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Dáil Éireann debate -
Wednesday, 13 Mar 1974

Vol. 271 No. 2

Private Members' Business. - Energy Crisis: Motion.

I move:

That Dáil Éireann deplores the handling of the energy crisis and calls on the Government to inform the House of its future policy on energy.

I should say at the outset that in setting down this motion for consideration by the Dáil I was not concerned to make political capital from the serious problems that have arisen as a result of the oil crisis. Neither am I interested in making personal attacks on any member of the Government. However, I feel it is right and proper, because of the concern throughout the nation, that we should ensure that the fullest possible light is allowed into what has become for this as well as every other country in Europe the most sensitive sector in our economic wellbeing.

The ability of the Government to identify the problems, to deal with them and to lay the groundwork to ensure that we learn from them is of the utmost importance to us all. We have certainly gained a great deal of information over the past six months as a result of this crisis. If you will bear with me I should like to highlight some particular events during this time. Each and every event has had one ingredient, I regret to say, at least as far as the public are concerned, and that ingredient is confusion. People have been confused from the very outset and they are still confused to a great degree.

In mid-November last a rationing of supplies was introduced by the companies themselves. This caused confusion initially because of the retrospective element which was involved. People were told of a 10 per cent reduction in petrol deliveries, and yet the ordinary motorist was faced with garages open for only a few hours daily and no supplies at all over the week-end. It is no exaggeration to say that on some occasions in this city these queues erupted into violence as a result of this confusion. The public were bewildered by what was going on. Many people were calling for rationing to regularise the position.

There would have been no such confusion if they had been told the true implication at that time, which was that that 10 per cent cut would be nearly 20 per cent because of the increased consumption during 1973 over that of 1972; and because many of the traders had already, by mid-November, drawn their regular supplies for the previous year, this cut eventually became a 45 per cent for the second part of the last quarter of 1973.

Immediately the Dáil recessed last Christmas the people of Dublin were confused further by the news that the Dublin Gas Company proposed to introduce rationing of gas supplies. It nearly brought them back to the wartime days of rationing. What really happened on that occasion was, as far as I am aware, that one company who had contracted to supply the gas company for a period of seven or eight years or more had cut down supplies of naptha gas to the Dublin Gas Company because their contract was not as profitable as continuing on with this naptha gas and refining it further into petrol products. As I said, this caused tremendous confusion in this city, particularly among the more vulnerable people, the old people, many of whom are depending on the Dublin Gas Company.

Rationing of course suggests that people are told that they may consume a certain amount of any product, and the person responsible for giving them this information would be the Minister. It is probably unnecessary for me to say that no directive came from the Minister on this occasion. All the people were treated to were curtly worded advertisements in the daily papers which were couched in very general terms, telling consumers that they would receive specific details of the rationing scheme at a later date. Fortunately the rationing did not take place, but definitely the confusion took place.

During this time the public learned, probably for the first time, that the oil supply to every section of this country was completely outside the control of the Government. They also were to find out during this period that we refined only half of our total oil consumption, half of the five million tons which are required each year for this nation, and that we were considered as part of the British market for the remainder of the supplies. From the end of December the public had to rely on the various newspaper correspondents to try and get some idea of what was going on in the oil world. Countries that were supposed to be cut off from supplies, but although we were to be quite capable of getting adequate supplies, but although we were repeatedly told we were regarded as a friendly nation our supplies were severely cut back.

It has been the pattern in many parts of the world to make the Arab people the scapegoats for this oil crisis. I am not one who subscribes wholly to this. The Arab people and the oil-producing nations were undoubtedly entitled to more than they were getting for their product, and since it was their main revenue it was only natural that they would look for this. It is quite understandable that they should decide to use it as a political weapon in order to further their own ends in the war with Israel.

However, there were other people involved. The multi-national companies of which we hear so much nowadays were very much involved and these same multi-national companies have approximately 80 per cent of our consumer market here. I shall come to them later. While I do not consider we have yet overcome this problem of supplies, we can at least be grateful that the weather has been kind to us recently, not only here but throughout Europe. This has cased the crisis to a great extent.

The costs of our staggering and childlike actions, as they were, had a more serious effect. The decision to dismantle the price control on oil which was operating up to 5th of last December, was a grievous error. I raised this matter in an Adjournment Debate here on 12th February last and I criticised this action in dismantling price control. The case is a very simple one to understand. It is of the utmost importance to establish once and for all that the Government have the sole responsibility for the price levels of all petrol products sold and consumed in this country. Under the control mechanism now in operation these oil companies are obliged to give only seven days' notice of any further price increases. This has been the case since the 5th of last December. Once they give seven days' notice the proposed increases are permitted as long as they are in line with what is happening within the outer UK zone. It is a great flaw in our price control system that this is permitted to these multi-national companies, who, as I have said, have approximately 80 per cent of the outlets for these oil products in this country.

The Minister for Industry and Commerce on the 12th February last on the Adjournment debate stated that the Prices Commission recommended this link with the outer zone of the UK. On that occasion he quoted an oil company spokesman as confirmation for the need for price increases. He stated that the Arab producers raised their prices on January 1st and that between that date and mid-February our stocks would have been exhausted. This simply is not acceptable as an explanation. Is the Minister aware that the price increase of 1st January, 1974, applied at the Gulf or Mediterranean ports of loading and not in the UK or in Ireland? Stocks held at Whitegate oil refinery and other oil company owned installations amounted to almost 400,000 tons on January 1st. We have confirmation of this figure from the Ministers for Transport and Power and Industry and Commerce when we were told that we had about 45 days' stock. The stock levels in the UK at that time were 55 days.

