Eamon Ryan (Dublin South, Green Party)
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I am pleased to introduce the Bill for the consideration of this House. While it is a relatively short Bill, it will provide for an important strengthening of the overall regulatory framework governing exploration for and production of oil and gas. This Bill is a key part of the Government's priority legislative programme. At present, my Department is responsible both for licensing petroleum exploration and extraction activities and regulating those activities from a safety perspective. The Bill proposes to confer responsibility on the Commission for Energy Regulation for the regulatory function for safety in the case of upstream petroleum activities and associated infrastructure.

In conferring this new responsibility on the commission, the Bill gives effect to a key recommendation of the report produced by Advantica following its safety review of the Corrib gas pipeline. Advantica recommended that a new risk assessment-based safety framework with respect to gas pipelines, in line with best international practice, should be developed and implemented in Ireland. The Bill expands on this concept to provide that petroleum activities generally would be governed by the new safety framework.

The safety framework will be a manual setting out the nature and scope of the petroleum activities and associated infrastructure that will be designated and subsequently regulated by the commission. It will include the systems and procedures to be operated by the commission in designating and regulating such activities and associated infrastructure, including an ongoing system for audit and inspection. It is envisaged that the framework will cover a wide range of activities, including the construction, operation, maintenance, modification and decommissioning of petroleum infrastructure.

Before turning to the detail of the Bill, I would like to outline how this new function sits well with the existing responsibilities of the commission. Established as the independent regulatory body with responsibility for electricity under the Electricity Regulation Act 1999, the commission's powers and responsibilities were extended under the Gas (Interim)(Regulation) Act 2002 to incorporate the regulation of natural gas. These powers and responsibilities were further extended by the Energy (Miscellaneous Provisions) Act 2006 and the Electricity Regulation (Amendment)(Single Electricity Market) Act 2007 with respect to the commission's participation in the development of an all-island energy market.

The 2006 Act also extended the commission's regulatory role with regard to the operation, maintenance and development of gas transmission and distribution networks. That Act conferred responsibility on the commission for the regulation of safety for the transmission and distribution of downstream gas. This Bill now proposes to consolidate the commission's role as the regulator for gas safety by conferring it with responsibility for the regulation of safety in the case of upstream petroleum activities and the associated infrastructure. Given its already wide-ranging knowledge and experience of both the gas and electricity markets and its statutory responsibility to carry out its activities in a fair and impartial fashion, I believe the commission is well placed to take on the additional functions and responsibilities proposed by this Bill.

I shall now turn to the detail of the Bill. For the convenience of the House, a detailed explanatory memorandum has been published which provides a synopsis of the Bill's provisions. There are only four sections in this Bill. Section 3 inserts a new Part II into the Electricity Regulation Act 1999. Part II now effectively comprises a new section 13, which itself consists of 28 sections. Section 13A is the definitions section. Section 13B provides that the provisions of this Bill will not affect any other existing statutory obligation with respect to petroleum undertakings. Section 13C sets out the type of undertakings and activities to be governed by the new safety framework to be established and operated by the commission. Section 13D provides for the designation by the commission of the specific petroleum activities and associated infrastructure to be regulated.

There is a very wide range of activities and infrastructure, both offshore and onshore, which could be required to conform to the new safety regime. Such activities would include the drilling of wells for the purposes of exploration and extraction of petroleum, and the transmission of gas by sub-sea and onshore pipelines and gas processing terminals. The criteria to be considered in determining designation will include the nature of the activity and the type of infrastructure associated with it, together with an assessment of the potential risks of engaging in such an activity and the safety measures required to reduce such risks. The extent to which an activity is regulated by other legislation will also be a factor. Prior to the designation of any activity, the commission will consult specified bodies, including the Health and Safety Authority, HSA, to ensure any potential overlap in functions is managed in an effective manner.

While the role of the Commission will be to regulate with respect to public safety, the HSA is the national body in Ireland with responsibility for securing health and safety at work. The HSA's responsibilities cover every type of workplace and every kind of work in both the public and private sectors. The functions and responsibilities of the HSA will remain unaffected by the provisions of this Bill and the commission and the HSA will undertake their respective statutory obligations in parallel.

The National Standards Authority of Ireland, NSAI, will also be a mandatory consultee. The NSAI is responsible for the development of Irish standards, representing Irish interests in the work of the European and international standards bodies CEN and ISO, and for the publication of Irish standards. In effect, the NSAI certification creates, maintains and promotes recognised standards. To ensure there is clarity with respect to the appropriate standards applicable to the petroleum activities and infrastructure that will be designated by the commission, the NSAI will create a petroleum exploration and extraction standards committee in accordance with section 10 of the National Standards Authority of Ireland Act 1996. The purpose of this consultative committee will be to advise the authority on the need for and the content of standardisation in the field of petroleum exploration and extraction. The commission will liaise with the NSAI when it is setting out in the safety framework the appropriate code or standard with respect to safety, to which all petroleum undertakings must conform when carrying out each designated activity.

Before designating the activities to be regulated, the commission will provide an opportunity for interested individuals, organisations and other bodies to provide their views. In addition to the HSA and the NSAI, the Bill specifically provides that the commission must also consult the Environmental Protection Agency, the Maritime Safety Directorate and the Irish Aviation Authority.

Section 13E makes it illegal for petroleum undertakings to carry on any designated activity without having been issued with a safety permit by the commission, and section 13F ensures it will be a condition of all licenses issued by my Department that such undertakings hold a safety permit. This will ensure compliance by all petroleum undertakings, whether they are existing or new licensees, with the requirements of the safety framework, within the statutory timeframes proposed by the Bill.

Section 13G provides for an enhanced role for the Commission for Energy Regulation in that it establishes as an objective of the commission that it should foster and encourage safety with regard to the carrying on of petroleum activities. The actual functions of the commission with regard to its new regulatory role are established in section 13H. While the key function is to establish and implement the safety framework, other specific functions place obligations on the commission to investigate and report on petroleum incidents, to monitor and enforce compliance with the requirements of the framework and to grant safety permits where it is satisfied with the safety management system proposed by the petroleum undertaking.

The matters to be considered by the commission in carrying out its functions are also set out. They include minimising the potential for overlap or duplication of effort. This will be achieved by the commission having regard to where similar functions are already performed by other bodies, and by co-operating and consulting with the bodies specified in this Bill.

