Private Members' Business. - Estimates for Public Services, 1987. Vote 48: Energy (Revised Estimate).

I move:

That a sum not exceeding £9,649,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1987, 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 a grant-in-aid.

In this debate we are covering the Estimates for Energy, Forestry and Communications. I will deal with them in that order.

The Energy Estimate is relatively small, representing less than 1 per cent of the total Estimate for the Public Service. The size of the Estimate, however, does not reflect the relative importance of the role of my Department or the wide range of activities for which it exercises responsibility.

The stance that was adopted by the Government in framing the Energy Estimate and related policy measures now before the House for discussion reflects the economic and financial situation at home and developments in international energy markets which affect the cost and availability of our energy supplies and natural resources.

In economic terms the role of energy policy is to: (a) meet the needs of economic development and consumers; (b) to underpin security of supplies while maintaining reasonable costs; and (c) to maximise the gain to the national economy from the exploitation of our indigenous resources.

In so far as the Energy Estimate is concerned, the priority of the Government to restore order to the public finances has been carried through into the Estimate before the House and, above all, in the provision for capital expenditure in the energy sector contained in the public capital programme.

Gross expenditure in the Energy Vote has been reduced by 3.5 per cent as compared with a growth of 3.5 per cent in total supply services. This reduction must be assessed against a background in which the expenditure in the Vote for Energy is now not significantly different from that in 1980 when the Department of Energy was first established. On the capital side, major reductions are being made on investment to complete programmes for electricity production and distribution and bog development but it is necessary to continue development of our natural gas resource.

With regard to future developments, I intend to pursue a programme as rapidly as possible: (1) To revitalise our oil and gas exploration programme. Our immediate objective is to delineate certain discoveries of oil and gas off our south coast and to promote their commercial development; (2) To exploit our natural gas resources by the extension of the gas grid to serve the horticultural industry and to the Drogheda/Dundalk area; (3) Taking advantage of the lower prices now prevailing for coal, oil and gas to improve the efficiency and competitiveness of electricity supplies, for the benefit of industry and of the householder; and (4) To urge the European Community to make positive moves to strengthen and integrate electricity and natural gas supply, particularly in the peripheral regions of the Community.

Considerable attention has been focussed recently on the drilling operations on Block 49/9 in the Celtic Sea. While oil flowed in that well, it has not, unfortunately, fulfilled the oil companies' expectations for it. The data obtained from the well is being integrated into the companies' existing data banks to assess further the potential of Block 49/9.

However, the potential of the entire Irish offshore, or even of the Celtic Sea basin, does not hinge on the results of any one well. I can, of course, accept that the results of this as every other year's drilling will have an important bearing on our exploration programme, but it must equally be accepted that we have a long way to go before offshore Ireland can be regarded as fully assessed.

There has been much criticism in industry circles concerning the terms being offered by Ireland as compared with other exploring nations. I want to take this opportunity to assure all concerned that I am undertaking a major review of our licensing terms for oil and gas with particular emphasis on marginal fields. It is my intention to ensure that our terms will be clearly seen to compete favourably with régimes in place elsewhere. I place great importance on this particular sector of my Department's activity because it requires a medium-sized oil development only to make this country self-sufficient in oil and to improve our balance of payments significantly.

An initiative which my Department recently launched sets 1 July as the closing date for licence applications for a five-block package in the Celtic Sea which the Department believe offers an attractive prospect for the oil industry. Presentations have been made to a number of companies of the integrated geological and geophysical interpretation of the blocks. I look forward to seeing the companies' interest in the presentations translated into licence applications.

Natural gas now supplies approximately 20 per cent of Ireland's primary energy needs. Sales of natural gas to the utilities and industry now represent 26 per cent in volume and 31 per cent in value of total sales. When the Government decided to build the pipeline from Cork to Dublin they did so as part of a national energy policy and strategy. Natural gas is a premium fuel and Dublin is the largest premium market. It also supplies ESB at Dublin as well as Cork. The pipeline was completed in 1982 and the conversion of the city was completed in September 1986.

The Dublin Gas development programme ran into difficulties which have been fully aired on so many occasions that I do not intend to elaborate on them this evening. However, I am pleased to say that present indications are for continued steady expansion in natural gas sales in Dublin — particularly in the premium sector. Progress towards viability of the Dublin Gas Company has been slowed to some extent by the heavy pipe repair programme consequent on the tragic events of January last. This rapid increase in Dublin Gas Company's repair programme will, of course, reduce the future need for such works and, consequently, enhance the future prospect for the viability of the Dublin Gas Company.

The Government have already decided upon and achieved the completion of a bid by Bord Gáis Éireann for the assets of Dublin Gas. The contract for the acquisition of the assets is due to be signed in the near future and Dublin Gas will then be integrated into Bord Gáis Éireann.

These and other issues facing Bord Gáis Éireann in the near future will require some amendment to existing legislation. This amending legislation, which I propose to introduce shortly, will allow for the transformation of Bord Gáis Éireann from being essentially a gas-transmitting body to being a fully integrated, safety conscious, streamlined modern and efficient national gas company with responsibility for the transmission and distribution of natural gas.

After the tragic events in Dublin last January the question of safety must be a top priority for any gas utility. The recommendations of Cremer and Warner have been accepted by the Government. On foot of these recommendations the Government appointed a task force, under the aegis of my colleague, the Minister for the Environment, to identify potentially vulnerable buildings, provide technical guidance on the implementation of practical remedial measures and to identify all relevant codes and standards that need to be reviewed and updated. The task force will report to the Minister for the Environment before the end of July. The recommendations specifically relating to Dublin Gas are being implemented by Dublin Gas and the implementation is being monitored by my Department.

On 26 April 1987 the Government approved the construction of a natural gas pipeline from Dublin to Dundalk as part of a policy of extending the gas grid to the north and north-west. The pipeline is designed and routed so that supplies can be offtaken in the region for industry, for horticulture and for domestic purposes. Project planning and acquisition of rights of way is under way by Bord Gáis Éireann who expect to have the project completed by summer 1988. The estimated cost of the project is £30 million approximately. The routing and design would allow for possible interconnection of a supply of gas via the UK should that be the option which commends itself to me and to the Government.

This project represents a major extension of the natural gas grid and a significant growth in the market for natural gas. I expect that the availability of natural gas in the region will clear the way for the expansion and development of new industrial and commercial opportunities.

My Department's energy conservation programme is designed to improve the awareness of the consumer of the value of saving energy. It is important in the long run that the impetus on conservation should not be allowed to decline. It is basically in the interest of users of energy to continue to use it efficiently.

In December 1986 this House unanimously called for the closure of the Sellafield reprocessing plant. The operation of the plant has been of major concern to the Irish people for some time. The increasing number of incidents there has led us to the conclusion that the plant was inherently unsafe and that the Irish people were living with the threat of serious nuclear contamination on our doorstep and this has been borne out by the report on Sellafield published by the UK Health and Safety Executive a few days after the passing of the Dáil resolution.

As part of the Government's international campaign for the closure of Sellafield and the elimination of radioactive discharge to the Irish Sea the House will, no doubt, be aware that the Government tabled a number of recommendations for adoption at the meeting of the Paris Convention in Cardiff which finished today.

I am pleased to inform the House that the Paris Convention has adopted an Irish recommendation concerning discharges from all nuclear industries. The recommendation provides that "the Contracting Parties to the Paris Convention for the prevention of Marine Pollution from land-based sources declare their firm intention to apply the best available technology in order to minimise and eliminate as soon as possible any pollution caused by radioactive discharges from all nuclear industries, including reprocessing plants, into the marine environment".

The Paris Convention agreed on the basis of an Irish proposal to establish as a first step a system for reporting of unplanned discharges from nuclear installations in member countries. It was also agreed that Ireland, as lead country would undertake the responsibility, with the Secretariat of the Commission to identify any improvements to the reporting procedure adopted by the convention today.

The Government also tabled for the first time at an international conference a recommendation for the closure of Sellafield. While the recommendation was not successful, nevertheless the Government were heartened by the expressions of understanding, support and sympathy about this menace on our doorstep which we received. The Government intend to resubmit a similar recommendation for next year's meeting of the convention in Portugal. I want to assure the House here tonight that the closure of the Sellafield complex will be pursued relentlessly by this Government as it poses a threat to the health and safety of our people and our environment.

I have allocated £895,000 to the Nuclear Energy Board for 1987. Approximately £300,000 is for the provision of new laboratory facilities in Clonskeagh. The acquisition of better analytical facilities will improve the environmental monitoring programme. These measures are consistent with my intention to place increased emphasis on radiological protection and monitoring through the establishment of the National Radiological Protection Institute.

As I have already indicated to the House in a reply to an oral question on 8 April 1987, I propose to replace the Nuclear Energy Board with a National Radiological Protection Institute. I am at present considering the legislative measures that will be appropriate and I propose to introduce the necessary legislation at an early date, in the autumn session.

Turning to the minerals prospecting and mining sector, I see this as an area with potential for considerable expansion and with capacity to play a significant role in the economy of the State. I need not remind the House that the period 1960-1970 was one of intensive prospecting activity which led to a number of significant mining developments. These greatly benefited the State in a number of ways in terms, for example, of jobs created and the positive effect on our balance of payments.

We have been unable to escape the worldwide recession in the minerals sector in recent years which has led to a downturn in prospecting activity and consequently in new mining developments. What we must ensure is that no factor within our own control will have a dampening effect on such activity.

As in the case of the oil licensing terms there has been criticism of the State's practice in relation to mining lease terms. The approach has been not to define these terms in advance but to settle them on an individual basis at the time that a commercial orebody has been fully delineated and the economies of the mine development have been evaluated. Prospecting companies have put it to me that this creates a degree of uncertainty as to what the State will ultimately seek as its share of the revenues arising from a project. This, they say, contrasts unfavourably with the situation in other countries where lease terms are defined in advance. It is my intention to remove this uncertainty. I have put in hands a complete review of existing policies in this regard and I expect to make an announcement shortly of clearly defined terms which would ensure a fair return to all parties. I hope that the industry will then respond with increased exploration activity.