All these stocks had to be either in the form of crude oil or refined products costing below the price applying at the Gulf or Mediterranean ports on January 1st, 1974. Allowing for time for loading crude oil into the tankers at the Gulf ports or Mediterranean ports, allowing time for tankers to reach the United Kingdom or the Irish ports with the crude oil, allowing for the refining of this crude oil into refined products, then a minimum of four to five weeks must have elapsed before any product refined from crude oil which had to bear the 1st January price increase reached consumers in this country. During the period from January 1st to February 9th, 260,000 tons of refined products were landed in Dublin, half of which came from Whitegate and half from British refineries. During the same period 230,000 tons of crude oil were landed at the Whitegate oil refinery.

It would have been impossible for any of the refined product shipped into Dublin to have originated as crude oil in the Gulf subsequent to the price increase there on the 1st January. It is also reasonable for us to assume, having regard to the procedures at Whitegate oil refinery for handling crude oil whereby some trans-shipment from stocks held at Milford Haven occurred that at least 25 per cent of the crude oil arriving at Whitegate would have originated at the loading port prior to the 1st January.

In addition it must be noted that storage facilities exist in places like Limerick, Galway, Sligo, Waterford, New Ross and perhaps a few other places. Whilst they may not be large they could also have some stocks which were refined from crude oil shipped from the Gulf or Mediterranean ports prior to the 1st January. It is evident, therefore, that the price control mechanism in this country is not effective at the moment. If you take the February rise of between £15-£20 per ton on all products you can see that more than 300,000 tons held in stock benefited from this increase. This is an undeniable fact. I am not saying that supplies were withheld or that stockpiling took place; I am saying that because of these stocks £5 million or £7 million extra profits found their way into the multi-national oil companies because of these stocks and not because of any stockpiling elsewhere.

I have noted a report which has suggested that this increase resulted in a paper profit and that no extra cash could be taken from the business of one company because of the need to pay more money for the higher priced oil at the Gulf after the 1st January. Of course, there was no increase in the price of oil bought after the 1st January if we are to accept that. This is only a cash flow exercise on paper and has nothing whatever to do with what should be an ordinary profit and loss statement by such a company as the one involved.

With regard to the profits, there are many interesting disclosures which we can get from American statements by these multi-national companies. First of all, we had confusion on availability and now we have even more confusion on the price situation. I want to draw the attention of the Government to some facts which have emerged in other countries which I have already mentioned. First, every major multi-national company is reporting massive increases in profits at the moment. Some of these companies have subsidiaries trading in Ireland. One of them has reported an increase in profits of no less than £400 million. To lessen the reaction from consumers in the United States they are publicly advertising in the American Press the fact that the increase in profits took place outside America, particularly in the European zone.

I suggest we are only one of these countries which were involved and exploited in this way by these multi-national oil companies. Time magazine published a report on a Senate hearing in America, at which large oil companies were questioned about their profits. During the last quarter of 1973, which roughly coincides with the Arab oil embargo, Esso's profits jumped by 59 per cent with a profit of $2.44 billion.

A Deputy:

What quotation is this?

It is Time magazine of 14th February, 1974, page 34. This is a statement made by Senator Ribbicoff. While the consumer is suffering the industry seems to be receiving a bonanza all over the world. When questioned at the Senate hearing a certain oil company which operates here reported 83 per cent increase in profits from oil it bought and sold in Europe and only 16 per cent increase is reported from oil sold in the USA.

This is what is happening in America. Also in that country a gentleman called William Simon, who is deputy-secretary of the USA Treasury —according to Time magazine of January 21st, 1974, page 29—sent agents to audit the supply price profit and so on, of every refinery in that country. Knowing the price paid per barrel of approximately $10.30 for Saudi Arabian oil the big oil companies can regulate price increases. The Treasury hope to have some control over this matter in future. Another interesting fact from Time magazine is that the chairman of the parent company of one of the subsidiaries operating here was paid no less than $596,000 salary last year. This is one of the companies that has a large slice of the market here.

That is considerably less than the chairman of Green Shield Stamps in England receives.

Does that justify it?

It is nothing to do with this country.

They are operating here.

The Deputy quoted a price of $10 per barrel. I did not get the reference.

It was $10.30 and it was stated in Time magazine.

Is that what the oil companies are paying for crude oil?

Yes, it refers to America. They claim they are paying that for oil from Saudi Arabia.

I think it would be considerably less.

I agree it can be bought for less and they are buying it for less from Exxon. However, they are selling it at a good profit here. I quote these facts in order to throw some light on statements made by the oil companies with regard to their operations here. They claim they are making little or no profit and one of the subsidiaries returned a profit of £15,000 over two or three years recently. The data I have given is interesting information from the parent companies in America.

Other countries are trying to take some steps to control profits. For instance, Germany recently reported an alleged price manipulation to the EEC and Japan are endeavouring to control the situation with regard to increased profits to the multi-national companies. Not long ago they refused to allow the price rises we allowed on 1st January to apply in their country until 31st March next. Japan is totally dependent on oil, even more than we are, but they stood up to the multi-national companies. This shows we should have taken some such action and postponed the price increases. There is no reason to think we would not have got away with it as Japan has done.