Section 131 is the section that expressly sets out what is required of the commission in establishing and implementing the safety framework, including the information to be contained in the framework document. It is envisaged that the framework document shall contain information in regard to the following: the nature and scope of the petroleum activities to be regulated, the systems and procedures to be operated by the commission, a list of designated petroleum activities and associated infrastructure and the appropriate code or standard with regard to safety relevant to each, the procedures for assessment by the commission of a safety case application and a system for the ongoing monitoring of compliance of petroleum undertakings through audits and inspections.

In deciding what other matters may feature in the framework, the commission may consider such issues as technological developments, industry best practice, reviews of safety codes and standards, or submissions or recommendations made by interested parties. In the interests of transparency, the commission is also required to report annually to the Minister as regards the functioning of the safety framework.

The implementation of the framework in compliance with section 13M, in practical terms, will mean that within a specified statutory period, a petroleum undertaking will be required to submit a safety case application to the commission with respect to any designated petroleum activity it is carrying on, or it proposes to carry on subsequent to the enactment of this Bill. This section addresses the fact that the new regime will apply to both existing and to new licensees.

The use of a safety case regime is a standard feature in the regulation of safety-critical industries, including rail, nuclear and chemical. It is well established and has been used in the offshore oil and gas sector in the UK and Australia for the past 20 years. In the UK, the Health and Safety Executive, or HSE, is responsible for the safety regulation of the offshore oil and gas sector. Those undertakings responsible for offshore oil and gas installations are required to submit safety cases to the Health and Safety Executive for acceptance as a condition of operating in UK waters.

In Australia, the National Offshore Petroleum Safety Authority is responsible for the regulation of offshore safety, where the requirement is to have an accepted safety case for each offshore petroleum facility and for the facility operator to act in accordance with the safety case. In Ireland, the commission has already successfully implemented a safety case regime in discharging its downstream gas safety responsibilities under the natural gas safety regulatory framework, provided for under the Energy (Miscellaneous Provisions) Act 2006, where similarly, if a safety case application is approved by the commission, a safety permit will be issued to the petroleum undertaking.

Section 13L provides that the commission, following consultation with specified bodies, will be required to draw up and publish safety case guidelines which will set out the appropriate content of a safety case. This may include the specification of the appropriate technical design principles and safety standards to be achieved, together with the procedures to be followed in the submission of a safety case for approval to the commission. This will provide guidance for petroleum undertakings as to what is required of them in submitting a safety case. This requirement will make it illegal for petroleum undertakings to continue to carry out a designated activity without having submitted their safety case within the prescribed timeframe.

The commission will only approve a safety case pursuant to section 13P, or a revised safety case pursuant to section 13N, for the purpose of issuing a safety permit where the information in the safety case complies with the requirements of the safety case guidelines. The commission must also be satisfied that the petroleum undertaking is capable of implementing the safety management system described in the safety case.

Using similar provisions governing other functions of the commission, the Minister may pursuant to section 13J, in the interest of proper and effective regulation, give written directions to the commission in connection with the exercise of its statutory functions. A written direction could be given if, for example, the safety framework was not published within the specified timeframe, or where measures might need to be taken arising from reports on major accidents, or where the Minister considers it would be in the public interest that the framework be reviewed or amended.

While petroleum undertakings must comply with the specific requirements of the safety framework, section 13K also places a general duty on petroleum undertakings with respect to reducing risks with regard to safety to a level that is as low as is reasonably practicable. Section 13O imposes an obligation on petroleum undertakings to carry out designated activities in conformance with their approved safety case. Section 13P sets out the basis upon which the commission may approve a safety case and issue a safety permit. A key consideration for the commission will be the capability of the petroleum undertaking to implement the safety management system described in its safety case.

Section 13Q provides the commission with a power to refuse to grant a safety permit or to revoke a safety permit. It sets out the basis for taking such decisions and the process that the commission must follow. Revocation of a safety permit by the commission, which would prevent the continuation of a particular activity, might occur if, for example, an undertaking was not complying with the conditions of its safety permit. This section also provides for a right of appeal by a petroleum undertaking to the High Court where a permit is refused or revoked.

Sections 13S to 13X, inclusive, make provision for what should happen in the event of a petroleum incident occurring. A petroleum incident is defined for the purposes of this Bill as an incident resulting in loss of life, personal injury or damage to property not belonging to the undertaking. There is an obligation on the undertaking to report such an incident and the steps the commission is subsequently required to take, including furnishing a report to the Minister, are also set out.

The purpose of this Bill is to promote risk assessment and risk management. To assist the commission in ensuring full compliance in this regard, it has the power to appoint petroleum safety officers, as required, to investigate any circumstance it deems appropriate. The routine functions of the petroleum safety officer are clearly set out in the Bill. A significant power proposed is that in the event that a petroleum officer perceives there may be imminent serious danger in regard to a designated activity, the petroleum officer can pursuant to section 13AB request that a direction be issued by the commission to interrupt the activity. Failure by a petroleum undertaking to comply with such a direction may result in an ex parte application to the High Court for an order to prohibit the activity in question.

The commission, for the most part, will monitor compliance though a system of inspection and monitoring and in the event that it considers that an undertaking is not complying with its approved safety case, it can request that it submits an improvement plan. Should the improvement plan not be submitted, or fail to satisfy the concerns of the commission, a prohibition notice may be issued. This would suspend the carrying on of the activity in question until the commission could be satisfied that the risk has been reduced to an acceptable level. In the interests of fairness and transparency, either of these actions by the commission may also be appealed to the High Court.

The Bill provides for the cost of establishing and implementing this new safety regime, which will be funded by way of an annual levy on the petroleum industry and the imposition of administration charges with respect to consideration by the commission of safety case applications and the issuance of safety permits. The requirement with respect to transparent accounting procedures in this regard is also clearly established.

This Bill is an important measure in further strengthening the overarching regulatory framework governing exploration for and production of oil and gas. By focusing on safety, this Bill, on enactment, will have considerable benefits for all existing and potential petroleum undertakings in Ireland. It will provide greater clarity and robustness of process. It will establish the appropriate code or standard with respect to safety relevant to each designated activity to be regulated by the commission. It will also provide for the issue of safety permits by the commission, which will enable petroleum undertakings to carry on their business in conformity with their approved safety case.