As regards developments of current interest I might mention first that there has been increased activity recently in investigating the country's gold potential with a number of encouraging areas being identified.

Unquestionably, the main talking point on the Irish mineral exploration scene during the past year has been the identification of highly encouraging mineralisation at Galmoy on the Laois-Kilkenny border. A major benefit of the find has been to focus once again the attention of the major international mining companies on the potential Ireland offers for further mineral discoveries. Already there has been renewed interest and increased exploration activity as a direct result of this.

There is a continuing high level of interest in prospecting and development in the Leinster coalfield. I will be responding in a positive way to this interest and I have approved of certain measures aimed at a comprehensive programme of prospecting and mining in the coalfield. I will be making an announcement about this in the next few days.

Bord na Móna are just starting to recover from the worst two years in their history with the very wet summers of 1985 and 1986. The board have reviewed their operations; taken steps to get production back, weather permitting, to full swing; taken measures to improve the financial state of the business and stepped up horticultural peat output.

The Government have included a number of developments by Bord na Móna in their proposals to the EC for Valoren aid. This, together with EURO-loans approved earlier and State support for exchange risk will help the board to complete some elements in its third development programme which would otherwise have been delayed or abandoned because of the difficulties of recent years. The task now is to rebuild stock, get up to full production and to strive for greater efficiencies all round.

Deputies will recollect that on 28 April 1987 I announced the contents of the programme, approved by the Government, which Ireland has submitted to the EC for funding under the so-called Valoren Regulation. This regulation, which was adopted by the Council in October 1986 is a regional policy measure aimed at promoting regional development in Ireland and in parts of other member states by assisting in the exploitation of specific indigenous energy resources. Under this scheme assistance of up to about £19.2 million is available to Ireland over a five year period and the programme which we have submitted to the Commission aims at drawing down our full entitlement to funds. The essence of the scheme is one of matched funding, with Community assistance coming to not more than 55 per cent of the total costs of the programme to be assisted. The total cost of Ireland's programme over the five-year period is about £35 million.

With the appointment of a new chief executive which is under way at present — interviews are being held — it is an appropriate time to evaluate the strengths and weaknesses of the organisation, to ensure its effectiveness and to affirm its role for the future. I am particularly anxious that Bord na Móna should concentrate all the efforts of their management and of their very loyal workers towards their main purpose of maximising the production of peat products in the most cost effective way.

The Electricity Supply Board's non-voted capital expenditure for 1987 will be of the order of £127 million. This represents a decrease of 20 per cent of the 1986 outturn of £168 million, and reflects the continuing trend of reduced capital expenditure by the board as the Moneypoint generating station nears completion.

Favourable trends in oil prices and interest and exchange rates as well as the savings accruing from increased coal fired generation made possible reductions in electricity prices on two occasions in 1986. I am very anxious that Irish industry, commerce and domestic consumers should continue to benefit from a downward trend in prices. I am pressing the ESB for further economies in their operations which should allow for further price reductions. Supply of energy at a more competitive price is a priority for the Government and as Minister for Energy it is one to which I attach critical importance.

The 1986 fall in oil prices was very welcome for the economy. Prices to consumers showed a notable downward drift. The Irish National Petroleum Corporation had a good year due, at least in part, to the fall in crude oil prices and their operations have continued overall in a satisfactory manner. Concern has been voiced that the full benefit of the oil price fall is not being passed on to the consumer as a result of the abolition of the National Prices Commission in January 1986 by the previous Government. Arrangements have been put in place to enable the Department of Industry and Commerce and the Department of Energy to monitor movements in oil prices. While the area of price control is a matter for the Minister for Industry and Commerce under the prices Acts, I can assure the House that whatever measures might prove necessary will be taken to ensure that Irish consumers of oil products benefit fully from movements in the international price of oil. At this stage I question the wisdom of the decision made by the previous Government to abolish the price control mechanism which was in operation until 1986.

I turn now to the Forestry Vote. The Government are convinced that forestry is an area which can contribute significantly to the resolution of this country's economic and social difficulties through generating increased employment, improving our balance of payments, as well as contributing to the national tourism drive through its wildlife conservation and amenity programmes.

State forestry has passed the difficult development years of estate formation, planting and species experimentation,et cetera and has reached a point where it is timely and opportune that it be separated from its present role within the Civil Service and be given a more prominent profile. Forestry is one of the great economic and social achievements of this country and an activity, I am glad to say, which has received the support and encouragement of all parties and successive Governments.

The Fianna Fáil Programme for National Recovery indicated that it would be the Government's intention to stimulate investment in the forestry industry and to restructure it to cater for market needs. The Fianna Fáil Government are committed to arranging for a commercial semi-State structure to be established to develop the potential of our forestry industry. This approach was also the conclusion of the Review Group on Forestry. We have decided to establish such a semi-State body. I am keen to have this new body operational as soon as possible and to this end the Minister of State, Deputy Smith, and I are preparing the necessary legislation to give effect to the Government decision. I intend to introduce this to the House later this year. May I take this opportunity to thank my colleague, the Minister of State with responsibility for Forestry, Deputy Smith, for his commitment to the forestry area and for the work he has done since his appointment.

The previous Government, in a decision on the Estimates for this year, decided that the forestry service should raise £3 million by the forward sale of the standing timber in non-amenity immature State forests — the money so raised to be used this year principally to fund the acquisition and planting of 1,000 additional hectares over and above normal planting. This Government support this decision, particularly since it will not involve the sale of the land which in time will revert to the production of a new timber crop. What are being offered for sale are stands with approximately 20 to 25 years of their rotation still to run. My Department have selected the initial group of stands which are being advertised for sale within a week or so.

The sale of the timber in immature State forests enables the State to acquire additional 1,000 hectares and to plant a total of 8,000 hectares this year. This, coupled with an expected 3,000 hectares of private planting, will give a national planting total of 11,000 hectares — which will be an all-time record in planting in this country. The future of forestry is dependent on maintaining a sustained yield by adequate levels of annual planting and it is the Government's intention to vigorously pursue this desirable objective.

Total production and revenue from timber this year will be 1.25 million cubic metres and £17.25 million respectively. The dramatic improvement in these figures can be judged by a comparison with the performance in 1980 when total production and revenue stood at 530,000 cubic metres and £6.6 million.

To turn to the Communications Vote, I would first draw the Deputies' attention to the establishment of the Departments of the Marine and Tourism and Transport and I will, therefore, restrict my comments to the items that remain in the Vote for the new Department of Communications.

The Minister for Finance in his financial statement on 31 March talked about the need to give the economy a new sense of direction, that people were dispirited and that there was a prevailing lack of confidence in our ability to achieve progress. The State sector under my responsibility clearly demonstrated what can be achieved. An Post, Telecom Éireann and Radio Telefís Éireann are three major success stories. In the case of An Post, they have reversed a loss-making situation, having achieved a modest profit in their financial year ended 31 December 1986. Mail traffic volume is now 14 per cent higher than when the operation was set up. Quality of service is high with 90 per cent of letters being delivered on the working day after posting. An Post have been active and inventive in the introduction and extension of measures to develop the postal service. The company are giving a high priority to the expansion of their express mail service and now operate an international network extending to some 50 administrations. Thre are plans to extend the express service even further.

It is gratifying to be able to note that basic postal rates rose for the first time in almost four years in March 1986 and that An Post are committed to keeping rates at current levels until the end of 1987 at least. The company have shown their capacity for achievement in the way they are operating the national lottery. The results to date have vastly exceeded expectations.

An Post have been allocated £8 million in the 1987 public capital programme. There will be no draw on the Exchequer as the entire allocation will be funded by a combination of borrowing and internal sources. The bulk of the money will be spent to effect further improvements in the standard of accommodation and security at post office premises and on replacement of part of the company's extensive motor fleet.

Telecom Éireann took over responsibility for the telecommunications services on 1 January 1984, and since then, building on the accelerated development programme laid down by the Government in 1979, they have over the past three and a half years made dramatic improvements. There are now 750,000 subscribers connected to the network. The telephone system is now fully automatic. The technical quality of the network has been transformed. With 40 per cent of subscribers connected to digital exchanges, we are at the forefront in the use of the most advanced telecommunications technology in the world. Bord Telecom Éireann have been allocated £120 million for their telecommunications capital programme. This expenditure will be funded entirely by the company from non-Exchequer sources and substantially from internal sources. It is expected that 78,000 consumer connections will be carried out in the year.

To turn to broadcasting, the Estimate for Communications provides for payments of grants-in-aid to RTE under subheads F1 and F2 of amounts equivalent to the net receipts from television licence fees and cable television licence fees respectively. The Estimate provision for television licence fees is £40.125 million, representing an increase of over 4.5 per cent on the 1986 outturn and therefore considerably in excess of the annual rate of inflation. The provision in respect of cable licence fees is £1.674 million as compared with an outturn of £1.28 million in 1986.

The Estimate also provides for a payment to An Post of £4.95 million to cover the cost of collecting television licence fees. RTE has on many occasions expressed dissatisfaction with An Post's achievements in this area and has sought to take on the work itself. I am also concerned to ensure that the maximum number of television households are correctly licensed and that this work is carried out in the most cost effective manner. I know that An Post have put a big effort in recent times into the introduction of new procedures and computerised systems to improve performance. I will be reviewing An Post's performance over the next 12 months in this area.

Radio Telefis Éireann is another success story. In their financial year ended 30 September 1984 they had a deficit in excess of £100,000, an overdraft of the order of £10 million and they were over-dependent on borrowings. Their accounts for the year ended September 1986 show a profit of £3.5 million after tax; dependence on borrowings has been virtually eliminated and the need for overdraft is only an occasional occurrence. I have every reason to believe their financial performance this year will be even better. Some 43 per cent of all television output is now home produced and RTE have consistently achieved their highest multi-channel audience share in many years.

The winning of the Eurovision Song Contest by Johnny Logan means that RTE will host the competition next year. I know that RTE are actively involved in making satisfactory financial arrangements to cover the costs involved while at the same time maintaining their satisfactory financial performance.