The Government are examining the position in order to see what action they might take to help the sections of the community who are hardest hit. I should like to draw attention to some matters that require immediate attention. I refer in particular to people engaged in the glasshouse industry, particularly around Dublin, where there is a substantial investment. In the past these people received considerable grants and were given every encouragement to expand the industry. This sector require immediate attention in the form of some subsidisation to alleviate the effect of the cost increases. Countries such as Holland, Germany and Denmark have already acted and Great Britain is considering the matter in order to help people engaged in this industry. They are hard hit and risk the possibility of being put out of business. A long drawn-out investigation will not be of much use to them if immediate action is not taken. I would impress on the Minister the necessity of giving serious consideration to this problem.

I have been told that farmers who purchased tractors recently are having considerable difficulty getting their oil quota. The Minister might look into this matter also. It might be possible to make special arrangements for many sections in the community. The lessons of the past should guide our future actions.

Last December I asked for speedy action with regard to extending and improving storage and refining facilities. The Ministers for Transport and Power and Industry and Commerce stated this matter would be dealt with. It is time we were told what action was taken and the result of such action. I know that the Minister for Local Government consented to the erection of an oil refinery at Bantry, although I believe one Minister afterwards expressed some doubts whether the project would go ahead. I understand that even if the project goes ahead it is designed for part processing of products for trans-shipment to markets outside this country and that there is no provision in the proposed design to refine petrol. If that is so, the refinery will not be of any great help to us.

So far as oil refineries are concerned I am aware that there is a very emotional lobby with regard to environmental matters. Surely it is possible for the Government, with the experience and advice available to them, to confirm that modern, conventional oil refineries need have no effect on the environment. A public relations job is necessary in this matter. I realise oil refineries cannot be hidden but the cost of not having sufficient refining capacity in this country is now being borne by every householder in the increased costs. We must tackle this emotional reaction to oil refineries. They are necessary if we are to continue with oil as our chief source of energy.

The Minister has stated that in the short term we are in the hands of the multi-national companies. This means the Government have identified the problem and it is time they told us what they propose to do in the matter. We use approximately five million tons of refined products, one million approximately being used by the ESB. It is said that this costs the ESB up to £40 per ton and the bill will be £40 million this year. The average cost to the oil wholesalers is £50 per ton for the remaining four million tons. We were told in January that the posted price for crude oil was $11.50 per ton but the posted price is not the real cost. The real cost to the major oil companies for Middle-East crude oil is about 65-70 per cent of that amount and this translates into £20 per ton.

There is a necessity to examine an industry which requires more than £100 million to transport crude oil, to refine it and to deliver the products to the wholesale trade. This is something that would bear examination.

Coming back to the question of storage. I wonder has the Minister for Industry and Commerce or the Minister for Transport and Power, whatever Minister whose bailiwick it is— taken any steps to ensure that further storage is erected here by these multi-national oil companies. They have fallen in for a bonanza of £5 million to £7 million to which they were not genuinely entitled and the least they might now do is erect more storage tanks. They can well afford to do that. They cannot whinge about not having money because this money fell into their hands unexpectedly: I should say it was permitted to fail into their hands.

Would the Minister spell out what the programme is with regard to the erection of refineries? The people are entitled to know. We refine only 50 per cent of our total oil requirements and there is no doubt but that we will have to erect more refineries. Even if the oil comes in as plentifully as is reported we will still need the storage capacity. I should like to hear from the Minister what is happening. What has happened since the oil crisis began last November?

Would the Minister also spell out whether or not we have made any direct approach to some of the Arab oil producing countries and tell us what the results have been with regard to the possibility of securing supply and possibly getting some form of participation in refining the crude oil? These people are said to have big cash reserves. We might be able to tempt them to invest in refineries here to meet our needs. What is happening from the point of view of a direct approach to countries like Kuwait and the other oil producing countries? I understand the ambassador from Kuwait visited this country and had talks with members of the Government. We should like to hear the outcome of those talks.

Perhaps the Minister would also spell out something about the oil finds off our south coast. What plans are being made for further development by him, or the Minister for Industry and Commerce, for taking out this oil which is alleged to be there in such large quantity?

We should also like to hear what the future policy of the Government will be with regard to the Electricity Supply Board which plays such an important part in all our lives. He might be more specific about an increase in turf production as a means of energy for the ESB. He might tell us what plans the Government have in the pipeline in regard to the natural gas found off the south coast. Is it intended that the ESB should be given access to some of this natural gas? Surely that would be a cheap method of producing electricity? Or do the Government intend to let other interests develop this natural gas into other products? As far as I know, the ESB would be very interested in having access to this natural gas for the purpose of producing electricity.

I am sure everybody would like to hear what has happened since the oil crisis started and what plans are now taking shape to ease not only the long-term situation but also the short term situation. There has been so much talk in the past about storage capacity I am sure some definite plans are now underway. Storage tanks may be under construction. As far as I remember our storage capacity was far below that recommended by the EEC. Their figure was more than twice what our storage capacity was last December, or thereabouts. I expect some definite steps have been taken to improve the situation.

