Alan Farrell (Dublin North, Fine Gael)
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Question 216: To ask the Minister for Communications, Energy and Natural Resources his reasons for legislating for offshore gas storage facilities; the main issues this Bill will tackle; when he expects the Bill to be published; and if he will make a statement on the matter. [38350/11]

Pat Rabbitte (Dublin South West, Labour)
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Natural gas plays a key role in Ireland's economy and fuels around 60 per cent of national power generation. The Government is committed to actions to ensure security of gas supply and the delivery of essential and timely investments in Ireland's energy infrastructure. It is also committed to continuing to actively encourage private sector interest in investing in gas storage. Offshore gas storage facilities can help provide more secure gas supplies for all consumers. Ireland's dependence on natural gas combined with EU gas security of supply obligations make it an imperative that a regulatory framework be put in place that encourages the market to provide new gas storage.

Ireland's sole offshore gas storage facility is operated in conjunction with commercial gas production activities at the South West Kinsale gas field. It is licensed under the petroleum production lease between the Minister and the company.

There is currently no legal mechanism to provide for Ministerial consent for the use of a depleted gas field as a solely stand-alone gas storage facility i.e. at a site where there is no gas production. Nor is there statutory basis to explicitly authorise stand-alone gas facilities in offshore geological features such as salt caverns. Given the growing market interest in exploring opportunities for offshore gas storage, it is timely to progress a legislative framework.

Legislation is required to regulate offshore gas storage as a stand-alone activity and thereby provide certainty to potential developers and to gas consumers. A legislative framework will provide the necessary signal to the market.

Following a consultation process undertaken earlier this year by my Department, the drafting of Heads of a Bill is currently underway. It is envisaged that the legislation will provide a regulatory regime for gas storage at offshore sites under the seabed, at sites where extraction activities are taking place, at depleted gas wells and at virgin sites.

In general terms, the regulatory regime will provide for the granting of exclusive rights over areas under the seabed for the purpose of gas storage and for the terms and conditions under which gas storage activities may be carried out.

Following the preparatory work now under way, I will be in a position to seek the approval of the Government for the drafting of the Bill in the first half of 2012 with a view to its publication later in the year.