asked the Minister for Industry and Energy if he will now confirm that the reserves of natural gas at the Seven Heads field, Kinsale, County Cork is considerably in excess of the present estimate of those reserves and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Natural Gas.
20.
My Department's reserve estimates on the Seven Heads prospect are based substantially on information which is confidential to the Department and to Esso-Marathon and consequently the actual figures may not be published. An extensive re-examination of this prospect was put in hands in my Department recently and the report is now almost completed. The preliminary indications are that the Department's previous estimates of recoverable reserves will not be significantly increased.
Is it not a fact that the reserves have been discussed in public on a number of occasions and by officials in the Minister's Department and that they are not confidential because they are a matter of public knowledge? Is it not also a fact that the present re-testing of reserves was initiated by the previous Government and that there are indications that the reserves are substantially in excess of the present public figure?
I am aware that figures have been quoted in the newspapers in relation to the reserves and that the original estimate has been increased in recent times. The report I mentioned will indicate whether there should be a further raising of the estimates.
Will the Minister indicate when the report will be on his desk and if, in view of the public importance of the information to be contained in it, the updated reserves will be published?
I expect to have the report shortly.
What is the significance of the change in policy here? As the former Minister of State correctly remarked, we went public at official and ministerial level on any revised figures on the reserves in the field. What is the reason for this about-turn in policy in relation to the confidentiality of the revised figures?
When I receive the up-to-date report I will make a decision on the matter.
Would the Minister not agree that previous practice has been to release these figures because the public are entitled to know what the figures are?
When I receive the report I will deal with the matter.
21.
asked the Minister for Industry and Energy the policy of his Department and An Bord Gáis in regard to supplying natural gas to the Dublin Gas Company.
22.
asked the Minister for Industry and Energy the effect of the supply terms arranged between An Bord Gáis and the ESB in regard to the supply of natural gas on the cost of electricity to industrial and domestic consumers; and if he will make a statement of the Government's intentions regarding the supply of natural gas to the ESB in the next five years.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 21 and 22 together.
On a point of order, I would submit that these are two distinct questions referring to two different utilities, the Dublin Gas Company and the ESB. The questions should be taken separately because of the different problems connected with them.
It is not a question for the Chair, much as I would like it to be. It is a matter for the Minister.
It is a very unwieldy amalgamation.
It certainly is but there has been no effort to change it. It is a situation over which I have no control.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 21 and 22 together.
Negotiations on a supply of natural gas are at an advanced stage between BGE and the Dublin Gas Company and I am hopeful that they will be concluded shortly. I am encouraged by management changes in the company and by the operation of a comprehensive works agreement with employees. Reforms in the operation of the company will continue to be monitored and I envisage that any arrangements with the company will be tied to its performance in achieving planned market performance.
Consistent with the long-term requirements of premium markets, such as Cork, Dublin and other populated centres, and with a prudent depletion policy for the Kinsale Head field, it is envisaged that significant quantities of gas can be made available for electricity generation in Cork and Dublin over the period mentioned.
At current quantities and contract price the supply terms arranged between BGE and the ESB have the effect that the price of electricity to the consumer is of the order of 10 per cent less than if imported heavy fuel oil were being used. I would emphasise that the level of electricity prices is influenced by factors other than fuel costs and that the benefit of natural gas use at any particular point is affected by factors such as the level of offtake of gas and the prices of other fuels.
In relation to Question No. 21, is it not a fact that the delay in agreeing a price with the Dublin Gas Company is detrimental to their development plans and that if the price is not agreed in the very near future there may be a delay in connecting the gas supply to domestic and industrial consumers in the Dublin region?
Development plans are not being held up and neither is the supply.
Would the Minister not agree that there have been long negotiations between BGE and the Dublin Gas Company regarding supply and the price of the gas and that there has been an undue delay in finalising the price of the gas and the rebate system?
These negotiations have been of long duration but I am sure the Deputy is fully aware from his experience in this. Department that there were reasons for it and that the arrangements with the company were to be tied with performance in achieving certain restructuring within the company and a planned market performance. I assure the Deputy that the development plans are not being held up.
Would the Minister agree that the correct strategy in the long-term must be to increase domestic and industrial offtake since this is the best means of making this natural product most cost-competitive? Would he agree that the speed with which we complete the pipeline arrangements between Dublin and Belfast have a bearing on this? Could he throw any light on delays which may be occurring in this matter?
I agree that this is the correct strategy and it is one which I am pursuing. There has been no delay in the construction of the gas pipeline from Cork to Dublin. As the House is aware, I recently met the Northern Ireland Minister, Mr. Adam Butler, and there was broad agreement on many issues. Officials from both sides are carrying out an immediate examination of other areas and I expect to have another meeting with Mr. Butler within a matter of weeks.