What steps have been taken to erect oil refineries to ensure that instead of having only 50 per cent of our oil needs refined here we are aiming at having 100 per cent refined. If that is done we will, like the French, have considerable control over our oil supplies. We could deal directly with the Arab oil producing countries for our crude oil. We have been told over and over again that they are our friends. We could buy below the posted price as some of the subsidiaries here buy from their parent companies in the Middle East. In some cases they buy three dollars below the posted price. If we had the refining capacity we could buy cheaper and refine the oil ourselves with the help of some State participation. This is absolutely vital. In France the biggest oil company has 50 per cent State participation and they are supposed to have over 50 per cent of the market. They have succeeded in securing their crude oil and they have the refining capacity. Admittedly we have not got the resources of a country as vast and wealthy as France, but we could aim at refining the other 50 per cent of our total oil needs.

I formally second the motion and I reserve the right to speak later.

I move:

To delete all words after "Dáil Éireann" and to substitute the following:—

"approves of the handling of the energy crisis and urges the Government to develop its future energy policy in the light of the experience gained".

I am glad to have the opportunity of having this debate, though it is perhaps a little bit soon to have it since plans to deal with the energy crisis have not yet been fully formulated. It will take months, possibly years, to bring some of the plans to fruition. I do not think it would be in my interest, the interest of the House or the interest of the nation to say what the plans are at the moment.

I did not follow some of the figures Deputy Barrett produced. I hope however that when I see them in the Official Report I will be able to analyse them and see whether or not they make sense.

I should like to say something now about the oil refinery. That is one of the Deputy's points I picked up. He said one Minister—I presume he was referring to me—said he had doubts about whether or not this would be built here. What I said was that the situation had changed since permission was sought to build a refinery in Bantry and the time the permission was granted in December or January or whenever it was. The environmentalist lobby in America is as strong as it is here. For a number of years, because the American Government were squeezing the profits on refineries and because there was this environmentalist lobby there objecting and making it difficult to get permission to build refineries, the American companies, the majors, the multi-nationals, the manipulators of the oil scene, as Deputy Barrett said, were building refineries outside that country and shipping in. When he says that 100 per cent of the products coming out of Bantry were not destined for Ireland, he is quite right. In fact none of them was for Ireland. When it was decided to build an oil refinery there, when planning permission was sought, it was with the idea of supplying the American and the fact that the oil companies and refinery owners complained that the American Government were squeezing their profits so that it was not profitable to refine oil there. That situation has changed in the last four months. The environmentalist lobby in America is not as concerned now because they have experienced a shortage of oil. The panic in America in the buying of petrol and of oil for home heating has been considerably greater than here and lasted considerably longer even though the shortfall in supply was much less than in this country. It was for that reason I said that the promoters of the oil refinery may now be having second thoughts about it. It may not be as profitable now. I think I saw in some paper that they intend to make the decision before the end of this month.

The Minister saw it in the paper?

That they are not coming.

The Minister saw that in the paper?

Deputy Haughey asked did the Minister see that in the paper?

The Minister is telling us what he reads in the paper.

I am telling the House what I understand their position now to be. I have no knowledge of this. Deputy Haughey knows as well as Deputy Brennan does that negotiations of that kind go through the IDA which is under the Department of the Minister for Industry and Commerce.

Surely the Minister's Department should supply him with this information.

This is not for my Department officials; it is a matter for the IDA and the Department of Industry and Commerce. I understand the position——

(Interruptions.)

The Minister has a half an hour only and should be allowed continue.

The position, as I understand it, is that they will make a decision before 1st April whether or not they will go ahead. But I would think they would look at it again in the light of a changed situation from the time they applied for planning permission and received it earlier this year.

I have made no change in the oil situation in this country since last March. The same companies operate here; they operate under the same conditions; anything they are doing now they have been doing for a number of years. The profit set-up, the company structure, the refining, is exactly the same as it has been for years. I should have said that before I started. Whatever the position is now about the price and the availability of oil, there is no doubt that on 16th October, 1973, the organisation of Arab oil producing countries decided they would turn off the tap as regards oil products and, at the same time, try to raise the price. That is not something I dreamt up or read in the papers. That is a fact. They decided they would use the oil weapon. I do not think I would disagree too much with Deputy Barrett when he says that the price they got for oil up to then was not as high as it should have been. That may well be so. But to pretend that this had no effect on us and that we did not have to pay these oil prices just because we are friendly with the Arabs is not being realistic. The fact is that on October 16th last they deliberately decided to curtail the availability of their oil to consumer countries and put an embargo on the supply of that oil to America and Holland.

The major oil companies—there are seven of them in the world—are extremely complex, multi-layered, multi-national concerns that control the oil from the hole in the ground from which it emanates right to the nozzle of the petrol pump going into the car. They control every stage of the production, transportation, refining and distribution of oil products in many countries of the world. They decided openly—they have admitted it—that even though Britain, and we are part of an integrated market with the United Kingdom, was a favoured nation and should get 100 per cent of her supplies, they would "spread the misery"—as they said—and that they would take non-Arab oil, Syrian, Venezuelian and other non-Arab oils, and give them to the embargoed nations, America, Holland and other countries in the neutral zone which were not getting as much. They would take this supply from the friendly nations who should get 100 per cent of their requirements and give it to those on whom the Arab nations had imposed an embargo. There was nothing any nation in the world could do about this. They had to learn that they had not enough clout to belt the major oil companies. That was the truth of the situation. The oil companies made no excuse for this. In fact they considered they were morally obliged to look after their customers; to see that their American and Dutch customers would get the same level of supplies of fuel oil or of oil products as those countries considered to be friendly to the Arab nations. We, as part of an integrated market with England, suffered from this shortfall or this "spread of the misery" as the oil companies called it. In December, our availability of supplies was down by 15 per cent. I think Deputy Barrett said that the oil companies took it upon themselves in November to cut supplies of petrol to garages. If that is what he said it is not true. On the 16th November I made an order which restricted quantities on a base period from October, 1973 to March, 1974. This restricted the amount of products that could be given to distributors, wholesalers, garages, or to industry.

