International Energy Programme Agreement: Motion.

Debate resumed on the following motion:

That Dáil Éireann approves the terms of the agreement establishing an international energy programme.

—(Minister for Transport and Power.)

Mr. O'Malley

Last November in Chicago Dr. Kissinger, the United States Secretary of State, made an important speech in which he warned the western world in particular that the high prices for crude oil fixed by OPEC threatened the future existence of the western industrial world as we have known it in recent decades. That speech and sentiment was probably true for the most part but since then and since the amendments to the agreement we are discussing were initialled in October and November, 1974, there has been a major change in the United States policy in relation to oil and in relation to the sentiments expressed by Dr. Kissinger last November in Chicago.

These are of great significance because the sentiments of the United States at the time of the original signing of the agreement may not have been totally in conflict with our interests and with our sentiments. It appears that since this agreement was originally signed and its amended form signed on behalf of the Government, the United States has changed the rules and we are now being asked to approve an agreement that is significantly different. At least the circumstances are so significantly different that its meaning and effect will be different from what was originally intended.

When dealing with details of the agreement I shall say something about the voting system that is proposed to be established in this authority. The voting system is such that it is totally weighted in favour of the United States and its interests. An example of this is that as the agreement stood when it was signed at Brussels on 13th November, 1974, there were what were described as 100 oil-consumption voting weights distributed between the various countries who were then part of the agreement. The United States has 48—in other words it has 48 per cent of the muscle straightaway and if anyone else goes with the United States it has almost control. The extraordinary situation is that Ireland under that heading has no votes at all. The only other country with no votes, because like ourselves it was considered of no significance, was Luxembourg.

When we see the total dominance of the United States in the context of this agreement we must consider the current United States policy. They have changed ground since the November, 1974, policy.

The present proposal of the USA Government is to put a 3 dollar-per-barrel tariff on imported oil from OPEC. Their second proposal is to remove price ceilings on domestic US oil so that it will climb to the level of imported oil. Thirdly, they are now endeavouring to negotiate a floor price which is not much below the present level. Furthermore, they incorporated in that floor price for oil a built-in escalating clause to cover world industrial inflation.

The current proposals of the US Government in relation to this agency, which is virtually controlled by the US, can be summed up as being proposals which in each instance suited the interests of the multi-national oil companies, and I do not think it is unfair, as has been suggested by Deputy Barrett and others, to say that the interests of the multi-national oil corporations and of the USA and their policy in relation to oil are almost synonomous.

We are, therefore, putting ourselves in a situation that we are going into an authority controlled by America whose policy, in turn, is identical with that of the multi-national oil corporations whose activities we have had so much reason to resent in this country and others in recent years. It is no wonder that the public are confused. First of all, the US Government said that high prices are intolerable and then a few months later their objective seems to be actually to make them higher in the US and to stop them from falling in Europe.

The agreement we are now being asked to endorse has been formulated under the influence of the USA whose so-called energy policy is completely muddled with contradictions as between what they are now seeking to achieve and the principles which they propounded through the Secretary of State in Chicago last November. Participation in the EEC and the OECD should not diminish our traditional aspiration with regard to non-alignment with power blocs. We now enjoy international acceptability and credibility with regard to neutrality and independence not disimilar to the countries traditionally regarded as bases for international aid, such as Sweden and Switzerland.

We ask the Government here, before finally committing us to this agreement, to look at the circumstances which would bring the agreement into effect. The greatest single possibility of its being brought into full effect would be consequent on OPEC retaliation to political provocation initiated in the turbulent mess of Middle East politics, or because OPEC retaliated against an authority such as this which they would rightly feel had been set up as an authority in some way in direct confrontation with OPEC's best interests.

These are the obvious circumstances in which this agreement would operate and we should clearly recognise that. If we do, we must appreciate that we are being drawn into an area which is fraught with danger. We will be labelled because of our association with this authority and because of our association with those who dominate and control the authority. No case has been made from the Government side, as far as we can see, to show why it is essential that we should ratify this agreement and become part of this new proposed energy authority.

All the evidence in the past 18 months causes us and many other people to have the gravest reservations with regard to any proposals related to oil or energy which emanate from the Government. I would suggest to the Government that there is a strong case for us now to give serious consideration not to join this proposed authority to which we are provisionally committed but to stay away from it and, as our own resources become developed, to consider joining OPEC.

