Before I move the Estimate, may I say lest I get blamed for the clocks in the House that I have no responsibility for that matter.
Estimates, 1985: Vote 48: Energy (Revised Estimate).
Nobody knows who is responsible for them.
Certainly I have not. I apologise for delaying the House. I move:
That a sum not exceeding £10,277,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1985, for the salaries and expenses of the Office of the Minister for Energy, including certain services administered by that Office, and for payment of certain loans, subsidies, grants and grants-in-aid.
In presenting this Estimate for the Department of Energy, I would like to take the opportunity of describing the role which I see for my Department and to hear the views of Deputies on the matter.
As Deputies will have noted, the Estimate for the Energy Vote is quite small but the amount to be voted does not fully reflect the extent of those activities for which the Department exercise responsibility. I am also answerable for the plans and overall operations of the State agencies in the energy area — the ESB, Bord na Móna, Bord Gáis Éireann and the Irish National Petroleum Corporation, as well as the Nuclear Energy Board. I intend to advert in my speech to the work of these agencies and Deputies will, therefore, be given an opportunity to discuss all aspects of energy policy.
Before going on to the details of the Estimate, I would like to draw the attention of Deputies to the very significant financial contribution the Department are making to the revenues of the State. The Estimate indicates that, in addition to Appropriations-in-aid, that is, income generation totalling over £2.6 million, it is expected that Marathon will pay about £6.7 million in Kinsale Gas royalties to the Exchequer in 1985. It does not, however, record that some £87 million is to be remitted by Bord Gáis Éireann direct to the Exchequer on foot of receipts for natural gas. As well as contributing to the revenues of the State, the activities of the Department and their associated agencies confer major economic benefits on this country. I will deal with those later in my speech.
Deputies will note that the Estimate for the year is just short of £10.3 million and shows an increase in net expenditure of £1,368,000 over the outturn for 1984. There is an increase in estimated expenditures in 17 subheads amounting to £2,597,000 but this increase is offset to a large extent by a reduction in the estimated expenditure in three subheads amounting to £500,000 and an increase in the estimated Appropriations-in-Aid amounting to £729,000. The largest increases in expenditure occur in two capital services — subhead M — Bord na Móna, Grants for Private Bog Development (£500,000) and subhead P — FEOGA, Western Aid Electrification (£924,000). Over a quarter of the gross expenditure is provided for capital services. The largest increases in non-capital services occur in subhead A.2 — Consultancy services (£342,000), subhead D — Geological Survey (£172,000) and subhead A.1 — Salaries, wages and allowances (£158,000). Most of the reduction in expenditure occurs in subhead L — State support for mining operations (£387,000).
Government policy on energy has as its main objectives the promotion of the use of domestic energy sources and the lessening of our dependence on oil by broadening our choice of fuels together with initiatives to encourage exploration for additional domestic supplies of oil, gas and coal. These policies are designed to achieve the maximum benefit to the country from our indigenous resources by implementing appropriate and consistent pricing policies.
The use of domestic energy sources has been advanced primarily by the development of the Kinsale Head gas field and through infrastructure investment in the gas network. This includes the construction of the Aghada ESB station to use gas, the conversion of Marino generation station, Cork, to gas firing, the laying of the Cork to Dublin pipeline and the conversion of plant at North Wall and Poolbeg, and the development of the Dublin and Cork gas companies.
Bord na Móna continue their turf development programmes for supply to ESB turf-fired stations and for private use. We have also seen a continuation of investment in the private bog development scheme, for which Bord na Móna act as my administrative agent.
As a direct result of these strategies native fuels increased their share of total primary energy requirements from 19.4 per cent in 1979 to 41 per cent in 1984. These reductions in dependence on imported fuels are due mainly to the use of natural gas.
Hand-in-hand with these efforts we have pursued a strategy of broadening our fuel mix to guard against physical shortage and price increase impacts. The most notable success of that strategy has been the construction of the Moneypoint coal burning electricity generation station, the first phase of which is due to come on stream next October.
This diversification in our national fuel mix, together with the maintenance of an oil refining capacity at Whitegate, improves our security of supply position. The medium term outlook now looks more stable and the economy less vulnerable to sudden disruptions in supply or to the impact of severe oil price rises. We must constantly seek further ways and means of reinforcing this situation.
The use of natural gas for electricity generation and the development of the gas network through the construction of the Cork-Dublin pipeline, together with the extension of the gas network principally in Cork and Dublin have introduced a major element of competition with oil, and a choice of fuels for industrial, commercial and domestic consumers.
Furthermore, the allocation of natural gas for electricity generation and very favourable prices since 1979 — often about half that or less than what the alternative fuel, oil, would have cost the ESB, have reduced the ESB's fuel costs and tariffs for all users. In particular the allocation, which I made earlier this year, of an additional 10 million cubic feet per day of gas to the ESB is specially designed to improve the competitiveness of electricity for industrial users.
The policy of encouraging exploration for additional supplies of native energy sources is continuing. The number of exploration wells to be drilled offshore in 1985 will equal the 1984 drilling. While the majority of the wells will be located in the Celtic Sea, the prospectivity of other areas, such as the Porcupine Basin off the west coast and possibly, the Kish Bank Basin in Dublin Bay, will be tested. At present Britoil are drilling in the Porcupine and Esso in the Celtic Sea. Other oil companies are finalising their plans in order to commence operations later in the season. Deputies will be aware of the announcement of the results of the BP well, 48/18-1, in the Celtic Sea which showed an encouraging gas flow and will help to intensify interest in our offshore potential.
This year will also see awards of further offshore licences, under our third round of exclusive licensing. Deputies may recall that because of the late availability of certain technical data the closing date for the receipt of applications — originally fixed for February this year — was postponed to mid June in order to provide sufficient time for companies to fully evaluate all the blocks on offer. Given that our round coincided with similar rounds in other European areas and that certain material facts became available to companies only recently, the degree of interest in the round has been satisfactory. All in all, 27 companies are seeking licences under applications submitted by 13 consortia. These include a number of companies new to the Irish offshore as well, of course, as many of the companies already operating here. My Department are now involved in detailed discussions with the applicants. When all necessary negotiations have been completed the full picture will emerge of the acreage and associated work commitments to be covered by the licences to be awarded in the round.
I hope to announce the award of licences sometime in August. I am confident that as a result of the round the next few years will see some acceleration in the pace of exploration.
Despite the continuing weakening of world oil prices, and increasing competition for scarce exploration funds, interest has still not been lost in the deeper waters off our coasts. As I mentioned previously, Britoil are drilling their first exploratory well offshore Ireland in the Porcupine Basin and another company, new to Ireland, Quadrant Exploration, have carried out an extensive seismic programme over three Porcupine blocks, which they hold under option agreement. More recently, an agreement has been reached with BP giving them an option on seven Porcupine blocks in which they have a keen interest. Apart from wells to be drilled if the area is eventually licensed — and there is provision for up to four wells in the initial phase of such licence — the agreement provides that BP will immediately shoot 1,500 kms of seismic over the blocks. This work has already commenced.
My professional advisers believe that the Porcupine Basin has considerable potential and to advance exploration there my Department are in the process of preparing a comprehensive report on the geology, geophysics and geochemistry of the basin. This report will be made available for purchase by the oil industry. It will be prepared along the same lines as the report which was produced for the Celtic Sea Basin, which on its publication evoked a positive response from the exploration industry and led to an upsurge in exploration activity in that particular area.
The Government are well aware of the commercial realities facing the oil exploration industry at the moment. Earlier this year, the Minister for Finance issued a statement giving details of the taxation regime which will apply to oil and gas developments. By and large, the industry has welcomed that statement. More recently I outlined in the House the manner in which I would apply, in the case of marginal fields, the discretionary power available to me under sections 23 (7) and 29 (2) of the 1975 exclusive off-shore licensing terms. These two sections empower me to reduce the levels of royalty and "carried" State participation in order to enable a marginal field to be developed and, at the same time, to provide a reasonable return on the expenditures to be incurred by the licence holders.
The new arrangements, without going into much detail, provide for a formula governing royalties, State participation and carry, based on a profitability indicator. Relief, by way of the formula, will only apply in the case of marginal fields, and by a "marginal field" I mean one on which the return on investment does not adequately reward the investor for risk, taking account of alternative investment opportunities.
The arrangements I will be applying may seem rather complex. This is unavoidable, because it is a delicate exercise which needs to strike a fair balance between the State's interests and the need to allow an adequate return on the high risk investment of the oil companies. The matter has been studied in great detail in my Department and the arrangements to be applied have been tested over a wide range of hypothetical cases. I am satisfied that they are the fairest that can be achieved.
The new arrangements, which will apply to new licences, including licences granted under the third round, will facilitate the more competitive and better endowed companies in committing the large funds involved in exploration and will at the same time safeguard the State's entitlement to its due share of revenue from a field. I will, of course, be prepared to consider on a case by case basis any requests from the holders of existing licences to have the new arrangements made applicable to their current licences.
Despite the fact that 85 exploration wells have been drilled offshore Ireland, I still believe that the potential of our acreage — which is very considerable — is far from fully tested. While we would have wished for better results to date, we have nonetheless one producing gasfield and there have been quite a number of encouraging flows of oil and gas. Regrettable, it is a fact that many of the wells drilled in the Celtic Sea did not penetrate the deeper geological horizons which now, in the light of more recent developments and with the availability of better quality seismic data, are considered to be more prospective than was originally believed. My Department have been trying to ensure that as much information as possible should be made readily available to the exploration companies and to encourage them to participate in our exploration programme. Indeed, over 10,000 kilometres of speculative seismic have been shot in preparation for the Third Round over the blocks on offer. Arrangements were also made in 1984 for all available non-confidential well and seismic data to be commercially marketed on a worldwide basis so as to ensure maximum access to that data for the industry. Companies are aware of this and, indeed, many of them have acquired large amounts of the latest available good quality seismic data which, together with the most recently available well data, will in the future form the basis for sound exploration programmes.
Onshore exploration activity continued during 1984 in the North West Carboniferous Basin, where two exploratory wells were drilled, one in Cavan and one in Leitrim. Unfortunately, only minor indications of gas were encountered in each case. These two wells were part of a four-well exploration programme relating to the entire Basin, which extends to areas north of the Border in County Fermanagh.
My Department, in consultation with the licensees, are now considering possible arrangements to provide for further exploration work in the licensed area.
During 1984 a new onshore licence was awarded to the Tullow Oil Company. The licensed area covers parts of counties Carlow, Kildare, Kilkenny and Laois and, following the satisfactory execution of the initial work phase of their work programme, which was commenced this year, the licensees will have earned the right to a one-year extension of the licence during which they will be committed to drill at least one exploratory well.
I would now like to focus briefly on two other issues relating to oil supply. While other energy forms, particularly natural gas, are now playing an increasingly important role in meeting Ireland's energy requirements, oil remains the primary energy source and will continue to be very important for many years ahead.
Deputies will be aware that the issue of the Whitegate refinery is one that comes frequently to the fore in any Irish energy policy debate. The background to the State acquisition of the refinery and the introduction of the mandatory offtake regime in September 1982 is well known, and I do not intend to dwell on past history on this occasion. The mandatory offtake system was challenged in the Irish courts by some oil marketing companies in Ireland, and was defended by the Government. In July of last year the European Court ruled that, while the mandatory offtake system amounted to a quantitive restriction on imports — prohibited under the EC Treaty — an exemption from this probibition may in certain circumstances be justifiable on grounds of public security as provided for under the Treaty.
Although it was a year of two distinct halves in terms of market and refinery economics internationally, Whitegate got through 1984 within the target levels which were anticipated when the purchase of the refinery was entered into. While international developments played a major part in these matters, the INPC and the Whitegate workforce have themselves achieved significant improvements.
During 1984 my Department entered into more intensive negotiations with Gulf Oil in relation to the Whiddy Island oil terminal. Those negotiations concluded in a package which I outlined to this House last December. The formal contractual agreement with Gulf which embodied this package, the principal element of which provided for reconstruction of the terminal's jetty, was signed on 4 February 1985. Since then preparatory work on the project has been under way, including discussions between Gulf and various Government and local authority agencies, to ensure that the project fully takes account of the recommendations of the Costello Tribunal report into the Betelgeuse disaster at Whiddy in January, 1979.
Turning to mining, there has been a fall-off in the level of exploration in recent years for a variety of reasons largely outside our control. This has been a world wide phenomenon related to the recession in economic activity. My Department have taken various steps with a view to attracting foreign exploration companies to Ireland such as the improvement of services, in regard to information and otherwise, available from public agencies. I am glad to state that the steady decline in recent years in the number of exploration licences appears to have been arrested and we are looking forward to an increase in the number of such licences in the current year.
I have mentioned in the House recently the position in regard to the Tara-Bula takeover deal. While agreement in principle was reached some months ago, the deal in question has not yet been completed and I am not, therefore, in a position to give full details. The preparation of the necessary contract documents and an examination of certain financial details have been in train for some time. A number of significant problems emerged in the course of these exercises, which necessarily took some time to resolve. I am hoping, however, to bring the matter to a satisfactory conclusion in the near future.
I am determined to ensure that in this case as in other cases there is a reasonable return to the State in terms of tax, royalties and dividends. In fact, towards the close of last year Tara Mines complied with our wishes not to issue redeemable preference shares which would have diminished the rights of the State.
I wish now to refer to the activities of Bord na Móna. Today, Bord na Móna contribute about 15.3 per cent of our national energy needs. At the end of the 1983-84 production year, turf accounted for 1.303 million tonnes of oil equivalent in our national energy supply. The overall Bord na Móna capital estimate for 1985 is nearly £11 million which is mainly for the continuation of bog development work under the board's Third Development Programme. Significant provisions include £1.914 million for railways, £1.794 million for machines, £2.337 million for drainage and £0.612 million for buildings. The Ballyforan briquette project was deferred by decision of the board in 1984. Consequently no provision has been made for it in this year's Public Capital Programme.