The one dark spot in broadcasting is the failure of successive Governments to tackle the problem of illegal broadcasting. For ten years now they have operated virtually unhindered, resulting in a chaotic situation on our airwaves, not to mention the impact such actions have on respect for law and order generally. I am determined to tackle this problem once and for all.

I said in a speech in Cork recently that I believed that we are no longer in a situation where unduly elaborate and costly State structures have to be established to provide and regulate local radio services. I also said that there were many people — be they business people or enterprises, community groups or co-operatives — who have the capability, the talent and the resources to get involved in providing broadcasting services on the modest scale of local radio. My task, therefore, is to create the right environment in which as many as possible of those who wish to do so can gain entry to local radio within the technical constraints of the number of radio frequencies available for local radio use. I have already been examining the options available to me and as I said in this House last week I intend to bring legislative proposals to provide a legal framework for the licensing and regulation of local and community sound broadcasting before the Oireachtas in the autumn session. I intend to seek the Government's approval to re-introduce the Broadcasting and Wireless Telegraphy Bill, 1985, in the autumn session in parallel with the legislation dealing with local and community radio.

I commend this Estimate to the House.

I congratulate the Minister on his appointment and hope he will have a fruitful term in that office. I am very concerned at the trend in the pricing of oil products in the last number of years. The most recent copy of the EC bulletin which reviews oil prices on a weekly basis reveals that the price of various oil products was way in excess of the EC average. In the case of premium petrol it was 33 per cent; regular petrol was 37 per cent; motor diesel was 37 per cent and home heating oil was 16 per cent. Combined this represents an excess cost that the Irish consumer has to bear of £90 million. I am sure the Chair, coming as he does from a Border county, will feel the full impact of what this higher pricing means in the market.

The most worrying feature is that this rise above EC levels is of comparatively recent origin. In 1980 we compared very favourably with average EC prices. On average we were less than 3 per cent in excess of EC prices in general. By 1983 this had widened to 20 per cent and in 1986 it exceeded 40 per cent. It continues at a very high level at present. It is very important to bear this deteriorating trend in mind when considering the various explanations put forward. The oil companies have attempted to portray that heavy distribution costs can explain this feature. Heavy distribution costs were always a feature of the Irish scene and they succeeded in living within a 3 per cent price margin over EC margins in 1980. There is no reason why our high distribution costs should have led to a trend where they went from 3 per cent to 20 per cent to 40 per cent ahead of EC prices. That argument must be seen for the smokescreen that it is.

We often hear complaints from the oil companies about the operation of Whitegate and its potential to add to the cost of petrol and oil products. As we have seen from recent annual reports of the INPC, Whitegate is producing products at a price equal to and sometimes below the price of the major companies imported product. It is not adding in any way to costs at present and it nails that explanation as a possibility for this deviant trend. We should also dismiss what the Minister for Industry and Commerce suggested at the week-end, that was that there was a question mark over EC bulletin prices. There is some doubt expressed about EC prices but as the Minister should know, the National Prices Commission in 1984 employed consultants and conducted their own research. They used independent price data which corroborated the evidence of the weekly data published by the EC. To hear that argument trotted out again as a possible explanation is merely trying to deflect attention away from the root cause. I heard recently that the oil companies claim they have operated the prices commission formula since 1986. If that is the case it says more about the formula which allowed this problem to emerge than it does about what the companies are doing. In fairness to the NPC, in 1984 they said that while they were prepared to accept the then 28 per cent mark-up for retailers and oil companies they intended to examine it and noted the lack of competition in the retail market as a major contributory factor to our high oil prices.

The issue of achieving competitive pricing for oil products is the nub of what the Department of Energy say they are about. It is important to confront these problems in a serious way. We should have a maximum prices order linked to EC prices and we should further examine competition in the retail market through the normal Restrictive Practices Commission procedure. The evidence is there to show that the oil companies and retailers have been substantially increasing their margins in recent years. They have been taking advantage of falling prices to increase profitability.

I find it particularly difficult to understand the attitude of the Minister for Energy to this problem. In reply to a question on 27 May he said he was ready to co-operate with the Department of Industry and Energy but he disclosed no knowledge of deviating price trends other than reports he had heard. The following day we learned that his Department was actively involved in a study, and had been for some days, on deviating price movements. Either the Minister did not consult with his officials or he failed to account to the Dáil for what was going on in his Department.

The cost of energy products for Ireland is a crucial question. The Minister rightly highlighted the need to tackle the wider issue of the cost of energy, particularly electricity. His party indicated their intention to get to grips with this but developments to date give the lie to their intentions in this area. There was no mention of any new measure being considered by the Minister or that he was putting it up to the ESB to bring down their prices. He must have had the benefit of the Jakobsen report which is available in his Department. A rates payment was exacted from the ESB which it is believed is three times the true rates bill that would have been levied on them if they were on a proper valuation basis compared to other commercial bodies. We have seen concessions in the form of a pay agreement in excess of the pay guidelines and discount electricity concessions to ESB workers which are adding to costs and reducing revenue in the ESB. Those measures, to which the Government have been a party, will add to the cost of electricity and further worsen the competitive position of those who are trying to compete and have to pay our high energy prices. I was disappointed that what appeared to be a very strong commitment on the part of the Minister has not been delivered by him in his actions to date.

I should like to return to the question of Dublin Gas. The report on Raglan House highlighted the serious problems in this area. It identified poor procedures in installing piping, the failure of gas piping to withstand stress from overhead traffic, a breakdown in the proper procedure for investigating gas leaks, a poor system of follow-up, inadequate building standards and so on. The Minister has responded to this by appointing a task force to examine buildings. However, I fear that the most important long term requirement highlighted by the disaster has not been addressed, that is, the need for a proper regulatory framework for gas distribution. In reply to questions in the House the Minister referred to the gas company's liability at law under the 1847 Act — an Act which was passed during the Famine — but the conditions of gas supply have dramatically changed since then. We have seen only too plainly how safety standards suffer under the day to day pressures of managing a company in a tough commercial environment. The gas company's responsibility needs to be clearly spelled out in new legislation. The most important element of that new legislation is the need for a watchdog to act on behalf of the public. I submit that it is not the job of the gas company to certify that leakages which have been discovered have been made safe. I submit it is not their job to maintain a record of leakages and mishaps. It is not their job to monitor progress of safety action programmes which they may be implementing or to keep a check on the installation and handling practices in their company.

I submit that those tasks should be the responsibility of a person independent of the gas company. It is disappointing to learn that the gas company, in the wake of Raglan House, are losing customers. The only way to address this problem is to have a proper piece of legislation updating the 1847 Act and have somebody to monitor leakages, to keep a public record of the leakages and accidents that occur and to ensure that progress is made in the safety area. We are very strong in our requests for similar procedures to be adopted at Sellafield and we should learn something from our own advice to the British in regard to Sellafield. In the case of our gas company we should have independent monitoring of leakages and accidents so that the public can feel assured that the standards of safety are of the highest possible order.

The emphasis the Minister made in his reaction to the Raglan House report was misplaced. He referred to an agency to investigate major disasters and he cited the Stardust and theBetelgeuse tragedies as incidents that such a body could investigate. We want an agency to prevent problems occurring, not to sift through the debris after an accident has occurred. The need for a more active piece of legislation has been underlined by the latest series of accidents, the Nicholas Street explosion and the more recent accident. The Minister told us that the commercial position of Dublin Gas is continuing to cause concern, particularly in the light of high cost replacing network that has arrived. I should like to ask the Minister to be extremely careful in the transfer to An Bord Gáis of the Dublin Gas company. It must be realised that Bord Gáis are a cash rich company, a concern which take on behalf of the Irish people the benefits from the natural gas resource we enjoy. The new structure for running Dublin Gas must be carefully established to ensure that it has an effective commercial plan and is at a considerable distance from the cash source that Bord Gáis enjoy. A danger the Minister must address is that the cash facilities of Bord Gáis could conceal a continuing commercial problem unaddressed in Dublin Gas. It would be a sad day if that occurred.

I should now like to deal with the issue of natural gas on a wider plain and the whole question of the use and pricing of our natural gas resource. In his party's manifesto, confirmed by the Minister as Government policy, it is stated that there is a need for change in the present approach to natural gas which creams off the maximum short term profit for the State through high prices. That manifesto promises to supply gas at favourable rates to key areas. I would be anxious to hear that policy elaborated on and I regret that the Minister did not do so in the course of his speech tonight. My understanding is that at present the price of natural gas is based on the price of the fuel it seeks to replace but that is a price which gives the person taking up natural gas a margin which makes it considerably profitable for him to do the conversion. That is the sensible way in which to price a scarce resource belong to the people of Ireland.

Revenue from the sales of gas is the only way our people reap benefit from this resource. Discounting from the existing pricing policy amounts to using the public's money in a way which is not controlled by the Dáil to subsidise industries which we cannot say will provide returns to the State. If subsidies are required for certain industries they should be made known so that the Dáil can examine the justification for them. It is completely unfounded for the Minister to suggest that industries should be subsidised through discount gas. That may prove very short sighted because in a little over a decade we will find ourselves without a gas resource unless new discoveries are made. With that in mind we should be insistent on the gas being used by those who can make best use of it and I am not talking about people who have to be subsidised. In ten years' time if we have to import gas we will be doing so at a full cost import price. What will be the position then of the companies who have been getting discount gas? Will they have to get a continuing subsidy to survive? The strategy the Minister has proposed, but which he has not elaborated on today, is one which is fraught with danger. I suggest that the Minister think again about that policy.

The long term security of the gas industry is far from established. I was glad to hear the Minister say that he is considering the possibility of an interconnector. That will be a crucial development to secure the future of the gas industry in Ireland. At present we are highly vulnerable in that we have but one source and no reserve capacity. An interruption in that source, for whatever reason, would cause grave problems for the industry. The need for an alternative source will become more pressing in the coming years and this has been drawn to the Government's attention.