We now know we own a substantial gas field. The indications are that this country now has under its control a certain amount of oil. We do not know yet whether the amount will be sufficiently large to make it a worthwhile commercial find but the indications are that that may well be so. The fact that we are certain we have a substantial gas find and that it is likely we have a worthwhile oil find is of tremendous benefit to this country.

When the Minister for Foreign Affairs spoke on this the other day he saw fit to criticise the arrangements which put us into this situation of having oil and gas fields developed within the jurisdiction of the Government. For many years he and others, by innuendo and otherwise, suggested that while Fianna Fáil were in Government after the last Coalition debacle in the 1950s they made a bad arrangement. But we are now in the situation that this same agreement which the Minister for Foreign Affairs and others criticise actually qualified us for entry into the OPEC group. It has given us the means, without any cost to this nation, by which we can prove to the world that we have under our jurisdiction an energy source and this has created the widest possible interest among those who have the financial resources and expertise to prove and develop the extent of the oil and gas within our jurisdiction.

I suggest that we should now begin to identify ourselves as a producer nation. We should now be formulating an intermediate energy policy until we extend our area of known deposits and get them into production.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

Mr. O'Malley

The agreement which was made at the end of 1958 and beginning of 1959 with Ambassador Oil was at that time a considerable step into the unknown. It had then, and it still has, great implications. It would be no harm to remind ourselves of the atmosphere in which that agreement was subsequently ratified by the Oireachtas in the Petroleum Development Bill, 1959, which was passed in the Seanad in early 1960 and became the Petroleum Development Act, 1960. The agreement had been negotiated by the late Deputy Seán Lemass at the end of 1958 and the beginning of 1959, when he was Minister for Industry and Commerce. He became Taoiseach in June, 1959, and the Bill to ratify the agreement and to establish the various conditions in relation to exploration and mining for oil was introduced in this House by Deputy Jack Lynch, who was then Minister for Industry and Commerce.

Deputy Lynch said that this agreement had been made, that it had already been laid before the House and that it did not seem to the Government that there was any great likelihood of petrol or oil being found, that they had been so advised but that nonetheless, as this company wanted to explore for it and as they were prepared to pay a large sum of money to do so, $5 million, that the Government could see no objection to allowing them to do so.

That was the general atmosphere during the debate and it is perhaps brought out best by what the late Deputy William Norton, who was then the Leader of the Labour Party, had to say when he spoke first for the Labour Party on it. I shall quote the first paragraph of what he had to say from column 825 of Volume 177 of the Official Report. He said:

I welcome this Bill as, I think, will Deputies in all parts of the House, but I think it should be approached in a sober and very reasoned way. Nobody from a hurried reading of tomorrow morning's papers should get the impression that we will have gushers in stream next month or that the danger is that petrol will be flowing over all the main roads in the country within the next 12 months. However, if we recognise at the outset that this is really a shot in the dark, that this is a highly speculative project, that it represents an effort to discover oil where our own State geologist says that, in his opinion, there is no oil, then we get a more sober and realistic approach to the possibilities in this respect.

That is representative of the general approach of the various Deputies who spoke in that debate. Deputy Norton was preceded by the late General Mulcahy who devoted almost all his speech to a criticism of the provision in the Bill whereby farmers would be compensated by people drilling for oil for damage that would be done to the surface of their lands and to their crops. If, Sir, you read the Committee Stage debate, which follows in Volume 178 and which took place during the months of November and December, 1959, you find that the great bulk of that debate was confined to the topic to which General Mulcahy kept referring, namely, the question of compensating farmers for damage to their land. There was practically no discussion whatever of the principle underlying the Bill or of the principle underlying the agreement with Ambassador Oil, which appeared to have been totally accepted by everyone on all sides of the House at that time and recognised for what it was— an effort, in the words of a subsequent speaker, by an American firm to come in here to find oil when everyone knew perfectly well that there was no oil but since they were going to spend $5 million here we could not but benefit by it but, of course, everyone knew they would get nothing, so if they were so foolish let them on.

Mr. B. Desmond

You have lived with the mistake for 17 years. That is a peculiar piece of self justification is it not?

Mr. O'Malley

The principle of this agreement and of the Bill ratifying it and establishing the principles on which oil exploration be carried out was accepted at the time by everybody.