In 1985, production will consist of 4.8 million tonnes of milled peat, 0.484 million tonnes of briquettes and 0.415 million tonnes of sod peat. Production of moss peat will rise from 1.424 million cubic metres in 1984 to 1.5 million cubic metres in 1985. Over half of the milled peat will be used for electricity generation and the remainder for the production of briquettes. Sales in 1984 were 4.321 million tonnes of energy products and 1.424 million cubic metres of moss peat with a total value of £112 million. Sales in 1985 are estimated at 4.509 million tonnes of energy products and 1.5 million cubic metres of moss peat with a value of £121 million. The Government are committed to the continued development of this valuable indigenous energy resource for electricity generation and for domestic use.
The Private Bog Development Grant Scheme, which came into existence almost four years ago, has had a wide welcome and the indications are that it is highly successful. The 1985 allocation for the grant scheme is £1.5 million. Since its inception, approximately 550 schemes have been grant-aided and to date £3.327 million in grant-aid has been approved in respect of the development of some 1.5 million tonnes of sod peat under this scheme. I have just received a review of the scheme and my preliminary conclusion is that this State encouragement was a major influence on this significant production of domestic energy supplies. It is clear too that the existence of the scheme has promoted the development of more efficient machines and production methods.
I turn now to the electricity sector. The Electricity Supply Board's non-voted capital expenditure for 1985 will be of the order of £230 million. This provision represents a decrease of 7.6 per cent on the 1984 outturn of £249 million and signals the beginning of an era of reduced capital expediture by the board as completion of major projects such as the Moneypoint generating station comes to an end.
1985 is a significant year in the development of the ESB as the first 300 megawatt coal fired unit at Moneypoint comes on stream next October. The Moneypoint coal project was conceived to lessen our dependence on oil as a basis for electricity generation and to give major fuel economies. Steam coal is now considerably cheaper than oil and it is believed internationally that this price differential will continue long term.
The provision for expenditure on generating capacity in 1985 will be £140 million; £136 million of this sum will be spent on work at the Moneypoint site. The balance of £4 million relates to residual expenditure on the extensions to peat fired stations at Lanesboro' and Shannonbridge and the new gas fired combustion turbines at North Wall in Dublin.
The board's expenditure on premises and general equipment is expected to amount to £4.2 million. A major portion of this expenditure will be on the completion and equipping of the national control centre at head office in Dublin and refurbishment of a number of area depots throughout the country. The board anticipate that the expenditures on the new national control centre will achieve efficiency savings of up to £2.5 million per annum in their fuel costs.
Expenditure by the ESB on transmission and distribution projects will amount to about £82 million in 1985. This includes £25 million for the 400kV lines from Moneypoint to the east side of the country and £5 million on maintenance of standards on the existing transmission system. Expenditure on distribution projects will account for the remaining £52 million in 1985. This expenditure is required to maintain an acceptable level of service to existing customers and to strengthen electricity distribution networks for the connection of new customers.
The sum provided in the Vote this year for the Western Package Electrification Scheme is just over £2 million. The aim of this scheme is to improve over a ten year period the viability and competitiveness of farms through the extension and improvement of electricity supplies to farms in the region.
Eligibility is in accordance with EEC Regulation 1820/80. Those who qualify for aid must be principally dependent on agriculture for their income. The State and the EC each contribute 40 per cent of the cost of connection, the remaining 20 per cent being borne by the beneficiaries. To date, 3,264 applications have been approved under the scheme at a total cost of £7,640,683. It is anticipated that a further 699 farms will benefit under the scheme in 1985. I have recently carried out a review of the scheme, and I have put forward for approval by the Commission certain proposals with a view to its improvement.
The recent publication of the report of the inquiry into electricity prices is the result of independent analysis and research into the cost structure, operations and organisation of the Electricity Supply Board. The inquiry team was appointed in July 1983 under the chairmanship of the former chief executive of the Danish Electricity Utility, Elsam, and included in its membership representatives from industry and Government Departments. I have referred the report to the ESB for consideration of its various recommendations and I expect that in the near future we will have our first opportunity to assess how these are being or are to be implemented. The ESB have, as Deputies will be aware, already embarked on a variety of initiatives designed to improve overall efficiency and to effect price improvement. There are no easy or simple routes to this end, bearing in mind many adverse factors, among which are a few years of negative growth in demand, high dollar exchange rates and other; but I do agree that maximum efficiency and price improvement must be a top priority for the board.
Natural gas from the Kinsale gas field is broadening our fuel mix to a significant degree, providing a secure supply of essential energy until the end of the century and contributing handsomely to the economy by displacing a significant proportion of expensive imported oil products. For example, in 1984 natural gas displaced the equivalent of 2.09 million tonnes of oil, representing approximately 22 per cent of Ireland's primary energy input. As I have mentioned already, BGE are also a substantial contributor to the Exchequer. The amount to be paid this year is estimated to be £87 million, an increase of £33 million over last year's contribution. The explanation for this is that the State places in the hands of BGE, at a very competitive price, an asset which belongs to the people as a whole. The marketing of these resources in accordance with approved economic criteria inevitably gives rise to a large surplus in the books of BGE and it is clearly appropriate that this profit should be available, through the Exchequer, for the benefit of the people as a whole. Those who advocate "give-away" policies by BGE for the benefit of special interests, and those only in the regions linked to a gas supply, should bear this in mind. Moreover, market clearing prices are urged by EC and IEA to try to ensure rational use of energy. The Government adopted the policy of energy related pricing in 1982.
Under present policy, I am planning the depletion of the Kinsale field over 25 years approximately from 1979. The bulk of this is going towards electricity production, industrial and commercial use and the premium market of domestic and home heating uses. If there are further supplies of gas available, policies on allocation and price will be reviewed. I would point out to the advocates of cheap gas that it would make little economic sense to lay a costly capital infrastructure at heavy State expense based on a lower gas price than later further supplies will be available at. Such a development would be unlikely to endure. Imported gas is certain to be costlier than present supplies and any new indigenous gas is not likely to be cheaper either.
Following the agreement reached with the Dublin Gas Company last year, the development of the largest premium market in the country for natural gas is now fully under way. While sales by that company in 1984 fell somewhat short of projected levels, Dublin Gas Company are confident that they will achieve their sales target in 1985. Overall sales of gas in the Dublin region are targeted to show an eight-fold increase between 1982 and 1991. Despite some minor setbacks, Dublin Gas Company's major conversion and development programmes are progressing within budget.
The State's contribution to the project consists largely of rebates off the price of the gas delivered to the Dublin Gas Company, while the State has a significant shareholding in the company and is entitled to a large share of the profits. All in all, projections of the amount of moneys accruing to the State over the life of this project are expected to be about £740 million, and I would like to assure the House that so far as I am concerned there will be very little room in the affairs of Dublin Gas for speculator profits.
Government policy dictates that natural gas should be distributed to population centres and industrial consumers only where it is economically feasible to do so. Regard must be had to appropriate rate of return on investment in such supply projects. In adopting this policy the underlying consideration was that the gas should be utilised so as to derive the maximum possible benefit for the community as a whole while at the same time making it a competitive and cost-efficient fuel.
Accordingly, consideration of the supply of natural gas to towns or industries must necessarily be based on sound projects which will enable the State to achieve a reasonable return on its investment. Furthermore, BGE must get a price for the gas which reflects its inherent value as a replacement for imported energy. The Kinsale Head gas field has a limited life-span and its reserves must be fully and properly utilised to the maximum benefit of the Irish economy in the long run.
In this context discussions are continuing concerning the supply of gas to Limerick and I hope that these will be concluded soon so that I can put the matter before Government for consideration. Bord Gáis are also discussing proposals concerning the supply to and distribution of natural gas in Clonmel and in Waterford. In Clonmel, an already approved project had necessarily to be revised by the Clonmel gas utility management because of omissions from the essential scope of the work and other proposed variations in the project. Renegotiation of the altered financial requirements has not yet been finalised between Clonmel and BGE. The projects for Limerick and Waterford will be put to Government as soon as I have BGE's proposals. The same will apply to Clonmel unless the changes from the previous Government approval are not significant. As to Cork, following the withdrawal from negotiations of a private sector company, I have authorised Bord Gáis Éireann to proceed with an offer for all of the shares of Cork Gas Company. The Cork Gas Company have been in a critical financial position for some considerable time and I believe that this is the best means available of revitalising the company and of ensuring the continuation, on an economic basis, of supplies of natural gas to consumers in Cork.
Energy conservation remains a very important objective of my Department. The allocation for energy conservation at £310,000 is slightly reduced compared with the provisional outturn for 1984 of £351,000. I would have wished, if the overall financial position were easier, to have some modest additional funds for promoting conservation, but I am conscious that energy saving has its own significant reward, and a short pay back time. This will not cause any significant adverse effect on the effectiveness of the energy conservation programme. Furthermore, we must bear in mind that the expenditures in earlier years will continue to be rewarded in the longer term so that the national benefit from our endeavours is growing year by year.
In the past the main thrust of our conservation and energy efficiency effort was aimed at domestic and industrial energy users. Energy efficiency awareness was promoted in these sectors by means of information and advisory programmes, together with practical assistance under the attic insulation grants scheme, the steam audit service, the national boiler testing service, etc. These sectors will still be well provided for in the 1985 programme with the energy phone answering householders' queries during the months of the heating season and the introduction of the electrical audit service to replace the steam audit. The fuel efficiency survey grant scheme will also continue.
Attention is now being focused on the public sector in the development of new initiatives to realise the large potential savings previously identified in this sector, that is in Government offices, educational buildings, local authorities, etc. The practical benefit to be gained by achieving even a fraction of these savings is self-evident. In addition, the public sector, I hope, will be able to give the lead to others to improve their energy efficiency.
An important complement to the energy conservation programme is the European Community's energy demonstration programme which is administered by the Commission. Under this programme financial assistance is granted to support innovative energy projects which demonstrate the efficient use of energy. This scheme provides an excellent incentive for the development of new sources of energy and the improvement of energy efficiency in Ireland as well as in the other member states. In 1984 successful Irish applicants were approved grand aid totalling £1.9 million under the programme, and further grants will be announced later this year. We will also be continuing our various programmes, some of them with EC assistance, dealing with new and renewable energy. However dramatic results are not to be expected in the short term from these initiatives and caution is required in regard to the allocation of resources to them.
I have very briefly outlined the main areas of activity of my Department to illustrate the importance of the functions involved, despite the relative smallness of the Vote, at £10.3 million.
I recommend this Estimate to the House.
I am rather disappointed with the Minister's speech in that decisions have not been taken in many areas where I would have thought final decisions would have been taken, and action taken. I will list all these areas as we go along. I am gravely disappointed about the lack of action in areas that could make a very significant contribution to the advancement of economic activity. We have had a litany of inactivity and indecision, unfortunately, probably because of ideological paralysis that exists within the two parties in Government today. For instance, take the natural gas pipeline development. For the last two and a half years many times from these Opposition benches we plugged unrelentingly for an expansion of the natural gas grid. I have an interest in that because when I was Minister for Industry and Energy in 1982 that project was carried out in very quick time and under budget, and it was a significant landmark in public sector development. It showed what could be done with both public sector and private sector involvement, and I would have thought that such principles and policies would have been pursued by the present Government because of the excellent results they showed in 1982.
Even then, in October 1982, I made decisions in principle that Limerick should get natural gas, that the spur should be extended from the gas pipeline to Limerick, and that Clonmel and Waterford should get natural gas on another spur. What has happened? Nothing unfortunately. Two and a half years later we are still talking, and the Minister said that when the arrangements are finally worked out he will bring them to Cabinet. The history of the two Government parties is no credit to any Minister or Department. I appreciate that the present Minister has not been there for very long. Nevertheless we have had a Government in office for two and a half years. I do not know what the Minister and his predecessor were doing, but between the two of them we have not gone one step further down the road.
We finished a good project in 1982. We had excellent contractors, and one would have thought that the best value for money would be got by ensuring the continuation of that partnership and that team to expand our natural gas grid. It is not denied by anybody that a great impetus to economic activity on the building and construction side would be given by bringing natural gas into cities like Limerick and Waterford and a large provincial town like Clonmel. It would give an impetus to reducing energy costs for industry, and domestic consumers who have to meet high electricity bills week in and week out would benefit also.
While I accept that the Government face many difficulties in many other areas, this is one area where they could have got their teeth into something and shown something for their time rather than producing a blank sheet after two and a half years of inactivity and indecision. There is no myth about laying a spur off a main gas pipeline into places like Limerick, Clonmel and Waterford. I do not want to belittle the type of operation that takes place but in a sense it can be compared to bringing a group water scheme off a main. It is as simple as that. It is no great job. Why have this Government not proceeded with it?
There is no great joy in the Minister's speech for Clonmel, Waterford or Limerick and no indication of when the arrangements will be worked out. Arrangements were worked out by Limerick Corporation in October 1982. The Coalition-dominated corporation decided then that they were prepared, happy and willing to take a minority stake in Limerick Gas then. How two and a half years later, has it taken so long to break the back, the heart and the commitment of the private sector partnership who were prepared to go in with Limerick Corporation? Did it take so long to get them out of the scheme so that Labour Party ideology and policy could be pursued? The Minister is entitled to pursue his policies in Government. I too am entitled to question whether that is in the national interest, in the interest of the community in Limerick, Clonmel, Waterford, Kilkenny or anywhere else and whether it is in the taxpayers' interest.
