Paschal Mooney (Fianna Fail)

I was a member of the committee that prepared this report and we met a variety of stakeholders, both in committee and externally. Therefore, I welcome the opportunity for the House to discuss this important element of the Irish make-up, particularly if we manage to have a successful flow from the Atlantic seabed, as seems to be initially indicated. Perhaps we are in for better times.

The report debunks the notion that the tax regime introduced and altered by various Governments, dating back to Justin Keating's first regime, is somehow overly generous. In comparison with the regimes in other European countries, it is generous, but time and again the report points out, not just from its own sources but from independent sources, that the Atlantic seabed is an inhospitable place, as we can see from the lack of success so far.

The most important issues relate to community interests. We should be getting a flow from the Corrib gas field by now. We are two years late at this stage, which is primarily, although not exclusively, a result of local protests. I fully support the right of anyone to protest and if I lived where those who are most active in protesting live, I might have a different perspective. Having said that, the last Government and the Government before it were negligent in the manner in which they dealt with local community interests. One of the major recommendations of the report is that we consider the vital issue of how best we can ensure community consultation and consent which can be considered to be independent by all of those concerned. When a resource is found, there should be a system in place to ensure agreement on how it is to be developed in such a way that it maximises the take for the State and its citizens, while, at the same, being sensitive to local needs in the host community.

In our dealings with the Norwegians we discovered they did not put the cart before the horse, as happened here. They went out first and looked after the planning, environmental and community issues. Everything was put in place and all the building blocks were laid before the go-ahead was given to drill. This relates primarily to significant offshore drilling where the results are processed offshore. There are only one or perhaps two onshore processing plants, but they went to great trouble to ensure they were accepted. We asked them about the onshore processing plant located about half way up the Norwegian coast and were told the objections were from people who did not like having it in the line of sight. That reminds me of what is happening in Dalkey, where people are complaining that they do not like the notion of a drilling platform in their line of sight in the beautiful vista out over the coast. That was the only objection expressed. When asked how far residents were from the onshore processing plant, the question was not fully understood by the senior Norwegian official until we asked if they lived a mile or two miles from the site. She replied that they lived beside it, that it was part of the community and had not generated the same opposition as the Corrib site. I am not comparing like with like; I am simply pointing out that has been their experience.

The history of how we arrived at this point makes for interesting reading.

I commend those elements of the report to Members. The report states quite baldly that Ireland has serious disadvantages with regard to offshore exploration for oil and gas reserves by comparison with other locations. In 1985, the 1975 exploration and production terms, as referred to by Senator Norris, were changed by the then Minister through reducing State royalties. In 1986, the coalition Government introduced further changes by abolishing State participation rights for marginal fields. In 1987, there was a change of Government and a new Minster for Energy. Later that year, the then Fianna Fáil Minister announced new fiscal terms that included the exemption of all oil and gas production from royalty payments and a 100% tax write-off against profits on capital expenditure for exploration. In 1992, the then Minster for Finance made a further change. In 1997, the current regime, under which the current Minister, Deputy Rabbitte, is operating, came into being. The outcome of the licensing round as a result of those changes suggests the strategy of offering two-year licensing options rather than offering frontier exploration licences has a positive result. The number of proposed awards is the highest of any frontier round, the first of which was in 1994.

I will leave Members with the following caveat: although the State was more successful in attracting applicants than previously, an article in the Financial Times in 2011 did, however, highlight the fact that none of the world's major oil players applied under the licensing round. Therefore, those who perpetuate the myth that Irish exploration terms are so generous that they are bleeding the country dry need to go back and read this report. They will find the facts therein. I fully support what the Minister is doing in this regard. What will happen will benefit the Irish taxpayer in the medium to longer term.

I concur with the remarks of Senator Norris. The Minister may have an update on hydraulic fracking, to which subject I do not have time to devote today. I gather the issue is still dormant in that the company in question has not yet applied for a drilling licence. If the Minister has further information, I am sure the House would welcome it.