Dáil Éireann debate -
Thursday, 24 Apr 1980

Vol. 319 No. 11

Turf Development Bill, 1979: Second and Subsequent Stages.

Minister for Energy (Mr. Colley)

I move: "That the Bill be now read a Second Time."

The purpose of the Bill is to raise from £60 million to £100 million the limitation on the borrowing powers of Bord na Móna for the performance of their functions under the Turf Development Acts.

The Board's first development programme, adopted in 1946, had as its main features the production of one million tonnes of sod peat annually, improvements in the Lullymore briquetting plant and the establishment of the first generation of turf fired power stations. The second development programme, launched in 1950, concentrated chiefly on milled peat production and since that date the annual milled peat output has been built up to around three million tonnes. The implementation of that programme led to the erection of four additional turf fired power stations and two additional briquette factories.

In 1974 Bord na Móna commenced their third development programme to expand peat production. This programme was subsequently extended and now covers development of about 62,000 acres providing for the production per annum of 2.75 million tonnes of milled peat, 32,000 tonnes of sod peat and 650,000 cubic metres of moss peat in addition to existing production.

Considerable progress has been made in development operations under the programme and in some instances bog areas are approaching the production stage and production will commence this year. The operations involved in the programme extend over Counties Tipperary, Laois, Offaly, Kildare, Meath, Westmeath, Galway, Roscommon, Longford and Mayo.

Some of the additional milled peat will be used in two new briquette factories which are planned to produce 390,000 tonnes of briquettes annually. One of the factories at Littleton, County Tipperary, designed to produce 130,000 tonnes of briquettes per annum is nearing completion and production will commence in 1981. The second factory, which is at present in the planning stage, will be erected in the Ballyforan area, County Roscommon, and will have an output of 260,000 tonnes of briquettes per annum. It will use the milled peat to be produced at the nearby Derryfadda group of bogs from which a production of 700,000 tonnes per annum is planned. It is proposed to build the factory in two phases, the first of which will be in production in 1984 and the second in 1987. When all these factories are in full production, total production of briquettes in all the board's five factories will be 750,000 tonnes per annum which is over twice the present production level.

The balance of the production of milled peat under the programme will be used in existing electricity generating stations and in two 40 megawatt generating units to be erected by the Electricity Supply Board, one at Shannonbridge, County Offaly and the second at Lanesboro, County Longford, as extensions to existing stations. It is expected that the first of these new units will be in operation in 1982-83. The additional production of sod peat will be used to offset to some extent the reduction in output from existing sod peat bogs as they become cut out. The moss peat will supplement the board's present production of 1.25 million cubic metres per annum, the bulk of which is for export.

Bord na Móna expect to be able to maintain the full production capacity of their existing three briquette factories in the present year. As the House is aware, demand at present is greatly in excess of supply so that the quantities available are being distributed to customers of the board in proportion to their purchases in 1976 which was the last year in which briquette supplies were able to meet demand. The position will not be improved until the new briquette factory at Littleton starts producing early in 1981.

Bog harvesting conditions in 1979 were the worst recorded in the past 20 years. Despite this, machine turf supplies will be maintained at last year's level but demand for machine turf is greatly in excess of available supplies with the result that for the first time, Bord na Móna have had to restrict sales to existing customers.

At present the board employ 5,100 persons on average throughout the year. The full implementation of the Third Development Programme will mean additional employment for 2,200 persons on average. These will include persons engaged in turf production and allied operations on the bogs and employment at the Littleton and Ballyforan briquette factories. Apart from direct employment by Bord na Móna the increased production of briquettes is also estimated to provide additional employment in the briquette distribution trade for something in the region of 250 persons. The programme has already generated employment for 700 persons in 1979 and this figure is expected to reach 1,000 persons in 1980. In addition to the above, up to 200 persons have been employed by contractors to the board mainly in relation to the erection of the Littleton briquette factory. Moreover, apart from providing employment at the board's own engineering workshops, the programme also generates indirect employment in outside engineering firms in Ireland.

The present limitation of £60 million on the borrowing powers of Bord na Móna was fixed by the Turf Development Act, 1975. At that time the cost of the programme was estimated at £28.5 million. Due to an extension of the programme to include a greater acreage of bog than was originally planned for development, and the subsequent inclusion of the proposal to build a briquetting factory at Ballyforan and also because of inflation, the original estimate will be greatly exceeded and the capital cost of the programme is now estimated at £120 million. The board's borrowings are expected to reach the £60 million limit early in 1980 and consequently it is now necessary to raise the limit to provide for further borrowings. The board expect to reach the £100 million limit in 1982.

In the case of the first and second development programmes the necessary capital was advanced by the Exchequer. While the third development programme was also financed in the earlier years by the Exchequer, the indications are that from now on the board will be relying on borrowing most of their requirements from the European Investment Bank and the New Community Borrowing and Lending Instrument. These are EEC agencies through which loans are made for priority investments in infrastructures and the energy sectors in accordance with Community objectives and to foster economic growth.

I feel that Deputies generally will welcome the evidence which this Bill provides of the Government's intention to pursue a vigorous policy of expansion of Bord na Móna's activities. The board's operations are beneficial, not alone for the valuable employment and economic activity which they generate in particular areas, but on a national scale. Our turf resources have assumed a new importance in the present climate of restricted and increasingly costly oil supplies. It is fortunate that in recent years when our excessive dependence on oil has become painfully illustrated we had in existence a State body with the organisation and technical capability to embark on a major programme to expand development of indigenous fuel. This is a tribute to the foresight and courage of those involved in the setting up of the board.