I should like to deal with the question of Sellafield and the nuclear threat that faces this country. While there is certain pleasure in the Minister's speech about the adoption by the Paris Commission of his motion we have to temper our joy about that. In 1984 the countries involved in that forum agreed to take account of the best available technology in order to minimise discharges. It is not something new to adopt this motion. Perhaps the wording is slightly strengthened but not dramatically so because the crucial words——

Do I hear carping?

I am not carping, I am just drawing attention to the wording of the Minister's motion, the most important clause of which are the words "as soon as possible". That is the key escape clause——

Do not be small about it.

I am not being small. I am drawing attention to the defect in the motion which should have sought to ban discharges until the technology had been installed.

Will the Minister take it to court?

We must also remind ourselves that the key element in regard to Sellafield is the deplorable record of the management, not the discharging into the Irish Sea. This is the real danger which Sellafield poses; it is reeling from accident to accident like a drunkard.

It has long been recognised and has been referred to by the previous speaker that this country needs to develop a comprehensive energy policy, particularly relating to energy pricing, in order to ensure that the twin objectives of growth in industrial output and the creation of jobs can be achieved over the coming years. Industry is a major user of energy in various forms and in 1985, the last year for which I have figures, manufacturing industry consumed approximately 36 per cent of all energy consumption.

Obviously the price of these energy inputs has a major effect on the competitiveness of industry and, consequently, on the rate of job creation. An overall energy policy must have, as its main objective, security of supply at the lowest possible cost and the development of indigenous energy resources. The Government obviously have a major role to play in the implementation of an energy policy and the prices charged for energy inputs through the direction they give to State energy boards and semi-State companies. In some cases the Government are forcing semi-State companies to carry out instructions with which they would not comply if they had the freedom to make their own decisions. For instance, electricity costs to industry in Ireland are by far the highest in Europe. There have been changes in the past year in the right direction but they still have a very long way to come down to make us competitive in comparison with our European partners.

Some of the reasons for the high cost of electricity here can be attributed to things like the rates bill — to which Deputy Bruton referred — levied on the ESB. It is not a genuine rates bill in the sense that it has not been calculated in the normal way in which rates on property are calculated. In 1986 it amounted to £25 million which I understand is the equivalent of about one-seventh of the entire revenue collected nationally for rates on property. Clearly, it is excessive and arguably about two-thirds greater than what would have to be paid if rates had been calculated in the normal way. That is an indication of the costs of the ESB which ultimately add to the overall cost of electricity to industry.

Another factor is that the ESB have to pay a hydrocarbon tax which is twice the level that industry pays. The ESB pay £16 per tonne while other companies in the State pay £8 per tonne. Through An Bord Gáis, supplies of natural gas are sent to some ESB generating stations at a price that helps An Bord Gáis to make a healthy profit, which amounted to £94 million in 1985. Is there any point in allowing one semi-State company to make a large profit at the expense of another State company, particularly when the end result is that there will be dearer energy costs for industry and for consumers generally?

It could be argued that another contributory factor to the high cost of electricity is the money paid to Bord na Móna for turf for peat-fired generating stations which are inefficient and demonstrably more expensive to operate. I accept there is a question of social policy in this regard which may be difficult to resolve in one fell swoop but the problem must be addressed by defining a new role for Bord na Móna which recognises that peat production will decline and that there is a necessity to develop a policy to utilise the cut away boglands left behind.

The main impact of the measures to which I referred is that they increase the burden on the ESB and push up the price of electricity, particularly to industry. A comprehensive Government statement or policy on electricity pricing, including policy positions on the pricing of other indigenous fuels used by the ESB, is long overdue. There seems to be wasteful competition between the various energy bodies, the ESB, Bord na Móna, the National Petroleum Corporation and An Bord Gáis. A pricing policy for any body cannot be decided on in isolation and has to be dealt with in the framework of a national energy policy. This is an urgent and complex matter and the Government must tackle it immediately. Too many reports have drawn attention to this and the position has been ignored for far too long.

One of the factors in relation to ESB prices which I should also like to mention is that of the overall payroll costs which in 1982 were at a peak level of 13,300 personnel. I know that through a corporate ESB plan these numbers have now been reduced and I hope that trend will continue which will ultimately give rise to a much needed reduction in the cost of electricity which, as I said earlier, is the highest in Europe.

The Minister covered exploration in his speech, especially the policy in relation to oil and gas. He said it would be of enormous benefit to our balance of payments and a shot in the arm for the economy if we could discover a commercially viable oil field. It is everybody's wish that that would happen very soon. The incentive to the exploration industry to discover oil is in licensing terms and those on offer to the industry up to late last year at any rate were very unattractive. Consequently, exploration activities which should have taken place in the Celtic Sea in the early eighties did not take place. The recent changes are welcome but they are too little and too late. Exploration activity has decreased considerably due to the fall in world oil prices and, even though exploration costs are now one-quarter of what they were some years ago, there is very little drilling activity. For instance, in certain parts of the world, I understand it is cheaper to buy proven reserves than to drill for oil, discover it and to bring it ashore. However, oil prices are gradually increasing and the only priority for the Government should be to establish a set of oil exploration terms to ensure that Ireland is competitive as a location when exploration takes off again, as it inevitably will. Ideally, those terms should be marginally more attractive than those available in the North Sea, the only other significant area in this part of Europe.

The Minister said tonight that he will not hesitate to adjust the licensing terms to ensure exploration and exploitation of oil resources. I urge him to do that and not to allow the 1983 position to obtain again. With regard to gas exploration, at the present rate of take-off from the Kinsale field reserves are projected to be completely depleted towards the very end of the century. We all know there has been a substantial investment in pipelines which will be rendered uselss unless long-term supplies are assured through future Irish gas discoveries or taking supplies from the European grid through an interconnector to the UK. From Ireland's point of view, further gas discoveries in the Celtic Sea would be the ideal solution but at present there is no incentive to the exploration industry to find the gas as the home market seems to be catered for up to the end of this century and the lead time from discovery to production could be as short as two to three years. Therefore, the industry's attitude to some extent is, having found it, what would they do with it.

In order to encourage drilling and to lead, one would hope, to a discovery which would guarantee Irish supplies for a long time, favourable licensing terms and a favourable price regime should be drawn up, a condition of it being that if a new large field is discovered, and there is every hope and expectation that there will be one in the Celtic Sea, permission would be granted to export this natural gas through an interconnector into the European grid. The Minister recently announced an extension of the gas grid northwards to Dundalk. He referred to that again this evening, and indicated that there is a possibility that there could be an interconnector across the Irish Sea. On a previous occasion he stated that he was having discussions with his opposite number in the UK. Perhaps he might inform us whether these talks have taken place and, if so, what progress has been made.

There is one other point in relation to natural gas which I would like to raise and that is the supply of natural gas to NET who absorb about 30 per cent of the output of Kinsale gas each year. We have to ask ourselves if this is a proper use of such a vital resource in so far as NET is a lossmaker and has been for years. Though some improvements have been made in the company the inescapable fact is that the market for fertilisers seems to have collapsed. The long term outlook for the fertiliser industry is not good as there is also an excess worldwide capacity. The question is whether we continue with that wasteful process or whether the position should be looked at again as it seems to be costing the State a lot of money.

I would now like to move on to deal with the area of forestry. The Government have stated on several occasions that they lay great store on developing the forestry industry and intend giving it special attention. Indeed, as we have heard again this evening, a new commercial body is to be appointed to administer the operations of the Forestry and Wildlife Service. This is recognised as a good development as the industry is in need of being put on a proper commercial footing. Mistakes have been made in the past in this area and I would particularly like to raise at this stage the question of the supply contracts entered into by the Forestry and Wildlife Service in the early eighties with two pulpwood companies, namely, Medite Europe Limited, who are based in Clonmel, and Finsa Forest Products Limited, who are based in Scarriff, County Clare.

These contracts provided for very favourable terms for both of these companies. The Forestry and Wildlife Service seemed to have panicked as a result of closures in the pulpwood industry in the late seventies and early eighties and consequently entered into these two sweetheart contracts with Finsa and Medite. The full terms of the contracts were not disclosed to the Dáil Committee on Public Expenditure——

Who negotiated them?

I beg your pardon? The terms were not disclosed to the Dáil Committee on Public Expenditure and the 21st report of that committee——

I would like to indicate to Deputy O'Malley that it is wise at times not to feel obliged to answer any question that might be put to him.

I take your advice.

My advice is that you ignore any unwelcome interruptions.

It is the first time I have been interrupted and I tried to make a response.

I wish to apologise to the Deputy.

It is an indication of the contribution I am making or at least I will take it in that spirit. The 21st report of the Dáil Committee on Public Expenditure indicated that they got no——

Did Deputy Carey ask who agreed the terms at the time? I may not have heard him correctly.

This is a limited debate and the Deputy should continue without interruption.

I would like to put on the record the terms of the contracts which were entered into with these two companies. First, they guaranteed a supply of pulpwood to the two companies at less than market price. In the case of Medite this was for a period of 20 years and in the case of Finsa for a period of at least ten years. The prices were to be reviewed only after ten years and then every subsequent five years. In other words, the prices were not index linked on an annual basis and timber inflation, given that timber is in short supply, is far greater than money inflation. In addition, any review upwards can only take place if the net profits over a five year period on an annual basis exceed 25 per cent of sales. The price would be reviewed downwards only if profits of less than 15 per cent of sales annually were obtained. This is totally out of line internationally.

Average profits in this industry are 3.8 per cent of sales according toFortune 500 mazagine. The whole thing defies logic. Apart altogether from the price factors there are other aspects of the contracts which are having a detrimental effect on the timber industry generally. Before these contracts were entered into the saw log industry supplied chip to the board manufacturers and 50 per cent of what the saw log industry took in went out as pulp to the board manufacturers. Now, because of these contracts there is no outlet for this pulpwood and it has to be dumped or, alternatively, exported. As a result, many of these saw log companies are now unprofitable and faced with closure.