I look forward in particular, to working closely with the commission on ensuring the speedy implementation of the Bill's various provisions following enactment. I look forward to listening carefully to the views of Members on this important legislation and to their assistance in progressing this Bill into law.

Paschal Donohoe (Fine Gael)
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I welcome the Minister and thank him for his contribution. Our party is supportive of this legislation. I have reviewed it and will outline five areas where it could be improved and on which I will seek a response from the Minister.

The nub of this legislation is to provide for expanding the scope of power of the commission from downstream to upstream activity. That is being done for two reasons, first, to improve the efficiency and operation of the regulatory regime within which this type of activity takes place and, second - this is as important as the first reason - to improve the transparency of the operation of the regime and public confidence in the way it operates in granting licences to various companies.

Under the heading of the need to increase security and transparency in the sector, I invite the Minister to respond to comments made during the week regarding the appointment of a new commissioner to this body. This point is very relevant to how this body will operate. Comments have been made that a person has been appointed to be one of the two commissioners of this body.

Eamon Ryan (Dublin South, Green Party)
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There are three commissioners.

Paschal Donohoe (Fine Gael)
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I thank the Minister for that correction. That appointment appears to have taken place without regard to the public and transparent process the Minister said needs to be in place. This body has a role in increasing transparency and public confidence in this sector. One of the jobs that will be pivotal in doing this appears to have been filled without regard to the process that we deem necessary and expect to be undertaken. I am commenting on this Bill and the Minister has spoken at length in previous roles about the need for ensuring confidence and security in our public bodies. The Minister would raise the same question I have raised about the commission. This body has a role in ensuring there is confidence and security in this sector, but it appears one of the key roles in the commission has not been filled in the way we expected it would have been filled. The Green Party stated in the programme for Government that it would "introduce a legislative basis for a more open and transparent system for appointments to public bodies". Is this not a case of saying one thing and doing another? This will be an important body and the job will be an important one. I ask the Minister to clarify the process by which the person concerned was appointed. I am not casting doubts on the credibility or authority of that person, but I need the Minister to answer that question because the lack of a transparent process lets down that person and the people who need to have confidence in this organisation and the Commission for Energy Regulation.

With this in mind, I will move on to deal with the Bill, outline the reasons my party is supporting it and the ways in which it can be improved. As I said, it appears the reason this legislation is being introduced is to expand the scope of regulation of the commission from downstream to upstream activity. This is to be welcomed for two reasons. As we have learned to our cost in many other areas recently, the more regulatory bodies which are involved in monitoring one area, the greater the opportunity for something to slip through and the right kind of supervision to be lacking. What this legislation will do is to tidy up and establish a more unitary system, which is to be welcomed. It is also particularly important in this area because one of the reports that led to this legislation acknowledged that we had a system in which a Government body or Department was charged with marketing and expanding petroleum exploration and extraction, but we could have ended up with the same body - or the company which gets the contract for the activity - becoming the regulator for that activity and its safety. We now know that is not the right way to operate; this appears to have been one of the major lessons of the controversy over the Corrib gas field. It is for these reasons the legislation should be welcomed.

When considering the background to the Bill, one of the Acts I looked at was the Energy (Miscellaneous Provisions) Act 2006 which put in place the regime for all of this to happen from the point of view of downstream activity. If that appears to be successful and working well, we should be expanding the level of power and oversight to include upstream activity, which the Bill does. This is particularly important for two reasons. The first and most important reason is the human risk involved, which could be considerable. People who engage in this kind of work do so at great risk to themselves if the right safety procedures or regime are not in place. The other concern, about which there has been much discussion, is the risk to people living near the activity proposed to take place. The potential for loss of human life is something we always want to avoid and any legislation that recognises this and finds a way of improving matters must be welcomed.

The second reason which, although slightly less important than anything involving the loss of human life or injury, is still a major issue is commercial risk. The companies involved in such activity often operate at great commercial risk to themselves. My understanding is that the exploration and setting up of rigs for this activity can cost anything up to €150 million per operation, an awful lot of money. For those involved in this activity, it is fair to ensure there is in place a regulatory regime which is as strong and efficient as possible. It is for these reasons that we should comment constructively on the Bill.

There are five particular matters on which I would welcome a response from the Minister. The first is the interaction between the CER and the Health and Safety Authority. While the Bill will expand the powers available to the CER, it is my understanding, based on the Bill, that the HSA will still have a role to play in many cases, particularly with regard to the safety of persons working at or near the activity. We need to ensure the work done by these bodies is efficient and does not undo any of the work done in the Bill. This is recognised in the legislation, but I would like to hear the Minister's comments on what his Department will do to make sure this happens and that both bodies function well.

Section 13M of the text to be inserted in the principal Act deals with the submission and preparation of the safety case and is one of the most important parts of the Bill. What can we do to ensure the preparation of the safety case is more visible to the public during its development and presentation? Infrastructure deemed to be of national import is referred directly to An Bord Pleanála. The paperwork involved in background planning, the environmental impact study or a railway order and so on can frequently make up ten, 20 or 30 boxes of material. It is landed on members of the public who then have a short period in which to prepare submissions and go before An Bord Pleanála.

Particularly in view of the background to the Bill, I encourage the Minister to consider how we can ensure the preparation of the safety case by the company or contractor is made as transparent as possible. We must do all we can to make sure that body of work is shared as quickly as possible with those interested in knowing the effect the activity will have on them. We hear time and again that this is impossible for reasons of commercial sensitivity, but I am speaking in particular of the safety case. I urge the Minister to find a way of making sure it is published quickly in order that those who wish to make observations can do so and thus consider they are participating fully in the process.

Subsection (5) of section 13M deals with the person charged with leading the audit of the adequacy of the safety management system for an activity or piece of equipment. The line in the Bill referring to the qualifications of this person reads: "persons who are sufficiently independent of the system (but who may be employed by the petroleum undertaking) to ensure that such assessment is objective". I ask the Minister whether we are not holding ourselves out as a hostage to fortune by including such a provision. There is much expertise available in this area. Surely the person carrying out the safety audit should be prevented from working for the organisation preparing the safety case? There should be a clear delineation between the person conducting the audit and anybody who might end up working for that organisation in the future. If the person who conducted the audit of the safety case ended up working for the organisation presenting the safety case, it would be the first item to be criticised as involving a potential conflict of interest.