It is understandable that there are calls for an even greater expansion of our turf development schemes but it must be accepted that, substantial though the effort is, there are unavoidable constraints. Not all our bogs are suited to the mechanised development necessary for large-scale commercial exploitation. Bord na Móna are at present investigating, surveying and assessing the potential for development of other bog areas which are not included in their present programmes. As a result of this investigation, it is likely that further proposals will evolve for an expansion beyond the activities covered by the third programme.

The Central Development Committee who operate under the aegis of the Minister for Finance have investigated the prospects of increasing turf production in the western counties and has submitted a report to me which I will be examining shortly with considerable interest.

New development work must be accompanied by long-term programmes to bring into economic use the areas which are being cleared of usable turf deposits. The House will be aware that this aspect has been under continuous study and an interim report on this subject by a committee was published some months ago. This report concluded that much more research and pilot development schemes were necessary before definite conclusions could be reached on the best use of cut-away bog areas. We will be pressing ahead with this work.

I commend this Bill to the House.

Mr. O'Toole

I welcome the Bill introduced by the Minister. Anything that provides for development of turf in all its forms is to be welcomed by this House. Over the years Bord na Móna have made a substantial contribution to the social and economic life of this country through their development of a very important resource and, as the Minister said, an indigenous resource, turf and bogland. Bord na Móna are engaged in a very important social and national area of activity. Down the years this House has on numerous occasions expressed its satisfaction at the way in which they went about their business. That is as true today as it has been in the past. One must compliment the board on their foresight in broadening their base of activity which now comprises four areas—producing machine turf, milled peat, briquettes and peat moss.

Since the setting up of the Turf Development Board in the `thirties and Bord na Móna in 1946 we have come a very long way in this area of activity. In 1973 and 1974 with the first chill winds of the oil crisis blowing in our faces, dramatic changes took place in our attitude to the whole question of fuel supply, availability, cost and so on. We had come through an era of cheap fuel and this cheap fuel mentality took hold of us until 1973 and 1974 when we were rudely awakened by the effects of the oil crisis not in relation to cost but also to availability of the commodity.

A more careful scrutiny of fuel usage must continue to be undertaken and there must also be a detailed assessment of our needs and the types of fuel which we ought to be using based on availability and cost. The temptation would be, because of the crisis which brought about our present dilemma in the area of fuel, to over-exploit our native resource. That can be done provided we make the resources in money terms available to Bord na Móna. I am sure they are capable of producing more than they are at present, if they wish to. The overriding factor is that while turf can provide a certain percentage of our fuel needs its impact on our total requirements would not be that great. Having said that, it would be unwise to go overboard in exploiting that resource thereby diminishing the chances of having an alternative fuel supply available to us in case of emergency. It would be wise to apply the same conservation policy to the use of this resource as we are being asked to apply to the use of imported fuels, oil and coal.

We owe it to the next generation not to over-exploit this resource but to leave it in the form of an alternative to people who might be more in need of it when more dire circumstances confront them in later years. While the third programme is geared for expansion it is at a controlled rate. The House can go along with that idea. The third programme as the Minister outlined came into being in 1974 and the targets outlined in it—six million tons of milled peat, ¾ million tons of briquettes and 1.9 million cubic metres of moss peat—are achievable and sensible with an eye to conservation of the resource.

The Oireachtas Joint Committee on State-Sponsored Bodies in their report on the activities of Bord na Móna detailed the up-to-date achievement of the board in the context of the third programme targets. At this stage it seems as if the targets set will be achieved. As regards milled peat at present we have 2.9 million tons as against a target of 6 million, about 50 per cent of the target has been achieved. In the case of briquettes the target is ¾ of a million and we have over 300,000 tons. In the case of moss peat on a target of 1.9 million cubic metres we have exceeded the 1 million cubic metre mark at this stage. That is a fine achievement and the board ought to be complimented for it.

This source of energy is a wasting asset. It is non-renewable but it is unique in that it leaves a residue which is of paramount importance in the form of cutaway bog. The Minister did not, except in passing, refer to cut-away bog. From my experience of the activities of Bord na Móna in a neighbouring constituency and from the report of the committee I should like to comment on what may become the problem. I appreciate that the interim report of the committee set up to consider the possible uses of Bord na Móna's cut-away bogs is not available. This whole question is one which must be faced before long and some definite policy produced in relation to the different aspects of this national asset which, as time goes on, is increasing in area. We are talking about large areas of reclaimed land which as blanket bog were not economically viable in the area of agriculture but which, with the turf removed, could become a definite agricultural asset if given proper treatment. Fóir Teoranta in consultation with Bord na Móna, have succeeded in bringing about ways and means which are economically viable and beneficial to develop cut-away bogs, despite the high cost of maintaining standards of production which are taken for granted in the normal type of agricultural land.

These are purely technical matters. I understand from the interim report and the joint committee's report that there are no technical problems in relation to the development of this cut-away bog. The economics of the approaches adopted by the two bodies—Fóir Teoranta and Bord na Móna—give a very reasonable and favourable picture of what can be done. It is a viable operation.