I recognise, as the Minister recognises, that natural gas is a national asset which should be used to the best benefit of the taxpayers. I am not convinced by anything I have heard up to now that the taxpayer in Limerick or in the country in general will benefit from the policy and the direction being pursued that all gas companies in which the State is involved must be majority State owned, and nothing that has happened up to now has convinced or will convince me or any hard pressed taxpayer either. Surely it was in everybody's interest to get the job done two and a half years ago. Then the benefits would have accrued to the taxpayer and he would have received some alleviation, but no, this Government are prepared to stop all progress and movement because of an ideological hangup between the two parties. That does not serve the interest of the country or of the taxpayer.
After two and a half years finally the private sector partnership had to pull out of Limerick. The same private sector partnership was prepared to take a majority stake in Cork Gas Company. Here again the Minister's Department, and he I presume, were not prepared to give the go ahead to it. Finally the taxpayer — the State again — must come in and bail out an ailing company in a very serious financial situation. Pursuing that line, I find difficult to understand, and perhaps the Minister will tell me, if they were so badly off financially as obviously they were, why so much per share was paid to them. How long could they last? A week? A day? Has somebody political friends? I am not looking at the Minister when I say that, but if he is trying to convince me, this country, this party and this House that he is pursuing policies in the best interest of the taxpayer, then he should do the hard commercial thing in relation to that. Somebody's pal somewhere along the line had to be looked after because in the hard commercial world the shares were not worth what was paid for them, far from it.
Furthermore, why were this private company allowed to run up credit to the tune of £4 million with the State company Bord Gáis Éireann? Why did they allow the credit to run so high? That accusation is being made every day in the week by the hard pressed taxpayers against the Revenue Commissioners and the Government. Why allow them to run up such huge credit whether in holding back PAYE, PRSI or anything else? A semi-State body allowed a private company to run up £4 million approximately of credit and then had to allow them to pay for present day supplies. That was not in the best interest of the Irish taxpayer. The takeover inevitably had to be done by somebody, perhaps by the State fully. I would not agree with that. I would agree with a partnership of the private sector and the State sector which in my opinion would have worked out better in the long term and would give better value for money and a better return to the taxpayer in general. That did not happen in Limerick or Cork.
In Kilkenny we come to another private company who also have an interest in Dundalk in another gas company. Different criteria seem to apply there. The State were not prepared to take out Kilkenny but they were prepared to take out Cork. Yet a very large industrial complex on the edge of Kilkenny were only too happy to enter into negotiations. For months past the people of Kilkenny have been misled into believing that they were going to get natural gas. Representatives of the Government and of the Minister's party in Government with him were continually telling the people of Kilkenny that it could be negotiated, it would be negotiated, negotiations were going on. Negotiations have been finalised and at a meeting of the Joint Committee on Commercial State-sponsored Bodies Bord Gáis Éireann were able to confirm to me that Kilkenny was not getting natural gas. The following week in the Kilkenny newspapers Deputies from the Government side were still trying to mislead the public into believing that natural gas could be negotiated and would be on its way. Perhaps it was because we were nearing a local election era. Despite the fact that negotiations had been broken off a considerable time previously, members of the Government were still trying to mislead the people of Kilkenny that they would be supplied with gas. The people of Kilkenny are entitled to know why they should not get it when the State was prepared to bail out an ailing company in Cork. The 700 customers in Kilkenny and the large industrial complex were entitled to the same sort of treatment given to Cork but they did not get it because they do not have the political clout. Things might be different if Deputy Peter Barry represented Kilkenny. Maybe the chairman of the parliamentary party does not matter as much in Government circles as Deputy Barry. The latter was able to deliver the right deal for his people in Cork — of course, he had a Corkman as chairman of Bord Gáis as well and probably a little help along the way. Once the local elections are over the poor people of Kilkenny are thrown to the wolves and told to forget about natural gas. That is making fish of one and flesh of another. No matter how the Minister tries to explain it to the people of Kilkenny, they believe they have been treated as second-class citizens in relation to this national asset.
The Deputy wants to give it away.
I never said I wanted to give it away. They do not want it for nothing. The Minister should not use that excuse. What he says in this House is poles apart from what the Bord Gáis people say. Perhaps the Minister would consider the fact that officials of his Department are not willing to attend for further questioning by the Joint Committee on State-sponsored Bodies in relation to some activities of Bord Gáis. I hope the Minister will take this point and give due respect to the committees of this House.
I would refer the Deputy to the Deputy O'Malley precedent.
I would refer the Minister to the Joint Programme for Government. The Leader of the House, Deputy John Bruton, said he was going to make this House work better by enlarging the committee system and that this Government would give every help and assistance. The Minister for Energy now says that the Leader of the House does not speak for him and that he will run his own show. If that is to be the position, for heaven's sake stop conning the people and this House and forget about the committee system. I have put many working hours into the committee system and it is a pure waste of time. I am not interested in putting any public sector officials on the spot. They are entitled to respect and I do not concur with the sort of questioning and abuse they have endured from certain committees of this House.
If it is on that basis that they are making their case, I fully appreciate it but the committee of which I am a member have always taken the view that if a question is unanswerable as far as a civil servant is concerned all he has to do is say so and we will respect it. If committees work in the way the Government have led the country to believe they do, let them do so. If not, let us stop the charade, close them down and let the Ministers and Deputies get on with their business. All we are doing is running from one committee to another. It does not make much sense and they serve as a platform to undermine some of the institutions in this House. People are using the committees for cheap political reasons to get themselves publicity. That was not the purpose for which the committees were set up and I hope somebody takes a look at the system before it gets out of hand and decides whether we should continue to have these committees. If we are not to have them, let us stop codding ourselves and the House, as well as the public.
The area of Drogheda and Dundalk has been badly hit by industrial closures. Certain industries such as Premier Peri-clase were high energy users. I know the problem which existed there in 1982 and I doubt if a takeover would then have happened had it not been for the fact that they expected natural gas. As far as I was concerned, Dundalk and Drogheda, as well as Northern Ireland, were to get natural gas. That area is a region which would benefit economically from natural gas. We have a £5 million deposit from the British Government which the Minister held back despite the fact that the Taoiseach wanted to give it back and said so in this House. I pay tribute to the Minister that he holds the same strong views as I do on this matter.
In fairness, the Taoiseach did not say that.
In fairness, the Minister sat beside him and knew he said the wrong thing. He managed to change the record within three hours but the Minister knows as well as I do what was said. We both knew he was wrong. I have not a bad memory. He said that any interpretation of the documents before him would suggest that the money should be repaid. They were the precise words. I jotted them down. I got the record before he changed it. If that is the privilege of the Taoiseach of the day, let him have it.
There was never any disagreement.
I am glad the Minister kept the money anyway. Full marks to him for that. I would also draw attention to the fact that approximately £23 million is available from the EC for gas development along the Border area. With £5 million sterling from the British Government and money available from the EC, why not build the pipeline to Dundalk and Drogheda? What is holding it up? If Bord Gáis are treating this development in a laissez faire manner, the Minister should get his finger out and make them do something about it. For two and a half years they have done nothing except work on a small outer ring in Dublin, yet they have approximately 125 people employed. What have they been doing? That was the only project they undertook. I warn the Minister, his Department and the House against the building of another semi-State empire at the taxpayers' expense. Bord Gáis are a semi-State body who are no more than a conduit by which gas passes through — they are no more than that. I am not convinced that an organisation with 125 technical qualified people were not capable of doing something better towards the development of natural gas than constructing a small outer ring in Dublin.
Other benefits flow from the development of the natural gas grid. Our spokesman on horticulture will have something to say on this industry where we can make a big impact on import substitution if the Government decide on a proper pricing policy for natural gas. It cannot succeed until they have energy at the same cost as their competitors. That is a simple fact of life and the Government must realise that the horticulture industry cannot properly develop without a pricing policy which is competitive with that enjoyed by producers abroad who flood this country with their produce.
Today's newspapers contain a submission by the CII on the evaluation of the development of the natural gas grid. I hope the Minister will evaluate the project and if the sums are anywhere near those done by the CII the Minister should get Bord Gáis to do something about it. This country badly needs economic activity and here is an area which can show a proper return on investment. Borrowing money for good investment is good business. I am not talking about cheap gas policies, although there are many who want it for nothing. That is not the way to do it. There is a difference between charging nothing, a cheap policy and charging very high prices. There is also the spin-off and the added value to the economy in general. It should be considered in these terms and not merely on a narrow economic assessment as to the price to be charged for gas. Certain areas can give a greater economic return by a proper pricing policy.
I said many times in the House that the perspective to the outside world leaves a lot to be desired. A national newspaper had a headline saying that there was a £10 billion gas find when there was a show of oil off the Waterford coast and many people were put out of business by this kind of irresponsible journalism. That headline seemed to be as a result of a leak from Government sources and, if that is so, it is highly irresponsible. Thank God the Irish investors caught on because the shares went down the following day and that is the way to deal with that sort of journalism. The Government were not in a position to know how much gas was there and to talk about a sum of £10 billion puts it in a category of about two and a quarter times as big as the find off Kinsale——
It shows how good the journalists were.
Well, the newspaper mentioned Government spokesmen and I do not know who those invisible characters are. They used to be called national handlers and I do not know if that term applies to this kind of Government spokesman. Another national newspaper, within a matter of days, mentioned the sum of £4 billion which was probably a far better guess. We would all like to think that the sum of £40 billion was correct but we know that until another three or four appraisal wells are dug nobody will know the extent of the gas find.
I have always been convinced that there is more gas although I do not know its quality or quantity. When one find is discovered, it is normal for others to follow and we are hardly the exception in that regard. That is why I was prepared in 1982 to follow a progressive policy of expansion in the gas area and to follow an exploration policy which would have been of much greater benefit than the course adopted. We need any possible economic activity which can be generated and the building and extension of natural gas spurs is one positive way in which the Government could have demonstrated their willingness to do something for unemployment if they had been able to overcome their internal ideological differences. If there is gas, perhaps it is time to decide what we will do with it. Companies will not be interested in finding more gas here until we have a definite policy in that regard. We should develop the market to its full potential and a deal with the British Government regarding the supply of gas to Northern Ireland would have given impetus to market development which would have encouraged further exploration and a quicker development of any gas which might have been found.
If there is another gas find of significant size in this country, will we fully develop the market and evaluate a national grid? Will we use gas as the major component in the economy? I appeal to the Government and the Minister not to look at it in a narrow revenue context. We need economic development and whatever contribution can be made by changes in policy in relation to natural gas, distribution and pricing will be fully supported by this party if we can be assured that it will bring overall benefits to the taxpayers. Naturally, the Minister for Finance would love to see more and more revenue coming in but if we could get more revenue, directly and indirectly, by a different policy it would be far better. The Minister has common sense and I know that we do not differ much in many areas but I cannot accept the record of development and activity over the past two and a half years, as it has been very disappointing.
Oil exploration needs the same climate as applies in the case of gas. I have spoken in the House before on the revised terms of the 1975 agreement for oil and gas exploration. I do not know where the Minister found his magic formula; I passed it on to people who fed it into a computer and they did not come to the same conclusions as the Minister, who would like us to believe that the oil industry were satisfied with them. If that was the case, I would have expected that the third round would have been very successful. Reading between the lines, it is obvious that the response was not very satisfactory. If the third round had been successful, we would have heard a lot more about it and its postponement from 15 December shows that there was very little response. I know, from my contacts in the oil industry, that they were looking at areas outside Ireland in which to invest their money and who can blame them? The attempt at changing the terms was a step in the right direction. I gave my views on it at at the time and I have not changed them. The problems were not dealt with in those changes but the major problem to be assessed is that of State participation and I hold on to the the sure fire bet of royalties. From meeting oil industry experts, I know that they are more inclined to leave the royalties here and not to complain about them.
The terms of 1975 seem to be a sacred cow, that they were produced and could not be changed by anybody. They were right for the time when we thought that there was plenty of oil. Ten years later we are still in the same position. We are not an oil producing country. Why should people put money into high risk investments if they do not expect to get a decent return? It is a very risky area but the Government are not prepared to look at it properly, to provide the right climate and quadruple the level of exploration. In the course of his script the Minister referred to 84 wells, but more wells were drilled in the UK sector of the North Sea in six months this year than we have drilled since we started at the game. We cannot be satisfied with that level of activity. The expectation is, from information I obtained in the House, that we might have five or six wells drilled this year and possibly the same number next year, but that is far from satisfactory.
We should get rid of the hangup we have that we are giving away everything. We are not giving away anything because we have not found anything to give away. Let us find it first, and then, like Norway and the UK, we can change the rules. Anybody who looks at the change in rules by the UK in 1983 will note the difference it will make. Everybody in the oil industry accepts that when something is found and we become a proven oil producing province different terms apply. We have to get rid of the ideological notion that we cannot be giving away this and that when in effect we are not giving away anything. All we are doing is stopping investors coming here to help us find the oil we all want. I would like to see the horizon on the Celtic Sea, and the Porcupine if possible, littered with rigs drilling. That is what we need and the easy way to get that work going is to provide the right climate.
However, I am convinced, because of the OPEC oil price reduction and the weakness in the oil market, that Ireland has missed the boat in oil exploration. I am convinced that we are going to see a reduction in oil exploration for the rest of the decade and that it will be into the nineties before we see a rejuvenation of oil exploration activities. I have good reason to suspect that Ireland is being seen in the oil exploration world as a reserve field. We have been relegated to that position. It is no great joy for me to make that statement, but that is the reality.
The third round has been a dismal failure. I am convinced of that because four or five companies operating in Irish waters have not gone into the third round despite the fact that there were shows of oil and gas before that round closed. Surely that points to the fact that something is wrong. If companies, some Irish and some international, have not gone into the third round, we must ask why? The reason is that the climate is wrong, the return does not exist and the UK terms are better. Why should people not invest their money in the North Sea sector where they will get a good return in a proven oil province? Investors do not have to come here to please us or for the privilege of spending their money here. They will spend it where they think they will get a decent return with the minimum of risk.
