I suppose the first thing I should say on this Supplementary Estimate is that it makes a change perhaps, pleasant or otherwise I do not know, to have the Minister of State make the statement which I crave indulgence of the Chair to quote again. It is only fair to point out that had the Department remained an individual Department as it had been at the start of the year there would not have been an overall deficit in the Vote. In view of the statements made in regard to Supplementary Estimates introduced here recently the Chair will bear with me when I draw attention to that because we have at least that area of contention out of the way on this Supplementary Estimate as far as I am concerned. That does not mean there are not areas of contention with which I want to deal. There are, in fact, three major areas of contention with which I want to deal but, before doing so, there are some general observations I should like to make in regard to a number of items mentioned by the Minister of State.
First of all, in regard to the additional £275,000 sought under subhead A.2 for consultancy services, perhaps the Minister of State would elaborate a little more on the consultancy projects in regard to the development of natural gas and mining, areas covered by this additional sum sought. I do not want to suggest I have any objection to what is being done. On the countrary, I am quite sure it is part of the overall efforts to develop our natural resources and as such it is to be encouraged as strongly as possible but I would like to have a little more information on what is involved.
In regard to Avoca Mines, I agree fully with the statement of the position as put to the House by the Minister of State. This is a very difficult situation. A very considerable amount of State money has been expended over the years. Unfortunately, because of unforeseen developments, which could not reasonably be expected, it does not appear that the prospects for the mine of any possible future are great. They are, in fact, remote. That being so, the problem that arises for the Government is whether and to what extent the Government should continue to assist by subsidising the operation of the mine. The Minister is quite correct to draw attention to the fact that, if the Government were to cease assisting the mine in this particular area, as things stand there would be very little hope of alternative employment. It may well be that in due course with special efforts by the IDA and other State agencies it might be possible to provide reasonable hope of alternative employment for the men concerned. It would certainly be a major blow to the area if the Government were to cease the assistance being given at present.
With regard to the money being sought under subhead D for private bog development grants. I wonder would the Minister be able to give us some further information as to what has happened so far, whether he is satisfied with the way the scheme is operating. This is, of course, a new scheme and it is almost certain with any new scheme—particularly with one like this, for which there is very little precedent—that what was envisaged when it was launched may need to be altered or changed in the light of experience; whether the criteria which are operating are satisfactory; what kind of response is coming from all parts of the country; is the response mainly from co-operatives, from individuals or companies. If the Minister could give the House some information on how the scheme is progressing, it would be useful.
The Minister's description of the need for the development of privately owned bogs and the reasons for encouraging this in terms of national requirements are ones with which I would fully agree, although I might have to refer back to what he has said in that regard when speaking on some other matters on which I want to make some complaints. In so far as he has set out the reason for that, I agree fully with what he has said. With regard to the money being sought for the windpower project, could the Minister give us some further information in that regard? It was my understanding that the sum provided in the original Estimate of £290,000 was designed to cover four wind turbine generators being erected under the programme of the Department of Energy, as it then was, and also providing some additional money for certain other projects. That is, of course, apart from the programme being embarked upon by the ESB.
The four generators which were part of the Department's programme included one generator at Inisheer on the Aran Islands, to be erected in conjunction with Comharchumann Forbartha na nOileán and three generators to be erected under the auspices of An Foras Talúntais and operating under the direction of the Department of Energy. One was to be operated at Moorpark Research Centre in Fermoy, to heat water mechanically for use in a dairy and farm residence; another was to be used at Creagh Research Centre in Ballinrobe, County Mayo, for the purpose of draining land; another was to be used to generate electricity to heat water for a dairy at Ballinamore Research Centre in County Leitrim. I would like to know if these projects have gone ahead. The schedule would have required them to be in operation by autumn of this year.
The Estimate at the beginning of the year was designed to cover these and, in addition contributions to some other items — the installation of a 25 KW wind generator by Comharchumann Chorcha Dhuibhne in Ballyferriter, County Kerry, to provide electricity for the lighting and heating of some of the glasshouses which are operated by the Comharchumann, and also there was a proposal in regard to a water heating wind generator at Sligo Regional Technical College. I would like to know whether any of these items are included in the programme to be assisted under the additional sum now being sought for the wind power project.