The other area which must be looked into is whether to redistribute this asset. As we know, Bord na Móna had to purchase these lands and have now become the owners of very large tracts of this country. That is fine in so far as they acquire these bogs for a specific purpose, but having terminated their own specific function in the extraction of turf and its derivatives from bog land, while this land may have been marginal agricultural land, it has now become productive agriculturally. I do not know if Bord na Móna are in a position to exploit this asset to its full potential or if they, as a State agency, ought to do it. This is a big question which must be gone into.

I presume that when the committee's final report on the possible uses of Bord na Móna cut-away bogs is available, a decision as to what is to be done with this land must be faced. Land has always been a very emotive subject in this country and I do not think a State agency ought to become—as they would be at that stage—a massive landowner without any obligation to hand this land back to the original owners or to hand it over to an agency specifically designated for its development in its new form.

While it has been established that there are no technical difficulties and there is no doubt the viability of the operation in developing cut-away bog, the policy question of who should do this, for whom and by whom, must be faced. I hope the Minister will turn his mind to that question at the appropriate time.

This Bill is concerned specifically with the provision of extra borrowing powers for the board. From what the Minister said there is no question of the Bill not being justified. As the third programme will cost around £220 million and there is obviously need for this additional facility if the board are to continue their work. I want to refer to the board's finances. The relevant paragraph on page 6 of the 1978-79 Bord na Móna Thirty-Third Annual Report reads:

Under present policy the financing arrangements for the Third Development Programme require the Board to obtain a much higher proportion of capital monies from non-Exchequer sources, and in foreign currencies, which not alone increases the interest burden but creates a new cost risk in possible exchange losses. The Board would welcome a review of this new policy in order that the appropriateness of non-Exchequer financing to turf development might be further considered.

We are back to the not so old and very urgent problem here. This problem must be referred to because it was causing such concern that it deserved a mention in the board's annual report. The urgent matter specifically referred to is the risk involved due to exchange rates. This does not apply to Bord na Móna only; all industries are concerned with this problem. The question of whether those risks might be under-written by Government guarantee is something that must be faced fairly and squarely, and fairly soon. When a semi-State body refers to it, how much more does a private enterprise unit have to look to its problems in this area?

Bord na Móna are a very large industry. We are talking of 5,000 plus employees, hopefully rising to something in the region of 7,000 on completion of the third development programme. It is not an industry which can be taken lightly. Because of its nature there is another aspect to it—it fulfils a very important social function. In this House when the words "social function" are mentioned, it is taken for granted that somebody is getting something for nothing and that a service is being provided purely to meet a social need. Bord na Móna have been in the happy position that while they have performed an important social function, in doing so they have provided for a social need, mainly because of the locations of their operations. In deprived areas there is but one source, large tracts of bogland from which moss peat and other commodities can be extracted. While paying their way, Bord na Móna also have provided employment in areas where otherwise employment at that level would not be viable economically. They are in that fortunate position and at the same time they are meeting a social need from the employment point of view, though not from the viewpoint normally accepted in regard to industry in general.

I should like to deal briefly with the financial situation. The whole area of financing the board has been referred to elsewhere, in evidence taken from board members by the joint committee, and I do not wish to go into detail on the issue. However, I should like to refer to the board's annual report in which one member of the board saw fit to express disagreement with the assessment of stock values held by the board from year to year. This matter has attracted the attention of other people, and I am not in a position to say that the attitude adopted by this member of the board is a correct one.

We must accept that the audited accounts are satisfactory and that there is not a sleight of hand involved, but this member expressed his personal opinion that the value of the stocks held was a depressed value and that this assessment had been done deliberately to take into account more difficult production years. As the Minister has said, weather plays a very important part in the board's operations. At any rate, because of the approach to this matter, there arises the difficulty of assessing properly the financial performance of the board.

Apparently there has been a fairly substantial reduction in profits, from a figure of more than £500,000 to £206,000, thus leaving the board with a smaller margin for reinvestment. Looking back at returns for other years, despite development programmes undertaken by the board there was in some instances a fall in production in the last five years. For instance, in the case of briquettes, there has been a 1 per cent fall in the last five years, although the Minister has stated that with the expansion of briquette production there would be a resultant increase in income from this source.

I will refer briefly to the Central Development Committee under the aegis of the Department of Finance and the possibility of expanding Bord na Móna activities along the western seaboard. Rightly or wrongly, there has been an idea abroad that despite the large areas of bog along the western coast, there is not so much suitable for turf extraction on an economically viable basis. To put it in a simpler way, we have not got in the west enough of the right type of bog, but bog we have, and I should like to know whether the research element in the third development programme could include the possibility of a new approach to turf extraction from shallow bog.

Until now, it seems that the whole technology of the board has been directed at the extraction of turf from deeper bogs. The acid test of any new technology would be whether the extraction of turf from shallow bog would be viable economically. If it were, Bord na Móna would be able to expand enormously their area of activity along the western seaboard where there is a vast area of useless land that cannot be farmed. Though that land has some possibilities in relation to turf production, we are being told it would not be economically viable. I suggest that we look into it thoroughly because if production from that land could be made to break even at least, the social dimension involved would justify development of that useless land.