So far as the late Deputy Seán Lemass is concerned, instead of his now being criticised for having come to that agreement with Ambassador Oil in 1958, it must be regarded almost in the same way as his other great achievements like Shannon Airport and the Shannon industrial zone, as a tremendous achievement for this country because by virtue of that agreement we now know that we have within our jurisdiction oil and gas, certainly gas in commercial quantities and hopefully oil in commercial quantities. At the latest count some few months ago I understand there were 93 separate companies queued up trying to get from the Minister for Industry and Commerce exclusive exploration licences, 93 companies who want to come in here and arrangements can be made with all of them.

The degree of ignorance in relation to the possibilities of oil and gas at that time is best illustrated when one examines the emphasis in these debates entirely on exploration on land. Off-shore implications were barely referred to in passing at one passage of the Committee Stage debate. Subsequently there were protocols which accepted the principle that for minerals and oil the boundaries of the nation extended beyond the traditional landmarks which remained above sea level and right out into the depths of the sea over submerged continental shelves. This agreement with Ambassador, subsequently taken over by Marathon, having regard to every circumstance, was not then and is certainly not now the give-away that is constantly alleged.

Mr. B. Desmond

Deputy Haughey voted against it in the Cabinet.

Mr. O'Malley

If the Deputy would restrain himself, I am sure, Sir, he can make a speech when I am finished.

Acting Chairman (Mr. M. E. Dockrell)

The Deputy must await his turn.

Mr. B. Desmond

Deputy Haughey said it was terrible only a few weeks ago.

Mr. O'Malley

It will give us, without any risk, a much greater monetary return without any loss of credibility in so far as investor confidence is concerned than all the gimmicky public relations exercises performed by the Government in their negotiations with Tara Mines. The sums are simple and I will give an example at current day prices of what we stand to gain. We have a right to a production royalty which, if oil were extracted tomorrow—I am taking the current international price of $14.50 per barrel —of $1.81 per barrel without risk at royalty rate of 12½ per cent on production values.

Do that. We are also entitled to 40 per cent of the net profits under this agreement after giving credit for the royalties. It is an important proviso in the agreement as I understand it—it is a little difficult at one point to be quite clear on it—that if the production royalties exceed 40 per cent of the net profit, we are entitled to insist on the payment of the production royalties anyway. It is even stated in the agreement that, if the company are operating at a financial loss, we are still entitled to our royalties.

Taking the present posted price of crude oil per barrel at $14.50, our royalties at 12½ per cent are $1.81. The realisable price at the moment at the well head for crude oil is $9 a barrel. The projected average North Sea production cost per barrel of crude oil is $5. The Arabian cost is a little over 10 cents but that would not be relevant to our conditions which would be closest to the North Sea conditions. Therefore, the total payment by the company to get a barrel of crude oil out of the sea south of Ireland would be $6.81 assuming current prices held. They can sell it at $9 which gives them a gross profit before they pay any expenses of $2.19 a barrel of crude oil. Their expenses are difficult to estimate and it is difficult to arrive at their net profits because they depend on a number of factors of which we have no knowledge yet. Taking their gross profit at $2.19 and taking the State's share at $1.81, by taking our production royalties, we have an income of about 45 per cent of the total income out of each barrel of crude oil.

I referred earlier to Tara Mines. This party suggested very strongly that, in relation to that mine, or any other mining, or oil producing, or gas producing proposal, that it is very foolish for the Government of a country like this not to insist on a production royalty because, with a production royalty, you get paid for every ton, or barrel, or whatever the quantity might be, of gas or oil or minerals. Whether the company are operating at a big profit or a big loss, or just ticking over, the State will get the same. The State is at no risk. It has no worries. It simply has to collect the cash.

That was the arrangement made by the late Deputy Seán Lemass in 1959. It is a very good one. It has suited us that prices have risen so much since because our royalties can be correspondingly higher. The decision which faced the late Deputy Lemass and the Government and the country at the time was that we were told on the highest authority available —by the State geologists and various other geologists—that there was no oil in this country. The company, Ambassador Oil, came from America and said: "There is just an off chance that there is oil and we would like to have the chance to search for it. We are prepared to expend $5,000,000 in Ireland." The Government decided this was a free way of getting the possibilities of Irish oil and gas reserves discovered, that it was a very efficient way of doing it, and that a lot of money would be poured into our economy as a result even if nothing was found. Of course they realised there would be inestimable benefits to our economy if anything were found.