There is a further problem which makes these contracts even more ridiculous. When these companies are allocated a section of forest for thinnings there is no control over what is taken out and there is now a situation where trees in excess of 14 centimetres in diameter, which are properly trees which should be going to the saw log industry and not the pulpwood industry, are being sold back to the saw log industry and in many cases at prices very much over and above what these two companies originally paid for them. I suggest that these two contracts need to be looked at either by the Minister or by the new incoming authority which will be in charge of forestry. The contracts should be renegotiated in the interest of the industry as a whole and full details of them should be disclosed to the Dáil.

Finally, I would like to turn to the area of broadcasting and to the local radio Bill. The Minister has stated on several occasions that the Government intend to introduce a new local radio Bill in the Autumn. A local radio Bill was introduced in the House over two years ago. I do not know whether the Government intend bringing forward new legislation or reintroducing the Bill which was brought before the House two years ago. In any event it is a provision which the Progressive Democrats would like to see brought forward as soon as possible. The Minister has pointed out that there is a geat deal of ongoing priate radio broadcasting. He bemoans this situation and said we will have to wait until the autumn before the problem can be tackled. Perhaps he might persuade his colleagues in Government to extend this Dáil session beyond 26 June and give us two weeks in which to clear up this entire matter by way of the introduction and enacting of a local radio Bill which would cope with this ongoing problem of pirate radio broadcasting.

Methinks you protest too much, Patrick.

There are just a few points I would like to make. The comprehensive report which was referred to by the Minister contains many items which the Labour Party would welcome. This is a better Estimate than most in so far as it appears a lot more positive in its approach to some of the more serious problems we have been facing or are about to face. The Minister might be a little fortunate in that some of the near disaster areas of four years ago have been turned round for one reason or other and many that looked like absolute disasters now look like success stories. I hope the good work put into that Department by my colleague, Deputy Spring, will be continued by the present Minister. I wish him every success in that regard.

In relation to energy prices on which all sides of the House have been harping continuously, the Single European Act has been confirmed by referendum and I assume has been ratified. We had much talk from all sides of the House during that debate in relation to the price of energy and the harmonisation of prices within the Community. I find it very difficult to understand how we can effectively be a member of the Community and yet have the highest energy prices in the Community. With the ratification of the Single European Act there is now no excuse for not having complete and absolute harmonisation of energy prices. I wonder if under the Single European Act it would not be illegal for us to charge higher prices for electricity and other energy than are charged in the Community? It is probably a little early in the day for the Minister to be able to reply in detail to that type of question, but this thought was running through my mind very much during the course of the referendum debate and particularly since then.

As a Deputy representing a Border area, I am very pleased that we now have a very positive statement of intent to proceed with the extension of the gas pipeline to the Border area. I thank the Minister and I am delighted he has taken up the initiative of my colleague and followed it through in positive terms. I am sure I speak for all political parties in County Louth and the general Border area. We have been pressing on all sides of the House for this facility for a number of years now. I got the impression at one stage from discussions with various interested parties that the political will was there but that the gas pipeline project was being obstructed within the Department itself. It was suggested, not alone by interested parties in industry and the service but also at EC level, that there was a definite lack of commitment within the administration. I am delighted the Minister has shown very strong leadership. I am quite sure that he will see this through, particularly in the light of his statement that he would expect it would be in place by mid-1988. I wish him every success in that.

In my own town, for example, Premier Periclase, as the Minister will well know, would probably use as much natural gas as the whole of Dublin city put together. I could never understand the statements coming from the Department that it could be uneconomic to extend the gas pipeline from Dublin city to the Border when one manufacturing unit in one town would use as much gas as the whole of Dublin city. I am glad the Minister has recognised that that did not make sense. The question that remains to be answered is that as Bord Gáis are apparently funding this operation have they the necessary funds and will they get the necessary support from the EC? I am sure that the Minister will pursue this.

At the other end of the constituency there are companies like Dundalk Gas who has hung on by a thread while many other companies would have gone out of business. They kept their staff working and paying them in a very unprofitable and a very competitive situation. The subsidy was withdrawn from them last year — something of a lifeline for them for the previous number of years. Companies like that were staying in business in the hope that gas would flow. There is the idea of having a two-way entry system in so far as if the Kinsale Gas head runs out at least we can go a shorter distance across the Irish Sea and secure gas at the other end, it is hoped with a little more co-operation than we had from the Brits on the last occasion when we tried to sell gas to them. I hope that will not be necessary and that more gas will be found, perhaps not in the Kinsale area but somewhere else in the country. While the emphasis is being placed on oil, and probably rightly so, nevertheless the development of Irish industry in relation to natural gas is equally important. I do not know of any serious efforts being made in the exploration for natural gas.

I want to add my voice to the many hundreds who have conveyed their fear in relation to Sellafield. My own area is very close to this plant and there is there a genuine fear. This is not a political football. This is a fear shared by many in every sector of the community. The recent report indicated that the excessive levels of radioactivity found in the soil were due to Chernobyl but in the minds of the people in County Louth and the Border area and across the Border in County Down that is not the case. I share the view of the vast bulk of the people that this has been in part, if not completely, caused by emissions from Sellafield and that the radioactivity preceded Chernobyl.

I think the Minister indicated in one of his replies on the subject last week that there would be consistent monitoring of the situation in the Border area. Perhaps that could be co-ordinated with their opposite number in the appropriate Northern Ireland Department. It would be important to compare the situations. Nobody will ever convince me that a cloud of radioactive dust came all the way from Russia and landed in Counties Louth and Down. That would be too much of a coincidence.

I agree with you.

I am sure the Minister will have a very careful look at that situation. Naturally I am pleased to know he intends to proceed with the new Local Radio Bill and accompanying legislation. In my capacity as chairman of my own parliamentary party, I spent much time with the Minister of the day, Deputy Mitchell, in dealing with this Bill. While we found difficulty in reaching agreement on it, mainly because of differences in party policy, nevertheless we went very close to agreement. We were anxious as a party to ensure that the licences would not be handed into the care of private individuals who were not interested in the community as such but were only interested in making a fast buck. It will be very difficult for anybody to make money out of local radio. If and when legislation is passed, we will find that many of these stations operating at the expense of others by extracting news from the national or local media, will be unable to continue in profit when they have to pay for it under statute. It is in the minds of people that licences will be handed out to the boys and there is a danger that stations could become the vehicle of a political party or parties. For that reason, we were anxious to ensure that the local community held an interest and that the State held a 49 per cent interest in local radio stations. The Minister will see from the files the many proposals and suggestions that were considered——

I have seen the files.

I am not being critical of the Minister as the Minister has not yet produced proposals.

In relation to telecommunications, there has been a noticeable improvement in the service but much more must be done. In some countries one can get a phone within 24 hours. We should consider for instance local authority housing.

When local authority houses were built in the thirties, forties and fifties, there was not even a provision to park a car outside of the house and nowadays cars are parked on narrow housing estate roads as a result. About 50 years later some architect put forward the idea that there should be a place to park a car and the design of future houses was altered slightly to facilitate that. So that we will not end up in that situation in relation to phones there is no reason why a facility cannot be put in for a phone, when the house is being built just as there is a facility for the installation of electricity. It would cost money initially but it would save money in the long term in that there would not be a need to dig up footpaths or to dig holes in people's front gardens or to dig up floor boards in order to instal a phone.

In relation to forestry, I take the point made by the previous speaker about the examination of the forestry department by the Committee on Public Expenditure. We had a lot of difficulty in that we were not able to secure the information we required in relation to the special contracts which were arranged with the two companies. It is a great pity that we could not get the detailed information the previous speaker had. We could not get the details of that contract even though we were a statutory committee of the House. If preferential treatment has been given to these companies, rather than doing away with the preferential treatment, we should give the same benefit to the native people. While they had fixed guaranteed prices and could do the job on a better costing basis, the native Irish companies had to submit tenders——

The Deputy has seven minutes left.

——which was a lengthy costly process and it was soul-destroying in many cases because they could not plan their production. Native Irish companies should get the same facilities as the other two companies rather than doing away with the facilities which those two companies have. The employment in those two companies is important and they are obviously two companies which are earning money for this country through exports and so on. There is a lot of positive thinking in that report and I welcome it. I hope that the initiative which the Minister has decided to take in many areas is followed through.

I would ask the Chair if my colleague, Deputy Kavanagh, can have the next few minutes of my time to say a few words.

If the House agrees to that it is all right. It is not a request I have met before. I think I can anticipate the agreement of the House to it. Deputy Kavanagh can have the five minutes remaining if the House agrees. Does the House agree? Agreed.

I thank the House and the Chair for allowing me a few minutes to deal with the Forestry Estimate. I do not intend to deal with Deputy Bell's query about semi-State industries. That goes back to a previous Fianna Fáil administration and I am sure the Minister for Forestry will get an opportunity to answer that.

I welcome the continuation of the policy in the Department of Forestry in the area of setting up a semi-State structure to deal with the commercial aspects of forestry, although I would query what is in the Minister's brief when he says that he is following on the review group's conclusions to set up a semi-State structure. That is not strictly what the review group came up with as a conclusion. They proposed a national forest enterprise which was somewhere between——

Mr. Burke

Splitting hairs, I would suggest.

Not quite. It is important. It is something like the Revenue Commissioners which is staffed by civil servants and which has much closer ties with the Department than, for instance, the ESB or another semi-State company.

I am glad the Minister said that we have decided to establish such a semi-State body. Therefore, I assume that he will let the commercial side of forestry be totally separated from the Department. I would like to know if, for instance, the interests of Bord na Móna in a total takeover of forestry is under consideration? I would have some reservations about that but only the Minister can say whether he is considering that course. In any event, there is concern about the policy in the forestry industry, particularly among people who have worked in forestry in the Department and in the forests over the years. I hope the Minister will make it clear in the near future. I gather from what the Minister said that he is considering a total semi-State body.

