Joe McHugh (Donegal North East, Fine Gael) | Oireachtas source

I agree on the need to learn from past mistakes. No greater mistake was made than that in respect of the construction industry. The old adage that those who fail to plan plan to fail comes to mind. I agree with the overall principle of the Senator's argument. It is important, however, to point out that in the history of this State only four fines have been issued in respect of commercial production.

In regard to whether the State or the company should bear the cost of works in this area, the decommissioning regime currently in place in respect of the Kinsale and Corrib gas fields is based on the full cost of decommissioning being borne by the holders of the petroleum lease and not the State. Licensees are also obliged to provide an outline of plans and timeframe for decommissioning of the facilities, including full details of the methods, timing and cost of decommissioning, which are included in a separate facilities decommissioning plan. This plan must be agreed with the Minister early in the life of a producing field and is then subject to review over the lifetime of the field. Such plans will generally make provision for a financial formula relative to reserves left in the field versus the cost of producing those reserves. This provides a trigger for the decommissioning process.

Provision is also made with regard to the obligation on all parties to the lease to post a decommissioning a security once the decommissioning process has been triggered. A petroleum lease also includes a condition that requires a parent guarantee, which means that a deed of guarantee and an indemnity in favour of the Minister must be given by each licensee. This, in effect, means that the Minister has the authority to call on this guarantee in the event of a breach of the lease condition, including obligations with regard to decommissioning.

This Bill is focused on safety and the prevention of major accidents and the question of liability for the cost of decommissioning is already addressed elsewhere. I do not, therefore, propose to accept the amendment.