asked the Minister for Energy the plans, if any, the Government have to save the Limerick gasworks which is now threatened with closure and if he will make a full statement on the matter.
Ceisteanna—Questions. Oral Answers. - Limerick Gasworks.
13.
The problem of Limerick gasworks is a very difficult one. These difficulties are reflected in the fact that the utility's losses for 1979 were £317,000 and the projected losses for 1980 are expected to exceed £500,000. The factors contributing to this situation are varied and complex. A major one is that the price of naphtha charged to the utility has increased from £94.70 to £221.32 per tonne since March 1979. Another is the problem of financing the utility's capital outlay and bank deficit.
It would be unrealistic to suggest that there is any easy solution to the problems that beset the utility, but I am also conscious that closure of the gasworks would be likely to cause hardship for some of the people in Limerick who rely on town gas. In the circumstances I intend to have an urgent and careful examination made of all aspects of the situation to see whether there are any prospects of doing anything practicable to help the utility to operate on a satisfactory commercial basis. I would, however, again emphasise that the current financial situation of the utility is very grave.
I consider that the problems facing Limerick gasworks are so immediate and acute that any future prospect of supply of natural gas to the utility, which would in any event be some years from now, is of little or no relevance to a solution of its current problems.
I am grateful for the Minister's very comprehensive reply in which he referred to a number of contributory factors. Is he aware of one very important factor contributing to the current crisis in the Limerick gasworks? Over the last two years the Limerick Gas Company, via Limerick Corporation, incurred a total expenditure of £.75 million in modernising and re-equipping the plant. Would the Minister consider that the company should have been entitled to some capital grant for the modernisation and re-equipment which went on?
I am aware that one of the important factors in the difficulties the company are now experiencing arises from the capital expenditure they have incurred and the high rate of interest they have to pay. I indicated that I am having the whole position examined carefully and urgently. I will be looking to see whether anything can be done to alleviate the burden of servicing of capital money by the company. I cannot and do not intend to suggest any promise that this will be done, but it is one of the areas being examined.
Is the Minister aware that 90 per cent of the people using town gas in Limerick are living in corporation houses and they would not be in a financial position to change to an alternative system? Further, is he aware also that the vast majority of hotels and restaurants in Limerick city are using town gas and this would cause further unemployment? I ask him not to stand idly by.
I am aware of the nature of the consumer pattern of the Limerick gasworks and I am aware also that the average consumption of gas of their consumers is extremely low. The Deputy must be aware of the difficulties experienced by many gas companies at the moment. Probably he is aware that only within the last few weeks Belfast Corporation decided to close Belfast gasworks, and there have been other closures. There is grave difficulty in this whole area and Limerick cannot be insulated from that. Subject to this, I am having the whole matter examined very urgently and carefully to see if anything can be done to alleviate the position.
I am calling Deputy Quinn.
I ask the Minister what time is likely to pass before he will be in a position to make a statement.
I do not want to put the time limit on it but I am well aware that the matter is extremely urgent.
Regarding the interrelationship of the national gas grid pipeline and the position of the Limerick company, can the Minister assure the House that the Limerick gasworks will not be closed or eliminated in advance of any decision about the national grid? I presume, and perhaps the Minister would indicate, that the existence of a consumer outlet in Limerick would determine in part the economics of the national grid.
I cannot give any such undertaking. Firstly, I have indicated already in another place that a decision on the question of the construction of the pipeline and the supply of natural gas to Dublin cannot be made in less than about 12 months. The problems of the Limerick gasworks are so acute that we could not possibly contemplate waiting 12 months before settling them. If the result was that the gasworks in Limerick were to close, this would have happened long before any decision on the pipeline would have been made.
I see the Minister's point about the relation between the acute situation in Limerick and the somewhat longer term possibilities which natural gas offers, but I am not too clear about why the Minister would take 12, or as he said originally, 18 months or why the Government need to take so long to make up their minds——
A question, Deputy.
Why is it necessary to take 12 or 18 months for the Government to decide whether to build this pipeline?
The decision to build the pipeline would be consequent on a decision to supply natural gas to Dublin. The decision to supply natural gas to Dublin is contingent on, among other things, the Dublin Gas Company putting their house in order in various ways I have outlined in another place. It will not be possible to determine whether that is being done and whether there is a realistic prospect of its being done in less than 12 months. Apart from that there are other technical factors involved and I am advised it will take a minimum of 12 months before the decision can be made.
We are getting away from the original question. We have had eight supplementaries already. The Chair must move on.
I see the Minister's point, but would he agree that it places a terrible national responsibility on a private company in regard to what is a very important national energy decision and that this private company ultimately would carry the blame if the wrong decision were made?
The question deals with Limerick. We are getting into Dublin now. We will have a final supplementary from Deputy Quinn. We have had ten already.
Arising out of the Minister's reply in relation to the Dublin Gas Company, they are interconnected to the national grid. Would the Minister agree that Dublin Gas Company cannot begin to attempt to put their house in order until a promise about the long-term supply of natural gas is made in advance?
The question deals with Limerick. We are not dealing with Dublin.
I know we are not, but the Minister did introduce it.
I know he did but he should not have done so.
It appears from the question asked and the answers the Minister has given that natural gas is thought of as the saviour of both the Dublin and Limerick companies. At the moment I understand that An Bord Gáis are in negotiation with the Cork Gas Company to charge an oil equivalent price for natural gas. Is it then contemplated that Dublin and Limerick because of their financial position would get gas at a cheaper rate than Cork? Is that what is being suggested?
I can assure Deputy Barry that he need not have any worries on that score. The one gas company in the country that is assured of a supply of natural gas is Cork.
Would the Minister not agree that it is the price——
I have called question No. 14.
There is no question of favouritism in this area for Dublin or Limerick.
If it is an oil equivalent price it will not help the financial situation.
We can debate that at some future date. Question No. 14.