The Government should take their courage in their hands before it is too late — something I have advocated very often. I have made it easy politically for the Government to change the terms and spell out an honest appraisal of the position. We must find the oil first and then change the rules. Apparently, we are quite prepared for narrow political reasons to let good international investment, which is scarce, bypass the country. The end result is that we will have a bad third round. The Minister has told us that the position is satisfactory but, in departmental terms, that means that the position is far from satisfactory as far as the general public are concerned. Before it is too late the Government should go the rest of the way. They went a bit of the road, but in the wrong direction. Obviously, the people who advised the Government to go in that direction are not familiar with the oil exploration business and how one gets scarce international investments involved.
The Minister is well aware that the graph on mining activity here has gone down in recent years, once again indicating a need to change policy. The approach of the Government, and the policies that existed prior to their taking office, are in need of change. I did not have an opportunity to change the policy in the short time I was in charge of the Department but it may not be too long before I return and I will have pleasure in changing it to give Ireland the development prospects we should enjoy. I want to give the Minister the opportunity in his remaining months or weeks——
The Deputy should not hold his breath.
I will not, but at the rate the Government have been dumping Bills down the Swanee in recent days everybody is wondering how long more they will last. We had the radio Bill dumped one day and today the Valuation Bill was dumped.
The Deputy should return to the Estimate.
I will not stay on that track. There was a great flush of PR activity last December to announce the Bula/Tara deal. We were told by Minister Bruton and his sidekick, Minister Collins, that the mining town of Navan was getting a great present. We were told that the town would be getting an extra 300 jobs, but in the middle of July the Minister tells us that the deal has not been completed and when it is he will be glad to announce details in the House. When will something be done in the Department to finalise the deal? On the day the announcement was made I know the deal had not been sorted out and I made a statement to that effect in the House. It is my belief that the deal has not been sorted out, but if it is not sorted out quickly the only solution will be the appointment of a receiver. The Minister has been negotiating for the last seven months and he knows the problems as well as I do. You know that you are not going to get agreement between two of the hardest individuals you ever negotiated with, if you were involved in the negotiations with them.
I suggest that the Deputy use the third person.
The Chair would be a good person to mediate. He has managed to adjudicate fairly well in the House from time to time. Will he step into the breach and make the deal between Tara and Bula that the Government cannot finalise? That fiscal fable of folly enunciated by a Labour Minister in the mid-seventies cost the taxpayers £10 million and not one ounce of zinc has been mined. We are now in the business of giving people money to get out.
When the Dáil resumes in October I will be looking for direct action to be taken in regard to this project. It has gone on too long. It appears that the Minister of State is the workhorse being used from time to time to take others off the hook. He has tried to spin us stories and yarns in regard to the project, but his time has run out. I am aware of the problems and that they have not been resolved. I hope the Minister does something about them.
Changes are needed in regard to our mining policy. I accept that the climate for international mining is not great. I would have thought we would have heard more about the ESB from the Minister than the two paragraphs in his speech. I was a member of the Government that decided to carry out an inquiry into ESB prices. A major problem facing industry is energy costs. That problem would have been tackled if the Government were serious about reducing costs to industry and improving the climate for productivity. One major factor has been the cost of Government services such as the ESB and telecommunications. The private sector has slimmed itself down but the Government have not. Daily the Government are handing on to the private sector huge increases in costs in energy, public services and so on.
Here is a specific area which was tackled by experts, a good report was produced, but no action was taken except that some time ago the Minister said there would be a small reduction in the cost of electricity to industry. I wonder if the Minister was at the same Cabinet table that approved the Valuation Bill we had here this afternoon. Because of pressure being exerted here all day I am glad the Government saw the light and did not guillotine the Bill through at 5.30 p.m. Were the Department of Energy aware of what was in that Bill? The Minister for Finance tried to present it as a slight technical change, but the real effect of it was that it would have a horrendous impact on industrial costs and would make us even more uncompetitive.
We cannot have two debates on that Bill.
I was here for part of that very short debate and when the Leas-Cheann Comhairle said the Bill had to be dealt with in a hurry, I said I would take the opportunity to discuss it on the Estimate this evening.
There is a debate on that Bill going on in the House and it is not in order to discuss it on this Estimate.
Is it not in order to put to the Minister, as this is the only opportunity I will have to do so, that this will have a significant impact on electricity costs?
It is not in order to debate the Bill before the House. A passing reference——
I want to debate what I believe are the contributory factors to increasing electricity costs——
For starters, the Deputy will listen to the Chair and accept what he says. The Deputy may make a passing reference to the effects of the Valuation Bill.
I will settle for that. This is the only passing reference I want to make. It is not a technical change because it will include areas directly affecting the Minister and everybody else. For the first time electricity pylons and cables and electric motors in industry will be included. The definition of valuation is being changed. It used to cover machinery and buildings and now it will be plant and buildings. For the definition of "plant" new schedules are included and in that are all the electricity areas I mentioned——
The Deputy is making a Committee Stage speech.
One more sentence completes the passing reference. As at present set out, it will add almost 1p to the cost of production at Ardnacrusha and approximately ½p across the board. Earlier this year the Minister took one step forward but with this he will take three steps backwards. I ask the Minister to bear these facts in mind because this is running contrary to his declared policy trying to reduce electricity costs.
We have a report but no action is being taken on the prices side. I want to bring to the attention of the House and the Minister the changing of regions by the ESB and the closing of district offices. I am in favour of any move by the ESB as long as it will lead to a reduction in electricity costs. The ESB are talking about changing their regions and so are Bord Fáilte but the Government should stop semi-State agencies, especially those under the control of the Minister for Energy, from going in different directions. This has been a weakness in overall co-ordinated management and is shown up quite distinctly in the energy area. Over the years Bord na Móna went in their direction and the ESB went in another with the result that we have over-capacity in the ESB and problems with Bord na Móna, but no overall co-ordinated policy.
I ask the Minister to look at what is happening to the ESB and to look at the very excellent report submitted by the staff associations. They commissioned outsiders to investigate this area. I have read this report and the conclusion these outsiders came to is that it will do nothing to reduce electricity prices. Yet that is the reason the ESB gave for changing their regions. I want the Minister to satisfy himself that this will lead to reduced electricity costs. The staff associations, who proved their case, are not being listened to by the ESB. They refused to sit down and discuss the merits or demerits of this report. I want the Minister to take this on board and to ensure they get a fair hearing. If changing the regions does not reduce the cost of electricity, the Minister knows what to do, because Tralee, like Athlone, will be affected.
We are all disappointed to see that after another year the Ballyforan peat briquette is not going ahead. Deputy Kitt will discuss this in detail because it is in his constituency. I notice the Minister has reviewed the private bog development scheme. This is an excellent scheme, but I was worried about it when it was mentioned in this House. In 1982 the Department of Finance tried to ensure that that scheme would be scrapped. This is an excellent scheme which has provided jobs and incomes in many poor areas. With Bord na Móna's move away from sod peat production, this can fill that vacuum very effectively. I do not want to see anything happen to that scheme——
Except to expand it.
Yes. Would the Minister consider producing a policy for cut-away bog development? By the year 2000 there will be approximately 200,000 acres available. Here we are in 1985 and we are not focusing our minds on this. We are talking about it now and again, but that is not what I am talking about. I want a policy set out clearly so that we will all know what is going to happen. Part of these cut-away bogs may be suitable for afforestation or horticultural development or for other uses and it is time a policy document was issued so that each interest can make plans. We have 230,000 unemployed and these are areas which could provide work, but there is no sign of a policy direction. I appreciate that the overall drainage will have to be the responsibility of Bord na Móna, but whatever the Minister has in mind, he will have my full support when he brings it into this House if it makes sense and if it will contribute to economic development and activity.
When Moneypoint comes on stream there will be serious overcapacity of electricity. What are we going to do with it? Have we focused our minds on it? Have the ESB focused their minds on it? Perhaps I might mention a few ideas which I think are worth considering. In any industry if there is over-capacity one looks at the alternatives. The first is, we can leave it alone and the price of the product will stay high, it will probably be uncompetitive and no more jobs will be created, or we could look at the second alternative, which is marginal cost pricing. This situation must be realistically faced. We will have very serious overcapacity in electricity in relation to Moneypoint, where the fuel mix probably will be the cheapest of any. That is a plus on one side. On the other, we have the social and economic problems of Bord na Móna in connection with the peat stations. Having looked at the last report, I am quite satisfied that production unit costs in many of the milled peat stations are very good. What are we going to do with all this electricity? We are now at a juncture where more energy appears to be available and, with a full assessment of the natural gas situation in Cork, one should look at excess ESB capacity and ascertain the best use to be made of this.
One idea worth looking into again is that of a smelter. One of the reasons for this not being continued with in the seventies was the high cost of energy. That was only one of the factors, the market situation being another. We know where the smelter will be put and I am talking about the Minister's own constituency. This is also very close to Moneypoint for supply of electricity. This must be assessed and evaluated.
The Minister and his Department should now tell the ESB to stop planning any more generating stations. We have one which is costing probably £1.2 billion at Moneypoint. I am not faulting their vision away back in the seventies when they built to a certain expectation which was not realised. Nobody could foresee the oil crisis of 1979. I know the ESB and I am sure the Minister does. They will be doing things that we will never find out about until it is too late. What are the ESB planning people doing now that their capital programme has come to an end for the moment? The Minister for Finance said that I was not here last week. I was out in the Arab states and there are still very large areas for expansion of our services out there. The ESB have been singularly successful in the Gulf States and Saudi-Arabia. However, they can expand. Let them not plan any more stations until we see where our future supplies of energy will come from. That is a vital national problem which needs to be tackled.
Recently, the French were offering electricity to Britain at 2p per unit. If that sort of price is available in Europe, we are part of Europe and it is time we thought in European terms. It is time we thought seriously about an inter-connector into Fishguard. I know that the British Government are always reluctant on these matters. Perhaps they want to keep us as an isolated island. However, when one sees such electricity prices on offer in Europe and gas prices which are much less than we can offer at present, it is time we thought in European terms. If we are part of Europe, let us get the benefit of it. We can never have the economies of scaling electricity production or the nuclear power which they have in France, or the hydro power they have in Northern Europe. The only way is to do it ourselves as far as we can and where we cannot, to link into a European grid, both in relation to gas and electricity. Those areas must be examined now. However, I see no signs of any new policy coming out of the Minister's Department. I hope that they will address themselves to some of the points I have raised, and I am sure that there are many more as well.
We are still waiting for legislation to give a statutory base to the Irish National Petroleum Corporation. They have expanded their activity in Whitegate and should not be proceeding without such statutory base. I have heard nothing about this in recent times and it is a couple of years overdue.
With regard to the development of the Whiddy terminal, I remember the Minister for Energy's nice, flowery announcement of the takeover of Whiddy on 4 February this year. I happened to be down there not very long ago. I would like the Minister to confirm or otherwise if planning permission to do any work there has yet been applied for.
Quite recently, and it has been objected to in good Irish style.
I do not know the basis for that, so I cannot comment on it. I would like to see this terminal renewed as soon as possible. I hope the objections can be overcome because it is a development that we can do with, especially since that oil company got on so well in their settlement in the London courts. They were able to point out that a 60 million dollar job would be done in Cork. I hope that I am here on the day that job is finished. I am making a visionary statement when I say that I do not believe for one minute that they will spend 60 million dollars. It was a hiked up version. The Minister knows it is much easier to prove a claim in a London court if you are able to walk in with a nice agreement between yourself and the Irish Government saying that 60 million dollars should be spent and that that amount must be taken into account in the claim.
That is the overall value of the claim.
It took only 35 million dollars in 1982 to restore the Whiddy oil terminal to its former position. This is a half job. I do not think anybody can convince me that in 1985, three years later, it will take double the amount of money to do half the job. I do not think that inflation has been that rampant in the last couple of years.
I have dealt with the areas that have not natural gas and with all the areas of inactivity by the Minister and his Department. I should like to be progressive in relation to new policy but do not get the opportunity because new policies are not coming out. It may well be that I will have to start to write my own. I have already written some, in case the Minister does not believe I do any work in this area. Unless he is prepared to produce a policy for future energy direction, for promoting economic activity in the expansion of natural gas, for creating the right climate in which the horizons of our shores can be littered with rigs before it is too late, the alternative Government on this side of the House will show the direction, as we have often done in the past.
I welcome the opportunity of speaking on this Energy Estimate. However, I am very disappointed at the Minister's speech here this evening. The first thing which disappoints me, coming from the west of Ireland, is the western package scheme. This was the subject of parliamentary questions here recently when Deputies from the west questioned the reason for the scheme being so rigid in its application. The Minister told the House that he was hopeful that he could get some changes in that package, at least to restore the scheme to the position that obtained in 1983. He knows that up to the end of 1983 when a second family house was built on a farm, the people in that house could qualify for a subsidy on electricity installation. It is regrettable that that scheme was changed at the end of that year. That seems very unfair. I hope the Minister will have more success when he takes this matter up further with the EC Commission, as he indicated to us here a few weeks ago that he would do.
The second difficulty that arose with regard to the scheme was the fact that many people were ruled out from benefiting under it. For instance, where a farmer derived his sole income from the farm and where he got some social welfare benefits, whether unemployment assistance or some other aid, such a person was excluded under the scheme. I had hoped that the Minister would have provided more money under the western package. If we could remove these difficulties many more people would qualify. It is the duty of the Minister to renegotiate the scheme so that more people can apply.
Some years ago I spoke in this House regarding the scheme as it applied pre-1983. At that time I had hoped it could be extended to local authorities to help them in their house building programmes. I saw where they encountered difficulties in building houses in rural areas, particularly in remote regions, because of electricity costs. It appears that the EC Court of Auditors were not happy with the way the scheme applied. I am sure the Minister is confident about the success of the scheme but, as an indication of that, I had hoped he would provide more money in the western package.