Section 13N lays out a minimum review period for the safety case, stating: "A safety case ... shall be reviewed at least every 5 years". The Minister should consider lowering the threshold to provide for more frequent audits. The subsection highlights that technical knowledge relating to safety can change quickly and more frequently than every five years.

My final issue relates to the definition of "petroleum exploration". The Bill details the activities that covers but I read a briefing note which suggested it might be more worthwhile to include a broader definition based on function in order that an activity would not be precluded in the future from the ambit of the legislation because the definition is restrictive. We are supportive of the direction being taken in the legislation but I have outlined issues on which I would appreciate a response from the Minister and to which my party will return on Committee Stage, if needs be. With regard to public confidence, an appointment will be made under the legislation in a way that is completely different from the way the Minister's party said it wanted such appointments to be made and from how Fine Gael would do so. One cannot say one thing in this regard and do another.

Martin Brady (Fianna Fail)
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I welcome the Minister. He is proactive and has the respect of Members on all sides of the House and the public. He has always performed his duties in an efficient manner.

Any Bill that enhances safety is welcome. As Senator Donohoe said, transparency in the manner in which people are appointed to bodies is important but I would be surprised if the Minister did anything that did not conform to best practice and I am sure he will reply adequately to that issue.

Paschal Donohoe (Fine Gael)
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That is why I asked.

Martin Brady (Fianna Fail)
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The Senator asked good questions and I have no problem with that.

Paschal Donohoe (Fine Gael)
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I thank the Senator.

Martin Brady (Fianna Fail)
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Transparency and public confidence are important. Senator Donohoe referred to the five-year provision for safety audits and I agree with him that technology moves on and practices and technology become obsolete that were up to date, for example two years previously. The HSA will be involved and the petroleum industry is high risk. We can all recall the Whiddy Island disaster. If regulations such as those proposed in the legislation were in place, that might have been averted. The HSA insists on regular monitoring but that is of little use by itself unless regular inspections are carried out to ensure the conditions set out in the Bill are adhered to. A safety code must be published as well.

The legislation will strengthen the safety of petroleum exploration activities both onshore and offshore. It is important that people are reassured about new procedures, which should be publicised to avoid ambiguity and confusion because that causes problems. People hear different stories from all quarters and they get confused and when one gets into the confusion business, that can lead to aggression and so on. I welcome the legislation. Safety is important to all of us and I appreciate the questions asked by Senator Donohoe.

Joe O'Toole (Independent)
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I also welcome the Minister, even though I often argue with him about some of his proposals. I tend to be 90% in agreement with his agenda and I welcome this legislation. I compliment his officials who have put a great deal of work into it.

The Bill reflects international best practice. One of the great problems is the lack of clarity and responsibility in this area. Until now, the health and safety of workers was dealt with through a different method from the health and safety provisions relating to the transportation of equipment and liquids. The legislation will put together and tidy up many loose ends. In fairness to the Minister and his officials, it reflects the best of the practices which I have witnessed in different parts of the world. In other countries, similar legislation deals with work and investigation relating to onshore or offshore oil production activities and two different sets of regulations applies and it does not work. Norway and Canada have legislation to deal simply with the pipeline.

What the Minister has done is the way forward and it is a role model for best practice. International practice will mimic this and in that regard, it is crucially important. Senator O'Malley and I visited the Shell base in north Mayo. I have not been a great supporter of Shell over the years but I put my prejudices to one side to examine the work it was doing and I was particularly interested in the safety aspect of it. I was convinced and persuaded by the way the company does its work. I spoke with trade union and other worker representatives and found out that during 1 million man hours of construction on the site there has not been an accident. I never experienced such a concentration on safety on a site. Workers, including managers, were required not to exceed the speed limit under any circumstances on their way to work in the morning; they cannot go down a stairs without clutching the hand rail; and they must walk around on site not only with a helmet on but also gloves.

Senator Donohoe referred to the safety case audits. This issue jumped off the page when I read the legislation. I do not agree with the Senator's conclusion but I do not have a problem with the petroleum company being responsible for paying for the safety audit because that is no different to normal business practice where an auditor of a company's books must be paid by the company as long as we can have trust and confidence in him or her complying with certain standards and it is governed by a regulatory structure. If a petroleum company employed somebody to conduct a safety audit without any checks and balances regarding his or her qualifications, background and so on, the person's role would be questionable at best as the Senator said.

We all have our views about what happened in north Mayo. Shell has made many mistakes, including in regard to the recent issue where it emerged it was in breach of strict requirements of its planning permission. It should have more sense than to walk into it with the eyes of the world upon it.

We must be satisfied at every level that this is safe. We must say to the people that we are 90% dependent on imported energy sources and that, as the Kinsale gas field goes off-stream in the next year, we need the gas from the Corrib gas field. This must deal with all the issues in order that people can cope with them.

I read an article in The Wall Street Journal on the oil exploration industry and the lack of investment by companies, including Shell, in exploration. Many think these multinationals are trying to get into our territory, but in April last year the Minister had an auction for two of the blocks for exploration and there were only two indications of interest. We cannot live with this.

The Minister has picked up on unpopular issues such as the need for a debate on nuclear energy. We also need a fair debate on exploration, the costs of investment and how the State will never be able to afford to do it. The only way it can do so is in partnership with the private sector where the private sector gets the oil out of the ground and we achieve a fair result. I will not comment on that debate because my views are different from those held by many Members, but we need it.

In section 1 of the Bill there is a commencement date that is left at the discretion of the Minister. There should be a set commencement date in every Bill or the relevant Minister should have to explain why it was not implemented. There is legislation the public thinks was passed, signed by the President and written into law that has never been commenced by the Department responsible. This morning we talked about the Education for Persons with Special Educational Needs Act. I do not want to see us back here asking about this legislation. The Minister should insert a date into section 1(2); it could be as much as five years hence, but if it is not commenced by then, someone should be answerable.

Overall, this is hugely important legislation. It will be welcomed by the trade union movement that the Government has seen fit to bring forward legislation governing the safety of citizens, workers and energy sources. This is hugely important and the Minister is to be complimented.