Happily the late Deputy Lemass was proved right. Gas has been found in substantial quantities and oil in promising quantities. There are 93 companies waiting to move in. If ever there was justification for the foresight of that man it is to be found in what he did in 1958-59 in this regard. This suggestion about throwing our resources away and all the rest of it is totally at variance with the facts. I understand that Deputy Desmond has gone off to read the agreement.

Mr. P. Barry

The Deputy said a moment ago that it was Marathon who had the foresight and that the late Deputy Lemass did not believe there was oil there.

Mr. O'Malley

Marathon said there was a chance. Deputy Lemass was advised that there was none, but he let them in and told them they could go ahead. It would not cost the Irish people anything. In fact, they got $5,000,000 invested here which would not otherwise have been invested here. We now have all the benefits of having found oil and gas. How Deputy Lemass or the Government of the day could be criticised for having brought about the situation we are happy to be in today, I do not know. Surely this was the greatest time for them to be found when the price of oil from the Arab countries went up by 300 per cent or more.

I want to come back now to the agreement and to examine the assumptions arising from the effects of energy conservation and the contradictions which I pointed out in US energy policies which, because of the weight of voting, make US policies synonymous with the energy sharing committee policies. First, I do not think anybody can quantify precisely what reduction in consumption will occur because of the tariff impositions in the United States, or say that US domestic producers encouraged by higher prices will produce more oil from American sources. Most experts seem to agree that there is little chance of a significant increase in domestic US production, which has been declining for years. Despite the doubling in the price of US domestic oil, from $5.50 to $11 a barrel for oil from new wells, production fell by 600,000 barrels a day last year.

Secondly, tariffs on OPEC oil will not affect OPEC. They have a capacity of nearly 40 million barrels a day. They have already reduced production by 25 per cent in order to hold up prices and they seem capable of winning any price battle with the benefits of their financial resources and their limited home demands for oil. The suggestion that higher prices will reduce demand might well be valid, but it is also ammunition for the OPEC countries who also have access to the statistics which our Minister for Finance said our creditors watched, when he failed to fool us as to the reasons for his infamous 15p rise in the price of petrol in December last.

The OPEC countries see the resources accruing to consumer treasuries from taxes levied on petroleum products, and OPEC countries are very easily tempted to ask for a price which the product will apparently bear in the way of cost to the consumer. With petrol at 71p per gallon the great bulk of that 71p is duty accruing to the Exchequer. With all the criticism of them for raising prices, the Arabs get only a small proportion of that. About 60 per cent goes to the Exchequer and one-third approximately to everyone else. That, of course, includes the profits of the multi-nationals. The Arabs have considerably less than one-third. If the Arabs see this vastly inflated price being paid for oil products, and particularly petrol, in Ireland and in every European country, are they not entitled to say: "Why should the Minister for Finance of Ireland, or Britain, or Finance, or anywhere else get four or five times more out of a gallon of petrol than we, the owners and producers, get?" Is there not a great temptation for the Arabs to say: "O.K. We will retail petrol at 71p a gallon and let the Minister for Finance battle on as best he can. They have to have petrol. If the Minister for Finance is going to tax it to that extent why should we not get some of the benefit? Why should we be confined to perhaps a quarter, or less, of the price the consumer is paying?"

Would we not be better off to build another refinery so that we would be in a position to refine 100 per cent of our requirements? If we were lucky enough we might have our own oil but even if we were not we could, without any by your leave to the multi-nationals, go to one of the OPEC countries and buy on the open market at $9 a barrel and either get it refined in Europe, where there is now surplus capacity, as Deputy Barrett has said on a number of occasions, or get it refined here. Would we not be much stronger in an emergency situation if we were free to do that? We are tying ourselves, instead of that, into an organisation in which the totally dominant partner is the USA. She has shown in the last six months a complete shift of policy in relation to oil because her multi-national corporations who call the tune there decided that would be a good thing. We have no guarantee that these terms suit us in the context of the changed American policy. Even if they did we have no guarantee that America would not radically change her policy again in another six or 12 months. If she does, there is nothing we can do about it. If she changes her policy, the facts are that under this agreement the whole organisation, which we are now going into, changes its policy also, because America is sure to get at least some of the others to agree. If she gets any two of the bigger countries, they can carry it.