I welcome the Bill and compliment the board on the very worthwhile national function they are performing on and its sensible use of an indigenous source of fuel. I hope that in the years ahead they will continue to provide the social service which they are now known to provide. A social service in a peripheral way, combined with a workmanlike, professional approach to this unique area of activity, the production of turf, and that they will continue to research into other areas of new commodities which could be viable in the years ahead.

Mr. B. Desmond

The Labour Party fully support this Bill. Many in the country do not fully appreciate Bord na Móna's very considerable and growing contribution to economic and social development. Admittedly it is generally accepted that in 50 years' time we shall have very little turf left but in the past decades and each year that wasting asset—an important national asset—turf, decried a little during the years I felt, has given employment to over 5,000 people, particularly so to communities around the country where there was a low level of economic activity, and that employment is, by and large, very secure.

Bord na Móna have a major export in peat moss and have thus helped the balance of payments of a poor country. The critical importance of turf as a substitute for costly imported fuel is now fully appreciated, but the general activities of the board should be fully appreciated. I did not fully appreciate the role of the board until recently as a member of the Joint Committee on State-Sponsored Bodies. I had not adver ted too much to the fact that Bord na Móna is the second largest producer of peat fuel in the world. Those of us who over the years have had an opportunity of visiting their installations realise that they have a particular technological skill and that skill has been generally recognised. I approve of and support the decision here to raise by £40 million the limitation on the borrowing powers of the board to enable them to discharge their functions.

I confine my comments to one or two aspects, the aspect referred to by Deputy O'Toole and some suggestions of mine to the Minister regarding the future growing importance of cut-away bogs. I urge the Minister on this issue to establish with great care either an inter-departmental committee or a new, broadly-based committee representative of the various interests concerned, to report on the question of the future use and development of cut-away bogs. The Joint Committee on State-Sponsored Bodies fully appreciate that the subject is not within the terms of reference of the existing inter-departmental committee and feel that perhaps a look at the situation in depth should be set in train by the Minister. Having said that, I urge great care in the setting up of the committee. There are interests which in the decades ahead will cast a very covetous eye on this precious national asset. There are those who hold the view that the thousands of acres of cut-away bog should pass back into surrounding private ownership. I do not at all share this view. Bord na Móna have created, by virtue of their work and their contribution to the national economy, a very large tract of land under public ownership. Public money has been put into that land to exploit it in the national interest and to produce turf and the cost of development of those bogs has been very substantial. It would be reprehensible—I cannot think of any stronger word—that any policy should be devised whereby ownership of that land would return in small, haphazard pieces to a multitude of adjacent private interests. We are very well aware here of the difficulty which faced Bord na Móna in generally bringing those holdings together in the first instance and the general consolidation of those areas so that they could be effectively drained, effectively developed and ultimately made productive. It would be entirely inappropriate that any of the pressures—and I am quite sure that there will be in the years ahead enormous pressures exerted on successive Ministers for Energy—to allegedly hand back, to use a very inappropriate phrase, ownership of these tens of thousands of acres should succeed.

I refer the House to the annual report of Bord na Móna for 1976-77 in which is made an entirely valid point in relation to the land left after the private use of turf. That report stated that many thousands of privately owned cut-away and marginal land remain undeveloped because of the fragmented structure of ownership which inhibits drainage and development essential for the full utilisation of the real potential of those lands. It would be unfortunate if the cut-away lands of Bord na Móna were disposed of in a manner that prevented their full exploitation particularly in terms of agriculture and forestry.

I do not think that we appreciate the enormous value, particularly the long-term value, of the lands concerned. I am a member of the Economic and Social Affairs Committee of the Council of Europe and in recent years I have had the opportunity of visiting a number of European countries. When I see the intensive land usage, the enormous value attached to land and the intensive cultivation even of relatively unproductive land, in Europe, I get rather angry at the way we have not fully exploited the potential of land usage here. I urge the Minister to set up a new committee but he should be very careful of the terms of reference of such a committee. The committee should be asked to report on the future general utilisation of those areas, not their disposal. I do not think that should be considered at all.

Mr. Colley

The Deputy is a member of the joint committee and perhaps he could tell me who is advocating the return of the cut-away original owners. There was some reference to this in the committee's report but I am not sure who is advocating this.

Mr. B. Desmond

I can assure the Minister that it was not I who advocated it. The pressures will be enormous on the Minister. I think there will be a national consensus on this matter. Personally I would have every confidence in the Minister to lay down the principles of such development and I hope that during his tenure of office in his current portfolio he will lay down the principles in a very explicit manner. Bord na Móna are in a vacuum in relation to the issue. I should like the Minister to give consideration to this matter.

I would urge care in relation to the construction of turf-fired power stations. One or two State-sponsored bodies have not been entirely subject to what I would call conventional scrutiny in terms of their capital expenditure on some major installations. NET are a classic example in that regard. It is amazing how costs are allowed to escalate in some areas beyong all reasonable proportions. I urge care in considering expenditure in this case but I do not think my comment in that regard will unduly inhibit the board.

The development programme should go ahead rapidly. I have no doubt that in the years ahead employment in this area will increase by an extra several thousand persons, particularly in rural Ireland. I feel sure the contribution of the board to economic and social development will be decisive. Accordingly, I fully support the Bill.