All the points raised by Senator Donohoe must be answered and I hope the Minister will do so. The Minister has shown on the Broadcasting Bill his willingness to accept the changes necessary to strengthen the legislation. Both Senator Donohoe and I raised with the Minister's officials yesterday the need to have safety information in the public domain. It should be accessible on-line. We are not talking about commercially sensitive information. I do not want to receive telephone calls or people to say to me that companies are claiming that they comply with legislation but that there is really a deal between them and the Government. That raises unnecessary hares. There is no reason this information should not be available, while there are many good reasons it should be, the best being that people can find their own benchmarks. In the discussions we had with Shell, we asked how it judged its safety record and it had an answer to every question. I am not touching on issues that made national and international headlines, rather I am talking about on-site issues.

I welcome this legislation and will support it. I will also, on Committee Stage, seek changes, not to the main thrust of the Bill but to ensure we have learned from what has happened in north Mayo - that people will look under every stone and come to all sorts of conclusions if information is not available. I will give an example. There is a controversy about a proposal to build a prison near to where I live. Specifications on every matter from safety to drainage became an issue. Eventually those responsible handed over 12 volumes of information in a box measuring one cubic metre. That argument went out the window. That is the way to do business. If someone wants to argue about something, give him or her the information he or she needs in order that we can focus on the real issues involved.

I compliment the Minister on introducing the Bill, as it is important that we emphasise safety. I compliment the officials on bringing forward legislation that reflects best practice internationally.

Niall Ó Brolcháin (Green Party)
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I welcome the Minister. It is great to be here to listen to Members on all sides commend a Bill introduced by a Green Party Minister. It is also timely. It is a shame it was not introduced many years ago because we would have avoided the effects of what has happened in north Mayo since.

with the Minister for the Environment, Heritage and Local Government and the Minister for Communications, Energy and Natural Resources, when we wore a different hat, I visited the Rossport Five in Cloverhill Prison. At the time, this was a huge environmental conflict that involved huge emotion. There is still huge emotion, but a process has been established by the Minister to deal with the community aspect and the real concerns of people who actually live on the Erris Peninsula.

I want to concentrate on the human and environmental aspects of the matter. The safety Bill is one of a number of measures the Minister is introducing to deal with this issue because energy will be the currency of the future. It is of huge importance to this country. The Government targets to ensure net energy exports, while generating our own energy supplies, are crucial for the economy. To achieve this, the proper framework must be in place from a business point of view, although it must also be in place from a human and environmental point of view. There must be checks and balances.

I give credit to the Rossport Five. I will not say they are responsible for this Bill; the Minister for Communications, Energy and Natural Resources is clearly responsible, but the various protests in Erris and around the country ensured pipeline safety was an important item on the agenda. I visited Mr. Brendan Philbin, Mr. Vincent McGrath, Mr. Philip McGrath, Micheál Ó Seighin and Mr. Willie Corduff in prison. They brought forward an interesting debate on pipeline safety and were prepared to go to prison, not for monetary gain but to highlight a safety and environmental issue in their own backyard. Shell and previous Governments did not manage the projects correctly and many mistakes were made, from which we must learn. However, we will not be able to do that until we recognise that mistakes were made and introduce legislation to address the various issues raised.

Security and respect for Erris comprise a serious matter. Divisive issues were raised in the Rossport area because a lack of respect was shown during the initial stages of Shell's presence there. From my many visits to the area with other politicians and on my own, quite a few people living there believed the people in big cars coming into their area were showing them a lack of respect. The locals have grown up in the area and some of their families have lived there for generations. It is a beautiful area. When one brings pipelines onshore in the west, one cannot help but bring them through beautiful areas. The west is a beautiful place. The local community has a great dignity and possesses a resonance with the land. The individuals in question were concerned that people in Dublin, Shell and the Government were not respecting their opinions. This is the serious lesson that must be learned.

When the Solitaire came to Broadhaven Bay, I was present at the invitation of members of the Rossport five. I went down the bay in a fishing boat. The level of security was incredible. It was like a police state and needed to have been seen to have been believed. Two Naval Service ships were in the bay as well and security guards wearing masks were all over the place. Various boats photographed us, Garda divers were present and every move we made was monitored and photographed by the Garda and a private security company. Security is always a difficult business, but some people in that security company in County Mayo had links to Hungarian and Bolivian paramilitary groups, an issue that should be monitored.

People felt as if they were under siege. Their impression that someone from the outside has come to impose something on them must be addressed. I cannot stress enough the importance of the consultation process set up by the Ministers, Deputies Ryan and Ó Cuív. I have worked with Deputy Higgins and others in the area. The politics are wrong and disrespectful. We must recognise that there is a political aspect to the Corrib issue, but County Mayo is a Fine Gael stronghold and it is disappointing that some members of the Rossport community were cast adrift for political reasons. This is unfortunate, as local politicians have a key role to play in ensuring projects like this are brought forward. Great political mistakes were made.

The project must be resolved. For the country's future, it is important we have a model whereby oil and gas can be brought onshore safely and with the consent of the local people. The planning process must be and is being examined. It needs to be as transparent as possible. We need to respect communities and deal with the issues they raise. The Bill addresses one such issue and I support it 100%.

I am sure the Minister will consider the points made by Senators O'Toole and Donohoe. The Commission for Energy Regulation is the right body to look after this matter. We will arrive at the best result once the Bill passes through the House.

David Norris (Independent)
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I welcome the Minister. I will follow Senator Ó Brolcháin - it is what I had intended to say, but I will say it again, perhaps more vigorously - in that the Bill is a form of reaction. We should be grateful to Shell to Sea, without which we would not have this Bill. Shell Oil did not appear to take locals' concerns on board and was either blissfully unaware or uncaring of the safety issues. Shell Oil has a disastrous record worldwide. One need only instance Nigeria and the murky background of the environmental disaster caused by Shell Oil among others, the political involvement with unsavoury regimes and its clear implication in the death of Ken Saro-Wiwa. It has been forced to pay millions of dollars in reparations by a court in the US on foot of those matters. As such, I will first say that we should be careful in dealing with Shell Oil, given its nasty record and the history mentioned by Senator O'Toole. I applaud him and Senator O'Malley for going to see the situation on the ground, which makes their contributions all the more interesting.