We come now to the FEOGA Western Aid Development Project — that is the electricity aspect of it. It is, of course, a wider package than that, but we are concerned only about the electricity aspect of it. I am a little concerned that the amount being sought is only £700,000. In May or June last, it was estimated that the total expenditure for the remainder of 1981, excluding the contributions by beneficiaries under the scheme, would be about £1.25 million. Perhaps the Minister of State would explain why the figure now sought is considerably less than was then estimated. This is an important programme for underdeveloped areas. It is, of course, substantially assisted by the European Community and is of considerable importance to farmers in fairly remote areas for whom the cost of installation of electricity is now almost prohibitive. I am anxious, therefore, to see it progress as rapidly as possible. Indeed, the Minister of State indicated that that portion of the scheme which relates to the new provision of electricity, as distinct from other aspects of the scheme, is one which is being speeded up. I know that and know it is for a very good reason. Very many more farms would be served if that were done.
Therefore I am concerned if there is a delay occurring this year because the sooner it is under way the more farmers will be served. It may be that, as frequently happens, there are problems arising administratively when one is dealing with a scheme as complex as this and having to deal with the European Community and the ESB and other bodies. But I would like to know what is the situation and also to urge the Minister of State to keep up the pressure to keep that scheme going as fast as possible.
I want to comment in passing on the fact that yesterday the Tánaiste was in Belfast negotiating in connection with the possible extension of the natural gas pipeline from Dublin to Belfast. I wish him well in his endeavours in that regard. I suppose it is inevitable that in cases of this kind one is going to get some politicians or some Unionist hue objecting and saying that this is not for the benefit of people in Northern Ireland. It clearly is for their benefit, and it is quite unrealistic for any Unionist politician to pretend that because there is a land border between Northern Ireland and the rest of Ireland this affects in some way the natural resources available within Ireland. It does not. It makes a great deal of economic sense, particularly from the point of view of Northern Ireland, to be given access to our supplies of natural gas. It should be recognised that in the absence of those supplies of natural gas the whole town gas industry in Northern Ireland would be closed down. It should be recalled that the British Government made a decision a few years ago to close down the town gas industry in Northern Ireland and that a draft order in council was produced which, under the procedures now being followed in the absence of any parliament in the North, corresponds to the introduction of a Bill. That was laid on the table of the British House of Commons.
Now the position is that there is a distinctly good chance that agreement will be reached on the supply of natural gas to Belfast, thereby saving many jobs in the North and providing a reliable and, hopefully, steadily priced clean and efficient source of fuel to many hundreds of thousands of people in the North. That development is surely to the benefit of Northern Ireland provided the price is right and, of course, they will not enter into a deal unless the price is right. But there is no reason why agreement on a businesslike basis cannot be reached in regard to the price. That will come in due course. Having said that, I think I should also say that, while I have criticised certain Unionists in regard to their attitude to this, it is fair to say that that is not the attitude of all Unionists. Indeed, some Unionists have been quite active in promoting this project and are acting on the basis of the interests of their constituents, and I would congratulate them on the efforts they have made and the success which is, so far, attending their efforts. There never have been, in any discussion of this project, any political strings attached.
It has been discussed always on a commercial basis, recognising — and it is only realistic to recognise this—that we here in the South are willing to share this natural resource with the North where, if circumstances were different and we took a different view and regarded Northern Ireland as a totally foreign country and so on, we might well not be willing to make supplies available. To that extent there is a political implication in it. But that does not impose any obligation on the people in the North and the deal has been discussed and will, I hope be concluded on a commercial basis. I would like to pay some tribute to the Unionists politicians who took a much more realistic view of the interests of their constituents and actively worked to bring about this project. It is not complete yet, but I am quite confident that it will be. The groundwork which has been laid—and that goes back some years —is a sound groundwork. All the studies that have been carried out indicate that this is a feasible economic proposition from the point of view of both North and South. I hope that the Tánaiste and the Minister of State will be able to conclude an agreement in regard to it quickly so that the project could go ahead as soon as possible.