Mr. N. Andrews

I should like to welcome the Bill and to congratulate the Minister on his new portfolio. He has tackled the problem of energy generally with vigour, commitment and an open mind. That was demonstrated in his earlier statements on wind power and nuclear energy. It typifies the man himself. He has started a new Department with great energy and vigour. He has provided a greater openness so far as the energy debate is concerned. This is important in the context of people's feelings regarding the uses of energy and, in particular, the possibility of nuclear energy. The proposals of the Minister with regard to research on wind power are valuable. That is not the subject of the Bill——

An Leas-Cheann Comhairle

I was about to tell the Deputy that we should not go into nuclear power in depth on this Bill——

Mr. N. Andrews

I realise that Carnsore Point is a sore point with the Chair——

An Leas-Cheann Comhairle

I can assure the Deputy it is not a sore point with me. I have my own views on it.

Mr. N. Andrews

I have some reservations about the borrowing by Bord na Móna of large sums of money on the expensive European and world money markets. One of the immediate issues facing Bord na Móna is the price control system. It may be unwise for a backbench Deputy to raise the spectre of energy-related prices so far as briquettes are concerned. For several years past turf prices have been held well below their true market level. With the everincreasing cost of oil and coal Bord na Móna are selling their products at a hopelessly underpriced value. Nobody appreciates the problem of pricing more than Deputy FitzGerald, Leader of the Opposition, who used many column inches in The Irish Times in his day as an economic guru proving how stupid it was to use turf when oil was so cheap. He agreed that turf should be developed as an employment scheme in much the same way as walls were built during the famine. That argument has been overtaken by the prices charged for oil and coal by what I regard as the new controllers of world power, the Arabs. This out-of-date pricing approach stems from a policy of the prices commission and the Department which in fixing prices allows only for cost increases and makes no allowance for changes in market value of turf or briquettes. The effect of that policy is bad in two ways; it stimulates an artificial demand for Bord na Móna products and hence we have virtually a black market in briquettes. They are whipped up within hours of delivery. On some occasions the truck is followed through town to buy up the available supplies of briquettes. Secondly, it makes it impossible for Bord na Móna to finance their own development programme out of revenue and forces them to borrow at exorbitant interest rates on the international money market. The cost of borrowed money is prohibitive and prevents the development of the smaller bogs.

The question of prices is also relevant to turf supplies to the ESB. From what I can gather from talking to people and reading between the lines in the annual report of the ESB and the annual report of Bord na Móna and the present report just received from the Joint Committee on State-Sponsored Bodies, the attitude within the ESB—I want to stress here that it is not openly expressed—is that if they had to pay the market-related price for Bord na Móna turf it would no longer be economic to operate the older turf-fired stations which by modern standards are very low in efficiency. There are strong grounds for suspecting that the lack of efficiency is largely due to lack of sustained maintenance which has had a cumulative effect over the years and lowers their efficiency. I ask the Minister to have a look at that aspect of ESB usage of turf-fired stations particularly in view of the cost of energy today. The efficiency of these stations is less than it should be largely due to lack of development.

Deputy Desmond referred to cut-away bogs. I hope the Minister will assure us that these bogs will not in any way fall into private hands. I completely support Deputy Desmond and others who express this view. If there is no lobby, that is fine. If nobody seeks to take the land and distribute it in parcels of 50, 100 or 500 acres, very well, but we should make it clear, as I hope we will, that to allow cut-away bog which, in the next 20 years will amount to almost 100,000 acres—the size, I suppose, of a small county—with its great development potential into private hands would, in my view, be a wrong decision.

To distribute it between one farmer and another in the locality would be equally wrong. It has enormous potential for horticultural purposes and so on. Only the scientists will be able to decide the best uses to which it should be put. I have no doubt that the vast majority of Deputies would join me in the hope that cut-away bog acreage will be kept in the hands of the State. I do not know if there is a lobby—I hope the Minister will tell us if there is or not—but this is an enormously valuable national resource and I do not think he should yield to anybody on this issue.

I should also like the Minister to look at the possibility of amalamating the Forestry Division and Bord na Móna in some way. The activity of Bord na Móna is seasonal, mostly summer and forestry is a winter activity, mostly winter. The employment content, rather than being seasonal, could be year-round for thousands of people employed in Bord na Móna. This was advocated by the former Taoiseach, Deputy Lemass, and also by the former leader of the Labour Party, Deputy Norton. It is self-evident that a Government Department, by its very nature, is not adapted to deal with the administrative and physical work of commercial operations. Over the years Bord na Móna have adapted and found the expertise for the development of bogs and I urge the Minister to look at the possibility of bringing about an amalgamation in the interests of development of our national resources and in the interests of employment.

I cannot sufficiently stress the importance of examining the question of the cut-away bogs and dealing with it as a matter of urgency. It is an important issue and we cannot delay much longer in making decisions on it.

Finally, I wish to pay tribute to the staff in Bord na Móna. They are people dedicated to the development in the national interest of our natural wealth. Their contribution is one this House recognises. I am glad that the Minister has brought in this Bill to provide the necessary moneys, borrowed as they may be, and as I said earlier with some reservations the moneys might well be far less if the pricing system in relation to turf and briquettes were energy-related, but that is another day's work. I congratulate the Minister on bringing in the Bill.