Another area of concern is the increase in the appropriations-in-aid this year from £19.2 million of an out turn last year to £22.1 million this year. We are now almost half way through the year and the Minister seems to be saying in the House that he intends to find this extra £3 million by selling off or at least offering for sale some mature timber. I have grave doubts first about the figure he says he is going to take in. He says that £19.25 million is to be taken in on revenue from the sale of mature timber. That is down on what was achieved last year. In the whole Estimate, even with the extra £3 million there is a reduction of £677,000. In view of the various remarks before and after the election about forestry being one of the areas for development, I am disappointed that the net Estimate shows a decrease because it will take additional moneys to ensure this expansion. The Minister is putting a great deal of emphasis on private investment in this area, as I did in my time. However, if we are to see more employment in the industry and the greater expansion he hopes for in planting, we should not have a net reduction in the Estimate. I was glad the amount of planting has been on the increase in the past few years and I welcome the Minister's target figure of 11,000 hectares for the coming year. I wish him well in that but I have some doubt about it being achieved on the basis of figures in the Estimate and what the Minister said in his brief, since so much of the year has gone by.

We could talk about many aspects of this very important industry. I know the Minister's concern for forestry: the way he has briefed himself on it in such a short time shows he is endeavouring to do the best for this industry in the future. I wish him well and offer him my full support in what he is trying to do. However, he starts off from a difficult base if he is hamstrung for cash. I plead with him for the many people involved in the industry and who work for the Department. Their fears should be removed very quickly about possible redundancies in that area which were threatened as a result of the introduction of some privatisation into the industry. With the proposal to sell 1,000 hectares of semi-mature timber at this stage, many of the people who work in the areas that will be indicated in the next few weeks will be wondering whether their jobs will be secure.

Deputy, I am afraid you are trespassing at the last minute.

I would not like to do that because you have been very generous to me, but I would like to outline the concern that people have for their jobs in the industry. I hope that the Minister will comment on that when he replies.

I am happy to join the Minister for Energy in the presentation of this Forestry Estimate particularly when the Department are well on the way to achieving a new national planting record. It is now confidently expected that total planting between the State and the private sector will reach an all-time high of 11,000 hectares or 26,500 acres this year. I assure Deputy Kavanagh that that target on the basis of the most upto-date information available to me is on. This is a commendable achievement given the financial resources available.

As the Minister for Energy has stated, this Government are determined to promote forestry as a strong economic arm. With its vast and growing resources of marketable produce, forestry is identified as one sector which can make a substantial contribution to growth in our economy. Therefore, the Government have decided that the task of developing and marketing this resource is such as to require the undivided attention of one organisation. Legislation, therefore, is being prepared to establish a new State company who would be charged to operate as a full commercial enterprise. The new company will operate in any part of the chain from commercial forest growing to harvesting, distribution and marketing. They will assume full responsibility for the forest assets of the State and will enter into commercial ventures in land use associated with commercial forest growing. They will have the power to borrow, invest money and operate under a board of directors with freedom to undertake all commercial decisions. Commercial production in forestry will, as a consequence of these changes, achieve greater efficiency. The emphasis will be on results and performance.

At the most basic level, the new forestry company will be charged with development, husbandry and marketing of the State's wood resource and making the new structure ultimately a profitable one. This company will take over at a critical time when the industry has to gear itself to process growing amounts of timber reaching maturity and marketability. The challenge to the sector is to adapt in order to achieve the best results for the country and to develop the necessary skills to achieve pre-eminence in the marketplace with high added value wood products, thus creating worthwhile employment and substituting homemade products for imports. The Irish taxpayer has contributed substantially to this development and it is crucial that every aspect of the industry is developed in the most efficient way. Therefore, we are seeking to transform land with low or maybe no prospects in agriculture into some of the most productive and well managed forests in Europe.

Forestry has a true regional significance. Some of the best land for afforestation is located in the poorer regions. For instance, some of the best and most suitable land for growing trees can be found in the wet mineral soils of County Leitrim. We have no wish to see Ireland afforested at the cost of disrupting the rural scene but properly developed, this enterprise will help to halt the slide towards social welfare dependence and will contribute to keeping more of our people in rural areas with a prospect of a real income. Therefore, forestry as an aspect of agriculture and of land use has a very important part to play in the future development of rural areas. Land in this category can produce valuable forest crops without reducing our agricultural potential. Given the pressures on farmers from the super-levy and other EC measures to limit production, forestry is a very good diversification of land.

Why should we invest in forestry? Why should the ordinary individual be asked to do it? It is because we believe investment in forestry offers a prospect of real growth and the development of real assets. It also offers protection against inflation and the effect of economic cycles. Wood prices are likely to remain firm and become even firmer as we move towards the end of this century and further.

There is a favourable tax treatment régime. The EC pays more for imports of wood and wood-based materials than it does for any commodity other than oil. The UK, our nearest neighbour, imports over 90 per cent of its requirements. We ourselves import £300 million and over of timber requirements and all over the world consumption of wood, particularly pulpwood, newsprint and paperboard, is growing all the time. Therefore, we must capitalise on this renewable resource which has proved in the course of centuries to be extremely versatile.

In order to help the Exchequer finances and fund expansion of State forestry the Government decided to raise at least £3 million by the advance sale of immature, non-amenity forest crops in 1987. The sale is being done in two phases in order to create a competitive climate and the first phase of approximately 400 hectares in a countrywide spread of 18 lots should yield about £1 million. The second phase, designed to raise £2 million, will go for tender early in September 1987. As I have said, these plots are spread all over the country in order that they will have the least possible disruption on our labour force. In many ways this could help to tidy up and rationalise some of the developments in that area.

I am anxious, at this first opportunity which the Government have had to promote this sale, to ensure that we obtain the highest possible price and the commercial value of these semi-mature forests. As has been explained, we will not be disposing of the land. This will return to the State later, but the forward sale of semi-mature forests is a concept which is vital in the context of encouraging private sector involvement. It represents a tiny percentage of our total assets in this regard, but it does not suit every owner perhaps to retain ownership of a plantation for its full life span. Therefore, it is necessary that we be able to produce value for a plantation at any stage in its growing chain. This facility opens up new possibilities for short term and medium term investment and shortens the waiting time for real income for the producer. I am conscious of the necessity to bridge this income gap.

The funds available from the EC under the western package grants scheme have boosted private planting from what in earlier decades was an annual rate of 250 hectares to 2,500 hectares in 1986. This scheme will be extended shortly to cover the disadvantaged areas of the eastern region. Also ready for transmission to Brussels are two new proposals, one which will provide full time farmers in all parts of the country with grant aid covering afforestation, forest roads and fire breaks. The other proposal of some significance in the context of what I said earlier in relation to bridging this income gap is to allow farmers, in receipt of headage payments in respect of livestock, to continue to receive these payments for a period of 15 years if they afforest all or part of their land.

Senior officials of my Department visited Brussels recently to explore the possibility of obtaining substantial aid from the Community to fund our expanding programme of State and private forestry. I am now more convinced than ever — given the obvious comparable advantages of this country over any other European state for tree growth and given the difficulties posed by surplus agricultural production with the Common Agricultural Policy — that Irish forestry must have its claims pressed more vigorously in terms of access to the Regional, Social and other funds of the EC. Arrangements are now being made to exploit all of those possibilities to the full.

I welcome also the involvement of a number of investment groups, small co-operatives, the ICOS and would welcome the involvement of the whole co-operative movement in trying to spearhead a further drive down the road to private afforestation. In comparison with our European partners we have a much lower percentage of private afforestation. This is an area we need to develop vigorously. I would particularly welcome the help of the co-operatives because they can identify individuals with land available for afforestation. They can promote forestry to farmers at local level and also to co-operative shareholders. They can assist in the supply of material, labour and other services. We need to develop flexible structures for combining land ownership and capital, bringing them together in a variety of ways so that we are able to release growing acreages for afforestation.

We have also an interesting and good tax climate with regard to encouraging people in the private sector. Profits arising to an individual or company from the ownership and management of forests on a commercial basis are exempt from tax. When a forest is sold the amount received for trees on the land is excluded from capital gains tax. We also have a reasonably favourable gift and inheritance tax system which, in respect of lands in excess of a certain market value carrying an inheritance or gift tax liability means that up to 50 per cent of the market value of such afforested land is excluded subject to a limit of, I think, £200,000.

In addition there is the grants structure which acts as a form of tax incentive in the 12 western counties. I have dealt already with the possibility of extending that as quickly as possible. I am also anxious that funds will continue to be made available — as is indicated in this Estimate — for research by the IIRS in close association with my Department aimed at promoting greater use of Irish timber. The overall objective is to ensure that the increasing volume of material now becoming available from State forests is utilised to the best national advantage though the substitution of Irish timber, properly cut, finished and presented for imported sawn wood. This objective is being achieved by a combination of measures, for example, by improving the image of Irish timber, stimulating higher sawmill standards, encouraging the use of stress grading and other quality assurances, developing new products, applications for Irish timber and promoting its use by various specifiers and users. Considerable valuable information has been gathered on the properties of Irish timber. It is intended to incorporate the results into a national standard for Irish timber in the near future. The Irish National Standards Authority have initiated a process under which all the data accumulated in the various quality studies will be incorporated into a code of practice for the use of Irish timber on work sites. This will enable architects, engineers and specifiers to designate appropriate standards for Irish timber in design and construction in the confident knowledge that they are dealing with a proven product. We must bury the bias against homegrown supplies. I should like to avail of this opportunity to encourage architects, engineers and others involved, to examine some of the processing and dry kilning going on in two centres in particular, in order to satisfy themselves that we have now a product comparable with some of the best being imported and which should be used extensively in the interests of promoting employment here.

All of this work is in harmony with the general strategy of the IDA for the development of the timber industry. The effect has been a remarkable increase in penetration of the home market by Irish timber which now holds a close on 50 per cent of the market compared to just 13 per cent in 1979. We want to travel down that road as quickly as possible, toward 70 per cent to 80 per cent, as opportunities present themselves.