I want to come now to the major complaints that I said I wanted to make, and they are threefold. First, I want to refer to the apparent failure by the Government to protect our position in the European Community in regard to the building of a refinery. Second, I want to refer to the postponement of the Arigna electricity generating station for four to five years and, particularly, the postponement of the Ballyforan briquette factory.
In regard to the refinery it is no harm to recall what the position is. The only refinery within our jurisdiction is that at Whitegate, and that has been closed now for a very long time. Indeed, I think a statement from the Minister of State in regard to the Whitegate position would not be inappropriate. There is grave concern amongst the people working in Whitegate as to the future, and that concern is justified. But the significance of Whitegate is much wider than that of the future of the people in Cork. It is not, in refinery that we have got. It is not, in fact, the most modern refinery. It does not have the catalytic cracker capacity that a modern refinery has, but it is the only refinery we have got.
That being so, when I was Minister for Energy I made it quite clear to the companies operating Whitegate that, whatever else happened, it was not acceptable to the Government that this State should be left without any refining capacity. As far as I know, the Tánaiste and the Minister of State have taken the same line.
Certain things follow from that. One has to recognise certain economic realities but it is essential that we retain some refining capacity within our jurisdiction, that we do not leave ourselves totally dependent on the refining capacities of other countries. Being an island without oil resources of our own—at present, at any rate — for strategic reasons we need to have substantial stocks of crude oil of our own and a refining capacity which ultimately should include catalytic cracker capacity.
It is true that there is over-refining capacity in Europe, that some refineries are being closed down and that others are on short time. As a result of that situation efforts are being made in the EEC to discourage the construction of refineries.
That is perfectly understandable if it is applied to countries which already have an overcapacity, but it is not understandable if it applied to us. Being an island is a difficulty for us in regard to getting supplies. The only refining capacity we have is far below our requirements, is outdated and has not been working for months.
This is a serious position for us. I have been talking about stocks of crude and refining capacity and I should like to know what are the prospects for having adequate stocks of crude and the refining capacity of Whitegate being made available to us as soon as possible. However, that is only a background to my complaint, which relates to an issue referred to in a report in The Cork Examiner, on the front page, on Friday, 4 December last. It is headed “EEC Anger at Tarbert Refinery”. I will quote from that report because it illustrates our problem:
Energy experts at the EEC Commission are highly critical of plans to build a new oil refinery in Ireland.
Such plans were unveiled on Tuesday by Aran Energy Ltd., when it made public its request for planning permission for a £330 million refinery in Tarbert, Co. Kerry. The plant would create 2,000 jobs during the construction stage and continue to offer substantial employment later on when oil finds in the Atlantic will hopefully be flowing ashore.
Commission officials say they are totally unaware of Irish plans to build a new refinery. They have neither been informed nor consulted about such plans, which they consider inappropriate at a time when the Common Market is advising oil companies in the ten member states to cut down drastically on refining capacity. Guidelines to this effect emerging from Commissioner Etienne Davignon's Energy Department were adopted by a Council of Energy Ministers last October.
Commission sources say that at the time the Irish delegation mentioned the problems surrounding the Whitegate refinery but never mentioned any plans from public or private companies to extend capacity.
Later, the report states:
Major oil companies in Milford Haven, Wales, which count among important suppliers of the Irish market, yesterday also reacted negatively to plans to build up refining capacity in Ireland, several of these companies are coping with severe problems, and a reduced access to the Irish market could end up in closure for them.
At the outset I refer to the apparent failure of the Government to protect our position in the Community in regard to a refinery. I say "apparent" because I am referring to that report and, if I take it at its face value, it would be a very severe indictment of the Government. Therefore, I invite the Minister of State, if he can do so, to refute the allegation contained in that article because it suggests that our representatives at the Council of Ministers of Energy accepted guidelines which would prohibit the creation of new refining capacity in Ireland, with a reservation in favour of Whitegate, but no other reservation.