We should let this agreement be examined more fully in the light of developments since it was originally signed. There is a provisio whereby the Government under the agreement can apply to the organisation to have the ratification date put back until some time after the 1st May. This is a very important agreement. There are many implications in it which I do not think anybody is fully aware of. The implications are liable to change from day to day and from week to week as the domestic and foreign policy of the USA changes. We will have to reassess the wisdom or otherwise of our going in. We will have to reassess the effect it will have on our own supplies coming on tap within the next couple of years.

I suggest that the agreement be put back for three months to enable the necessary examination to be carried out in the light of changed circumstances and changed American policy. I have no doubt that the organisation concerned would agree to a request from the Government because there is an article in it which allows that to be done. I am sure they will be quite reasonable in that regard. I ask the Minister to postpone the agreement for a period of three months. If he does not do that, I am afraid this party are seriously worried about the implications of this agreement and in the national interest we, and anybody on the other side who is seriously worried about the implications in the national interest of the agreement, have no option but to vote against it.

Mr. Callanan

This agreement proves to me the irrelevancy of this House. The Minister devoted 15 minutes to informing the House of the agreement and since then we heard the views of three front bench members of my party, Deputies Barrett, O'Kennedy and O'Malley. However, we have not heard the views of any members from the Government side. Deputy O'Malley has pointed out that this agreement may be detrimental to this country at a future date, particularly if we become an oil-producing nation, and I agree with that view. The problem about these international agreements and EEC directives is that the Government make no attempt to have them discussed in this House before they are signed. This agreement is before us merely for sanction but it should have been discussed in the same way we discuss a Bill on Committee Stage. If we did that we could discuss the agreement line by line and then the Minister would be in a better position to assess the benefits we could derive from such agreements.

I am suspicious of the agreement. The agency mentioned in it will be run by the Americans. The Americans will have the biggest number of votes but we will not have any vote. Even though we will not have a vote, we will be obliged to obey all the decisions of that agency. In my view the agreement will prevent us from having any direct negotiations with the oil-producing countries. Because of the amount of tax collected on oil no one could blame the oil-producing countries charging more for this product. In a case like this I should like to hear both sides of the argument because I have not had an opportunity of considering the agreement in detail. I try to assess motions before this House objectively and never with the intention of scoring political points but I have only heard one side of the argument in this case.

I agree with the suggestion of Deputy O'Malley that we should adjourn further consideration of this motion until we have had an opportunity of discussing the details of the agreement. I will not vote in favour of the emotion because we have not discussed it in detail. I am annoyed and worried about the agreement. I cannot understand why more time is not devoted to consideration of international and EEC agreements. This House should be given an opportunity of debating them for at least two days. In this case we are told that the agreement has been signed—a case of take it or leave it. The agreement will be sanctioned by this House because the Government have a majority but the Minister has not the views of all Members. I expected that Deputy Barry Desmond would put forward the Government and Labour Party point of view but he did not offer.

When the first explorations for oil were carried out nobody, with the exception of the late Seán Lemass, held out any hope of an oil find. The people who carried out the explorations were laughed at. I sit in on as many debates as possible for the purpose of being educated and for this reason it was disappointing that the Members on the Government side did not contribute. I know Deputy Barrett's views. I know he holds very strong views in regard to the question of more oil refineries here—buying crude oil for refining here.

There may be suggestions from that side of the House which would convince me, but such suggestions have not been forthcoming. It detracts from the prestige of the House that a good case has not been made by the Government side in favour of this agency of which we are now asked to become a member. I did not intend speaking on this matter at all, but I could not sit here and be told: "This is an agency we are joining. We think it is good for you. We will tell you a little about it." I understand the agreement is a long document which would take much time to study. I could not allow the Minister wind up this debate without giving my views, as an impartial observer, having no axe to grind one way or the other with regard to this agency. We are endangering this country by not discussing fully here, and objectively, any international agreement, whatever it may be. The way this measure has been brought before the House, without any explanation from the Government side, is not good enough.