I am glad to see that the private bog development scheme is being continued. This is the only scheme in the west for providing roads and developing bogs. The conditions relating to the local improvement schemes have almost ruled out work under local authority schemes. Obviously it is important that this private bog development scheme should continue and I am glad that money has been provided for it.
For me the major disappointment of the Minister's speech is that he gave only one or two sentences to the review of the Derryfada peat briquette factory near Ballyforan. This review has been going on since May, even though it was supposed to be a short review. However, he has not told us anything about the outcome of the review and no money has been provided.
In 1979 this major development was sanctioned by the then Fianna Fáil Government and in the 1982 Estimate a sum of £5 million was provided. In 1983 more than £8 million was provided and last year, even though the project was suspended, I understand that £4 million was provided. This is the first year that not one penny has been provided in the Estimates for it, and the Minister has confirmed that fact for us this evening. It is obvious that the Government have abandoned the project because they have not been prepared to allocate money for it.
It is rather ironic that in the last three weeks in Derryfada materials, machinery and plant for the Ballyforan peat briquette factory have been arriving in lorries. That is in line with the announcement made in 1982 by the then Minister, Deputy Reynolds, that phase one would be in operation in 1985. However, the machinery and plant arrived on a site that was cleared by the contractors when the contract was awarded but a building has not been provided. Deputy Reynolds must be given credit when, as Minister, he named a target date for completion of phase one. Obviously Bord na Móna went ahead in good faith, as I have always claimed, and they placed the contracts for the materials. There was some controversy at the time that they had not placed these orders but it is obvious that they did so. Some of the materials that were produced in this country were stored elsewhere in the meantime but now they have arrived at Derryfada.
The scheme has been delayed each year and each of the delays has cost the taxpayer more money. I understand that three reviews have been carried out. It has been estimated by the ITGWU that the two year delay has cost in the region of £4 million. If the delay is any longer it is obvious that we will have to spend even more money in the long term.
In November 1983 I asked the then Minister for Industry and Energy, Deputy Bruton, the amount of money spent and the contracts entered into. He told me the amount spent then was more than £4,500,000 and that Bord na Móna had gone ahead and had entered contracts for work on site development and on the entrance road, for the turbine generator, boilers, presses, screens for the factory, lighting, the intake system and the electrical works at the plant. It was very encouraging at the time to see the work going on. In terms of commitments, the figure I got from the trade unions was almost £20 million. When one considers this amount, one has to ask what direction are the Government taking. We have not had a decision from them regarding the outcome.
During 1984 some 100 people were laid off from the Bord na Móna development works at Derryfada. At the same time the Government told us they would review the project after a year. It was most unfair to attempt to prejudice the review of this project. There were 106 people working there but now there are only 56. Some extra people were employed recently but some of them will be involved in building a tip-head to take away the milled peat from Derryfada and that is not an encouraging sign. However I welcome the fact that some have been employed on developing the bogs.
The Government decision to suspend the project for a year and have another review is a most unfair one. People should not be laid off if the Government are to review the project. Perhaps the Minister will explain why the decision was made.
The first sod for the proposed Ballyforan briquette factory was turned in November 1982 and the first phase of the plant was to be in operation in 1985. The factory was to have an output of 140,000 tons providing 110 jobs. The second phase was to be at a later date. While all the controversy went on about how big phase 1 and phase 2 would be, we did not even get a factory. All that happened was that the site was cleared in 1982 but the civil engineering contract was withdrawn. The workers are uncertain about their future and the Minister owes them, and the local authorities in Galway and Roscommon who have carried out infrastructural work, an explanation. What will be the outcome of the Ballyforan briquette factory?
Like Deputy Reynolds, I support any efforts made to reduce the cost of electricity. The ESB Officers' Association made a very reasonable request. They asked the Department how in the proposed reorganisational plans savings could be made. In County Galway we have a typical example of where a county will be divided into three areas. The northern part of Galway will be administered from Sligo, the southern part from Limerick and east Galway from Dundalk. It is proposed to close the ESB headquarters in Galway. The association commissioned two independent studies of the report carried out by Millar Barry, an American based company. The association have stated that 60 jobs will be directly affected by closing down the ESB offices in Galway and that there will be a further 94 indirect job losses. There will be a reduction in the level and quality of customer services.
It is difficult to envisage how Galway could be administered by Dundalk. The basic point made in the study is that there is no evidence from the report that there will be any cost savings. The Minister should take up with the ESB the fact that we have a western package. This is administered by the Tuam office in County Galway. How could that package be administered from Dundalk?
The request made by the association has not been answered. We were told that if the report was implemented it would lead to efficiency and a reduction in the cost of electricity. I have no information to indicate that that would be the case. I am thankful to the Minister for sending me a letter stating there would be minimal changes. I do not accept that 60 job losses is a minimal change. If the Tuam office is closed there will be far reaching changes in County Galway.
In his speech the Minister dealt with renewable sources of energy. I am glad to see that money has been provided for these schemes and that the Department will promote the use of wind as an energy source. I compliment in particular the Tuam engineering firm which provided a steel tower in the last few weeks. It was switched on by the Danish Ambassador for the Agricultural Institute's Research Centre at Kinsealy. Other areas such as the small hydro scheme are also worth promoting. While the supply may be limited the cost is very reasonable.
A lot of information is available about changing from oil to solid fuel systems. Many industries and, in particular, cooperatives like Waterford have had great success with these systems. I am sure Deputy Kirk will have something to say about horticulture and how it can benefit that sector. We all support the need to reduce the price of electricity but we must have facts and figures regarding organisational changes.
The Department should look at the fact that we have such high energy costs in comparison with other EC countries. I saw a paper by the CII last year which stated that energy intensive firms have an annual electricity bill which is as high as their annual wages and salaries bill and that could cause any firm to make a loss. Many of the closures in 1984 were due to the very high cost of electricity.
The Government's response was very poor. At the end of 1984, when we should have been endeavouring to bring our costs into line with those of our European colleagues, electricity prices here increased. According to the CII, electricity costs have increased from 44 to 51 per cent of our total energy costs between 1981 and 1984. The fact that the case was taken up by the CII and of course by people in business and industry also is an indication of how seriously the situation was regarded.
The domestic consumer, too, has every reason to be critical of the high cost of electricity. In that regard, the very cold weather at the beginning of 1985 emphasised the importance of a low cost energy policy. I trust the Minister will take up some of the points I have mentioned and that there will be more action in this area in the Department. We have put forward our views in a constructive way but there is a need for much more activity on the part of the Department than has been the case up to now.
I am pleased to have the opportunity of contributing to the debate on this Estimate. The Department of Energy are considered very important so far as my constituency of Louth is concerned. The question of the extension of the natural gas pipeline to such towns as Drogheda, Dundalk and Ardee is very much a live topic in Louth. Much regret has been expressed in regard to the breakdown in the arrangements for the cross-Border pipeline to Belfast. Many had regarded that arrangement as the beginning of a major step in the economic unification of the country. Unfortunately, for reasons that are not very clear, the arrangement fell through. In the meantime there had remained the hope that it could be activated but the indications are now that that will not happen. Our hopes were raised recently when a report of the two international firms of consultants — Coopers & Lybrand and Congas Engineering, Toronto — indicated that the Kinsale gas project to the North was still a viable proposition.
I trust that the Minister and the Government will recognise the urgency of an extension of the natural gas line to County Louth. As Deputy Reynolds has pointed out, there are many industries in Louth that would benefit immediately on natural gas becoming available there.
Industries in that region and in the north-eastern part of the country generally have been struggling to continue in operation in the hope that the natural gas pipeline would be extended to the Border. I appeal to the Minister to apply himself immediately to this question. In recent times, as the spiralling unemployment figures will indicate, there has been a very considerable upsurge in industrial stagnation. I am not saying that industrial promotion at this time is an easy task for anyone but there is a responsibility on the Government and on this Minister to ensure that viable projects such as the extension of the natural gas grid be given priority. Finance must be provided to ensure that this sort of infrastructural work proceeds immediately.
Recently, too, many commentators have been analysing the implications of population trends in Europe compared with the situation here. These analyses would suggest that in some of the countries on the mainland of Europe there will not be sufficient manpower in between five and ten years' time to keep the existing industries in operation. Therefore, the possibility of those industries relocating here should be pursued actively. However, any such move would involve our having regard to the state of our infrastructure. We must consider such factors as production and energy costs. Our energy costs may be anywhere in the region of 25 to 40 per cent higher than the cost on the mainland of Europe. The possibility of attracting industries to relocate here in such a high cost environment is a non-starter. Therefore, we must tackle our energy costs immediately and bring them under control. We must ensure that the forces that will control energy costs are brought into play without any further delay.
In an American publication recently the President of the American Gas Association said that natural gas could move America away from over dependence on foreign oil, that it is an energy source that is available in growing volume. Those sentiments could be applied to our country also. If we had natural gas as an alternative source of energy, and if it were available at prices that would ensure lower production costs, we would be in a position to compete with our competitors in the market place. That would give us immediately an advantage in the market place for our product. As a small island country we are dependent to a large extent for wealth creation on our exports, so it is not unreasonable that our production costs be kept under control at all times. Our electricity costs can be between 25 per cent and 40 per cent dearer than on the Continent. What chance have we of encouraging industrial development here while those costs obtain?
If the Minister were to examine the programme of diversification of sources of energy, especially for electricity generation, and in particular the research programme for alternative sources of energy — and many people feel that the commitment of funds to that alternative energy programme by the Government is not what it ought to be — new forces could be introduced into the energy field. A notable success in recent times has been the generation of power by wind, the wind that blows freely along our western coasts. Indeed, the Minister took pride not so long ago in unveiling one of those projects in the south. It is a pity there are not more of those projects under way, because, the more alternative sources of energy we have the sooner will our dependence on imported oil be reduced.
We cannot continue to ignore the fact that we have the dearest energy in Europe, and that is not conducive to attracting industrialists here. It may well be that in five or ten years' time we shall have a well educated, qualified workforce available to man the high technological industries and in other productive areas — a workforce that may not be available in the rest of Europe. Surely we shall not allow a situation to develop in which our people will emigrate to take up the shortfall that may well apply in Europe? Rather we should examine the possibility of attracting such industries or having them relocated here. We shall have to ask ourselves if our energy costs are not too high to render it attractive for such people to settle here, absorbing the many unemployed we have at present. All the indications are that those unemployment figures will continue to increase in the immediate future.
There have been fleeting references to energy costs for the horticultural industry by a number of speakers before me. Undoubtedly energy costs have devastated that industry over the last seven or eight years. By way of example I should say that in 1977 we were producing approximately 121 per cent of the country's tomato needs whereas now we produce approximately 72 per cent. Inevitably this has led to an increase of imports of glasshouse crops. The oil crises of the early and late seventies contributed to the near demise of our glasshouse industry. We have in that industry people of tremendous commitment, who were prepared to work on, seeing the light at the end of the tunnel. Unfortunately, the light at the end of the tunnel seems to be farther and farther away.
We did not appear to recognise that high energy costs were devastating their valuable source of employment. We were prepared to see the industry go into decline, allowing more and more imports from countries such as the Netherlands, and that at a time when the Dutch Government were prepared to make natural gas available as an energy source to their horticultural industry. We did not appear to identify what was happening or to formulate policies to reduce those imports. Taking tomatoes as the prime example, they are still being imported in too great a volume. Much media comment has been devoted to speculating on horticulutral produce being imported here and there have been many suggestions about how we should combat the problem. We must first tackle the very high energy costs for growers here.
The introduction of the grant scheme for conversion to solid fuel boilers offered a flicker of hope to those horticultural growers. One must not overlook the huge investment of such growers in solid fuel boilers to burn coal. A movement towards solid fuel inevitably carries inherent difficulties and dangers. For example, there is the problem of coal imports — coal being the sole source of energy for these solid fuel boilers — when control will be out of the hands of the Department of Energy and our horticulturalists. Having made such huge capital investment the possibility of a transition to an alternative source of energy could pose real problems. It could well push those growers, who have shown the grit and determination to remain in the business against all the odds, over the cliff into oblivion.
The possibilities of the availability of natural gas to such growers should be examined immediately. If the gas pipeline were to go northwards to Drogheda and Dundalk it would pass one of the main centres of concentrated horticultural production in the north Dublin area and on into my county of Louth, where there is considerable horticultural group also. I do not see why we cannot make gas available at the right price to the industry, as was done in Holland, thereby ensuring the expansion of the industry and giving them the wherewithal to reduce imports. The people in glasshouse production cannot wait for the Minister for Energy to make up his mind on this issue. If they cannot be assured that natural gas will be made available to them, their businesses will go to the wall and we shall be left with a dead industry. Those who were prepared to make the capital investment in conversion have found that there is a possibility that natural gas will not be so attractive a proposition at the end of the day.
I appeal to the Minister to address this problem in his summing up. Both I and the horticultural industries will be glad to hear the Minister's views. The Minister could throw a lifeline of hope to people in the horticultural industry if he told them that he is examining the possibility of having natural gas made available as quickly as possible. If the Minister were to say tonight that he would make natural gas available in County Louth many people would be very happy. We have 8,000 unemployed in the county and the unemployment figure will increase because we cannot get industries to set up in the county because of the high price of energy along with other factors. I hope that the Minister, with his overall responsibility for what has become a very important Department, will recognise the policy changes and the measures required to give the economy the uplift it so badly needs. Is our economy to continue to stagnate? Are our young people to see that there is no hope of employment except temporary holiday work for a few months in New York, San Francisco or wherever it is available? That is a very bleak future for the many fine people coming through our educational system.