Apart from the announcement by one company in regard to plans for a refinery in the Shannon Estuary which prompted this story, we know that there is another and more advanced proposal being dealt with by the Department of Energy for a substantial refinery in Ballylongford on the Shannon Estuary. If it is true that no effort was made by the Government to preserve our position in that regard and if the Government have accepted guidelines which would prohibit us from going ahead with at least one of those projects on the Shannon Estuary, the Government would be guilty of a very serious and grave dereliction of duty, because, as I have indicated, our position is not the same as many EEC countries which are now pressing to prevent any new refining capacity being created. Our position is that we do not have refining capacity other than the unused capacity at Whitegate, which is in need of modernisation and which even then would be below half of our requirements. From a security and supply point of view we cannot accept that position and we should be trying to get new refining capacity installed in addition to Whitegate.
Nobody in his senses would think of investing the huge sums of money now required to construct an oil refinery unless he had guaranteed access to adequate supplies of crude oil to make the operation of the refinery viable. A lot of the trouble for many of the refineries with overcapacity in Europe at the moment is that their owners do not have access to adequate supplies of crude oil. In the case of at least one of the projects for the Shannon Estuary the promoters have access to crude oil and that is the reason for the effort to build it there. We have a number of natural economic advantages for such a refinery, because of our location, because of the availability of deepwater facilities and because of our location in relation to both Europe and the eastern seaboard of America and the markets in both of those areas. In fact, the advantages we have in this regard were urged on me as Minister for Energy by one of the best-known figures in the oil world from the Middle East earlier this year.
It is clear that, although we need refining capacity, the cost involved is such that the Government would have to think very hard before embarking on it. In any event, even if they were willing to do so, since we have not got access to crude oil it would not make any sense. If there is access to crude oil, and if people are willing to invest the necessary funds in building a refinery here because of economic advantages which I have just touched on, the Government should be encouraging this as strongly as possible. It would be deplorable if the Government were to allow arguments coming from some countries in the European Community who have a problem of overcapacity to operate to have a circumscribed guideline in the Community which would prohibit us from having such a refinery. I trust the Minister of State will be able to refute categorically the story which appeared in The Cork Examiner to which I have referred. I have to say some information I have privately suggests that story is correct. I am not saying that positively because I do not know. I hope the Minister will be able to refute it.
The next item to which I want to refer is in regard to Arigna. The ESB Chief Executive, in a letter dated 30 September to the Chairman of Arigna Collieries, indicated that the electricity generator which was to be built there, and for which I had given approval in principle in April of last year, is to be postponed for a period of four to five years as far as I can see. It may not be quite obvious on the face of it how serious this is, and I should perhaps explain that electricity is generated there at the moment. The source of the electricity generation is local coal. It is running out and this new project would have been phased in just in time to maintain the employment of miners and others concerned.
This is a very interesting use of natural resources which would not have been possible some years ago. What is involved is called crow coal—locally it is called "craw" coal — which contains about 55 per cent stone. Some years ago it would not have been possible to think of utilising this at all. Application of the fluidised bed technique to this, with a number of experimental efforts by the ESB and people commissioned by them, produced a method of burning this crow coal which would be sufficient to enable a new generating station — not a very large one, about 45 megawatts — to operate.
It was estimated that the supplies of crow coal would last for at least 25 years. I gave a decision in principle authorising the go ahead for this generating station in April 1980. I find it very disturbing that it is now being postponed. I should like to quote from the letter from the ESB:
At the present time the bulk of our finance for capital development has to be borrowed abroad at high interest with substantial currency risks. We must curtail our borrowing to the minimum which is unavoidable. We would not be justified in going ahead with a project which is not needed to meet electricity demand and which has no cost/benefit advantage for the ESB. If there was not capital scarcity, indeed development of distribution and transmission systems would have a higher priority than Arigna.
That is a view expressed by the ESB. It may make sense within the narrow confines of the ESB's terms of reference. I do not want to get into an argument about that, although perhaps it could be argued that that is not so. Accepting that within the ESB's narrow terms of reference that is so, the question arises: is that the way this whole problem should be approached by the Government as distinct from the ESB? Surely the Government should take a broader view of the situation.