The Bill has only been introduced because of the activities of the Shell to Sea campaign. I deprecate the fact that when the matter was raised in the House, a number of speakers used the opportunity to issue calumnies against Shell to Sea and those involved in it. We were told they were paramilitaries and smeared them with an IRA bully boy image. Doing so was grossly unfair. When I protested and investigated the comments made in the House, I found there was not a tissue of truth in them. One is not responsible if people with certain backgrounds join public protests. I do not doubt that those centrally involved were properly motivated and concerned about health and safety issues. Regrettably, they came under sustained attack by the agents of Shell Oil in a brutal fashion, supported by the agencies of the State. I have watched videos of worrying Garda behaviour. It is appalling that the agencies of the State, especially the police force, should be used as instruments in support of a multinational corporation with an unsavoury record. I am not alone in this belief; I am not just a crank.

The Minister will remember the incident involving Willie Corduff, whose peaceful work has been recognised internationally. He has been awarded a number of prizes. At the time, a figure we all respect, Archbishop Desmond Tutu, issued a statement on the high-pressure pipeline and Mr. Corduff's response. I will put a part of it on the record. He stated:

This is opposed by local people, particularly in the parish of Kilcommon where the project is based, because of fears for their health and safety (including possible contamination of their drinking water). A compromise proposed by three members of the Catholic clergy and supported by a majority of people in the locality, would have seen an onshore processing plant located in an unpopulated area away from the community's water supply, eliminating the need for high pressure pipelines.

The pipe's pressure is beyond anything that has ever been passed close to domestic habitation anywhere in the world. There are on record a number of disastrous explosions at significantly lesser pressures. These are matters of fact, so people have a right to be concerned. Archbishop Tutu also stated:

This proposed compromise has, unfortunately, been rejected by Shell and the Irish government. The strength of feeling in the community regarding this issue is illustrated by the fact that five people, who became known as the Rossport 5, spent 94 days in prison for their non-violent opposition to the project going ahead in its current form. Mr. Corduff, one of the Rossport 5, went on to win the prestigious Goldman international environmental award, known as the Green Nobel Prize, in 2005.

We need to take this type of issue seriously. The media have not distinguished themselves in this regard. The Minister may have watched a documentary within the last year, broadcast on RTE television, which was violently biased and clearly skewed with any kind of impartiality totally abandoned in the editorial process. I read the reviews in the newspapers, one in particular in the Irish Independent, with great interest. The television reviewer said that this was one of the most biased programmes he had ever seen in his life and he thanked God for it because he indicated the Shell to Sea group was asking for a belt on the nose. That was the attitude of a television critic who acknowledged bias and said that the lack of impartial information in the debate was a good thing. That is a corruption of public discourse which we really should deprecate. We should not co-operate with it in this House.

The Minister is in a difficult position because he has come in towards the end of the process. The matter was muddied long before he started to deal with it as Ireland's position was substantially weakened historically by a Fianna Fáil Government in which Mr. Raphael Burke played a significant role in negotiating deals. Currently, a generous tax rate of 25% - low by international standards - kicks in when the company's exploration and development costs and estimated costs of closing down its operation are paid off.

That raises questions about the argument that we cannot afford to do this ourselves. We are doing it ourselves; we are paying for the process because we do not get a red cent in tax until every item of expenditure is paid off to Shell. We are paying that company for the privilege of developing this, although I acknowledge there are difficulties in selling licences in this market. It will get easier as resources diminish and technology improves.

In any case, there are no obligations regarding the provision of gas to Ireland. There is nothing in this agreement that obliges Shell and the other companies to sell the gas to us. If they do, it will be sold at the current rate. In that case, we could buy it from anywhere. What exactly are we getting out of this except some small degree of ease of access? That worries me. We may get some tax after the first half-life of the field is exhausted. That is about all the benefit we get.

This represents a change from the Irish Government's strategy for energy extraction in 1975. It held that the State would have a 50% shareholding in any oil or gas discovery and an extracting company would have to pay royalties of at least 8%, as well as tax at a rate of 50%. The shift was made under the ministerial responsibility of Mr. Burke and the people are entitled to an examination of that deal, how it was done and why the people were so significantly disadvantaged. I know I may be seen as an old-fashioned socialist and I am one. The resources of this country belong to the people. In the current financial crisis, we can see how much of the necessary infrastructure, developments and support of education and health could be met from these resources, if only we had made a better deal. We have made a very bad deal and are just giving our gas away.

We can consider other countries. Bolivia nationalised its structures, although perhaps nationalisation might be medicine that is too strong. I am not an unequivocal admirer of Mr. Vladimir Putin but on foot of a series of infringements - in planning, environmental and civil rights laws - Mr. Putin renegotiated with the companies and got a much more favourable deal. Shell were glad to get that deal. We could renegotiate our deal.

I mentioned infringements. These include spying on and filming people as well as breaking civil rights. The Minister is a member of the Green Party. What about the way the company has used nets to stop the nesting of birds in an area that was under environmental protection by EU law? The list of categories of Shell's sins is on the public record and they give us the reasons to renegotiate the deal. I would like to see that done.

We should be thankful for the protests by the Rossport five and Shell to Sea, whom I honour. A judge tried to have one woman psychiatrically examined because she was upset. It is because of these people that we are here today.

Fiona O'Malley (Independent)
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I welcome the Minister, who is prolific. He is frequently in the Chamber dealing with legislation under all his banners. I want to discuss a different element of this Bill. On Second Stage, people choose the area of a subject they want to deal with specifically, and I will deal with offshore licences because the word "extraction" appears in the Bill's title.

I know the Minister is dealing with offshore licences and how to create an enabling environment for more extraction than we currently have. The committee has provided the Minister with a model of legislation to consider in the area. It would be a coup both for the Minister and the committee if our draft legislation could be taken on board. It would make all of us happy. It is a sign of a very good Minister, with confidence in himself or herself and the subject, to take amendments, support and suggestions from the Opposition or anywhere else. The bottom line is we are all interested in what is best for the country. A Minister does not necessarily need to fear suggestions from the Opposition or a committee. I encourage the Minister to move as quickly as possible on the legislation dealing with offshore licensing.

As with other speakers, I welcome the Bill. Anything dealing with safety and ensuring legislation is of the highest standard should be welcomed. Listening to the contribution of the Minister and others, one might be alarmed at what is current practice. Are we so out of kilter with proper practice and safety standards? I would like to think we are not acting dangerously.