Many people believe that there is no future for the economy but I do not subscribe to that view. We are going through a difficult period but if we pursue the appropriate policies confidence can be generated by an enlightened Government and we can get out of our economic difficulties and proceed to be a great nation.
I will take up the previous speaker's comments about the need for cheaper electricity for industry because I come from an area where one of our major industries, Irish Steel, is under threat and one of the major factors affecting the viability of that company is the high cost of energy. Last week a number of speakers called on the Government to make cheaper electricity available to industry and specifically to Irish Steel. If we make electricity available on a cheap basis to Irish Steel we must make it available to all industries. I heard again this evening the call for cheaper electricity for commercial consumers. If we drop the price of electricity to commercial consumers, because of legislation, we have to increase the price to the domestic consumer. Nobody has faced up to that. Are the people who are advocating a drop of 20 per cent in the price of electricity to the commercial consumer prepared to face the protests that will come from the domestic consumer when the price to them is correspondingly increased? We cannot have it both ways. We cannot demand a drop in price without picking up the tab elsewhere. There is no way out.
A figure of £87 million profit was quoted by the Minister as being the profit of BGE this year, despite the fact that a certain amount of natural gas was going to industrial consumers at a very cheap rate. Is this equitable when another source of energy is very expensive with the result that some industries are coming under threat? Could we not have the various types of energy under one umbrella and could we not divert some of the profits from BGE to subsidise electricity to commercial users? I would like some answers on that. Perhaps the £87 million profit from BGE is being used elsewhere? Perhaps the Minister will address that problem.
Since we have a very high price for electricity we must continue to look at the operation of the ESB with a view to making it more efficient and more competitive. I was at a meeting of the Committee on Public Expenditure today and we heard a CTT executive saying that a lot of the difficulties facing our products abroad relate to high production costs. That relates to high energy costs.
I was disappointed that the Minister's speech did not refer in more detail to the operation of the Nuclear Energy Board. I raised the question of the disposal of radioactive waste and the effects on the environment of the dumping of radioactive waste both at sea and on the land, and I have questioned the operation of the NEB. Some months ago they invited the Oireachtas Members to see how they operate but unfortunately that invitation was extended on a day when Deputies from the provinces were out of Dublin and could not take up that invitation. I would like the Minister to go into more detail as to how the Nuclear Energy Board are operating. I know they monitor seaweed and waters along our coastline but the Windscale problem is becoming an international issue.
Reports are coming from Europe that the European Parliament are now discussing the threat to our environment from Windscale and there is a promise of action at long last at European level. We should take a more active interest in that operation. We should look at the effect of nuclear waste discharge not only on seaweed and water along the coastline but on human and animal life. Zoologists told me recently that we could get strong evidence of the damage done by that operation if we carried out experiments on animals. Some people might have a conscientious objection to that, but it must be examined and taken into consideration by the Nuclear Energy Board, and I that the Minister has not attended to that in more detail in his speech this evening.
Becoming more parochial in relation to the Cork Gas Company and BGE, I ask the Minister to use his influence and that of his Department to reverse the policies of Cork Gas Company in recent years because those policies have been to offload the domestic consumer and make an attractive operation available to commercial enterprise in the Cork region. Cork Gas Company have an obligation to the people of Cork, the domestic consumers who supported them down the years. The policy is to take meters out of houses and impose quarterly accounts on people, and old people especially cannot cope with quarterly accounts. The Minister should take that up on behalf of the elderly who are disturbed by the withdrawal of meters from their homes after many years. I hope also that the roads that are potholed and marked around Cork because of leakages and breakages will be repaired.
My contribution is short but I would like to hear the Minister's views on the major problem of high electricity charges to which there is no easy solution, and I would like him to deal with the role of the Nuclear Energy Board in more detail.
The contribution of the Minister for Energy is typical of the present Government under whom we see nothing but cutbacks imposed right across the board consistently since they came into office. The Minister's speech this evening on the Energy Estimate illustrates the Coalition's ongoing imposition on the people. Energy is a vital resource and, as I said last year, the Minister has a vital portfolio. If we cannot get the energy resources of the country right and use our natural resources to the maximum we cannot hope to create an upturn in the economic climate. The most disappointing aspect of his speech is that the Minister gave only two lines to the west and in particular to the Ballyforan briquette project. It seems now that the Minister, supposedly a member of a socialist party and a member of a Coalition Government, has put the final nail in the coffin of the Ballyforan project.
He did not put it in Moneypoint.
I am sure Deputy Taylor-Quinn will have an opportunity to make her contribution on behalf of the Banner County later. The Ballyforan project was going ahead on a commitment from Fianna Fáil. We put it in motion and now we see that all that has been done is being terminated and it seems that the activity in Ballyforan and Derryfada will slowly grind to a halt, similar to what prevails in the Tuam sugar factory which has been closed by stealth because of failure of the Government and the Minister for Agriculture to put the necessary investment into it. This is when unemployment is rife throughout the country and particularly throughout the west.
When Fianna Fáil were in office the workforce in Ballyforan was approximately 150 people. This has been ground down, and in the past spring it was down to 40 jobs. In the summer we had a seasonal improvement, bringing it up to 56. The most important industry at the moment is building a tiphead to bring milled peat from Ballyforan over to Shannonbridge. This Coalition Government have no commitment to the project or the utilisation of our natural resources and are prepared to condemn the west of Ireland to the unemployment that is now rampant throughout the country. Proposals were made and targets were set for 180 jobs in the construction of the Ballyforan project and thereafter permanent jobs for 110 people on the bogs and 300 people in the factory. This would be in the region of 400 permanent jobs in an area that has high unemployment, great natural resources and small fragmented farms. The small towns in the whole western region would be the major beneficiaries of capital investment needed for this project.
As the Deputy for this area I say that we are disgusted and disappointed with the attitude of the Government, and the Minister for Energy especially as a member of a socialist party, towards the west. He has no interest, politically or industrially, in the west. That has been proved conclusively by the actions of this and previous Coalition Governments. Surely if they cannot utilise our natural resources and create every opportunity and make capital available for the creation of jobs through the utilisation of natural resources, we have no hope of creating any type of economic activity that would take this country out of the mess it is in.
Would it not be better to give £20 or £30 a week more to people in full-time employment than to hand them £100 or £80 in unemployment benefit or assistance as is happening throughout the country? Is it not time for a new direction and change before it is too late? The project is 50 per cent of the way. Mechanism and machinery are purchased and space was rented in Dublin to preserve them and some of that machinery and mechanism have been lying out in the elements in Ballyforan. Many of the services and much of the capital provided by the local authorities in Galway and Roscommon are going to waste and will be unnecessary if this Government continue with their attitude.
I ask the Minister to have a critical look at the situation with a view to creating jobs. It does not matter where they are created, the gain will be made if the common good and economic good can be achieved. I appeal on behalf of the many unemployed in the west and in the Ballyforan area that he have another look at the situation before it is too late.
The Minister referred to the private bog development grant scheme. Much tribute for the innovation and efficiency of this scheme must go to our spokesman on Energy, the former Minister, Deputy Reynolds. This has been an outstanding scheme and I compliment the Minister on supporting and continuing to support it. It is vital for the economic good and for the provision of natural energy resources and it creates an opportunity for people to provide their own energy resources. This scheme has been implemented and assisted for many years and I hope that the Minister's commitment will be given to it as long as he is in Government holding the Energy portfolio.
The Minister referred to the fact that he had responsibility for other semi-State bodies. The ESB are one of the big semi-State organisations under his wing. Let me say that I admire the professionalism that operates within the ESB but it is important that the ESB recognise that they have and will have a commitment to the west. If the people of the west happen to live in an area that has not seen the same type of resource and facilities as are in the rest of the country, there is no reason why any semi-State body or Government should discriminate against them.
The ESB are bringing in American consultants to have a look at their operations. They recommend that there should be regionalisation in order to save money. There are proposals before the ESB to close down certain sectors and operations in the west. In my constituency the Tuam engineering headquarters are to be closed down, the Galway district headquarters are to be abolished and the area is to be run from Limerick. What natural connection or commitment have the people of Limerick or the management of any semi-State organisation to the west? Galway is the capital of the west, a famous historic city where many people like to work. Were it not for this Government's decision to cut back on various regionalisation programmes we had, many civil servants, particularly from the Department of Defence, would be going to the west. One of the most beautiful and sensible office blocks built on the verge of Galway city is to be closed, 60 people are to be made redundant and the rest of the staff deployed to Limerick.
Something similar is happening in Athlone, the heart of the midlands, which is to be administered from Dundalk. There must be some sense in centralisation in the heart of the country and regionalisation but there is no sense in moving two headquarters from Athlone and Galway to Dundalk and Limerick. This is denying the people the services, resources and facilities to which they are entitled as citizens. Staff are being made to pull up their roots and move their families to Limerick, while 60 people are to be put on the dole queue. It is utterly ridiculous, especially in view of the fact that the major capital investment has been made by the ESB and by the State in providing beautiful office facilities in Galway city, Athlone and Tuam town. I ask the Minister for Energy on behalf of the people of the west to reconsider the position. If cutbacks are to be made, surely it should be at head office in Dublin or in the power stations where so many people are highly paid for doing very little. The people of the west have suffered enough over the years and should not be deprived of services they are prepared to pay for and to which they are entitled.
The Minister also referred to the western package electrification scheme negotiated by Fianna Fáil in 1982. It was designed to stimulate agricultural growth and development in the west. There was a commitment from the EC to provide £10 million over ten years but we were able to negotiate so that the money may be spent over a shorter time span if necessary. When we were in office people who worked on farms, farmers' sons who wanted to marry and build a house, were getting those grants from the Department of Energy. Many applications have been rejected since this Government came into office and I have had correspondence from the Minister in this regard, as well as several parliamentary replies. I welcome the decision to put proposals to the EC to review the scheme and I hope there will be an acceptance that in the west the farmers are in a difficult situation because farms are small and fragmented and there is a need for off-farm jobs in order to maintain any existence on the land.
I cannot see anything wrong in the Department of Energy subsidising an ESB connection in a case where a farmer's son has an off-farm job but works on the farm in the evening and at weekends and invests money in the farm in order to upgrade it and make it more productive. If that man is through his personal efforts helping to stimulate the growth of agriculture surely he must qualify for these subsidies. I could give many other examples. Let us consider the case of a young farmer, a married man whose father died and left him half the farm, the other half and all the stock being left to his mother. The young man works on the farm and operates it in his mother's name, yet because he has 25 acres in his own name and has built a house he is denied the subsidy. It is a very unfair and discriminatory decision. I have a number of similar cases. It is totally unfair that the rules have been changed. We should be able to spend money from Europe in the best way for the economy and the country. When we get European money we must decide to spend it our way.
They give us the money and they make the rules.
They give the guidelines. It is up to us after that to operate that scheme to the best advantage of the farming community and the nation.
I appeal to the Minister to make natural gas available to as many centres as possible. It is time to look towards Limerick and Galway, two outstanding historic cities where the population is fairly large and where natural gas would make a major contribution. There are other areas adjacent to the gas pipeline along the route to Dublin. Natural gas should also be made available to farmers in north County Dublin, Meath and Louth, who are involved in horticultural production. They have been put at a grave disadvantage due to high energy costs. The fact that the deal hammered out with the Northern Ireland authorities has broken down should not deprive farmers in the north east of the supply of natural gas. Increased production would offset many of our imports and make a major contribution to our balance of payments, putting these farmers on a viable footing.
I ask the Minister to consider this matter and before he leaves office to make some major contribution in relation to natural gas for which he will be remembered and respected. When a project is set up, it is financial lunacy to terminate it midstream. The Ballyforan project and the natural gas works are well under way and the necessary capital resources should be put into both of these schemes to ensure that the natural resources available are utilised to the maximum benefit of the nation and the economy as a whole.
I welcome the Minister's contribution on the Estimate for his Department. The subject of energy has often caused controversy; nevertheless, since the Minister took over this portfolio he has acted honourably and taken care to look after as many interests as possible. Coming from the Clare constituency, I commend him for paying particular attention to the Moneypoint project and we appreciate the valuable contribution it has made to the economy of Clare as well as to the national economy. This project was vehemently opposed by Fianna Fáil, and the workers in Moneypoint should remember that. When projects of this nature are proposed they are intended to benefit the community by reliance on raw materials other than gas and oil.
There is a great record of industrial relations on the site at Moneypoint and those who work there reside mainly in Clare or Kerry. The Minister said that the first phase will be commissioned in October and that work is continuing on the other phases. The ESB should publish their intentions for the future as this is necessary from the point of view of the community in Clare and the workforce. Any uncertainty should be removed and I urge the Minister to ask the ESB to publish a progress report.
I came into the House because I heard Deputy Treacy mentioning a scheme for western electrification. He castigated the Department for not catering for farmers in the west, especially part time farmers looking for assistance. I, too, made representations for small farmers and I regret that they were not successful. However, the Department made the point that there was a certain amount of discretion given to them originally but when officials of the EC examined projects which were being undertaken with the help of subsidies, they found out that everything was not above board. People were abusing EC money and Deputy Treacy should have mentioned that point.
The flexibility which some Deputies and indeed leaders in society want in dispensing EC money has to be seen to be believed. The Minister was forced by the EC to alter the guidelines in regard to assistance for schemes which is regrettable as many young, part time farmers have suffered as a result. I am glad that the Minister will renegotiate the guidelines but the House should realise that this matter has been thoroughly examined and it was not successful because it was abused. The EC is the piper and it calls the tune. In other countries money is allocated properly and spent in the correct areas and I am glad the Minister will fully examine the matter.