I have indicated that if this project went ahead as planned, it would fit in very well locally with the problems arising from the running out of the existing coal supplies. From the point of view of the area concerned, the building of this generating station and the provision of crow coal for it would provide jobs for miners and workers on the construction of the generating station. What are these workers supposed to do now if it is postponed for four to five years? Are they expected to live on the dole for that period? If they can get away that is what they will do, and they will not be there if it is decided in four to five years to go ahead with this project.
All that is involved is a small generating station of 45 megawatts. However small, it represents a use of our indigenous resources. It represents a reduction in imports of either oil or coal. Therefore it makes economic sense. Perhaps a more disturbing aspect of this is that this matter was raised recently in the House by Deputy O'Malley and the Minister for Finance replied to him. I should like to quote something he said as reported in the Official Report of 1 December 1981 at columns 758 and 759:
Deputy O'Malley referred to matters concerning electricity. The decisions which have been taken, or may be taken, in regard to electricity, do not come within this motion. As a nation we cannot ignore that our existing capacity to produce electricity results in a production of 40 per cent more than our needs, that we use only about 60 per cent of our capacity. That gap is wider here than in most countries.
The money we are using to increase our capacity to generate electricity is being provided by the European Investment Bank and other such bodies, and they will naturally ask whether we need this additional capacity at this time, whether we need this additional investment in electricity generation, and whether we have the ability to generate the income from the use of electricity to enable us to repay the debts incurred to build the additional capacity. If average use is no more than 60 per cent of existing capacity to generate electricity there are arguments for at least being careful before committing ourselves to raising capacity even further, possibly widening the gap between use and capacity.
It may be that the Minister for Finance is now dictating energy policy—I hope it is not so—but, if it is, it might explain what is happening in this regard and in regard to Ballyforan. I cannot believe for one minute that any Minister for Energy, knowing the score, would subscribe to what is happening in regard to Arigna. I suggest that the Minister for Finance is wrong in what he said, in what I have quoted, both from the point of view of energy policy and indeed economic policy. All the international advice available to the Government, and indeed common sense, stresses that top priority for productive investment should be investment in energy projects which will reduce imports and our dependence on foreign supplies. If we add the problem about jobs in the area of Arigna—where there are few, if any, alternatives available for employment, at a time of an unemployment crisis in the country generally—if one adds that to the other economic reasons it becomes obvious that all economic and energy policy would indicate that small as is this project it should be gone ahead with as fast as possible.
Furthermore I do not know where the Minister for Finance got his figures but I do know that any electricity undertaking must have, as a very minimum, spare capacity equal to the largest generating station it runs. If one thinks about that for a moment one will see why—if that goes out of action they have to be able to replace it. That is true of any electricity undertaking. That is the absolute minimum. In practice more than that is required. That is not excess capacity. It is simply a necessary and essential part of operating any electricity undertaking. If one takes that into account I doubt very much if there is any accuracy at all in the figure given by the Minister for Finance of our having 40 per cent more capacity than we need. Even if that were true the kind of logic about which he is speaking does not make any sense to me but, if his logic is upheld, then why not stop the building of the Moneypoint electricity generating station which is very much bigger? Arigna would not add very much to our capacity. If one expects some kind of growth at some time in the future — which would add slowly to our capacity —Moneypoint would add enormously to our capacity. That is the logic of the case put forward by the Minister for Finance. But Moneypoint is not being stopped. I am not advocating that we should stop Moneypoint, on the contrary we should go ahead with it. What I am saying is that a project designed to use native raw material, to generate electricity and at the same time to answer an acute unemployment problem in a remote part of the country—which would, even in a small way, reduce imports of oil or coal—is one which from an energy and economic policy point of view makes absolute sense. It does not make sense to postpone it. I call on the Minister of State and through him, on the Tánaiste to direct the ESB to reverse their stance on this because there is no justification at all for it from any point of view and it is not something the Government should accept. It may be that it makes some kind of sense within the ESB's narrow terms of reference—I doubt it— but whether or not it does it makes no sense at all under the Government's terms of reference, and the Government should direct the ESB to proceed as fast as possible with the project at Arigna.
