I move:
That Dáil Éireann calls on the Government to prepare and implement a national energy policy based on the maximum use of the country's natural resources and making adequate provision for the protection of the natural environment.
It is not our intention in moving this motion to make a political football out of the energy situation—a motive of which we were accused twice recently in regard to Private Members' motions. Our purpose is to highlight the absence of an energy policy and to highlight also the importance of an energy policy to the welfare of the country. We all know that a stable supply of energy at an acceptable price is a prerequisite for all economic development without which social progress would be impossible.
During the last months of 1973 international economic relations were disrupted as a result of new policies pursued by the oil producing countries, better known as the OPEC countries. At first, the OPEC countries introduced restrictions on the output and distribution of oil and oil products. They then increased the prices of their oil exports by successive stages. This had its effect on the prospects for employment. At first, employment appeared to be threatened by cuts in production resulting from material shortages. From 1974 the threat came mainly from the impact of oil price increases and the threat to the balance of payments came from oil price increases. There was also the threat to domestic inflation and the threat to the pattern of internal demands throughout the entire country. The major consequence of these changes has been a substantial threat to the growth of real income in the short-term and a marked change in the pattern of world trade. The initial effect of higher oil prices is to reduce the purchasing power of any country and it happened in this country. It creates a substantial deterioration in the terms of trade which means that more real resources must be exported to pay for the same amount of imports. It created substantial change in the structure of internal prices which has resulted directly or indirectly in changes in the pattern of activities and employment within the country.
These basic elements of economic reality were capable of recognition in the first half of 1974—I repeat in the first half of 1974. It should have been realised that a reduction in the rate of growth of real income and price increases would have to be absorbed at a time when inflation had already reached serious proportions. Inflation was at that time disrupting the pattern of income distribution mostly to the detriment of the weaker sections of our society. Efforts by the stronger groups to maintain past rates of growth of real income by demanding higher money incomes could only lead directly or indirectly to higher unemployment. One thing is certain: there is a close link between economic growth and energy consumption. This became very obvious at that time and it was apparent to everyone in 1974. It follows, therefore, that an essential element in any economic policy should be a well-thought-out energy policy. Since 1974 we have awaited the production of an energy or an economic policy. We have not yet had either one or the other. Instead, we have had an example of somebody listening to the superficial statements expounded during those months of price increases between October, 1973, and April, 1974, and influencing Government policies of attempting to reduce consumption of oil and oil products by endeavouring to price consumers away from the necessary usage of these products.
No regard was paid to the particular situation of the Irish consumer, to the fragmentation of our population density, or to the essential factors in the amount of energy consumed in Ireland. If we take note of EEC and OECD exchanges in the energy field, we see in a world context and in the context of energy how necessary an energy policy is. Otherwise, the very means of sustaining life may be in jeopardy for the next generation.
The cost of energy input into the production and consumption structure has grown from £120 million in 1972 to between £700 million and £800 million today. That is the consumer cost. The escalation in cost input has not only contributed to the number of unemployed but has so affected production and consumption cost structures that the consequent aid to inflation has triggered off very significant influences, all of which in turn have affected the standards of everyone.
The Coalition Government, instead of responding to what was apparent in 1974, succeeded in fuelling the inflationary effects of the energy cost increase by imposing further tax on petrol, as we remember at the end of 1974 when they put 15p on petrol. We remember also the reasons given for this imposition—that so much of our petrol was going over the Border it was interfering with our balance of payments was the main one. The Government further extended the range of taxes over all oil products in the 1976 budget which added greatly to industrial costs and must have had a very serious effect on employment. That is the kernel of our criticism, the cost imposed by our own Government adding to the cost imposed by the OPEC countries in their various increases.
The Coalition Government ignored the need that became evident to all during 1974 and then compounded the problem created for the economy and the industrial and social structure as a whole by utilising oil products as a medium to finance current expenditure incurred by themselves in an effort to buy political peace or support during that period.
For three years we have been exposed to the myth of Coalition ability. Here is one classic example— one of many—where the problem, having been exposed so clearly that even a child could diagnose the cause of it, the Coalition did not attempt to remedy it but proceeded to add further complications to an already serious problem. The lack of understanding has meant that industrial production has not responded to the need for change. Our production costs are causing us to be priced not only out of the export market but even out of the home market. It is no use for the Government to say that we built a few houses without fireplaces—that was a decision made on the basis of facts prevailing at the time. The changed circumstances applying since 1973 should have encouraged action on costs since then. What are the facts since that time? The IIRS have been encouraged to assist in energy saving schemes—a very worth-while exercise in our opinion. The problem for Ireland is not just to save 1 per cent or 2 per cent, but to get the consumers' cost of central energy utilisation down by very much greater percentages.