Mr. Kenny

I welcome the increase of £40 million being provided by way of this Bill. The Bill is especially appropriate to the constituency I represent and it provides us with an opportunity of raising some points on turf development. In the west there is an enormous amount of blanket and virgin bog—about 570,000 hectares—much of which is very poorly drained and which varies from bog of shallow depth to bog of much depth.

In the past ten years there has been a dramatic change in the attitude of our people towards the simple and humble bog. Just as the camel is referred to often as the ship of the desert, the donkey might well be referred to as the ship of the bog so far as the west is concerned because since the beginning of the century turf has been drawn from the bog with the help of the donkey. However, the question of access to the bogs today is a very important factor in encouraging people to cut turf. Since the oil crisis many people realise that the simplest and most reachable form of energy on which they can draw is the bog. In the west a large amount of the untouched bog could be used if there were proper access to it. Quite an amount of this bog is held either in commonage or by private owners with Bord na Móna having control of some of it. Many of the bogs are unreachable and we have reason for believing that many thousand of potential users would avail of this form of energy if the bogs were accessible. A switch of this extent to turf would make some impact on the usage of oil, a commodity that is costing us much more than we would wish.

If it is within the portfolio of the Minister for Energy to do so, perhaps he would consult with the Minister for the Environment and with the Minister for Agriculture, because of his association with the Land Commission, regarding the provision of financial assistance for the purpose of creating access to areas of bog that are capable of being developed. This question has been raised time and again during budget debates. It has been raised repeatedly, too, at various county council meetings but the message would appear not to have sunk in yet. Consequently, we have not been able to get the necessary finance to enable us to do a decent job in providing efficient access to boglands. One appreciates that access roads to bogs are used only during the turf harvesting period but during this time they are used extensively. The provision of funds for the creation of access to bogs, even to a minimum degree, would assist in drawing from those bogs sufficient quantities of energy to make some impact on the amount of oil being used, particularly by people in rural Ireland.

On several occasions, by way of parliamentary questions, I have raised with the Minister for Energy the question of providing a peat briquette factory at Bellacorick in Mayo where there is a peat-burning station in existence. The Minister's answer was fair in that the surveys undertaken indicated that the depth of bogland, taking the region as a whole, is too shallow to warrant the setting up of a peat briquette factory there. I am aware, though, that since the results of the survey concerned were made known, Bord na Móna have taken control of further sections of the bogland concerned and are developing it. I trust that this development will continue on an increasing scale. In an area which for many years suffered seriously from unemployment and from emigration there lies in the continued expansion of these areas of bogland the capacity to increase much needed male employment. I urge that at least some of the extra £40 million being granted to the board be used for taking over extra bogland where possible. The price of such land is not becoming any cheaper.

I welcome also the recent decision to institute a station for a biomass experiment in that area. I understand that the number of trees to be planted on an experimental basis will top the 1 million mark. I take the assurance given to me recently by the Minister that the level of planting to be carried out there would be sufficient to fuel the proposed station for that region.

Regarding those boglands that are held by shareholders in various commonages I urge the Minister to consult with the Minister for Agriculture in an effort to have speedy solutions reached so that work might go ahead in reducing sufficiently the level of bogs to enable them to be put into use.

There are areas of bogland which are physically of a fairly high level and which I presume would be suitable for tree planting and that is another matter to which the Minister should direct his attention. From various excavations that have been carried out in relation to drainage experiments it is obvious that all of the area concerned was once a tree-growing area. Since timber and turf development go hand-in-hand the question of planting in this context is important, too.

There is an increasing demand for peat briquettes but production must be increased if this demand is to be met. It is unfortunate that instead of briquettes being brought to the west in increasing quantities, the traffic is not the other way. However, I accept the findings of the survey concerned to the effect that bogs in the region are too shallow to warrant the setting up of a peat briquette station. Since Bord na Móna were set up some years ago quite a number of achievements have taken place. Quite an amount of employment has been generated and they have done their work well in the years since they were set up. I welcome the fact that the increase here is of the order of £40 million.

In conclusion I want to make two points to the Minister for Energy. The first is that he should do something about the creation of new entrances and access roads to bogland that can and will be developed by thousands of potential users. This will have a continuing effect upon the oil demand for central heating, and I am sure the Minister himself will welcome that. He is in a position to do something about it, perhaps through Bord na Móna, the Land Commission or the Department of the Environment, and I urge him to do so. The other point is that Bord na Móna should be encouraged to continue their expansion of the takeover of suitable bogs, particularly in the western regions, for the purpose not alone of production of an increased amount of peat but also of increasing the capacity that lies there for continued male employment. That region suffered very heavily from emigration and would benefit greatly from an increased amount of male labour which would result from these boglands being taken over. The area of bogland that could not then be used suitably for production by Bord na Móna possibly could be converted to the Department's programme for the biomass experimental station. To that end I urge that the Minister set about this in the context of this Bill.

Minister for Energy (Mr. Colley)

I thank the Deputies who contributed for their welcome for this Bill and the remarks that they made in regard to Bord na Móna and their records. All of them expressed well-deserved appreciation of the work of Bord na Móna. I also thank Deputy N. Andrews personally for the kind and generous remarks which he made with regard to myself.