Regarding the cost of electricity to industrial and domestic consumers, is the Minister aware that there is widespread public concern, especially in view of the fact that there is an oil glut and also because there is a supply of natural gas to the ESB? Would the Minister consider abolishing the fuel variation clause in electricity accounts in view of the fact that it is now within our power to control the price of electricity to both industrial and domestic consumers?
The Deputy should be aware that the price of electricity is a matter for the Minister for Trade, Commerce and Tourism. It is a separate question which should be addressed to another Minister.
The price of natural gas is within the competence of the Minister present, as is the supply of this gas to the ESB. In that context, would he be kind enough to answer the question?
I have already said that the price of electricity is a matter for the National Prices Commission, who are under the aegis of the Minister for Trade, Commerce and Tourism. That Department have received and will continue to receive full information from my Department in relation to various inputs in the cost of natural gas to the ESB. They are fully familiar with the matter when they consider a price application from the ESB or when examining the whole question of electricity charges.
I have rarely come across an occasion on which so many parliamentary questions have been so adeptly avoided by a Minister.
(Interruptions.)
A final supplementary from Deputy O'Leary.
The Minister is aware that the ESB have had their offtake from Kinsale increased to 140 million cubic feet from 1 April. Is the Minister satisfied that this is the most cost-efficient method of utilising natural gas?
The Minister is aware of the situation in relation to usage but I am sure Deputy O'Leary is also aware that bulk customers were needed in order to get the pipeline into use in the first instance and to cover development costs. This is one of the reasons for the supply of gas being made available to the ESB on an interruptable basis. Regarding the contribution of natural gas to electricity prices, my Department keep the other Department fully aware of the quantities they are getting so that this can be taken fully into account in assessing electricity prices.
23.
asked the Minister for Industry and Energy if he will outline his intentions regarding the supply of natural gas to Northern Ireland; and if he will particularly outline (a) the quantities involved on an annual basis; (b) the pricing policy to be adopted by him; (c) the route to be taken; and (d) if an underwater route has been considered; and if he will make a statement on the matter.
The Government believe that mutual co-operation in energy between North and South can be of major benefit to both communities. A supply of natural gas to the North would provide an opportunity to develop a cooperative venture with potential for mutual advantages.
Very recently I met the responsible Minister in Northern Ireland, Mr. Adam Butler, and we discussed certain issues outstanding. Progress was made and we agreed that certain officials would examine the main unresolved questions before the Ministers meet again in the very near future. Since questions relating to quantities and pricing arrangements still remain to be finally settled, it would not be appropriate for me to comment on them at the present time.
All options on the routing of a possible pipeline to the North will be evaluated fully. Until this evaluation has reached a more advanced stage than at present I will not be in a position to make a statement on the feasibility of the suggestion at (c) of the Deputy's question.
On the schedule of construction that the Minister is now adhering to, I had thought that, based on our contracts with the Belfast authorities, we could see the agreement already signed, work got under way before the Summit and the project completed by next year.
I find it very difficult to understand the question the Deputy is now asking. When he left office he must surely have been fully aware——
Thanks for the compliment.
——that all the problems relating to the Cork-Dublin gas line in relation to acquisition and CPOs were not dealt with by him before he left office. How he can suggest in this House that the programme for bringing to Belfast gas which has been brought from Cork in the first instance, could be completed in the time-scale he is talking about is beyond my comprehension.
the Minister is now talking to a low common denominator not even up to the style of his earlier answers to questions today.
(Interruptions.)
Relating to the schedule of construction previously agreed on the Dublin-Belfast line which, as the Minister knows, is a separate matter, of course the gas must come to Dublin and that schedule is being adhered to. In the course of these discussions——
Not talking of any assistance you are getting.
That remark is uncalled for.
Deputy Collins must be fully aware that 129 files have to be gone through, that a contract was signed for starting on 1 April with a tenancy clause on it ——
(Interruptions.)
Please allow the Minister to speak.
(Interruptions.)
Deputy O'Leary, please complete your supplementary.
Does the Minister believe, in the light of his dealings with the Belfast authorities, that the previous schedule can be adhered to?
The Deputy knows full well that the discussions had not reached that point at the time he left office. If they had, the negotiations would have been finalised long ago, but it was not the position and he knows that quite well.
Would the Minister try to ensure that in any studies regarding the direction of the pipeline to the north of Ireland, to Belfast, if it is going near the towns north of Dublin, that is Drogheda and Dundalk, the possibility of supplying natural gas to these large towns will be considered?
The Deputy can be assured that these towns will be considered when the gas pipeline is going out.
The remaining questions will appear on the Order Paper for Wednesday, 26 May 1982.
(Limerick East): I give notice that I wish to raise on the Adjournment the matter that Aer Lingus have arranged to over-fly Shannon in their charter flights to Toronto in the summer months. This is very serious for Shannon Airport and the mid-western region.
I will communicate with the Deputy.