Senator O'Toole referred to the visit we made to Belmullet and the Corrib gas site. One sees what one wants to see in many instances. This is true of previous speakers as well. I would like to think the process there is positive to the community as the industry is in an area where it is needed. There is a resource that will mitigate our dependency on imported gas and fuels, and I could see these positives. As I travelled with the committee to the site I was in a positive frame of mind about it. Equally, one has to be open to the issue because of the history of what had happened there. I was most reassured by the local people of the good work that is being done down there, the high standards that are applied and that they are grateful for the jobs. This happened a long time before the economy took the turn it has taken. People were even more glad to have jobs because it was an area that had a problem with emigration and this was stopping it. As we arrived on a Sunday evening, we had never seen a town that was busier. There are very few towns that are busy on a Sunday night, but Belmullet was booming. They were all saying "thank God" and much of this has got to do with jobs that come from the site.

As Senator O'Toole pointed out, Shell's safety record there was outstanding and that is what we saw. When Senator Ó Brolcháin travelled, he saw something else. I suppose the truth lies somewhere in between. The Minister's position is that we must support a company that has a licence, and I accept Senator O'Toole's comment about the appropriateness of the licensing agreement that was reached. I hope something like that will not happen again. However, the company has been licensed to come here and we need partnerships with industry. Senator O'Toole also highlighted the very poor take-up of extraction licensing, and we need to be realistic about that. We are not some kind of pseudo-state. We are a sovereign country and we have got to operate in an international context. We have to realise that our resources are attractive to companies coming in and using them. Given that the location of these resources is in the Atlantic, we must accept that it will be more expensive for an oil or gas exploration company to extract them. Therefore, we need to construct a regulatory system which enables them to do this, but this does not mean we are compromising safety standards.

People who are hostile to private operators in a public transport system seem to think that they operate to a different safety standard, but of course they do not. Safety standards are uniform. If we are creating an enabling environment for people to extract the natural resources that exist throughout our country, we must ensure it is as safe as possible. That is why I welcome that the Minister is streamlining the system to create a single safety standard.

It is worth listening to the contributions of other speakers. Senator O'Toole made an interesting point about commencement dates. What is the point in having gone through the legislative process to update the Statute Book and then not implementing the law? When we pass a law, we think that surely it will be enacted very quickly. The suggestion of five years to implement the Bill seems extremely generous. It should commence within two years. The Minister should respond to this because we should know why we cannot have a proper commencement date. As legislators, we should be confident that the legislation we pass will be brought in quickly.

I welcome the Bill and I hope we will be examining legislation on offshore licensing before the end of the year. We need to create an enabling environment because I know that is what the Minister wants to do.

Paddy Burke (Fine Gael)
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I welcome the Minister to the House and I wish him well with this Bill. It is very important and some credit for this should go to Shell to Sea and to the Rossport five. They have probably highlighted the safety issues and they have generated the debate. However, credit is also due to the Minister for bringing forward this Bill.

I was a member of Mayo County Council when the gas issue first arose. There was a time when it was thought that the gas would come onshore at Rossaveel and into Galway. However, it came through Broadhaven and County Mayo. There was a great welcome for that in Mayo because it allowed the pipeline to come right through the county and all the way into Galway. It has also opened up to Sligo and the north west. A pipeline was planned from Dundalk via Longford and Athlone to Galway and the Corrib Basin, which would have seen the north west without gas. The fact that it was brought in through Broadhaven opened up the west and the north west for connection to pipeline gas. We welcomed that at the time.

I was at a meeting in Belmullet when this came up. The biggest objection at that time came from the fishermen. The gas find was 75 miles out in the Atlantic in very rough seas. There are different ways of disposing of the outflow. In some cases, it can go back down the wellhead from which it comes in the first place. This would have meant that Shell would have had to bring a second line back out. However, the company did not plan to do that and had planned instead to bring the pipeline out four or five miles. This drew the wrath of the fishermen in that area because they could see that this outflow, only four or five miles from the coast, would be washed ashore and would affect them. They got their way with Shell which eventually put the outflow further out to sea.

The objections took a different route after that. Senator Ó Brolcháin has said that it is a Fine Gael stronghold, but nothing could be further from the truth. Fine Gael has one councillor in the area, and between 2002 and 2007 the area was represented by an Independent Deputy.

Niall Ó Brolcháin (Green Party)
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Deputy Ring gets a good vote out there.

Paddy Burke (Fine Gael)
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I am 50 miles away from there.

Niall Ó Brolcháin (Green Party)
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Mayo is a Fine Gael stronghold.

Paddy Burke (Fine Gael)
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Mayo might be a Fine Gael stronghold now but it certainly was not at that time. This project was never hijacked by any of the main political parties. They never brought politics into it during this dispute. We were delighted the gas find was coming through the county because it carried many benefits from a rates point of view. The pipeline was going 100 miles from north Mayo to the Galway border and this would bring in a significant annual rate of return to a county that needed it badly. The whole project was welcomed from that point of view.

However, some issues were handled very badly. Planning permission at the beginning was announced on a bank holiday weekend. Compulsory purchase order powers were given to a wealthy private company, which should never have happened. The CPO powers should have gone to the local authority or some arm of the State. There were many badly handled issues during that period. Shell was not that generous to the community at the beginning. It could have offered much more community support. This would have softened the blow and brought the community along. However, it took Shell a long time to come around to the idea of supporting the community, which is still divided to some degree. The Minister for Communications, Energy and Natural Resources, Deputy Ryan, and the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cúiv, must be complimented on the structures they put in place to heal this. The Minister should ensure Ballyglass Harbour is chosen to service offshore gas or exploration in the area. This could heal what happened there and it would bring much-needed employment to the area. Ballyglass Harbour is one of the finest deep sea harbours in the country and using this would lead to other infrastructure being improved.

I welcome the Bill. I agree with Senators O'Toole and O'Malley on the point that safety measures are not so bad that we need legislation. However, this legislation will underpin the safety requirements. Senator O'Malley also referred to foreshore licences, an important issue for our country if we are to be a net exporter of energy. Many countries plan to be net exporters of energy derived from solar and wind sources. If every country is exporting energy, there will be a major decrease in the price of energy.

Niall Ó Brolcháin (Green Party)
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Good.

