportunity for us. We must take stock of what is happening not only here and in Europe but also consider the impact of the US example and the opportunities it will present to us.

Irish agricultural land offers a huge potential to develop alternative energy crops. At present, the greatest potential for Irish crops in this industry lies in the development of bio-diesel and bioethanol not least because production is already under way, albeit on a small scale. We must focus on developing this area as a priority. The immediate focus must be on developing the process of fuel blending. Essentially, this involves blending standard motoring diesel with rapeseed oil to produce bio-diesel and petrol with bioethanol.

To be fair to the Government, the smoking ban was a major success as was the plastic bag tax because they were implemented throughout the country. We can discuss bio-fuel until we are blue in the face, but until every petrol station has bio-fuel readily available, consumers will not be able to switch. This is where we can take a leading role. We can follow on from the example of the smoking ban and the plastic bag tax where the Government was successful. I urge the Minister of State to seriously consider this.

Included in the Fine Gael proposals in this area are the removal of all excise duties on bio-fuels produced from renewable energy crops and the establishment of grants for producer groups which would consist of up to 50% of the cost of establishing the group, to a maximum of €300,000 per group. We must have a public competition for the establishment and operation of a number of bio-fuel processing plants strategically located in a selected number of locations. We would require capital start-up grants for these processing plants which would enable them to become established and begin viable processing operations. We would also require greater links with international bio-fuel processors and fuel suppliers and the relevant Departments, particularly the Departments of Transport and Agriculture and Food.

Fine Gael recently launched a policy document, Energy for the Future. This includes proposals for the reform of the VRT system, the necessity for blended fuel and the requirement for all public transport vehicles and public service vehicles to convert where practical and feasible to forms of bio-fuels. The Taoiseach's recent announcement was welcome but much more remains to be done.

Fine Gael believes if the correct steps are taken now we can deliver real change in the short term through lower carbon dioxide emissions and in the long term by reaching a generation capacity of 33% of our electricity needs within 20 years. We cannot and must not concentrate on long-term 20 or 50 year targets to the detriment of immediate action to reduce CO2 levels now. It has become increasingly evident that apart from higher oil and energy costs, this country is particularly vulnerable when it comes to storage facilities for oil or gas. Hence, the recent need to introduce the National Oil Reserves Agency Bill without detail.

Regardless of continued political instability in energy producing countries such as those in the Middle East, the Government should take on board the Fine Gael energy policy and incorporate it in the national plan. This would put in place energy conservation such as vehicle labelling, development of bio-fuels, home heat conservation through insulation, the use of alternatives, a major plan to develop the alternative energy industry and the necessary back-up to guarantee security of supply. Such a move would not only conserve and replace energy and develop the energy sector but would also draw public attention to the necessity of taking such steps involving both industrial and domestic customers who rely heavily on reliable energy sources.

I hope to obtain planning permission shortly to build my own house. I am keenly aware of the various energy sources available. What comes across loud and clear is the need to insulate the house properly in the first place. We can speak about energy this evening, but unless we have in place systems and standards to ensure houses are properly insulated, we will draw on more and more energy. The Government has failed miserably in this regard.

When I was canvassing on Sunday, I had grave difficulty in hearing doorbells ringing in older houses because of insulation and double glazed windows. I knocked on doors in a brand new estate in Carlow and I may as well have been knocking on paper walls. I could hear the doorbell with crystal clarity when I rang, as well as a dog barking inside. I thought to myself afterwards that the houses could not be built to the standard they should be in terms of heat and noise insulation.

This Government has failed to look after citizens buying property. I do not envy people buying property in Dublin and I wonder how many terraced or semi-detached properties have proper walls between neighbours. This has significant implications for heat loss, etc.

It is time the Department for the Environment, Heritage and Local Government and the Department of Communications, Marine and Natural Resources worked together to enhance further the grants available to people for building new houses and insulating existing houses. The building standards in the 1970s and 1980s were certainly not what they should have been and we must learn from that. We all have a role to play and when we build a house. It should require very little energy. The key word in this is "insulation".

I wish to ask the Minister about VAT on fuel bills. Every day we are being crippled despite talk of a low-tax economy. I discovered today that more than €600 million was taken in last year in VAT on gas, ESB and telecommunications. We should consider the area and reduce the amount of VAT payable to help consumers who are being crippled.

I was amazed to learn from the Minister of State's speech that we have 129 days of oil reserves, which is welcome. It is amazing that whenever oil prices increase, they go up immediately at the petrol pumps but when they go down, there can be a few extra days or weeks before the consumer gets the benefit. The Government should monitor and pursue this issue. This begs the question why, if we have so much in reserve, and I presume petrol companies in this country buy in bulk, there is an immediate increase when the price of oil goes up and a slow decrease when its cost goes down.