I have been accused—and Deputy Barrett repeats the figure here—of making a 45 per cent cut. Of course, that is nonsense because, as early as the middle of October, I had warned that this situation would arise and that there would be a shortage. I warned also that anybody who stockpiled, whether it be a garage, distributor or individual, would find himself affected by the orders I introduced and would not be allowed reap the benefit of his stockpiling while other customers would have to be cut in the latter half of the period.

I do not think I have to defend the decision not to introduce petrol rationing, which has been continually requested. I think the rest of the world would agree that, in the countries in which it was introduced, it produced far more chaos and panic than it did over roughly three weekends, confined mostly to Dublin. If any Deputy opposite cares to go around garages or consult the Irish Motor Traders' Association, they will recent endless instances of people coming up demanding petrol, saying they were extremely short and had to visit their sick mother down the country but, when the nozzle was put in their tank, it took only 15p or 20p worth. Every single garage in the country can recount instances of that nature, of selfish, greedy people who would not leave the petrol there, for essential users of this product and who brought about a situation where doctors, nurses, commercial travellers and so on, found themselves at the end of extensive queues with their day's work ahead of them unable to reach the forecourts of garages. Nobody would disagree that I did the right thing in December in not rationing. If rationing had been necessary it would have been possible to introduce it. Certainly the ration books were distributed. Perhaps an indication of what people felt about rationing was that 70 per cent only of the people entitled to coupons applied for them; of the number of cars and commercial vehicles for which coupons were available only 70 per cent applied for them. In other words, 30 per cent of the people decided that this situation would not last, that there would not be petrol rationing and they did not bother applying for coupons. That, in a way, is a reflection of the fact that at least 30 per cent of the people felt the decision not to ration was the correct one.

I said there was sufficient petrol, sufficient oil products in the country and if properly conserved and used, if people cut out unnecessary journeys, if an effort was made in industry, agriculture and horticulture and in every other sector of the community to save specific amounts of fuel then we could get over the hump. That has been proved to be the right decision. There was sufficient oil for everybody provided they did not waste it. The price increase of all fuel products and of all energy which has come in the last few months will have its own rationing effect. It will be much dearer now to drive a car. The central heating for houses will cost much more. The cost of running an industry will increase.

We have been accused of not making available the same allocation of fuel oil as Britain did. Our allocation was exactly the same as that in England. In December we both had 85 per cent of what the normal requirements would be. A number of different products were involved in each case. The way in which the 85 per cent allocation was used in each country was different. The prime concern of this Government was that jobs should be preserved and that as many people as possible should keep their jobs for as long as possible. This was the motivation of the whole Government. They were anxious to see that people did not lose employment because of the energy crises. We were successful in that.

In England a different system was adopted. They gave a 90 per cent allocation of the petrol used last year Initially we did the same. A number of associations approached us and said this was causing confusion and asked us to express the percentage as a drop in the availability for the quota period of this year. One gentleman repeated, even though he was told at least twice, even though he knew the figure was wrong that Britain was getting only a 10 per cent reduction and we were having to suffer a 17½ per cent reduction. He must have known he was wrong, because it was at that request of his organisation that we related our 17½ per cent to this year, where the British cut of 10 per cent was related to last year and did not allow for an increase in the meantime. Both allocations worked out the same.

We gave 100 per cent allocation of oil where it was a basic raw material to manufacturing industry. That was with the idea of conserving jobs in industry. We could only do that by cutting down on what other people were using. We did this in the area of home heating where the restrictions were more severe than those in Britain. We decided people could more easily bear some hardship in the home if a saving in oil in that sector was used to preserve their jobs or those of their neighbours. This was the correct decision to make. There were exceptions to the restrictions. The Ballymun flats were an exception in the area of home heating. In a number of local authority areas through the country houses have been built without any fireplaces. People had to be given an adequate supply of oil to heat such houses. They never got as much as they wanted.

Last July, when the energy crisis was beginning to be noticeable and people were getting a whisper of an energy scarcity, the Minister for Local Government reserved a decision which had been in operation for a number of years and stated that every local authority house would have to have at least one open fireplace. There were many houses in the country which were dependent on central heating in one form or another—gas, oil or electricity. Such heating was based on the use of oil. These people have to be catered for. The Minister's decision will mean that if there is a scarcity in the future people will not be so badly off. When there is a scarcity of heating oil people buy other forms of heat and as a result these other forms become dearer and scarcer. For many years the demand for coal has been dropping by 7 per cent per annum. There has been a steady decline in the use of coal. The coal merchants placed their orders for this winter on the basis of that 7 per cent decline. When the oil crisis came central heating oil became scarce and people tried to switch to the use of coal fires. This created a scarcity of coal and raised the price.

