asked the Minister for Energy when it is expected that a decision will be made with regard to the extension of the natural gas main up to the Border.
11.
Ceisteanna—Questions. Oral Answers. - Natural Gas.
9.
asked the Minister for Energy his plans for the provision of natural gas to Border counties.
13.
asked the Minister for Energy the amount which has been allocated to the Government from EC funds for natural gas development.
15.
asked the Minister for Energy when he will extend the natural gas pipeline to County Louth.
19.
asked the Minister for Energy if any of the 32 million ECUs available from the EC under Council of Ministers Regulation 3637/85 for Border gas development, will be taken and spent during 1986; and the reason none was taken up during 1985.
I propose to take Questions Nos. 9, 11, 13, 15 and 19 together. The EC Council of Ministers approved a Community regional aid package on 17 December 1985, which included provision of up to £23 million, 32 million ECUs, for a gas development programme in Border counties. The Council Regulation No. 3637/85 was published in the Official Journal on 27 December 1985, and provides that only expenditure incurred after the regulation came into force is eligible for ERDF aid. Funds could not, therefore, have been drawn down in 1985.
The prospects for the gas supply network being extended to particular centres in the region covered by the Council regulation are very much dependent on the economic viability of such projects. The priority is to carry out the detailed feasibility studies necessary to determine the viability of particular projects, taking into account the availability of ERDF funds.
Under the Council regulation a project programme has now to be drawn up and approved by the EC Commission. Until this programme has been prepared and agreed it is not possible to comment on the likely draw down and application of the ERDF funds.
During last summer there was talk of amending the regulation regarding the Border fund to involve extension of the gas pipeline but from information I can get it appears little has been done since to examine the market in that region. Article 7 of the regulation states specifically that member states shall take the necessary measures to make the potential beneficiaries aware of the possibilities. I am concerned that to date local authorities or people in the private sector have not been contacted regarding the potential usage of the gas. The area has suffered greatly under the allocation from the regional development fund because of the Border fund which operated in other years. This year we received only a meagre allocation from the Regional Fund. The area has lost the Border fund and now we are losing with regard to the Regional Fund. It is difficult to see how the area can benefit from the regulation mentioned by the Minister.
That was a good speech.
Is there a question?
There are a number of questions.
I explained in my reply that money could not be drawn down until the regulation was clarified by the Council which was done on 27 December. It is envisaged that Bord Gáis Éireann would be the lead agency in drawing up the programme. At present we have a steering group comprising the Department of Energy, the Department of Finance and the Department of Industry, Trade, Commerce and Tourism. Our objective is to draw up a programme as quickly as possible, to seek the approval of the Commission and then to implement the project. We need the approval of the Commission in respect of a project as specified. Obviously there is the question of the viability of the project in the Border areas and that matter will receive my attention in the coming months.
Will the Minister state the amount of money available for the project? Will he state if this fund which is available for the supply of natural gas to Border counties will replace the special programme for Border areas? Donegal benefited to a reasonable extent from that fund but there are fears that Donegal may not get a supply of natural gas as it may be suggested the project is not viable. If Donegal is not to get its share of this programme, will the Minister insist that we get a share of the special Border programme?
In reply to the Deputy's query, the sum is £23 million or 32 million ECUs. It will be spent on the basis of a viable project for the Border areas. The Deputy is aware of the counties concerned, namely, Louth, Cavan, Leitrim, Monaghan, Sligo and Donegal. We have to prove to the Commission that an overall viable project can be established for those counties and then we will seek their approval. The question of any other fund is a separate matter.
We have set up an action committee in Donegal to try to impress on the Minister and his Department that the project can be made viable. Will the Minister or his Department consider meeting in the near future a group drawn from business interests and public representatives in Donegal County Council?
I can assure the Deputy that can be arranged at an early date.
Will the Minister not agree that the feasibility and viability of extending the natural gas pipeline to Drogheda and Dundalk has been established as a result of the survey work carried out for the pipeline from Dublin to Belfast?
I will not agree for the simple reason that the Deputy is not comparing like with like. The economics of bringing gas to Belfast and feeding the towns of Drogheda and Dundalk along the way are quite different from the economics of a stand alone project involving two counties. It was for this reason that we had to recommission studies on the Drogheda and Dundalk aspect of the project after it was realised that the Northern Ireland gas deal was not being brought to fruition. If the Deputy is probing in relation to viability, I would have to say that we should be fairly optimistic about developments taking place in the northern counties, especially in the light of funds being made available now.