I might deal with questions raised by Deputy Pat O'Malley with regard to the accusations levelled at the Department arising from the Medite and Finsa contracts. At the outset I should say that the Deputy is approaching this matter on a very simplistic basis. He will have to recall the situation obtaining in the later seventies when we were exporting the thinnings from our forests in absolute raw form to Sweden at ridiculous prices. At one stage it will be remembered that we entered into a contract for three years. The House will recall at that time also that Athy Chipboard, Munster Chipboard, Scarriff and one other I cannot recall at present were going out of business. We had a real problemvis-à-vis the use of thinnings, which are such a crucial element in the management of our forests. In relation to the contracts entered into, Medite had made an investment of £60 million. It is very simplistic at this stage to refer to opening up the possibility of renegotiating contracts. The international climate at that time should be remembered. The Leader of the Deputy's party, as Minister for Industry and Commerce, was anxious to encourage investment from outside. In order to do that there was incorporated in contracts long term possibilities for supply of timber as an endemic part of those contracts, not just here but the world over. I should love the contracts to be better. I should love more money to be available. But the practical position obtaining at that time meant that the Government had to tackle the problem. I am sure that under the Deputy's party leader, who was Minister for Industry and Commerce at the time, the best deal possible was achieved.

With regard to the question of the copy of the contract I should say there is a nondisclosure element in quite a range of contracts of this nature, relating not only to my Department but right across the whole spectrum of Government activity. If one wants to operate a Government business on the basis of disclosing to one's competitor what is entailed in those contracts I would contend that one would be undermining many procedures developed comprehensively over a very long time.

I want to say a few words in relation to the wildlife and conservation aspect of the activities of my Department. I am happy to say that the programme of work of the Forest and Wildlife Service is proceeding satisfactorily despite the effects of present financial constraints in some activities. During 1986 11 new nature reserves were established, bringing the total number of statutory reserves to 38, and I am confident of being able to add to that list shortly. The long term aim is to establish a national network of nature reserves representative of the various types of habitat found throughout the country. I am particularly concerned to ensure progress in this field. Here I should like to acknowledge the co-operation of Bord na Móna in this area. They have already donated two bogs, Redwood and Raheenmore, to my Department and are in the process of transferring Clara Bog, County Offaly, for conservation. I believe they are also considering the possible transfer of some other valuable peatlands.

An essential part of any wildlife programme is research. A variety of research projects relating to both wildlife habitats and species is being carried out. The Department are maintaining their educational role by disseminating information and literature to the general public. The wildlife conservation programme is funded out of subhead H of the Forestry Vote for which a sum of £0.154 million has been provided in this Estimate.

Subhead G of the Vote is a closely-linked wildlife provision, covering primarily the salaries and expenses of 46 wildlife rangers. The success of the wildlife conservation programme depends to a large extent on the ability of the Department to implement the provisions of the Wildlife Act, 1976. It is the primary function of wildlife rangers to enforce these provisions and they also assist in the carrying out of wildlife surveys and censuses. In addition they provide an educational and advisory service for schools and other interested groups. The provision, under subhead G, in this respect is for £0.561 million.

I will conclude by telling the House that while we have set a national record for 1987 we do not see that as being the end of the road. We are now preparing our Estimates for 1988 and we intend to set a new national record in the context of State and private planting for that year also. I would like to tell the House, as Deputy Kavanagh who was involved in the preparation of Estimates in the Department will be very fully aware, that a provision was included in that Estimate for £3 million which was to be raised in the same way as we are proposing to raise it. We are happy that the provision which has been made — we would like if it was bigger — will enable us, with perhaps some change in practices, to continue down the road of ensuring that this potential is exploited to the full.

I wish to join with my colleague, Deputy Bruton, in congratulating the Minister and the Minister of State on their appointments and in wishing them well. Their brief seems to be very wide. It is the first time I have seen, on an Estimate debate, such a large number of civil servants or "heavies", as one might describe them, listening attentively——

Coming from the Deputy, "heavies" is an unfortunate word.

——to the contributions of people from all sides of the House. I am confident that both men who have taken this brief will carry out their work conscientiously and well. They have shown their ability in the way they have come to terms with the various details they have dealt with tonight.

These programmes are very much in the public eye. When your knowledge ranges from RTE to gas to oil and forestry you are educated. The public would have to see what is in this for them if something positive is to come from this debate. With regard to the use of oil, will the Minister say tonight whether he is concerned about the extra 50p a gallon the oil companies are charging and which discriminates against us in the EC? We would see a positive result to the debate on the Estimate on Energy if the Minister, Deputy Burke, was to say, as he is wont to say in regard to everything he tackles, that he will insist on the oil companies reducing the price of a gallon of petrol by 50p because, as Deputy Bruton has pointed out, they are discriminating against us. That would be a positive outcome to this debate.

I know that both Ministers enjoy the fullness of debate and exchanges in the House. For instance, they revelled in Deputy O'Malley's embarrassment at finding out that his leader had agreed the Medite arrangement.

We did not revel in it; it was just a factual statement.

The Minister enjoyed it.

The Deputy should not be uncharitable. We know that is not his style.

One of the companies mentioned by Deputy O'Malley is in my constituency.

The Deputy would not argue against it.

When prices were negotiated the company that was established demanded the same terms and got them, though not for the same length of time as provided for in the contract agreed with Deputy O'Malley. I have no objection to that because Finsa are making proper commercial use of all aspects of forestry. As has been encouraged by the Minister, Deputy Smith, Irish wood products are being used extensively in that company. Demand for those products is increasing all the time and there are indications that the company will export some volume of wood to the UK market in the near future. There is a bright future for companies that are well run commercially. I commend the Finsa management and also the Department of Forestry for the way in which they have continued to work with this company in making use of our natural resources.

In regard to the future of forestry, we are mainly concerned with land usage. I am impressed by the way the Minister of State has grasped all aspects of forestry. Obviously he has studied the subject in great detail.

With great assistance from the Opposition.

I would like him to pay more attention to the role being played by ACOT in encouraging private forestry development. The ACOT officers in my constituency are doing their best to encourage investment on the part of farmers who have marginal land. There was some difficulty in getting many of them to agree to this because they had not the details of the headage payments and this is becoming an urgent requirement. I request the Minister to impress on his officials the need to have this scheme fully documented and available for the autumn of 1987. The co-ops and the farmers, whether in the west or the south west, need to know the position with regard to headage payments in 1987. I believe proposals to plant will come to a halt. One co-op of which I am aware have proposals to plant 400 acres in the coming year. They have impressed on me that their members will not proceed with this work unless they know exactly where they stand with regard to headage payments. This matter should be given priority.

I know criticism has been levelled in various reports at the rapport that exists between the Department with responsibility for forestry and the EC. Many problems arose because the brief for forestry comes under Agriculture. I do not know whether the current Minister has taken the proper officials from that section of the Department of Agriculture to proceed——

Not only are they proper but they are perfect.

I commend the Minister for his expedition in this regard. I do not believe the marketing programme appeared out of the sky. I would say that previous Ministers played some part in the unique record of 11,000 hectares which the Minister claims were planted. I know an instant decision was not made to plant trees. Farmers, banks and co-ops would have been encouraged by the various incentives and techniques used by Deputy Kavanagh and Deputy O'Toole when they were Ministers.

The Minister has to do a big sell with the farmers, but I have found him very reluctant to get involved in this area, despite forestry costings given by ACOT which indicate that the cost per hectare would be approximately £800 and the grant would be £800. If the farmer carries out this work, there would be no labour costs involved but if he does not do the work himself, the labour cost will be £200. That is the problem and this will cause a great deal of delay. According to the figures given, trees will cost £375, fencing £150, a Hymat digger £200 and the interest on any money borrowed — say, £700 for six months at 15 per cent — giving a total cost of £800. In the first year 75 per cent of the grant is paid. That too is a stumbling block to which the farming organisations take exception. They want to know why the full £800 is not paid in the first year. The Minister might take another look at this. The fact that 25 per cent of the grant is paid some years later is proving an irritant. Could the percentage be revised downwards?

The figures given on the capital value following forestry investment are interesting. This is what the Department should be selling. ACOT say the first felling after 15 years of 60 cubic metres would yield £900; the second thinning after 20 years would yield £1,000 and clear felling after 30 years would yield £12,500. This shows that harvesting is of value to the small farmer, and it will provide him with continuous work. If farmers get involved in forestry it will lessen the pressure for alternative employment in rural areas. This problem needs to be urgently tackled. I would recommend that the Department and ACOT get together over the summer and have a marketing programme to get small farmers to make greater use of marginal land.

Another point raised in discussions with me was about the resources and the funds provided by companies to small farmers. Allied Irish Banks will not give money for investment in forestry unless they can purchase the land. Their line seems to be that leasing is a new concept in this country and it therefore will not work, whereas there is widespread use of leasing in the United Kingdom and it works so well that commercial banks will lend money to farmers to develop marginal land. My question to the Department is this: how can we encourage the banks to make greater use of the model leases which have been drawn up by the Department of Agriculture? There has been a lot of disappointment expressed by the farmers' associations, particularly the ICMSA, about this area. They are very concerned that small farmers should have alternative land use especially when one remembers the milk quotas and other difficulties the EC is undergoing at present.

The Minister, Deputy Burke, always raises a hare or two when he goes around the country. He made one foray to the midlands and told us he was going to have a new role for Bord na Móna. In their programme for national recovery Fianna Fáil said they would examine how Bord na Móna could be developed into a resources development corporation. Now the Minister said he was giving Bord na Móna a new role in forestry.

The Minister of State, Deputy Smith, has already explained to Deputy Kavanagh that scarce resources are available, that he will be encouraging the private sector and that when he is selling the semi-mature forests, he is very conscious of how the money should be raised.

The Deputy was doing fine until he got into this area.

In his speech the Minister failed to develop the future role he envisages for Bord na Móna. In the medium-term Bord na Móna have a problem as the bogland is depleted. His proposal for activity by Bord na Móna in the forestry area needs to be explained. If we take this to its logical conclusion it means the Minister will be taking resources from the new forestry company, about which the Minister of State has been telling us. I welcome the setting up of this new forestry body on a commercial basis. I do not understand why the Minister found Bord na Móna unsuitable to take on this function since they have commercial and marketing experience which the Forest and Wildlife Service do not have.