The Polish coal exporting board— or the Russians, from whom the ESB buy oil—were not slow to take advantage of the world scarcity of oil and coal. They increased the price of coal. The Polish exporters have had a contract for a fixed amount per annum until 1980. They increased their price this winter. We received an extra shipment in January and that is why coal supplies did not run out. The price of coal went up by 75 per cent because of the scarcity of oil. The position about ESB oil is peculiar. For many years the ESB had had a policy of buying in the open market. We have had the benefit of that purchasing policy. The price of electricity in this country has been at a level which was lower than that in many other European countries. They bought about 50 per cent of the oil they use from the Russians. They got the oil at extremely competitive prices up to last October. Once the oil became scarce, as businessmen the Russians increased their prices because they obviously could get much higher prices. The world wanted oil in the last three months of 1973 and the first two months of 1974.

I spoke on the 11th of December. I had got news that throughout the importing countries for oil products there was considerable confusion and people did not know the position. The producing nations changed their minds weekly about what they would do. At one stage they announced cuts of 5 per cent per month; at another stage an increase of 5 per cent per month was announced; in December they announced they would double the cut for January. It was a confused situation. Information one had one day would be out of date the next day. One could not see further ahead than the next week. One did not know what price would be asked or what quantity of oil would be available.

It has been said that I had only the oil companies as a source of information when I spoke in December. That is not true. I get most of my information from the oil companies because they have 85 per cent of the oil between the three companies in this country. Eighty-five per cent of the oil products in this country are handled by the three companies and I get information from them. A member of the Irish Embassy staff in London is in daily contact with the Energy Department in London. Every week officials from my Department have meetings in the EEC and in the OECD in Brussels. I have been to London myself to talk to the previous Minister there about the situation. He was as concerned as I was, and also unable to see into the future about oil supplies.

Where was he getting his information?

From the EEC and the OECD also. They have representation also in the Middle East. We have not any representation at the moment there. We have not representation in any of the Arab countries. The British have that further source of information. When I spoke on the 11th December I said that the information I was getting was that by January the shortfall in supplies would be about 30 per cent.

The order we proposed and which fortunately did not issue—again Deputy Barrett criticised me for this and said that people do not know until the last minute; that is the way it must be, when information changes so quickly — for January would have shown a 30 per cent cut. But on Christmas Day, as many Deputies heard on the news, the Arabs decided they would not make any cut in January. This was six days before January came. They decided to double the price. We were then faced with the choice of continuing with the order for a 30 per cent reduction because we would not get the increased production into our system until the first or second week of February or, taking a gamble, run down our stocks and make the order less severe than it would have been. That is what I decided to do, to run down stocks, take a gamble and bring in a reduction of only 20 per cent. Again, this proved to be the right decision. Our stocks ran down to a very low level at the end of January but have now come up again. We were in a fairly critical supply position at the end of January.

A further complication in our case arises because half our oil supplies come from the United Kingdom. One would normally expect that part of the back-up for that half would be held in the United Kingdom, but because that was a foreign country even though in an integrated market we had no way of checking whether these stocks were held for us. The oil refinery here produces 50 per cent of Irish requirements. They do not make profits here. There is no way of checking on their profits because even though the company is registered in Ireland it is wholly foreign owned. the Irish refinery is paid a commission to refine 2½ million or 3 million tons of oil every year and give it to the majors. It does not matter what the price of oil is; their profit is exactly the same. If oil prices treble it would make no difference because they would get the same commission for handling the same quantity of oil.

The same thing applies to the company to which Deputy Barrett referred to earlier. For a number of years they have been returning the same minimal amount of profit. They are not a profit-making company. They act on commission and have no stocks here on which they take profit if the price goes up. They are owned by the parent company in England.

The Minister has approximately four minutes left.

I thought it was 7.10?

Seven minutes past seven.

I am sorry. I thought I had another seven minutes. In the case of that company, unless their commission rate changes, if they are putting through the same amount of oil in 1973 as in 1972, their profit remains the same.

I did not realise it was so late and as I have so little time left I want to quote from page 49 of the National Prices Commission Monthly Report, No. 23 of November, 1973. The commission is composed of Professor Ryan, Professor of Political Economy; Mr. Liam Connellan nominated by the Confederation of Irish Industry; Mr. Peter E. O'Brien, nominated by the Federation of Trade Associations; Mr. John F. Carroll nominated by the Irish Congress of Trade Unions; Mr. Harold O'Sullivan; also nominated by the Irish Congress of Trade Unions; and Mrs. Mairéad Allen, nominated by the Irish Housewives' Association. These are the people who decided how oil prices should be fixed in the future. Their report says in paragraph 77:

In our view, the aim of price control in present circumstances

—this is in reference to oil and petrol prices—

should be to make sure that the Irish consumer does not have to pay more than is necessary to ensure the maintenance of supplies. If the maximum prices were fixed at levels which were too low, petroleum products would not be supplied to this country but would be sold in markets where more lucrative prices could be obtained. On the other hand, if no control were applied in a situation of scarcity when consumer resistance was low, prices could rise to levels at which Irish consumers were being exploited.

Paragraph 78 then says:

We believe that the best arrangement for the coming months

—I want Deputies to note those words—

would be to link the maximum prices of petroleum products in Ireland to those charged in the outer zone of the UK. We therefore recommend...

Paragraph (f) on page 50 says:

that the operation of the recommendations at (a) and (e) above

—these are the recommendations I have quoted—

should be reviewed by the commission at three-monthly intervals and that during the currency of the proposed new arrangements the companies should provide the Minister with such information as he may from time to time request from them.

There is a built-in safeguard for the Irish consumer in regard to the price of petroleum products guaranteed by the National Prices Commission.