The economy is to be motivated so that the aspirations of our people for an increased standard of living will be achieved. The Government should and must initiate policies which will substantially lower the cost of energy consumption across the board. We propose the establishment of an energy authority which will examine and report on the entire energy needs of the nation. Such an authority will be encouraged to recommend measures to achieve self-sufficiency in refining capacity. We are all aware of the importance of refining capacity and we stressed this at the time of the oil crisis in October, 1973 and have continued to do so. We have the capacity to refine 50 per cent of our oil requirement. The remainder, about 2.5 million tons, has to be imported by way of products from other countries and other refineries.
I am glad to see the former Minister for Transport and Power here tonight. He told us in 1973 that we were in the hands of the multi-national oil companies. This party maintain that we are still in the hands of those multi-national oil companies. We have no more control over our oil and energy supplies now than we had in October, 1973. We still have the refinery at Whitegate. Even though it does a good job supplying 50 per cent of our oil needs, we are still dependent on the multi-nationals and outside influences for the remainder of our oil requirements.
If we were self-sufficient in refining capacity, we would at least have control over supply and cost. Without adequate refining capacity we cannot have this control. This means that we are still in the same position as we were in October, 1973—almost three-and-a-half years ago. It takes approximately three years to build a refinery and have it on-stream. This means that we have lost three further years in gaining self-sufficiency. We continue to have no control over supply and cost. If an oil refinery was about to become operational here we would have control over supply. We could buy direct from the OPEC countries as other countries are doing. Tankers, tied up around the world at the moment, are two a penny and can be chartered very cheaply. We could be importing crude oil and refining it here. We could have Government participation in the said refinery and have control of cost.
By having control of cost and endeavouring and succeeding in bringing down present costs of products we would create an atmosphere where the people supplying the remaining 50 per cent of our oil requirements would be forced to compete with the second refinery. They in turn would have to bring down their costs. This happened in Britain. The multi-national companies operating there had to get involved in price cutting because a French company bought out the interests of an existing British company's distribution interest and started supplying oil on the British market. This brought down the costs and the big companies had to compete. The result is that at present a gallon of petrol is about 10 per cent—approximately 10p—cheaper in the United Kingdom than here. This is a sizeable amount.
No attempt has been made to try to deal with this problem which has been with us since October 1973. We in this House are within our rights to highlight the importance of the failure of the Government to initiate any form of an energy policy and more particularly to get a second refinery under way with some Government participation thereby leading to control of supply and cost. I do not know of any active proposal to erect such a refinery or of any encouragement being given to any group to do so or to get involved in such a project at present. Nothing has happened since 1973. I fail to see where we have an energy policy in any form.
Our industrialists, petrol users and so on, are still exposed to the same influences. This has had a detrimental effect on our industrial output and industrial operations. The increases not only by the OPEC suppliers but also by the taxation imposed in the 1976 budget on heavy fuel oil for industry have added greatly to industrial costs. This has made industrialists less competitive not only on the home market but also in world markets. This in turn has led to more unemployment here. Nothing has been done about this. The taxes still exist. The extra costs imposed by the Government are still with us. While this Government remain in office it appears that these taxes and extra charges will remain.
As we said during the debate on An Bord Gáis, this party would not permit the waste which has occurred or is about to occur with the discovery of natural gas. The Government decided to give half of the gas to the ESB to create more electricity thereby effectively wasting close on 75 per cent of its thermal value. At that time we advocated that a gas grid should be set up whereby the natural gas could be fed into areas which already have a gas mains structure in different towns and cities, such as Dublin. In that way cheaper domestic fuel would be available to users than that which they now have. We also maintain that it should be utilised to supply low cost energy to industry in some areas. These ideas were unacceptable to the Coalition when we put them forward and we still find ourselves about to waste a large percentage of this natural gas. In Britain they have utilised it for low-cost energy and they are so competitive that the Coal Board and the Electricity Authority cannot compete. Here there was a golden opportunity for this Government and the country to start on the right foot with its first strike of natural gas or oil and utilise it properly, maximising it for the benefit of consumers and thereby helping industry and those dependent on gas for domestic use. Despite what we advocated, the Government continue on the course of wasting this natural resource which we were so fortunate to find.