Is the Deputy suggesting that they should take this on——

I am at pains to understand where Bord na Móna are going from what the Minister said tonight. Perhaps he would explain this.

I want to join with other speakers in congratulating the Minister and his Minister of State and to ask them if they would look at the western package electrification scheme, a scheme which has been of great benefit to the west over the last number of years. I am very disappointed that since 1983 the scheme has been so rigid that fewer people are qualifying for it.

I have some figures which will show what has happened. In 1983 and 1984 1,444 farmers benefited from this scheme but that figure dropped to around 350 at the end of 1986. One of the reasons for this is that the scheme is so rigid that farmers' sons, people on social welfare and old age pensioners living alone cannot qualify because the income from social welfare is now taken into consideration. I hope the scheme will be made more flexible, that more people will qualify and that money will be made available. At the end of 1986, money was left over because the scheme was so rigid.

I hope the scheme could be extended to include quotations for electricity for local authority constructions. Many local authorities do not build houses in rural areas if the quotation for electricity is prohibitive. Under this scheme I believe they would be able to do that. We are losing money from the EC because the scheme is so restrictive. It seems ironic that the Western Health Board and other health boards have house repair schemes in operation and yet they cannot find money for the installation of electricity. We must ensure that deserving people benefit from the scheme.

I welcome the Minister's announcement of a package costing £19.2 million for Bord na Móna. It is very important that sod turf burning stations and milled peat and briquette factories be helped under the scheme. The Minister pointed out that under this scheme and under the hydro-electricity scheme, 13 countries will be helped. It does not matter to me if the Minister tours areas or not. Deputy Carey was worried about that.

I made a mistake. I called them a chopper Government rather than a Government of choppers.

I hope the Minister will succeed in getting more money from the EC for bog development. We asked the previous Government to seek EC aid for this but they did not do anything about it. I am glad the Minister got the money for Bord na Móna. It will be of great benefit to them. Thanks to the good weather production is good at all the stations. I am told that this year's production is ahead of the production in mid-September 1986. That is a very good sign.

Thanks be to God.

Instead of people being laid off, approximately 7,000 people are now employed in the bogs. It is important that Bord na Móna be seen as an employer in rural areas. In the Derrynafadda station 30 people have been taken on. I hope that the milled peat which has been harvested there will be used in the briquette factory. It would be better to do that than transport the milled peat over bad roads to the midlands.

Farmers were not the only people to lose out as a result of the bad weather. Private bog developers also lost out. They should not be forgotten when we talk about grants for swamp diggers and so on.

Like other Deputies I congratulate the Minister and the Minister of State on the mastery of their brief. I welcome the 11,000 hectare planting target. It is a very important decision. I take Deputy Carey's point that it is not something that came out of the air but is part of the continuity of Government. The most welcome aspect of the Minister's speech was his statement about the State-sponsored body to deal with forestry. For far too long, the forestry brief passed from Billy to Jack within the Civil Service structure. There can be no doubt that the ministerial responsibility that applies within the Civil Service has pressed down very heavily on forestry and has prohibited the development of that area of national enterprise. Not only has it prohibited development but it has prevented forestry investment from reaching its full potential. By saying that I am not in any way attacking the Civil Service. What I am saying is that forestry, which is a potentially commercial activity, operated as an anomaly within the Civil Service.

Deputy Carey referred to the marketing side. This suffered greatly from its existence within a departmental structure. The decision to establish a separate State-sponsored body to deal with forestry is very important. Like the 11,000 hectare planting target it is an historical decision.

I welcome clarification given on the question of the involvement of Bord na Móna. I have always felt that the idea of attempting to tie Bord na Móna, which is basically an extractive industry, to forestry, which is a regenerative industry, would not be the right direction to go in. I am pleased that the point was clarified even to Deputy Carey's satisfaction.

The Government's decision on the experiment with the forward selling of standard timber is a welcome innovation. This is an alternative to privatisation. It is a welcome measure in that it will provide some funding for additional activity and employment in the area. The important aspect is that the land will revert back to the ownership of the State and can be further developed for forestry products.

I have always believed that it is very bad to have the headquarters of State-sponsored bodies in Dublin. It is part of the Government's policy in the longer term to decentralise as much of public administration as possible. That is a very welcome reversal of the centralist policies adopted by the previous administration. I cannot think of anywhere more appropriate to have the headquarters of a forestry enterprise than in the premier forestry county.

I differ with the Minister on that. I do not think the premier forestry area is Swords but rather County Wicklow. I hope the Minister will smile in that direction. I congratulate the Minister. The decision to go ahead with a separate commercial State body is an historical one as is the decision to go for the major planting target. All Ministers who contributed to those decisions are to be congratulated.

The hour is late and it is not possible for me to cover all the very constructive and interesting points made by Deputies from all sides. On my behalf and on behalf of the Minister of State, Deputy Smith, I thank all Deputies for their contributions. Those who contributed were Deputies Bruton, O'Malley, Bell, Kavanagh, Carey, Kitt and Roche. I take this opportunity to say that in the short number of months I am in the Department of Energy I have found the level of efficiency, loyalty, support and advice that I received from the public servants something this nation can be proud of. Our public servants have in the past come in for unfair criticism of their commitment to the nation. I take this opportunity to say my respectful thanks to them for the co-operation which I have received since I went into the Department.

In the short time available to me it will not be possible to answer all the points made by the various Deputies. I assure Deputies I have taken note of the points made and I will follow them up. I thank Members who extended good wishes to me on my appointment. I can assure them of my full co-operation and that of the Minister of State, Deputy Smith.

The oil price control issue was raised by Deputy Richard Bruton. I am sure there is no need to remind him, a former Minister of State, that responsibility for price control does not rest with the Minister for Energy but with the Minister for Industry and Commerce. I would have thought he would be familiar with that and would be aware that it was a Deputy from his side of the House, one with whom he has a close connection, who, when Minister, abolished price control. I considered the contribution of Deputy Carey on forestry very positive but it was unfortunate that he slipped into the area of price control by calling for a 50p reduction in the price of a gallon of petrol. The latter proposal surprised me because it was his Minister who eliminated price control but he may have forgotten that.

The Minister has said that the aim is to underpin security of supplies while maintaining reasonable costs.

The Minister's time to reply is very limited and he should be allowed to proceed without interruption of any kind.

With regard to forestry, I should like to tell the House that there will be a separate commercial semi-State body responsible for the development of forestry and it will be separate from Bord na Móna. Bord na Móna have a special responsibility to develop our bogs to their full potential. They experienced great difficulties in the past few years, mainly due to the adverse weather conditions. A new chief executive has been appointed and it is important that Bord na Móna will look to their principal remit, the development of our bogs. That task is a big one and I do not see any reason why they should be asked to get involved in forestry development.

Questions in regard to Dublin Gas were raised by Deputy Richard Bruton. It is my intention to bring legislation forward in this session in regard to that company. It is unfortunate that the taxpayers will have to endure a big burden as a result of the guarantees given to the banks by the previous administration. It is unfortunate that we have to take over those guarantees. We have succeeded in getting Bord Gáis to complete a bid for the takeover of Dublin Gas. I look forward to a detailed debate on the legislation. Had ideological rows not taken place in the last administration I do not think the burden involved in the takeover of Dublin Gas would be as great as we expect it to be.

I am grateful to Deputy O'Malley for his complimentary comments in regard to my appointment and I can assure him I will be pushing for a reduction in ESB charges. The Deputy was concerned about the cost to the ESB of supplies of peat for electricity generation. The social implications of cancelling such orders would be so horrendous for the midlands and other areas where Bord na Móna operate that they do not bear consideration. It has been stated that NET is a dead loss and I was asked if we should continue with what was described as the wasteful exercise of supplying that concern with subsidised gas. I do not see it in those terms.

I welcome the Deputy's comments about the need to introduce legislation to provide a legal régime for local and community radio and to restore order to our airwaves. I welcome his support and I should like to assure him that the matter is being urgently dealt with. I will have the legislation before the House in the autumn. In conjunction with that it is my intention to introduce legislation to put the pirates off the air because I do not think we can have one without the other. It is regrettable this has gone on for ten years because it has brought the law into disrepute.

For the record, may we take it that the Minister is referring to Deputy Pat O'Malley?

Yes. With regard to exploration I should like to tell Deputy O'Malley, who called for an exploration programme, that when I took office on 10 March this year I discovered that the only commitment for exploration in 1988 was for one well. That is what the previous Government left and I find that unacceptable. That is one of the reasons I have had to revise the terms.

I should like to thank Deputy Bell for his comments in regard to the extension of the gas pipeline to Drogheda and assure him that it will take place in 1988. I should like to thank Deputy Kavanagh for his comments on forestry. Most of them have been responded to by the Minister of State, Deputy Smith. I should like to tell Deputy Michael Kitt that I share his concern that the western package electrification scheme is used so that deserving people benefit. I will do everything in my power to ensure that. We have taken steps at EC level to ensure that the sons of farmers and those who are on what is called dole income can be included. I can assure the Deputy that his representations in regard to this have been noted.

In regard to the Deputy's concern for the Derrynafadda bog, I am aware of the financial commitment involved in that area. I am delighted the weather has been kind to us and that the management and staff of Bord na Móna have been able to take advantage of it. I hope we will have a good season this year because it is vitally important for the industry.

I can confirm to Deputy Roche that there will be a semi-State body for the forestry area as Bord na Móna have a major responsibility for bogs. As far as decentralisation is concerned, we are now going ahead with this plan and I take note of the Deputy's suggestion in relation to the site of the new forestry board.

I should like to thank Deputies for the support which the Government and I have received in relation to our approach to Sellafield. I assure the House there will be constant monitoring of pollution of the Irish Sea and we are setting up a national radiological institute to replace the NEB. I should also like to express appreciation for the support we received at the Cardiff Conference which ended today. I should like to thank member states who supported our resolutions and to assure the public that we will continue to fight to protect the health and safety of the people in line with the unanimous resolution passed by this House in December 1986.

Vote put and agreed to.