Paddy Burke (Fine Gael)
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The Minister has acknowledged this and has a pilot scheme in this area. The Minister should be complimented on this. The foreshore licence issue is a major issue and must be addressed. I support Senator O'Malley in this regard. I welcome this important legislation and I wish the Minister well. As Senator Donohoe said, Fine Gael will be fully supportive of the Bill.

Eamon Ryan (Dublin South, Green Party)
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I am pleased to reply to what were varied and useful contributions from the floor of this House. I will not address every detail because we can return to these matters on Committee and Report Stages. Regarding Senator Donohoe's point, I stand by the decision to use statutory powers, as has been done before, to appoint a person as commissioner. This gives a particular mix to the commission. There was much thinking behind the decision to give a mix of administrative, economic and industry experience. This has been done in a timely manner as needed. I am confident this will lead to the continuing success of the commission. It has been in place for ten years, it is working well and is working closely with the Government where appropriate but independently for certain decisions it must make. It must also follow the broad policy thrust set by the Government within the European context. We are starting to get the pillars of energy policy in place and we are starting to get people across the sectors in the utility companies, the regulatory systems, Departments and in our political system saying the same thing, that efficiency and renewables will make us progress. This is what I am working on, on a team basis, with the Opposition and other agencies to protect this country and provide security and safety. I am confident the new commissioner and the existing commissioners will work together to achieve that.

I am glad of the detailed analysis Senator Donohoe has undertaken for the Bill and the five areas he suggests we should examine. We can return to this on Committee Stage to examine specifics to ensure safety comes first and is well delivered. I thank Deputy Brady for his sense and sensibility, for his continuing support for my role in government and for providing a commitment to get this legislation through the House. Senators O'Malley and Norris referred to the need to be quick, to be seen to be effective and to do business in an effective manner. I appreciate the support in this regard.

I listened with interest to Senators O'Toole and O'Malley reporting from their visits to Belmullet to examine the glass refining facility and the other facilities built. I was not aware of their itinerary. Senator O'Toole referred to 1 million man hours worked without any injuries. If I was given a hammer and a spanner I would hate to count the number of injuries I would inflict if I was able to clock up 1 million man hours. That is an important measure and it is important we are specific, that people in this industry are careful and that it is safe. We are dealing with materials that require such a level of detail and environmental and safety care. It is correct that demanding and exacting standards are our measure.

Senator Ó Brolcháin's contribution was particularly useful. It is important we get the perspective of what it is like to be in a small boat surrounded by naval vessels and Garda vessels. That conditions people's thinking and is a safety aspect we must get right. The more we scale down policing to an appropriate level, the safer the situation. We must be careful in our security and policing arrangements that we do not scale up to the point where we transgress proper safety measures. In the process set up by myself and the Minister for Community, Rural and Gaeltacht Affairs we have heard submissions from the appropriate authorities to examine the standards and operation of independent security companies so that we have a check on this. We also had a presentation from the Garda Commissioner to hear his experience of the nature of the complaints the Garda Síochána received and the process it is going through to examine such complaints. This is right and fair. It is correct that this should be centre stage in our thinking as well as the safety of the pipeline. Senators Ó Brolcháin and Norris pointed out that the concerns of the local community have brought this issue up the agenda and led to this legislation. I acknowledge the point made in this regard.

I agree with Senator Norris that our terms were too generous and needed to be improved. The Government did that in August 2007. If we compare ourselves with countries in the Atlantic that do not have the North Sea resources of Norway and the UK, such as Newfoundland, Greenland, Spain, France or Iceland, our terms are more analogous to these. They are not at the lower end or the higher end but they are in the ballpark. That we are not getting massive amounts of exploration activity here indicates the deal is not a giveaway. The terms are not excessively generous.

I disagree with Senator Norris in respect of policy in Venezuela and Russia where terms were changed and deals were changed in respect of tax arrangements. The Government made a decision that this was not something we could do because it calls into question other aspects of the State tax system. The Government took a decision that we are different and that if we commit to something and issue a licence, we will seek to maintain the terms and live out our part of the deal. However, if circumstances change and we find extensive reserves in the deep Atlantic waters, we will intelligently reconsider the terms of the offer. We should continually examine the terms we offer and that is what I have done in government.

Senator O'Malley made a point about the existing safety regime. That exists within the Department and includes detailed assessment processes, the technical advisory group and the safety measures that are implemented. This Bill builds on it, makes it specific and gives the commission a role with a detailed legislative form. That is an important and progressive step which will offer people the certainty and security they need.

Senator Burke referred to Ballyglass Harbour. I agree with Senator O'Malley that Belmullet is booming as a result of the Corrib development. However, the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, and I have been concentrating on local concerns, even including the parish of Kilcommon which is distant from Belmullet. We have to be attentive to the views of the people most affected by such developments. The Minister, Deputy Ó Cuív, has been working on a number of initiatives aimed at ensuring local communities benefit from the project.

I raise the broader issue of energy security. We are fortunate because gas prices are relatively low and, according to the prognosis of the International Energy Agency, will remain so for the next few years. However, a rational analysis of Ireland's gas supply would reveal a significant security risk. The North Sea gas fields on which we depend for as much as 90% of our supplies are rapidly depleting and will not be available to us in ten years' time. Our second largest supply source off the coast of Norway is limited. Ultimately, we will have to rely on distant Russian and Algerian fields or liquefied natural gas, in addition to what we can produce here.

Energy security involves long-term investment decisions in respect of both gas and oil, in which respect a peak in production is about to occur. As one of the most oil dependent countries in the world, we must prepare decades in advance if we are to continue to run the economy, feed ourselves and maintain our transport system. The best way we can ensure security of supply is by developing our own resources. Fossil fuels will play a role but climate change limitations mean they cannot be our main response. A grid connection is being constructed in the sea to the west of Belmullet because we have the world's richest wave energy resources. If we can crack the technology, we will ensure our long-term security. We must also use our finite energy resources wisely because the fossil fuels we use were stored for 100 million years and will not be available to us again.

First and foremost, however, we have to deliver our energy resources safely. That is the purpose of the Bill and I look forward to debating it further on Committee Stage.

Pat Moylan (Fianna Fail)
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When is it proposed to sit again?

Martin Brady (Fianna Fail)
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At 2.30 p.m. next Tuesday.