asked the Minister for Energy if he is prepared to enter into meaningful negotiations with Aughinish Alumina for the provision of natural gas as a source of energy in the interests of preserving 800 jobs and reducing oil imports.
Ceisteanna—Questions. Oral Answers. - Aughinish Alumina.
24.
Negotiations with prospective customers for bulk allocation of natural gas are primarily a matter for Bord Gáis Éireann. Guidelines on pricing policy for BGE which have been agreed by me with the Minister for Finance for large allocations of gas are currently in force.
Aughinish Alumina Limited have recently experienced considerable difficulties in the alumina market and have requested a very large allocation of gas below the market price by way of assistance.
It has been the established policy of successive Governments that natural gas should be sold at market prices. This produces the most favourable allocation of the gas both for the purpose of displacing more expensive oil product imports and of providing an income to the Exchequer which benefits the community at large.
A working group under the aegis of the Minister for Industry, Trade, Commerce and Tourism have been appointed to examine the difficulties facing the company and to report on any steps which might be considered to alleviate them. Until the group have reported, I feel that it would be premature to comment further except to say that not all the company's problems are due to energy costs. I understand the group will report shortly.
Is the Minister aware of the serious situation in this industry and that there is every reason to fear the possibility of losing 800 jobs in the area if the owners decide to close down the plant at Aughinish Island? The Minister should be aware of the major impact that will have not alone in the mid-west but on the economy generally. If as the Minister says An Bord Gáis can only sell gas to Aughinish Alumina at market price is it not likely that there may be little or no concession to Aughinish Alumina to help them to keep going? Would the Minister not think, having regard to the economy, that direct negotiations should be opened between the Minister and the management of Aughinish Alumina to deal with the problem having regard to the fact that this company may close? Would the Minister not also agree that it is best to deal with this at ministerial level rather than at arm's length from An Bord Gáis? Is the Minister further aware that there are four plants, one in Jamaica, one in Quebec, one in Australia and one in Ireland and that one of the four must go? Is the Minister not aware that it looks to us now that the dearest energy is at the plant in Aughinish Island and would the Minister not agree that in an effort to maintain the 800 jobs something positive should be done immediately rather than waiting for the report of some board, which may be too late, which he says is under the auspices of the Minister for Industry, Trade, Commerce and Tourism.
I share the Deputy's concern for the future survival of this project. I am aware of the difficulties they are experiencing for various reasons, not all energy related, in their four plants. I am aware that they have had discussions with the Government in Jamaica where the raw material is. The Deputy is probably aware of what happened. The Government's concern in this matter can be seen from the fact that meetings have been held between the Taoiseach and myself and the Minister for Industry, Trade, Commerce and Tourism with Aughinish Alumina's board of management. We felt that the best assessment of the difficulties should be made before further discussions would take place. I assure the Deputy that we are treating this matter as a matter of urgency because of its implications, not just in west Limerick and north Kerry, but because of the national impact. I do not agree with the Deputy when he says that the report of the committee which has been set up will be too late, because we will have that report in a matter of days and then we will be in a better position to act on it in all our interests and resolve this matter to the benefit of the economy generally and to ensure that the plants stays in production.
Is the Minister aware that Aughinish Alumina would represent a £20 million a year customer for natural gas and that that gas would replace oil imports and that this would be of tremendous value to the State? Would the Minister have a very serious look at the approach of An Bord Gáis? The Minister says that they want to sell the gas to Aughinish Alumina at commercial rates which I understand is somewhere between the region of 40p to 45p per therm. If my information is correct it appears that Aughnish Alumina suggest that for the purpose of survival they would need that gas at 25p to 30p per therm. There is quite a gap between what An Bord Gáis and what Aughinish Alumina can pay if the company are to keep in operation. Will the Minister assure the House that both he and the Government will give the matter serious consideration having regard to the fact that 800 people work there?
I assure the House of that. Our actions to date will bear that out. The Deputy should be aware that when we are talking about energy costs, natural gas may not be the only option and we may find other methods of reducing energy costs to that plant. All the possibilities are being examined.