A somewhat similar situation arises in regard to Ballyforan where a new briquette factory was due to be constructed. In reply to a Parliamentary Question on 25 November last the Minister for Industry and Energy, replying to a question from Deputies Kitt, Callanan and Leyden in regard to Ballyforan, gave details of the employment which would be involved and went on to say:
The bog development programme of Bord na Móna is being re-examined by the board in the light of the board's projected capital needs in 1982 and, accordingly, it is not possible to say until this examination is carried out when work on the factory is likely to commence.
Although that is vague the message that comes through quite clearly is that this project is being postponed. How long it is being postponed is not clear but it is clear that it is being postponed. I might say in passing that there is a marvellous bit of circular reasoning involved in that, if I might read that last sentence again:
The bog development programme of Bord na Móna is being re-examined by the board in the light of the board's projected capital needs in 1982.
If they were going ahead with this obviously that would be a part of the board's capital needs for 1982. If they are looking at their capital needs this does not come at the tail-end. They must decide whether this is one they are going to do or not and then find out what are their capital needs. However, that is merely an observation in passing.
In this case, according to the Minister's reply, this briquette factory when in full production would employ a number of the order of 200 and the total number to be employed on the Derryfadda Bog and in the factory would be of the order of 600. Therefore the question of the provision of jobs, again in an area which is fairly remote, where there is little if any alternative source of employment, clearly arises here as in Arigna.
In addition to that there is, as everybody knows, a huge and unsatisfied demand for turf briquettes. Indeed the building of this factory was part of the effort being made to remedy this. Another part of it was in Littleton, County Tipperary where a factory, I think, had gone into production this year producing briquettes. But we also need the factory in Ballyforan to get anywhere near satisfying the demand for briquettes. I need hardly say that briquettes are perhaps one of the most attractive forms of fuel available based, of course, on our native resource, turf. The more briquettes we use the less money we spend on imported fuel. It is as simple as that. We should be pushing ahead and trying to get this under way as soon as possible. I want to pose a question to the Minister of State, and indeed to anybody else in this House: could there be a more productive or sounder investment than that in a factory producing turf briquettes for sale in this country?
However one looks at it, it is a sound, sensible and productive investment. Far from there being any question of a postponement, the Minister of State and his senior Minister should be breathing down the neck of Bord na Móna to ensure that they get on with the job. It makes sense from the overall economic point of view in that it will reduce imports, and it makes sense from the point of view of employment and energy policies.
I must say that I find this indication of postponement of the Ballyforan project and the positive decision of the ESB to postpone the Arigna project most disheartening. Apart from these cases themselves, if this is the way the Government think their financial difficulties should be tackled there is very little hope of any growth in the economy or any worth-while attack on our unemployment problem. The basic thinking behind the decision in those cases seems to me to be so perverse and so contrary to commonsense that it leaves one with little hope for the future under this Government if that is the kind of thinking that prevails.
It may well be that this kind of thinking will produce a neatly balanced set of books in due course but that is all it will produce. Certainly it will not produce growth or have any impact on unemployment. Neither will it advance in any way the energy policy that was taking shape in a way that I understood had general support and consensus on all sides of the House. I must say that I suspect, and I hope I am right in my suspicions, that the reasons for the two decisions lie not in the Department of Industry and Energy but in the Department of Finance and when I say Department of Finance I mean the Minister for Finance. I had experience of that Department and the civil servants concerned are quite capable of expansionist thinking with regard to our economy when that is appropriate. If the Minister for Finance is so set on acting as a book-keeper, without any sense of economic development or any intention practically to tackle the unemployment problem, it is time this was exposed. It is time that the Minister for Industry and Energy and the Minister of State stood up to this. They have an unanswerable, cast-iron case for insisting that the Arigna and the Ballyforan projects go ahead with all possible speed. Nobody can put forward a rational argument for not doing this.
I conclude by calling on the Minister of State to give us some hope that these decisions will be reversed. Whatever he has to say in this House, he must ensure that behind the scenes some commonsense will prevail in the approach to what are admittedly difficult problems on the financial side.