I would like to comment on a number of points raised which arose indirectly out of the Bill in relation to the work of Bord na Móna. Firstly, Deputy Kenny was commenting on the question of the problem of access to bogs. He was speaking primarily of the bogs in the west of Ireland which are not being developed by Bord na Móna and cannot be developed, at least in the traditional way, because of lack of depth in the bogs. As far as access to bogs and access roads are concerned, county councils have authority to devote money to this purpose. Some county councils in the west of Ireland have discussed this problem. Not surprisingly, they have come to the conclusion that the Government should make more money available to them, but by doing that they are saying that they do not consider that access roads to bogs constitute a first priority for them. If they did they would devote part of their funds to this purpose. They chose not to do that but say that the Government should do so. As far as my Department are concerned, the only funds I have available for this purpose at present relate to specific and limited cases of access roads in the west to certain turf-burning ESB stations. They are, of course, of a limited application and the funds I have do not extend and may not be extended to the kind of case that Deputy Kenny and a number of other Deputies from time to time have advocated.

I am having a look at this whole question of development of bogs in private ownership of the kind that Deputy Kenny has in mind, and the question of access will be one of the aspects being examined. I should mention that Bord na Móna themselves are operating under what informally is called their fourth programme. It is informal, and that is the examination of the possibility of a role for Bord na Móna in the development of some bogs which they are not able to develop in the traditional way. New techniques will be required, and almost certainly if it is to be done, Bord na Móna will have to operate in conjunction with other people, perhaps co-operatives in the area and so on. New methods of drainage and cutting of turf on a mechanical basis will be needed and some developments are taking place in this regard on inventions and experiments which are very interesting for the future. I cannot say at this stage that any of them have reached the point where we can say that we have the answer to the problem, but the effort is going on and I would hope that in the not too distant future we will see considerable advances in this area. This is important from the point of view of utilisation of all our indigenous fuel resources but it is also important for the area concerned from an economic point of view. Indeed, the whole history of Bord na Móna shows that the effect of Bord na Móna activity has been quite dramatic in areas where there was no prospect of economic development apart from the bogs. Therefore, the possibilities in this regard are quite important form the point of view of economic development of the areas concerned, apart from a national point of view as well.

I did refer in my introductory speech to the role of the Central Development Committee who operate under the aegis of the Minister for Finance. That committee has been examining the specific problems in relation to the development of the smaller and generally privately-owned bogs. Perhaps I should mention that that committee, amongst other things, makes grants available for machinery for the development of such bogs.

A number of Deputies referred to two aspects of cut-away bogs: firstly, the question of ownership and what would happen in the future in regard to their ownership. There seemed to be some suggestion—indeed there seemed to be some suggestion in the Report of the All-Party Committee to which I adverted when Deputy Desmond was speaking—that these bogs, when cut away, should be handed back to the original owners or, presumably, their descendants from whom they were purchased by Bord na Móna. I am not aware whether such a suggestion has been made but I may say quite frankly that, if it has been. I would regard it as grotesque that such a suggestion should be made. The very farthest one could expect that suggestion to go would be that Bord na Móna would sell the portions of cut-away bog that would become available. Whether that should be done at all is quite another matter because this whole question of consolidation of ownership and the difficulty that presents is one with which we are familiar. One would have to be very cautious not to undo the benefits achieved by consolidation of ownership in that way.

It might be of interest to the House if I give some details of what is expected to happen in regard to the availability of cut-away bogs. Bord na Móna have purchased to date, in 12 counties, approximately 70,000 hectares, that is approximately 180,000 acres, which is being drained and developed for peat production and from which, up to the end of 1978, 80 million tons of peat have been produced. It is estimated that two-thirds of the fuel deposits in this area have yet to be harvested. The board's third development programme which commenced in 1974 will mean an increase in the area of work by the board, so that ultimately Bord na Móna bogs will total approximately 80,000 hectares or 200,000 acres. This represents an area almost the size of County Louth. The whole area will gradually be available for other developments over the next 50 years as the bogland is cut away, although it will be only after the commencement of the next century that the annual rate of bogland becoming available in that way will reach substantial proportions.

Research work has been going on in regard to the uses to which cut-away bog might be put. That research work has been going on for quite some time. I adverted to the Report of the Inter-departmental Committee on this matter. That committee was set up in September 1977 by the then Minister for Industry, Commerce and Energy. The report produced is an interim one. It was submitted to the Government in June last and it indicated the various purposes for which Bord na Móna cut-away bogland could be used. Basically that report suggested five possible uses: firstly, farming enterprise, and these were envisaged broadly as coming under the headings of livestock enterprises, based on grassland, or arable farm crops, or vegetables and other horticultural crops. Secondly, commercial forestry; thirdly, amenity purposes; fourthly a combination of the other uses I have mentioned, and, fifthly, the use for biomass.