The most conclusive proof I can give the House of our successful handling of this crisis—it makes the Opposition argument sound extremely hollow—is that in every single week of 1974 up to last Friday the number of people unemployed has been lower than in the same period in 1973. In other words, despite the energy crisis —I do not know how many other countries have been able to do likewise; I should like to know—in every single week in 1974 fewer people have been unemployed than in the same period last year. That is proof that we handled the crisis correctly. It is the final proof of the correctness of our policy of seeing that where oil supplies are available they should be used as far as possible to keep people in employment. There is the proof that we were successful in that aim. There will be two other Government speakers later and I shall ask one of them to deal with the future. I am sorry I did not realise the time had run out.

We would have allowed the Minister to continue if he had some important announcement to make.

Standing Orders lay down 30 minutes for speakers other than the mover of the motion.

I could sacrifice some of my time but the more I listened to the Minister—and I do not say this facetiously—the more I was convinced that a motion of this kind was necessary. The longer I listened the less I knew about the reason for all the panic and trouble we have come through and about the future position.

I shall begin by referring to the Minister's final statement. While there was little change in the employment situation during the crisis I do not think the Minister did anything that would avert serious unemployment. The price rise intervened in time to make supplies sufficiently plentiful. You can get McGreedy roses with oil again. The price is high enough to justify it. I see the signs out on some petrol stations today. We had reached the stage where nobody knew what was happening. How the Minister can claim that he took any action that did anything to allay the anxiety of a panic-stricken public during that time beats me. You pulled in at petrol pumps and waited for hours. Some said they would have petrol now; others said they would have it again. You went away and you found that somebody coming an hour afterwards got petrol. I saw people engaged in fisticuffs in this city at 8 o'clock in the morning when they had been queueing from 6 o'clock. Many of these people were private motorists who had nothing to do but go out for the weekend. Supplies for them were not essential. At the same time, industry was told to cut down. In spite of what any other country may have done, I do not accept that it would not have been a good thing to introduce rationing here. The Minister should have ensured that essential industry got its full share to enable it to keep going full-time, irrespective of what the private motorist might say. He could have stayed home for the weekend and one weekend out of four would have been sufficient for him to visit the golf club. It was more important to keep the wheels of industry turning.

I saw boats tied up at Killybegs pier. I wrote to the Minister's Department and was told that the fishermen should get in touch with the local petrol company. That was all the information I got. There were thousands of pounds worth of herring in the sea and the fishermen could do nothing but hope that something would happen the next day which would enable them to get fuel. We were on the verge of a crisis which was averted only when the oil bosses met in Europe and said that things would improve. They did but the oil bosses made sure that they would not lose any money on the transaction. Somebody would suffer but it would not be the go-between. What did the Minister do to ensure that there would not be any exorbitant profits on the charges between the producer and the consumer? This sort of thing aggravates the consumer.

As the Minister admitted, at one time the situation looked very serious. The front page of every national and provincial newspaper carried headlines about a coal shortage, a gas shortage, an oil shortage, oil prices rising and coal prices rising. Machine-won turf was not available at one time. Everything was collapsing. I expected legislation to be introduced and a state of emergency declared, tax reduced on petrol and VAT removed. I also expected that the tankers going around the country advertising different companies would be put together as one company, to do one service and one delivery, that petrol would be rationed and coupons given to those who had bought petrol in the past.

It is a good thing that there was a change of Government.

The Minister was politically motivated.

The Deputy is suffering from retrospection.

The public are agitated about this and have not yet got any answers. They blame us because we did not elicit the necessary information as to what happened. There were people who did not get their supplies. Others tried to run on short time. The Minister stated that there was no significant reduction in employment. A rise in employment was bound to take place as a result of the increased number of factories attracted to this country. We have not reached the target which the IDA set for us. We still have 65,000, 75,000 or 80,000 people unemployed. It is incorrect to say that the handling of the oil situation had something to do with that.

There are a number of things which could have been done and can yet be done. At the beginning we were all prepared to accept that the Minister was caught on the wrong foot and knew nothing about supplies, storage, distribution and the quantities we were importing. We were prepared to accept that as a new Minister he had no experience. The public were left in ignorance of what the fuel situation was. Surely enough time has passed and enough petrol has been pumped into the tanks of many vehicles since this shortage began, for the Minister to know better than to tell us that he saw a report in a newspaper recently about something which will happen. Every Department which has anything to do with energy —coal, turf, fuel, industry, the provision of oil—should co-ordinate their services and spell out in black and white what future requirements will be. If there is a crisis coupons should be issued immediately in order to ensure that essential industries get their supplies. This has not been done.

Against the advice of the economist in the ESB we insisted, for social reasons, on building turf-producing power stations at Arigna. It had social, national and confidence values for the areas which were being denuded of their population. We pointed out that there could come a day when we would be glad to have a station using native fuel even though at that time it was less economical. The day of the roses, medals and so forth at petrol stations could not last forever. The time had to come when somebody would discover that there was more money in oil than was being taken out of it. The people who produced it saw that they were not getting enough. Nobody could blame them for that because what they were getting and what we were paying were two very different figures. When the multi-nationals got together during the shortage they saw an opportunity and exploited it. It was interesting and revealing to read the evidence of the committee held in Washington which put the multi-national oil bosses in the dock and questioned them. Out of this catastrophe the only person who was hurt was the consumer.