Other speakers made pleas in regard to the provision of gas, especially in the west. There has been a successful lobby to bring natural gas to Limerick. There is an industrial estate just outside Limerick which needs an alternative source of energy. The estate, located at Shannon, has provided many jobs for the mid-west and people come to it from Clare, North Tipperary, Limerick and North Kerry in order to work. If natural gas was provided in this area, it would attract major industries to the Shannon free zone. It would also mean that the housing estates in the area could avail of it which would be a major asset to the residents. There are certainly enough people living in the area to warrant bringing the gas at least as far as Clare. Deputy Treacy pleaded Galway's case but the Minister should first consider the Clare claim. Industrialists in Shannon want to peg their energy costs and the provision of natural gas is the proper way to do this.
There has also been a discovery of natural gas in the south and we all hope that there will also be a discovery of oil which will be viable. It is very necessary to have our own supply of oil in view of the volatile situation in the Middle East. With regard to the granting of licences, the scheme produced by the Minister was very complicated and many people do not understand it. Why are we not in line with our competitors? The exploration of the Porcupine Bank and other natural shelves around the coast should have the same conditions attached to it as those which apply to the exploration in British waters. If we gave the same kind of terms, prospecting oil companies would make a greater effort to recover oil.
I should like to express my congratulations to the Minister for the work he has done in his Department. I hope that in the near future he will be able to sanction the piping of natural gas to Shannon and the rest of Clare. I hope that if oil is discovered off our shores it is in the Porcupine Basin. I appeal to the Minister to help us develop the road from Ennis to Kilrush which is deteriorating because of extra traffic to the Moneypoint station.
I found some encouraging matters in the Minister's speech such as the bog development programme and the extension of the natural gas pipeline. However, we always have something to weigh us down and in this case it is the escalating price of electricity. That is causing a big problem in many industries. The extension of the natural gas pipeline to Border counties with EC funding was not mentioned by the Minister. I understand it is proposed to extend the pipeline to Louth, Monaghan, Cavan, Leitrim and Sligo. Previously the EC fund was allocated towards tourism, transport and accommodation. I understand the work on the pipeline will be the responsibility of the Minister and I appeal to him to consult with other Departments to see how this cheap source of energy can best be utilised. There is no doubt many industries will benefit.
At county council level, and in the House, I asked the Minister to alert industrialists to the fact that the pipeline was being extended to those counties. Our spokesman on horticulture has explained how that cheap source of energy could be utilised for fruit and vegetable growing. That industry is labour-intensive and a very adaptable workforce exists in those counties. In advance of the work on the extension of the pipeline discussion should be held with the co-ops and other interests. The House will be aware of the many successful mushroom growing projects in Monaghan and Cavan. There is no doubt that that industry which has increased fourfold in recent years will benefit from a cheap source of energy.
Today I asked the Minister for Industry, Trade, Commerce and Tourism if he was satisfied with the progress made in implementing the recommendations of the IDA report of June 1982, said to be a strategy for the development of the agricultural industry here. In the course of his reply the Minister mentioned one sector that was not performing satisfactorily, vegetable processing, and he said this was due to problems related to economy of scale and changes in the structure of the industry. Deputy Kirk outlined how we could use natural gas to heat glasshouses. There is no doubt that not alone could we meet the home demand for tomatoes but that we could export the produce to Northern Ireland. For years our supply of tomatoes has been imported and recently I read a report that 6,000 tons of tomatoes were imported by Northern Ireland. That market could be exploited by growers in Border counties. It is regrettable that vegetable processing is not progressing. We are all aware that in the beef industry targets for the nineties have already been met. It is important that all Departments recognise the advantage of an extension of the natural gas pipeline to Border counties to ensure that that source of energy is used to the best possible advantage.
The bog development scheme introduced in 1981 has been a success. At the time of its introduction I explained how thousands of acres of bogland in north Monaghan could be developed and since then five operators have set up business. One of them cut 130 acres of peat, but unfortunately, because of the weather, prospects for this year are not very good. Many entrepreneurs have got involved in bog development. They borrowed a lot of money and following some good summers are in a reasonably safe position. The Minister told us that approximately 150 schemes have been grant-aided to the tune of £3.3 million. That is very satisfactory. We must develop that natural resource.
Some aspects of bog development cause me concern. Under the scheme grants are available for drainage and the purchase of equipment but there is little to be had for road improvements. In the north Monaghan region most of the roads to bogs are privately owned. Some of them were improved during the emergency when councils cut turf for their institutions but little has been done since. I have been pressing for improvement of those roads at council level but with little success. Operators in north Monaghan have received grants towards the purchase of machines but they are having problems with the roads. I have approached our county development team and suggested that money be provided to maintain those roads.
A number of speakers referred to the mid-western electrification scheme, which has been very successful, and I am very glad to see the Minister is considering a number of other schemes. A young man under 20 years of age came to see me. He has been working for a farmer for the past two or three years and is building a broiler house. This is a big undertaking for a young chap. In my area all the farms have such houses costing about £60,000. Because this young man works for a farmer he will not qualify for the EC subsidy. This is regrettable because he must work until the unit is in production in a few months' time. A man wishing to produce mushrooms could qualify for the 30 per cent grant aid if his application is made before he builds the necessary three or four house units, but he has to be a full time——
Is that not more a matter for another Department?
No.
Would the Deputy relate it to the Energy Estimate?
It is related to this Estimate since under the western development scheme this man will not qualify for a grant because he has an income outside farming. We should encourage enterprising young men who are producing labour-intensive products. There should be some formula by which these people would qualify for grant aid since they will devote themselves full time to these projects.
We all talk about the amounts of money the Exchquer get from the gas finds and many people think gas should be provided at a cheaper rate. Some industrialists claim that gas costs the same as oil and many feel they should be encouraged to use gas by buying it at a reduced rate. We all admit it cannot be sold very cheaply but these people should be given a little encouragement. The Minister said native fuels increased their share of primary energy requirements from 19.4 per cent to 41 per cent. That is very satisfactory. Not alone are bog development and natural gas reducing our dependence on imported fuel, but they leave us in a more secure position than we would have thought possible some years ago because no longer will we be so affected by oil strikes and the like.
There does not appear to be any mention of gas development in the west Cavan and south Fermanagh areas but I hope such development will be proceeded with. There has been talk of cross-Border economic development but regrettably the Northern Ireland authorities did not proceed with the deal. Our interconnections between the two electricity boards have been severed but I hope we will be more successful so far as gas is concerned. It appears there are good deposits of gas in south Fermanagh and perhaps something will come of that. Many of us have raised the matter of afforestation schemes by way of parliamentary questions. The EC provided substantial sums of money for such schemes and I visited trial areas in Fermanagh and Carlow. The Northern authorities seem to believe more in the viability of these schemes than we do and the trials they carried out seem to have been very satisfactory. Their soil seemed ideal to produce a fairly high growth rate. Many of us believe we too could have availed of these moneys.
Deputy Kirk mentioned solid fuel and grant aid in this area. That was a good idea and should be pursued. A number of Deputies visited Wexford where tomatoes were grown using a solid fuel system. There are great opportunities for future development in this area. I hope the Minister will take note of the points I mentioned regarding those young people who might wish to apply for grant aid. We must have guidelines. Unfortunately, the longer the western package lasted, the tighter it got until in the end it was not of much benefit. I would welcome the Minister's review of this package and hope that he would give all possible consideration to the areas where there is a chance of helping young people.
This Estimate of the Department of Energy affects people in every walk of life throughout the length and breadth of the country and is particularly important at the present time. We must succeed in having a proper mix. By that I mean that we must utilise to the fullest extent possible all our native, indigenous resources, so reducing the importation of fuels of every type. We will thus reduce our dependence on fuels from outside Ireland and will create and maintain jobs here.
We have an abundance of natural resources. Our water supply was originally used for the generation of electricity and since then our bogs have been well developed. However, there is room for further expansion of our bogs for electricity generation and also for fuel for home consumption. Far too little emphasis is being placed on bog development now.
We are lucky to have a sizeable quantity of natural gas off our coasts which is being developed and utilised to a very great extent. Our coal resources also should be developed and utilised to their fullest extent. There is a further source of energy to which the Minister did not refer tonight and that is timber. That is an amazing source of energy, the development of which should be considered.
I am very pleased that the Minister has reiterated the Government's objective in regard to energy policy. He stated:
Government policy on energy has as its main objectives the promotion of the use of domestic energy sources and the lessening of our dependence on oil by broadening our choice of fuels, together with initiatives to encourage exploration for additional domestic supplies of oil, gas and coal.
I am sorry that the Minister did not emphasise the importance of bog development. I draw the attention of the House to the question of the sale of Bord na Móna products and the importance of their continued output of fuel being purchased by the Electricity Supply Board. The ESB should be directed to utilise these products. The Government's commitment is reiterated by the Minister as follows: "The Government are committed to the continued development of this valuable indigenous energy resource for electricity generation and for domestic use".
There has been considerable concern in the midlands that the Government are not as committed to the usage of the Bord na Móna products as they should be and I am pleased that the Minister has repeated the commitment that he made to the House and the country approximately 12 months ago. The Government are obliged to continue with this policy. The five year ESB corporate strategic plan which was going to lead to the closure of a number of generating stations throughout the country was very serious for people in the midlands. Far too little credit was given to the Minister for the major policy decision which prevented these closures. He was landed with a very difficult problem in that Moneypoint was being developed to a very high level. The decision was made in the national interest at that time and I am thankful to the Minister for it. It was of benefit not only to the people of the midlands but to all the people. Let there be no doubt about it, any country which would use imported fuels when indigenous resources are available would be making a very great mistake.
There are sufficient native boglands, not just in the midlands but spread throughout the country, to provide energy for electricity for another 20 to 30 years. It is essential that we continue to utilise these boglands. Sales of Bord na Móna products last year showed an increase with regard to moss peat and milled peat and the estimated sales of briquettes for 1984 will be bettered in 1985. I am pleased with the continued expansion of Bord na Móna.
The Minister mentioned a number of ESB generating stations in connection with which capital developments will take place.
I have visited most of the briquette factories throughout the country. The Department, in consultation with Bord na Móna, should consider seriously the improvement and updating of a number of those factories. I speak in particular of the Derrinlough briquette factory, where the station appears to be quite run down, and also of the Boora briquette factory, which is not being maintained at a proper standard. I view this matter with great concern. I am not happy about the conditions under which the staff have to work. Because of the lack of proper maintenance by Bord na Móna, people have to work in conditions that are not satisfactory. Due to the run down condition of the factories there is not a sufficient intake of air or light. It is essential that there be a major overhaul of the factories at Derrinlough and Boora. Thanks to Government policy, there will be continued development of our national resources. They have also given a commitment regarding the bogs in the midlands.
I have been in communication with the Minister and Bord na Móna regarding the engineering factory at Derrinlough. I might add that, while I got little satisfaction from either party, at least I got a little more from the Minister. In the Derrinlough machinery factory there is a highly skilled labour force. This factory was set up a number of years ago and from it have come many highly skilled people who are qualified in light engineering work. The factory produces machines for bog development. Many of the patents and ideas were hijacked from Bord na Móna by some entrepreneurs who are now competing against Bord na Móna. In fact, they are trying to sell back some of the machines to them.
Much of the third development programme has been completed. However, it is essential that Bord na Móna have their own machinery factory. There must be some co-ordination among our semi-State bodies. The ESB, the Sugar Company and other bodies should be directed to purchase some of the machinery produced by Bord na Móna rather than import plant. The Minister should give some serious consideration to this point. In this way he could play a major part in maintaining jobs that are threatened or even in creating new jobs. I am disappointed that Bord na Móna have turned a deaf ear to the pleas of public representatives in the midlands and to the pleas of the workers in regard to this important matter. There is a skill in the Derrinlough factory that is not being used properly.
The first stage of the Moneypoint project will come on stream in October. I have been accused by a correspondent of the Irish Independent, Mr. Maurice Heron, of being parochial when I spoke of the problems that would be caused by the fall-out at Moneypoint. I make no apologies for being parochial. It is important that a person should represent his constituency in a proper way. With regard to Moneypoint, there is the danger regarding air pollution. The House of Commons in Ottawa carried out a study on the problem of pollution and they published a White Paper which detailed in a most comprehensive way the damage caused by coal-burning stations to the environment. The cost of providing anti-pollutants at Moneypoint would be sizeable. The Managing Director of the ESB quoted a figure of £400 million but I have no idea what it would cost to make it safer. However, as a person who hopes to live in this country for the rest of his life, I hope the ESB will take every possible safeguard to prevent damage to the environment. I hope they will do everything possible to prevent damage by fall-out from Moneypoint to the beautiful parts of Clare and the midlands. This is of immense importance. Enough is being done to our rivers, streams and so on by pollution of one kind or another. Too little too late is always the cry. Look at the way our lakes have been destroyed.
Before Moneypoint comes on stream I demand that every possible effort be made to prevent pollution. If we do not prevent it in three years time the Burren, the lands of Cashel, the midlands, Offaly, Laois, the Golden Vale and right up to the Slieve Bloom mountains will be seriously damaged. I am a backbench Deputy and cannot overemphasise how concerned I am about this matter. There are 300 megawatts coming on stream and that represents a vast amount of coal being burned. We all know the amount of fallout from one small chimney, but if that is multiplied by the fallout that will result from the amount of coal which it will be necessary to burn to produce 300 megawatts one realises the amount of damage that could be done. The matter is not entirely in the hands of the Minister. The Government must become actively involved in immediate consultations. They should ensure the ESB take all necessary action. I urgently request them to ensure that the environment of the midlands is not damaged. Look at what happened in Canada.
Approximately 78,000 acres of land are under afforestation. The total acreage owned by the Department is now 966,000. To save the Chair asking what relevance this has to the debate, I would point out that it is one of the greatest sources of energy which we have on tap. Bord na Móna should be given responsibility for the development of the forests. Thousands of acres of land are lying idle and these could be planted. There is tremendous potential in the timber industry. In ten or 15 years after trees are planted they are ready for thinning and 20 years later they are ready for cutting and selling. It is an ongoing process, decade after decade, generation after generation. At present we are importing vast amounts of timber, but we should utilise our natural resource to prevent these imports.