There are a number of problems to be solved in regard to the use of cut-away bog under any of the headings I have mentioned but work is progressing in trying to establish the best uses to which they could be put. My own guess, and it is merely a guess, is that the correct use would probably involve a combination of some of the uses I have mentioned, indeed with variations in different areas. We ought not to overlook, in some areas in particular, the potential importance of cut-away bog for amenity purposes. We tend naturally enough, to think in terms of purely productive purposes. But there are some areas where the use of cut-away bog for amenity purposes—involving the creation of artificial lakes, woodland walks and wildlife sanctuaries—could be very important for our people and also as potential tourist attractions. But, of course, I am speaking only of certain areas of cut-away bogland. The fact that bogs have been, and will continue for a long time, to provide fuel dictates that in circumstances in which we are striving to use our indigenous resources, the suggestion automatically arises of considering the use of cut-away bog for biomass, for the growing of timber and other crops which can be used as fuel and, in particular, for the generation of electricity. It seems to be a natural use, continuing the kind of use to which nature has given rise in the very creation of bogs. Of course the great advantage from our point of view in biomass is that it is renewable. The House will be aware that there is work going on at present in this regard. It is impossible to say what will be the outcome of the assessment of the possible uses of cut-away bog. However, I must say I am anxious to expedite consideration of these uses as much as possible and to see results in that area as soon as it is possible to get them. But obviously it would be a mistake to be rushing into making decisions in this regard without adequate information as to the implications of the possible uses, the result of the research going on in regard to these uses and the methods of overcoming the problems identified.

Another matter to which reference was made by some Deputies, including Deputy O'Toole, was the question of the financing of Bord na Móna. Indeed Deputy O'Toole quoted from a part of Bord na Móna's Annual Report in this regard. There are two general comments I should like to make on this aspect of the matter. Firstly, Deputies speaking in the debate and the Joint Committee reporting on Bord na Móna advocated a revised pricing policy in regard to their products, basically on the understanding that the price of their products would be fixed on an energy-related basis. I must confess that it seems to me that whatever may be the arguments against that approach in present circumstances—having regard to the world and domestic fuel situations—the argument in favour is incontrovertible. I am taking steps as Minister for Energy to bring about that situation. Of course, it is not entirely within the competence of the Minister for Energy but concerns other Ministers and the Government in general. We are moving in that direction.

There seems to be an inherent contradiction between approaching the matter in that way and, on the other hand, advocating some special subsidised provision of capital for Bord na Móna. To some extent that is included in the reference made to this topic in Bord na Móna's annual report quoted by Deputy O'Toole. I suppose it is natural enough that any business, whether it is a State or a private enterprise, will go after capital if they can get it cheaply or for nothing, but it does not seem to make sense to think in terms of an energy-related price for the product of Bord na Móna and at the same time to seek some special cosseting of Bord na Móna in regard to the provision of capital.

By their access to capital from the European Investment Bank, Bord na Móna are obtaining funds at attractive rates. In so far as funds have been available from the Exchequer at rates of interest not otherwise available, that situation cannot last for very long as the Exchequer rate of interest catches up with the current rate of interest on Exchequer borrowings. Having regard to that fact, the availability of capital to Bord na Móna through the European Investment Bank should be an attractive proposition. As in any foreign borrowing, there is an exchange risk but the risk is minimised by the fact that borrowing through the EIB is in a package of currencies. Since these would be EMS currencies the risk of loss is very much reduced. Anybody who had borrowed since we joined the EMS would not have suffered any appreciable loss to date because there has been only minor movement within the bands. One can afford to sustain a fairly substantial loss and still gain having regard to interest rates payable as against the normal commercial interest rates payable in this country.

If one accepts the argument that the product should be disposed of at a commercial rate, an energy-related price, one must also accept that Bord na Móna should be financed on a commercial basis and not cosseted. They are well able to stand on their own feet in the commercial market and I look forward to seeing them successfully doing so in the future.

I have dealt with the major items raised by Deputies and I thank them for their approach. I regret it if I have omitted any points.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee and reported without amendment.

Question proposed: "That the Bill do now pass."

Mr. O'Toole

The Minister referred to the financial cosseting of Bord na Móna. While I quoted an extract from the report concerning the exchange risk involved, I did not expand on the whole area of risk. There is one anomaly which is becoming very obvious when the underwriting of the exchange risk is men tioned. The Minister for Industry, Commerce and Tourism said in the House last week that it would cost the Exchequer money. If it is to cost money, there will be a loss to Bord na Móna or to some other enterprise, whether public or private, if the underwriting takes place.

The only circumstance in which a loss to the Exchequer could occur would be through devaluation but suggestions of a possible devaluation are vehemently denied. If there is not a danger of devaluation there is no risk involved and consequently no loss to the Exchequer. It is a matter of restoring confidence rather than paying out hard cash.

While I agree that the Minister's approach is logical in that if commercial energy-based prices are applied to a product, normal commercial terms must be applied to the money supply. I was talking in the broader context of underwriting of the exchange risk. If I am to follow the arguments logically the end result will purely restore confidence and it would not cost money as there would be no risk. This is according to the arguments put up by the Minister's colleagues.

Minister for Energy (Mr. Colley)

When I talked about cosseting Bord na Móna commercially I included what the Deputy was talking about. I am not talking just about Bord na Móna. There are a number of Irish industries who wish to be cosseted in a way in which industries in other countries are not cossetted. No country would guarantee against any change in the value of the currency. By definition one cannot do that. What the then Minister for Industry, Commerce and Energy referred to was a scheme whereby they would be self-financing. There would be no question of financing from the Exchequer but, if people have this fear, this will reassure them because there will be a scheme whereby if there was a change in the value of the currency they would be reimbursed although it would be a self-financing scheme. That does not arise in regard to Bord na Móna. As we are running out of time I cannot elaborate on that but I have tried to show my attitude in what I said earlier.

Question put and agreed to.