The EEC have failed to a great extent in establishing a realistic energy policy. They have had meetings and the only thing we can ascertain from these meetings is their failure to come up with a realistic energy policy. In the period up to 1973 the Community adopted a series of measures in the energy field. These were however, too specific and too limited in their scope to constitute an effective basis for a Community energy policy. The 1960s and early 1970s were years of economic expansion not only here but in the EEC countries as well. People believed there were adequate energy supplies available and such optimism was hardly calculated to induce the member states to work out the principles on which a Community energy policy could be based. Not until 1973, when faced with the energy crisis, was an attempt made at such a policy and not until then did such a policy become an urgent priority.
In so far as there is a policy it would appear to be one of guaranteeing security of supply by reducing dependence on imported energy, an import which amounted to 61.4 per cent in June, 1975. Secondly, in so far as there is a policy, it would appear to be one of preserving the Community and the Common Market in the event of a crisis in oil supplies. On the negative side it appears unlikely that even the latest optimistic figures mentioned in the Council's resolution of 17th December, 1974, namely, a reduction of dependence on imported energy, will be achieved by 1980 and recent OECD estimates indicate that at best the Community's nuclear capacity will reach only 85.8 gw by the beginning of 1985, little more than half the objective set in 1974. Even if new policy measures permit an acceleration in the installation of nuclear equipment within the EEC targets will not obviously be achieved by 1985. At the same time, the cost of imported oil has increased sharply within all these countries with adverse effects on the balance of payments of all the member states.
It is by no means sure that the availability of oil supplies from outside the Community can be guaranteed if world consumption is maintained at its present level. Oil reserves in some of the major oil producing countries will not last more than 40 years at the present rate of exploitation. Producing countries with large reserves not in need of additional revenue may be unwilling to increase production. Any growth in world demand, such as might come from outside the Community, could lead to a further increase in the price of oil reinforcing the need for an overall Community policy aimed at reducing dependence on imported hydrocarbons and the development of alternative sources of energy. This would include the development of North Sea oil.
On the positive side, the Community's record since the 1973 oil crisis has not been entirely satisfactory. The Community consumed 2½ per cent less energy in 1976 than 1973. Imports were reduced by 7½ per cent. In this the Community is helped by such factors as a relatively low level of economic activity in certain energy intensive industry. The Community has made some progress, but that is not enough, by the reduction of its dependence on imported energy and that reduction becomes more pressing with each successive increase in oil prices. The year 1985 is the target year. The European Parliament and particularly the Committee on Energy and Research have stressed the need for positive action. The European Parliament is convinced that the adoption and implementation of a comprehensive energy policy by the Community is the only way to guarantee energy supplies. Like this party, it is convinced that a suitable supply of energy at an acceptable price is a prerequisite for all economic development on which social progress will be based.
As I said, the Community have failed to a great extent to initiate a comprehensive energy policy and we have failed as a nation to initiate such a policy. We tabled this motion to highlight that fact and to stress again the importance of a realistic energy policy. Since we will go on being dependent on oil and oil products for years to come the first essential is to ensure self-sufficiency in refining capacity with some control over supply and costs. We are fortunate in having some natural sources of energy but they are only a percentage of total requirements and we are faced with the fact that we will continue to import oil for quite some years. Even if we are fortunate enough to find oil off our south or west coast, it will still be some years before that oil can be brought ashore. That is particularly true in the case of the west coast because of the depth at which the oil is and the problem will be to make it a commercially viable proposition. Nobody has so far discovered a means by which to take out oil at a greater depth than 580 feet. That is the depth in the North Sea. Some of the deposits off the west coast are at a lower depth than 600 feet. If we find it, and hopefully we will, it will not be coming ashore for quite some years and, in the meantime, it is obvious, as it has been for the last three-and-a-half years, that the first essential is to become self-sufficient in refining capacity.
Until we find our own oil we can buy it direct from the OPEC countries and from the Arab countries. They are quite willing to do business with us and to sell direct to us. We have much to offer in exchange, in technology, agriculture and many fields, which could be utilised for the importation of crude oil from some of those underdeveloped countries. When we are fortunate enough to find our own oil, we will be able to refine it with the least possible delay and get the full benefit of being so lucky which will be of great benefit for the domestic consumer and the motorist but more important still, for the industrialist who has been faced with such costs in recent years that his competitiveness in the foreign markets and in the home market has been interfered with.
We maintain that we must have a realistic policy and that we have not had such a policy. We believe it is past time for initiating such a policy. This side of the House will have no hesitation in initiating an energy policy when returned to Government after the next election. We intend to get to the base of the massive energy problem which we will have to face for some time to come. We intend to do something realistic about the energy question in order to benefit the economic welfare of the country and to give some element of security to all the users of energy in the country.