When Bord na Móna was set up many people were critical of it as they were of the ESB. People laughed at the ESB. They said Bord na Móna would not get their policies off the ground. However, people came from as far away as Russia, Denmark and Sweden to look at Bord na Móna. If they were given responsibility for the development of the forests I am sure they would be very successful. There is great job potential in this area and we could save on our timber importation. We have people with the necessary vision and enterprise. The National Development Corporation might look at this area. It is a vast untapped resource and the sooner someone looks at the development of it the better. In his speech the Minister referred to £4 million and said it was for the extension of peat fired stations at Lanesboro and Shannonbridge and for the new gas-fired combustion turbines at North Wall in Dublin. The ESB station at Ferbane is operating far below its potential. If it was upgraded a number of turbines which are not presently utilised could be put into production.
The first inter-party Government developed bog roads. There are many roadways leading into our bogs. However, people are unable to get the turf out of the bogs because of the state of the roads. I ask the Minister and the Minister for Labour to see how they could develop these bog roads. A sizeable number of jobs could be created if these roads were developed. People would be able to bring light machinery into the bogs. I ask the Minister to look at this as the development of these roads would be of great social and commercial benefit.
The Minister has a very difficult but most interesting task and I wish him continued success.
I thank those Deputies who have contributed to the debate on the Estimates. All the contributions were brief and to the point and were offered in a constructive manner. I will reflect on the various points made and try to take them on board wherever possible.
Deputy Reynolds referred to the Limerick gas project. I should like to clarify the situation in that regard. The Deputy referred to an agreement having been completed in Limerick. An outline of an agreement had been looked at by BGE, Limerick Corporation and a private sector company. This would have involved a price for gas and loan terms from BGE which I would have found impossible to approve, given the amount of public funds that would have been required for the project. What is important about the Limerick gas contract now is that the agreement should be finalised within a matter of weeks, so that we can then go ahead with building the pipeline, expanding the grid and bringing natural gas to Limerick city, something that has been promised for many years.
Deputy Reynolds suggested that no money should have been paid by BGE in respect of the acquisition by the board of the shares of the Cork Gas Company. The bid offered by the board was the average for the previous 12 months. From a commercial point of view, the important point was to ensure that the bid was sufficient to make it attractive because otherwise it might have been rejected and that would have led to the liquidation of the company. It was in the interest of everyone concerned that liquidation be avoided so that BGE, the banks and the Department of Energy could monitor and control the development of the new Cork Gas Company.
Deputy Reynolds asked why the debt was allowed run to the £4 million level. The alternative was to cut off the supply of gas to Cork city and I do not think anyone would have countenanced such a move. While negotiations were in progress the obvious line to take was to allow the debt increase but what is important, as reaction on the ground would indicate, is that the gas supply to Cork city should not be interfered with in any way.
Regarding further supply developments, some people have complained about delays. Admittedly, progress has not been as fast as one might have wished but we are talking of a highly complex area especially when negotiations are involved and this would be the case whether we were dealing with the public or the private sector. It is very important that at the end of the day we reach agreements in relation to the distribution of natural gas that would be of benefit to local communities and to the economy generally. It is worthy of note that in many cases the utilities in question have been very run down. I do not think anyone would say that the selling of the old gas was an attractive project. It was an unexciting venture. What is involved now is the question of rebuilding the entire gas industry. That is an expensive procedure but it will be worth-while spending some months in order to have it right rather than to rush into agreements in the short term which one might regret later.
I am confident that agreements will be reached in the Limerick situation and likewise in Waterford and Clonmel. Efforts will be made in the coming months to devise a work programme so that we may expand the national gas grid and I think there is unanimous agreement in the House that there should be such expansion so that we may maximise the benefit of the whole project in terms of the economy as a whole.
Deputy Kirk and others referred to the extension of the gas pipeline to Northern Ireland. They referred to the failure on the part of the British to see the agreement through. At all times we dealt in good faith with our Northern counterparts but regrettably our efforts came to naught. I am considering all possibilities that would enable to be put together a viable project northwards, whether within or outside the State. What is important in this respect, too, is that we have a project which on a stand alone basis would meet certain economic criteria which we set at any given time.
Deputy Reynolds referred also to onshore and off-shore oil exploration. I must reiterate my earlier sentiments that the position relating to the third licensing round has been good and that we must take into account many adverse factors that are affecting this development. Increasingly less money is available for exploration. In the US particularly the main thrust of oil company development seems to be to move by acquisition rather than by further exploration. Given all the circumstances, including a softening of oil prices, we have had a good response and what is important is that there will be exploration in the next few years on the lines of the exploration of the past years.
It is not correct, as Deputy Reynolds insinuated, in relation to the report on electricity prices that no action has followed the Jacobson report. We have carried out the recommendation of the report which suggested that we look for the response of the ESB to the various suggestions in the report. We await the response of the ESB in relation to the implementation of those recommendations. I have no doubt but that efficiency measures and price improvements will be among the steps to be implemented in the aftermath of the report. That report was well worth commissioning.
As I said earlier, the Tara-Bula negotiations are continuing. I do not wish to elaborate further in that regard. As Deputy Reynolds has admitted, this is a very complex issue. He understands that from his experience in the Department. However, I am confident that we can bring the deal to a conclusion that will be in the best interest of mining in this country and that we will be able to provide further development and expansion and for the job creation that will follow.
Deputies Reynolds, Kirk and Leonard talked about the utilisation of cut-away bogs. There has been research into the question of whether these areas would be more suitable for grass, for dry stock or for the growing of vegetables. From the research carried out to date, it has been established that there is certain potential for these cut-away bogs. There is also forestry potential and amenity potential in this area. We will be bringing forward more concrete proposals when the research is more advanced.
Deputy Reynolds suggested that we build a smelter. Having regard to the proposed location in that respect I could go along with the project but discussions on such a proposal have not been taking place in recent years, so one might say that it is very much on the back burner.
The question of an interconnector is something we always had in mind. It is regretted that we have not been in a position to replace the interconnector in the electricity grid between North and South. Most people are aware of the reasons that has not been reactivated.
We are at present considering legislation on the INPC in relation to their statutory establishment and also in relation to their role in offshore exploration. Deputy Reynolds seems to be somewhat of a doubting Thomas in relation to the Whiddy Island project. I can assure him that the project is going ahead, that quite a lot of detailed work has been carried out. Planning permission has been applied for. I am sure that will be of enormous benefit not just to the nation but to the people of the Bantry area in particular, an area which has been quite depressed since the unfortunate disaster of 1979.
Most of us are in total agreement in relation to the western aid electricity scheme metnioned by Deputy Kitt. There is no doubt that there have been some hitches. From my recent contact with the Commission I shall leave no stone unturned in endeavouring to maximise benefit for the farming community in relation to the utilisation of the provisions of the scheme. I also take note of Deputy Kitt's and Deputy N. Treacy's comments in relation to it. We shall try to maximise benefit. If we get the co-operation of the Commission we should have little difficulty in so doing. It is a scheme which has been an enormous success, the application rate still being very high. We shall pursue that with vigour. One hitch has been the question of the second house on the farm, the second family home. We have made a very strong case to the Commission to ascertain whether they would be prepared to allow the occupant of the second house also to qualify. In most cases it is a question of a member of the family remaining on the family farm, working on the farm as well.
I can to some extent understand the regrets expressed by Deputies in Galway constituencies in relation to the Ballyforan project. I can assure them that if Bord na Móna come back to my Department, having carried out their assessment and review of the scheme — we can also safely say it is a matter for the board if they feel they have a viable project, a stand-alone project in terms of timing and marketing — then the Government will look at it in that light. I can assure both Deputies that such decisions are not lightly taken and it is not any lack of commitment by myself or the Government of which I am a member to the west or indeed to any place outside the Dublin area. But projects have to be assessed at any given time in relation to many factors. At the time of the deferral of the Ballyforan project Bord na Móna, in their judgment, felt that marketing and many other conditions were not suitable.
In regard to the ESB and the Millar Barry report, obviously rationalisation is a matter for the board of management of the ESB. I shall be happy to consider the views of the board in relation to the proposed restructuring. It is quite obvious that decisions will have to be faced up to in relation to the whole question of regional organisation. This will have to be done in a manner which is in the national interest and that of the regions as well as the whole interest of the organisation.
I appreciate Deputy Kitt's support for alternative energy projects. In the long term it is in this country's interest to continue both the research and practical development of alternative energy sources because, even if it is only on a small scale, it will be of economic benefit to have alternative energy sources evaluated and ready as projects for the future. On the use of solid fuel my Department have sponsored the design of a multi solid fuel stove. The NBST and the IIRS are currently endeavouring to commercialise this. This is of major significance and, if we get the level of commercial interest hoped for, it will constitute a breakthrough in that area.
Deputy Kirk mentioned the whole question of the gas grid for Drogheda, Ardee and Dundalk. In particular he requested an extension — and I can understand his concern in this respect — of the pipeline to the Border. He expressed the belief that it would constitute an essential part of the infrastructure and be a cost cutter for industry. In relation to Deputy Reynolds's comments, the whole question has to do with viability, in relation to having a project, and we have reapplied to the EC in terms of a stand-alone project. A favourable response would allow us look at the whole project in a different light.
I understand Deputy Kirk's concern in regard to the horticultural industry, particuarly in the Leinster and Border counties. I should be happy to see a project for a supply of gas to this and other industries tested for viability. It would be very difficult at this juncture to give any undertaking until all possibilities are explored and examined in detail.
Deputy Allen mentioned the figure of £87 million in relation to Bord Gáis. This is not a profit, it is a surplus, the extent of which is assessed. The transfer of the amount is settled by myself with the Minister for Finance and laid down for Bord Gáis Éireann. Deputy Allen also mentioned the high price of electricity, as did many other Deputies. The best response I can give is to refer people to the actual report on electricity prices and the specific recommendations contained in chapter 16 of that report. Only after a thorough examination of the recommendations and their implementation shall we start making progress on what we started last year when I sanctioned the reduction of electricity costs by 7 per cent for heavy users and 2 per cent for normal commercial users. Some people might contend that that reduction was quite small but I believe it was a step in the right direction. It does not happen too often and is something we shall continue given the right circumstances.
Deputy Allen also voiced concern that I had little to say in relation to the Nuclear Energy Board. I might remind Deputy Allen that during my time as Minister for the Environment I initiated meetings with my counterpart, the Minister for the Environment, in Britain, when we had discussions in relation to nuclear radioactive discharge in the Irish Sea. Those meetings proved to be very beneficial. We initiated a joint inter-Government committee who meet on a regular basis and keep both sides abreast of what is happening in relation to nuclear discharge and, of course, in limiting the discharge from the Sellafield plant. Significant progress has been made and the regular contact we have with the UK authorities is of benefit to us and can go a long way in allaying fears we have here in relation to discharge of nuclear waste into the Irish Sea.
Deputy Carey spoke about and was obviously very supportive of the Moneypoint project, perhaps influenced by regional location. Certainly I can take on board what he said. We do get progress reports from the ESB in relation to the project. Deputy Carey expressed concern that natural gas would be supplied to Shannon. Shannon could be looked at as a prospect for natural gas as soon as the Limerick project is up and running but it would have to be evaluated in terms of demand in the Shannon area. Deputy Carey may have been trying to score some sort of a hat trick when he asked me to get the roads from Kilrush to Moneypoint repaired. I suppose in Irish politics nothing is impossible, so we will try to get that done for him as well before Christmas.
And the roads around Ballyforan.
Deputy Leonard, who takes a very active interest in the affairs of the Department at all times during the year, mentioned his concern in relation to Border county projects in County Monaghan. As I said to Deputy Kitt in relation to the viability of the Northern project, it is based on the full assessment of the Northern project and the amount of EC support available. It is only then that we will be able to have a look at the expansion of the grid northwards. Obviously the Border counties will be looked at in terms of its beneficial use in those areas.
Deputy Leonard mentioned the private bog development scheme. That has been one of the success stories over the last number of years and I intend to ensure its continuance to maximise the benefit throughout the country. Many western areas have not had the full benefit of the grants available for the exploitation of turf. I would like Deputies to advertise these schemes in any areas where contractors are available or co-ops can be established to exploit and develop undeveloped peat areas.
The maintenance of roads was mentioned. Everybody is aware of the pressure on the Road Fund allocation in relation to county roads. I will ask my colleague, the Minister for the Environment, to consider that in the coming allocation for road expenditure because the maintenance of roads has fallen back so much that it will be very expensive to carry out repairs in the future.
Deputy Leonard suggested that there should be some relaxation of the qualifying conditions for the western grant scheme. We hope we will receive a favourable response from the Commission in relation to our submission.
In relation to short rotation forestry, as in Northern Ireland, we are launching a new test project in Leitrim. One which was done by Bord na Móna in the EC proved rather poor but certain lessons were learned and I hope that the forthcoming project in Leitrim will be more successful.
Deputy Enright, representing the views of the midlands, asked for even greater bog development. I have already covered those points. In relation to energy policy the utilisation of peat resources by the ESB has been settled and a balance in fuel mix in the best interests of the economy has been arrived at and it will get us through the next number of years. The question of the refurbishing of the briquette factories is obviously a matter for the board and management. The Deputy obviously knows the circumstances locally and the quality of the workmanship and the valuable experience built up in the locality.
I thank Deputies for their contributions and for the interest they have shown on the Estimate for my Department. I assure Deputies that all their comments will be dealt with in the coming months and I hope we will see an exciting 12 months in my Department which will make a major contribution to the economy.
Vote put and agreed to.