We have almost reached a stage where we are made believe that we would be very lucky to get oil at any price. It could be got under the counter if you were willing to pay enough. Controls were removed so that the price could be raised without notice. Then price fixing began and the shortage declined. Now one can pull in to a garage and ask to have the tank filled.

What is being done in places like Donegal, Mayo and Kerry where there are ample supplies of peat? This is a fuel which can compete with any other. No extra money is being provided for bog roads. We are told that the price of oil will rise further. Some of the money could be taken out of oil and used as grants for bog roads. Then our people could get the turf from the bogs. This would give employment as well as providing a cheap native fuel. The Minister has not given an undertaking that anything will be done about this. He spoke about how carefully he manipulated and took a chance with existing stocks and that when the stocks were exhausted we were lucky to get some more. We were told on a previous occasion by the Minister for Industry and Commerce—in this House, I believe— that the stocks were allowed to run down so that the dearer fuel would all be coming in at the same time as far as possible and that the cheaper stuff should be exhausted first. The Minister tells us today that he took a chance and let the stocks run down.

Can the Deputy quote the reference?

It was only when the Minister said he took a chance and let the stocks run down that I remembered the Minister for Industry and Commerce telling us that the dearer fuel was now to come in, that in order to prevent people having the opportunity of selling what they had in their tanks at the new dear price, it was permitted to run down.

He never said that.

I will be pleased to agree with the Minister if I cannot produce the proof of it.

They were going to put turf in the tanks. That was the idea.

(Interruptions.)

You were damn glad to have turf at one time and you will be again.

He represents Dún Laoghaire-Rathdown, of course.

Retrospective wisdom. It is great.

Many aspects of the crisis were revealing. I thought the arrangement the ESB had for the purchase of oil was a rather slipshod one. They had no guarantee except some sort of price clause which would permit the suppliers to increase their prices with the shortest possible notice. They had no bulk or quantity guarantee over any period and storage seemed to be lacking. It is hardly necessary to ask the Minister whether he has put these things right. I am sure he has. I am sure he has seen to it that they have three times the storage they had and that their contracting system has been changed, that as far as possible the people who have this valuable contract will supply them, and that we will not have frightening notices to the public. I would have liked to have heard the Labour Party on this side of the House if we were over there when it was announced that ESB charges were to be doubled almost overnight. There was not a cheep out of one of them. Everything was O.K. There was nothing to complain about. I do not think the public will take all this lying down unless they get some better explanation as time goes on.

Bord na Móna, or the Minister or somebody on their behalf made an announcement recently that they are to invest several million pounds in expansion. I should like the Minister or some other Minister to tell us from what source the money is to be derived. Will it be a public issue? Are they committed to raise capital from the European Bank or from any other international fund? When will work get under way? To what extent will there be expansion and where will the new sites for development be? We are most interested in those things. Those of us who are not ashamed to come from that part of the country which has some native fuel are interested to know to what extent an urban-minded Government are interested in the affairs of the west of Ireland.

It has been published. I will send the Deputy a copy.

This information would be of tremendous interest to all of us.

It was published about a month ago.

I failed to get the locations. Is it to be briquettes or machine-won turf or both? Will there be an expansion in the Glenties, for instance?

I will send the Deputy a copy.

I would be glad to get it, particularly with regard to the date and the cost and when extra production will be available. I should like to know whether there will be any further ESB power stations established using Arigna coal. I have been asking that of people who I thought would be in a position to know and I got the amazing reply that any further stations to be built could not be in Arigna, that they would have to be nearer to Dublin. I hope that is not correct. I was told that in order to feed into the national grid they would have to be sited somewhere near this over-expanding capital where you are attracting the people from the west of Ireland to live in poor housing conditions and leave their houses vacant at home. We would prefer to see industries being provided for them in the places they are leaving. This is an opportunity to establish further power stations in addition to those in Mayo, in Donegal and Leitrim. These stations were established thanks to the wise judgment of Seán Lemass and contrary to all the advice available to him at the time from the economists of the ESB. We would like to have three or four more of these and not to be depending on the Arabs or any of the multi-national magnates to supply us with fuel.

This motion tabled by Deputy Barrett is a very useful one and may succeed in eliciting some of the information we want. I am completely disappointed that up to the present no formal approach or no real organised effort has been made to deal with one of the biggest crises that this Government have been called on to meet—and have failed to handle— since they came to power just a year ago. I have occasion to do a good deal of motoring. We do not like drawing unfavourable comparisons these days between here and Northern Ireland but I could frequently depend on getting my supplies there whereas here you got 50 pence worth and had to drive from one station to another. At one stage I had a man in Virginia, County Cavan, pleading with me to ask the Minister to introduce rationing because their lives were becoming intolerable. If they gave only a little petrol, it was no good; but if they gave none at all, it was even worse. Then suddenly we find that so long as it is dear enough we can get as much as we want.

The problem with regard to coal came at a very bad time. There was some explanation given at the time by some of the biggest importers. I do not think the Minister made any pronouncement on the coal situation at all. Some of the big importers pointed out that the oil restricted countries had grabbed bulk shipping at prohibitive rates and shipping space was not available except at almost prohibitive cost with the inevitable result of rising prices. We suffered in Donegal. In one case the nearest place to which shipping could be got was Galway and the cost of bringing it from Galway to Donegal had to be added to the price of the coal. Some of the most respectable and best-run business organisations in the county were involved. There was no question of black-marketing. They were actually doing with a smaller profit than they had before.

Debate adjourned.
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