I listened very attentively to the contribution made by Deputies O'Malley, O'Kennedy and Barrett, all of whom put up a very sound, solid case for reconsideration of the whole question of membership of this agency. I would make a final appeal to the Minister not to push this through the House, not to vote on it immediately, to study it further and, if necessary, put it to a Committee of the House if he does not want to have an open debate. I do not like these committees. I prefer open debate in this House because such debate serves to make any legislation going through, or any agreements made, internationally or otherwise, better. No matter how good a man is—and I am not casting any doubts on the competence of the Minister—he can always learn. We often heard it said: "I never went to a meeting yet from which I did not learn something." If one debates anything in any House, certainly one will learn something. Let nobody set himself up, no matter who he be, from the Taoiseach down, as somebody who can say: "I know all"—that everybody is out of step except our Johnny. That is something I should not like to see creeping in here. From the way in which this agency has been presented to this House it appears that we are taken for granted. I know the Minister had advisers. However the attitude appears to be: "This is good for you; take it or leave it." I do not accept that and never will accept it. I am indeed sorry Government speakers did not tell us more about the agreement, which we think endangers the country. We feel it is a dangerous agreement. Our policy is to oppose it unless it is left in abeyance pending a full discussion at a later stage, just as one would have on the Committee Stage of a Bill. Again I would appeal to the Government, when they intend entering into international agreements, at least to think sufficiently of the elected representatives of the people to come in here and say, for example: "We are about to enter into an agreement on oil. This is what the agreement will be like. We should like the House to discuss it for a day or two."

The same applies to the Agenda at EEC level. It is scandalous the way this House is being treated—this attitude of presenting us with a measure and of saying: "Take it or leave it." It is that to which I strongly object. As long as I remain here, I shall continue to voice that objection. I stand for democracy and democracy means informing people about what one is doing. Consultation is consultation with people, and informing them before one reaches agreement. Certainly coming in here and informing us that an agreement has been arrived at, with an attitude of take it or leave it, does not constitute consultation.

I shall conclude by asking the Minister, as did Deputy O'Malley, to refrain from putting this measure to a vote, study the agreement which, in my view, will have serious implications for the country and one which I do not think should be rushed through this House.

Mr. Carter

As Deputy Callanan has said, this is a very important agreement at international level. Surely it merits more discussion in this House than has taken place to date. Admittedly, there is very little in the agreement in so far as practical gains for this country are concerned. A good deal of it is wishful thinking. For example, we are very unequal partners; we are the little men in the middle.

We heard a good deal about oil when its price increased fourfold. Every second day of the week we had Government spokesmen speaking in terms of the damage done to the economy by the drastic increase which took place. We were all prepared, more or less, to accept that sort of statement. But we are not so prepared to accept at face value agreements said to be entered into and which will fall as a burden on the Exchequer later. We are not disposed to accepting empty statements or pious hopes. It is said sometimes it is better to travel hopefully than to arrive. But there is no appearance in this agreement of our having arrived at anything beyond a certain set of aims. No doubt the agreement establishes a number of praiseworthy aims. Perhaps I might quote briefly from the Minister's statement setting out the terms of the agreement:

The agreement establishes a programme whose main features include co-ordinated efforts to develop an emergency supply reserve, a scheme for restraining energy demands and sharing oil in a supply crisis, arrangement for gathering information on the international oil market, long-term co-operation aimed at conserving energy and developing alternative energy supplies and the promotion of a co-operative dialogue between oil-producing and oil-consuming countries, including those of the developing world.

To deal with the first point, apart from the widespread mention oil received in all communications following the increase in its price, we have not heard to date too much of the aims set out here. We heard of them in the international context. How much are we, as a small economy largely dependent on oil, doing? How much are we doing, for example, to establish, to develop and to co-ordinate in a general way our fuel resources? We read of developments on the Continent—for example, of a house which would derive its heating from solar energy. We heard an announcement some time ago that the ESB were interested in solar energy. I should like to hear further from An Foras Forbartha and other agencies about how feasible it is to heat a house here, on the Continent or elsewhere, by solar energy.

Not too long ago I read a short article on the subject. I was glad to learn that the Germans, who as usual make the running in matters of this kind, have a house on the market designed to absorb solar energy. I was further edified to read that the roof was made mostly of metal. The windows seemed to be small but there was one large window under the roof which provided a conductor for the heat to be dispersed throughout the house.

As a small economy, we find it hard to find the cash necessary to pay for our imports at a normal, rational level. It will be much more difficult to find the cash to pay for a fourfold increase. As I said, the Government made much of this early on but did not make enough of the ways and means of generating, conducting and conserving our supplies of energy other than oil. This does not happen overnight but one will never reach this point unless there are various studies carried out on this subject.