Can the Minister be more specific and tell us when natural gas will be available in Drogheda and Dundalk? This is very important when one considers the very serious unemployment problem in County Louth where there are more than 8,000 people out of work. The availability of natural gas in the two towns in question would be an added dimension for the IDA in their industrial promotion work. This consideration, together with the domestic demand, should dictate that natural gas be made available there as quickly as possible.
It would be to the benefit of everyone that natural gas be available as soon as possible. As I have told Deputy Leonard, my objective is to draw up a programme that will stand the test when sent to the Commission. That test will be one of viability. My intention is to have the programme drawn up as quickly as possible and to have it back before the Commission by mid year. It would be our intention to move as fast as possible after that.
Would the Minister be prepared to use the RDOs for the purpose of compiling information on potential usage in the area concerned? They would be in a good position to undertake this task because they are gathers of statistics and would be of much help in this matter.
I will pass the suggestion to Bord Gáis so that they may consider it in terms of compiling information on the project.
Can the Minister say——
I will only allow a short question from the Deputy.
There are other Deputies waiting to ask supplementaries, too, and we have taken about four questions together. Can the Minister say what level of grant is available from the EC towards Border gas development specifically in the matter of taking gas from Dublin to Drogheda and Dundalk? Will the Minister accept that taking the level of grant that is available from the EC together with the £5 million in the Exchequer coffers by reason of the aborted North-South gas deal——
We have not touched that.
——only a small outlay would be required on the part of the Government. The economics are so simple as to be capable of being worked out on the back of a matchbox having regard to the small input that would be required on the part of the Government and taking account of the large number of people in the Dundalk-Drogheda areas who are awaiting natural gas? In addition, a factory in that region is barely in existence. It is hanging on by the boot straps awaiting for natural gas. How much more time is to be spent on viability studies?
I often wondered how Deputy Reynolds arrived at this economic evaluations. Perhaps they were all done on matchboxes. In relation to the level of grant, the EC regulation regarding the provision for gas infrastructure is that 50 per cent of the public expenditure involved in the extension of the Dublin pipeline to viable centres in the counties mentioned may be contributed.
The cost of bringing gas from the outer rim of the main pipe in Dublin to the Border was estimated in 1982 at £13.5 million. In today's terms, with construction costs lower and a depleted construction industry the estimate now might be of the order of no more than £15 million.
That is not a question.
It is. With £5 million sterling available plus the grant, the Government could supply natural gas to the towns in question for about £1.5 million. If they are not prepared to do that neither they nor Bord Gáis should be in business. There are potential customers waiting to pay revenue to the Exchequer but the Government will not give them that opportunity.
That is a great top of the head statement.
Is the Minister denying anything I have said?
I shall talk to the Deputy about his statement.
This is the place to talk. There is a grant of £7.5 million available from the EC and there is £5 million in the coffers. Is it any wonder the Government are on the way out? Poor Deputy Bell's seat is gone.
In view of the long delay in bringing the pipeline to Drogheda and Dundalk and taking into account the implications and delays involved in feasibility studies, it will be light years before we in Donegal can hope to have a supply of natural gas. In view of the chronic economic situation in that country and the hardship involved in trying to keep industry operating there, would the Minister consider relieving the industrial sector in Donegal by way of a subsidy in respect of ESB charges? We are entitled to that kind of concession. At least we are entitled to be compensated by way of a concession in respect of the source of energy we can produce in Donegal.
That is somewhat a different question. There is no proposal before me in relation to considering a variety of charges for electricity to customers in Donegal or for that matter in Mayo, Galway or Kerry. In terms of an island energy policy or of our industrial policy, a system of variable charges would be the beginning of the end of any sort of pricing policy for energy.
Will the new programme involve an extension of the gas grid to areas other than Border areas and, if so, will the Minister be seeking funding for the extension of the gas grid to the north Kerry region especially in the light of the setting up of the estuarial authority which we hope will lead to massive development in the region?
The money from the EC applies strictly to the Border counties.
This must be the final supplementary and it must be short.
Is there any possibility that the North-South gas deal will be re-activated?
That seems to be a separate question.
It is unlikely.