Tony Mulcahy (Fine Gael)

I welcome the Minister back to the House. By passing this Bill we will enable the Commission for Energy Regulation to access funding through the National Treasury Management Agency at low rates of interest thus enabling the establishment of a safety framework for the petroleum sector.

As Members of the Oireachtas we have a duty to taxpayers to spend their hard-earned money in the most prudent way possible. In addition, we must legislate to use all necessary means to achieve this. As we are acutely aware, a euro saved is a euro less we must borrow from Europe. For too long, financial responsibility was not the priority of successive Governments and we are left to clean up this legacy.

Section 1 amends section 18 of the National Treasury Management Agency (Amendment) Act 2000 to allow the Commission for Energy Regulation to become a designated body under the provisions of the Act. At present, bodies such as the Railway Procurement Agency and the HSE can access funding through the NTMA. Section 2 provides for the title of the Bill.

The Bill is a necessary step for the most cost-effective financing of a safety framework for the petroleum sector. This sector includes any mineral, oil or hydrocarbon or natural gas extraction carried out in the land mass of the State and its territorial waters. The Bill is in addition to the Petroleum and Other Minerals Development Act 1960, the Continental Shelf Act 1968 and the Gas Act 1976.

The petroleum safety framework is a product of the Petroleum (Exploration and Extraction) Safety Act 2010. This Act conferred on the CER the ability to borrow moneys necessary to carry out certain functions, with the creation of a safety framework being the primary function. Because of this additional role for the CER it must prepare administratively and financially. The Bill gives the CER the ability to source this funding from the NTMA. These funds will be paid back on a phased basis by the CER to the NTMA following the implementation of the safety framework in 2013. The oil and gas industry will be required to pay an annual fee to cover the safety framework costs.

Members of the House are all too aware of the controversy regarding the Corrib gas field and issues regarding pipelines and facilities being built on the Erris peninsula. If the Petroleum (Exploration and Extraction) Safety Act 2010 had been in place when the oil and gas companies were designing their infrastructure years of controversy may have been avoided. We could have avoided a cost to the taxpayer of millions of euro in policing the demonstrations and this money could have been saved or used elsewhere. This is because the CER would have been to the forefront in the protection of safety concerns of those living in the locality and those working in the petroleum industry. This would have happened through the use of enforcement orders and the withdrawal of safety permits.

The Commission for Energy Regulation has the ability to force operators to comply with its direction. Ultimately the courts can impose penalties ranging from €5,000 to €3 million. Because of the new safety role the CER has been granted, Ireland should not see incidents such as that which happened in the Gulf of Mexico in 2010 with the loss of many lives and subsequent pollution of the region. This will not be a self-regulating industry but one which will be held responsible and accountable. The CER will take on this safety role with regard to the petroleum sector and will liaise with the National Standards Authority of Ireland, the Health and Safety Authority, the EPA, the Minister of the Transport, Tourism and Sport, the Irish Aviation Authority and other such persons that may be prescribed by order of the Minister for Communications, Energy and Natural Resources. This will ensure the highest standards are set for safety.

The primary function of the Petroleum (Exploration and Extraction) Safety Act 2010 was to give responsibility for certain safety aspects to the Commission for Energy Regulation, to oversee safety from the primary extraction transport and related ancillary activities through to refining. Prior to this, these activities had been variously regulated by Bord Gais, the HSA and ministerial order, while An Bord Pleanála and local authorities had related and ancillary functions. Allocating responsibility for safety to the CER for the sector will create a pool of knowledge under one umbrella and economies of scale will be achieved. I hope inspectors employed at present by the agencies which previously had responsibility for safety in the oil and gas industry will be reallocated to the CER where their expert knowledge and experience gained in recent years will be of use or be given new functions so they work to the optimal level for the taxpayer and the Minister.

Under its new powers, the CER will have the authority to investigate and report incidents to the Minister and to monitor and enforce compliance. It will also have the authority to issue safety permits and provide safety information to the public where appropriate. It will report annually to the Minister on the functioning of the safety framework. All of this costs money and it will be financed by the imposition of the levy to be paid each year by those involved in the extraction and exploration of oil and gas resources. Any excess of revenue should be applied to the CER to meet its expenses in the following year and the levy for that year should take into account such excess. Any expenses incurred which are not covered by the levy payable for that year should be recovered on foot of a levy order in the subsequent year. This is a fair method of collecting the levy.

Petroleum companies must be encouraged to consider Ireland as a location to explore and extract, but the work must be carried out in a method that is safe for those doing it and for those citizens living in proximity to the operations. If the companies decide to come here they must contribute to any health and safety costs their operations will generate. We can see the enforcement of safety measures will be self-financing and that the initial set-up costs of the implementation of the safety framework will be recovered, thus no cost associated with the Bill will be incurred by the Exchequer.

I welcome and support the Bill and I wish the Minister well in his exploration proceedings.