This is a small country on the rim of Europe, an intensely developing continent. We went forward as fast as we could to keep up with the modern usage of all types of energy, especially oil. This led us to be largely reliant on oil for not merely heat but power in general. Even at this early stage we should be doing more to encourage the ESB to look further into this question of energy from natural water reserves. We never did enough in this direction. Admittedly what we did was very costly, but we should have a secondary programme that would shore up and help take the weight off our main generating units.

When speaking of energy one might ramble too far, especially when one has not had sufficient time to study the matter in detail. It has been said that sometimes we were too ambitious when we asked the ESB to develop sources of power, the cost sometimes running into many millions of pounds. My main point is that we should have a secondary programme running in the same direction but on a more modest basis of expenditure and in a most modest way. In this way we could provide an auxiliary to our main generating units.

We talk about our high rainfall, about our lakes, rivers and mountains. I often wonder if we are making the best use of our natural resources. There are many sources of energy, apart from solar energy. There are physical sources of energy, such as fossilised fuels and so on. If we intend reducing our reliance on oil for energy, what auxiliary sources of fuel are there?

I suppose one need not make too much fuss on this point I am on at the moment. While we had oil we all relied on it because it was the cheapest source of energy. No matter what the consumer nations, some of them producers, who signed this agreement say, oil will never be cheap again and the price of oil will depend on the producer countries, and undoubtedly the producer countries will form various cartels in order to keep the price of oil at a level which will pay them well as producers.

Therefore, we would want to be careful in considering international agreements, who we make them with, in whose company they are made and so on. If one is a producer and at the same time a large consumer, one cannot be entirely on the side of either the producer or the consumer. Regrettably, being entirely consumer, we would be a small man in company of this kind, and this is the kind of company we are in in these international agreements.

Leaving other sources of energy aside and dealing with fossilised fuels, what information have we regarding these types of fuel to give us any hope that now or in the near future we would be able to mount a programme to harness them, with the aim of reducing our oil imports? For a long number of years we have had small power stations, for instance, Mount Allen at Arigna. We had a long battle to get the ESB to agree that any energy could be generated there, and they were very hesitant on the grounds of cost and so on at the time.

I am not a miner nor have I any mining experience, but we have a large bed, of what is known as ash coal, the exploring of which would be worth expending a certain amount of money. If this ash coal was capable of producing the energy we need, then we could examine further the question of extending the generating plant that is there already.

There are other types of energy under the ground that we know very little about. We heard nothing about our sources of energy before the oil crisis, but since then we have had a good deal of discussion on this whole matter of alternative sources of energy. We should have a survey of every field in Ireland to see what energy is under the ground. We have the geological office, but that is not enough. Geologists are not miners and would not be experts on oil or gas. There could be pockets of oil or gas located here and there throughout the country and we do not know it.

Instead of relying too much on international aid and agreements we should be doing a little more at home in order to discover, even in a small way, alternative sources of energy. The terms of this agreement read well and anyone could subscribe to them, but will they be adhered to? One point that struck me earlier on when this oil crisis arose was that although the EEC was a developing area, a common market area, those making up that area did not stand together on that question. In a community which is made up of units with common economic and political aims, I question their integrity when they cannot stand together in face of the crisis which the question of oil brought about.

Small and poor and all as we are, we have certain sources of energy at our disposal for which we should be grateful, and we should investigate further sources of energy in order to know what is available to us. Not too long ago I was reading various articles on this whole energy question. From one article one would get the impression that the oil consumers would comprise a large unit and would have some say in the ultimate price of this product. However, a spokesman for the producers, Sheik Yamani, after listening to some discussions between the consuming companies was asked, as reported in The Irish Times of Monday, April 21st, 1975:

With the collapse of the talks between the oil producers and the oil consumers in Paris, what do you see as happening next?

and he said:

First of all, I have to be sure that there is a collapse and that it's not an adjournment. If it is a collapse, then I think it is a serious matter and the result might lead to confrontation—which is definitely against the interest of the consumer. But if it's just an adjournment of the meeting, then I hope the talks will resume as soon as possible, and that the full conference will take place and there will be some sort of international co-operation in the way of energy and development.

He was asked then whether Saudi Arabia would push to try to have the talks resumed if they did collapse. We know that agreement was not reached after those talks but there is this agreement between consumers and hopes have been expressed of taking certain steps. However, the expressed intention of the oil producers is that never again will they work to supply the developing countries with a cheap source of energy. This is not an ephemeral matter but a long term one and we can be assured that never again will there be cheap oil available. In this context one might pose the question as to what is meant by cheap oil. If a number of the Governments in Europe removed tax from oil the product could be had at a reasonable cost but, regrettably, ways have been found of harnessing energy for taxation purposes. Consumer countries, be they large or small, should impress on their own governments the necessity for releasing a product such as oil from the grasp of taxation. We see on the one hand the price of oil being increased fourfold in a short time while on the other taxes are levied by various governments on this commodity. In these circumstances we can rightfully and in fairness call for a halt to this method of raising revenue.

Another matter which must be considered in the context of energy is the question of wastage. As I said at the outset, the Germans always do something positive about such matters, something that is calculated to move their economies in the right direction. One would hope that other economies would follow suit. The Germans argue that 60 per cent of the energy of a power station is wasted. Having regard to the degree of scientific aid we can call on, this is a matter that we should be able to do something about. Admittedly, German power stations are on a much larger scale than ours but our power stations are as vital to our community as are those in Germany to the community in that country.

It would be time and money well spent to devise ways and means of harnessing this energy which at present is being wasted. It is a great pity that this waste energy cannot be harnessed especially in built-up areas and that it be piped to where it would be needed for heating purposes. Initially, the expenditure for any such project would be very high and would invite much criticism but the effort would be well worth while in the long term if it resulted in the conservation of what would otherwise be waste energy.

I should like the Minister to have the matter of fossilised fuels examined and have a report on it so as to discover how far we can go in extracting heat from those known sources of energy. If we could accomplish this even at a higher price than we pay for oil it would be money well spent. I should like to be the Minister who could come back and tell the House: "We know our sources of fossilised fuel; we know what we have under the ground. We are beginning to develop it."

Bord na Móna have not been mentioned here of late but peat should be utilised so as to be a far greater source of energy than it is. Admittedly, very good progress has been made not only in producing sufficient fuel for some power stations but at the same time producing sufficient sod peat for consumers at large. Last winter when it was very cold I was commenting on the poor insulation of houses and the degree of heat wasted in every house in the country —that was only last January or February—and also on the fact that Bord na Móna many years ago patented a grate for burning turf. One hears nothing about it now. I have asked for this grate in many hardware shops throughout the country and they have never heard of it. Matters like this should be highlighted and Bord na Móna should be encouraged to raise the necessary funds this year to begin an all-out programme to provide all the energy they can. In doing this we would be doing a good day's work for the country in the long run.

Even last winter we did not have sufficient emphasis on the need to conserve heat and save the energy we have. I often wonder why Dublin offices are lit up so late at night. We should have a good programme to conserve heat in the winter months when it is most needed and also a programme for the insulation of houses. We have had a wonderful housing programme, public and private, but how many builders refer to insulation as an element in the general housing programme? That question should be asked not only here but outside the House. We hear very little about those sources of energy because that is what they are. Where there is wastage we should try to eliminate it and to conserve the energy we have. If we did this, I believe the Minister could report progress in the long run. It is the little things in life that matter most. It is said that the best things in life are free and that is the attraction in this matter. I do not suggest that energy or anything connected with it is free, but we could make a much better effort to conserve the energy supplies we have, find out more about them and use them more efficiently. If that were done we could cut down substantially on our oil import bill. By doing a number of small things all calculated to lead to reduced oil consumption and reducing waste of energy we could, in the course of a year or so, achieve substantial progress.

Mr. R.P. Burke

Deputy Carter has made an excellent case for the rejection of the suggested agreement on international energy programmes. In his considered, well-documented and ably-delivered contribution he has, point by point, destroyed the arguments put up by the Minister for the agreement. What the Minister suggests that we as a Parliament should do is sign away our potential energy resources, at a time when they are either obviously available or becoming available, to the large multi-nationals controlled by the governments of the large producers such as the United States—and not even producers but governments holding shares in the multi-national companies that are developing and using various oil fields not necessarily in their own countries but in other countries. Directly or indirectly, as a small nation we are handing over our power and our potential to the multi-nationals whether from America, or the Netherlands with the Dutch Shell company, or similar concerns. This is at a time when we should be doing the direct opposite, namely, holding our independence, preparing to go forth into a brave new world with our own energy resources and our own potential as an energy supplier rather than an importer and a user.

Debate adjourned.

Dáil Éireann debate - Wednesday, 23 Apr 1975

International Energy Programme Agreement: Motion.

Dáil Éireann debate -
Wednesday, 23 Apr 1975