It is only a short time since I spoke on an Adjournment debate in the Seanad on the subject of Arigna mines. I will outline progress since then in a moment.
I am conscious that there is very strong support for the mining tradition in the Arigna area. People are obviously very concerned that closure of the ESB power station will devastate the economy of the region. Before turning to recent developments I think it is important to establish the background to this whole issue.
Mining started in the Arigna area in the 1800s. The coal was originally used for iron production. Subsequently it was used in steam trains and by the sugar company. Demand for Arigna coal was probably at its peak during the war years when other imported fuels were in short supply.
After the Second World War demand for Arigna coal declined and the Government of the day decided that the best way to protect employment in the mines and to maintain a viable local community was for the ESB to construct a power station. The Arigna power station was commissioned in 1958. Even at that stage it was clear that the project would not produce competitively priced electricity — its main purpose was a social one. Indeed, it was probably the only prospect for substantial employment in the area. The fact that it provided an opportunity to use another native fuel must also have been a factor as well as it represented about a 2 per cent increase in the ESB's overall generating capacity. The power station has now been operating for about 32 years during which time it has made a major contribution to the local economy.
In their 1989 accounts the ESB show that the cost of electricity from Arigna was 9.32 pence per unit — in other words it is being sold at a loss even before you take account of transmission and distribution costs. For comparison, the cost of power from Moneypoint was about 1.5 pence and the most expensive milled peat power station produced power at 5.7 pence per unit.
The total cost of the diseconomy in 1989 amounted to about £2.8 million or almost £12,000 per annum for each job in the mine and power station. This is paid for by the electricity consumer at a time when everyone is anxious for the ESB to keep their prices as low as possible in an effort to assist with industrial competitiveness and the general strengthening of the economy. Originally the ESB proposed to close the station in 1985 so it has, in fact, had a six year extension already.
Since 1958 the ESB's generating capacity has grown by over 3200 MW from about 700 MW to 3900 MW. As a result the Arigna power station now accounts for less than half of one per cent of the ESB's capacity.
Technically the power station was designed to burn what is known as main seam coal. Most coal fired power stations are designed to burn coal which matches a fairly narrow specification. I do not mean to infer that all of the coal being burned in the world is the same — far from it. It is possible to design boilers for many different types of coal. Once design decisions have been made, however, the type of coal fed into the boiler must be regulated carefully, otherwise there is always a risk of serious accidents.
In recent years, the ESB have been experiencing continuous difficulty in getting coal of the quality which is the minimum acceptable to them. This is consistent with the situation when the best seams have been mined and less useful seams are being resorted to. The tests carried out by the ESB on coal deliveries show a consistent tendency towards just hitting the minimum percentage required, and indeed falling below this, that is in the range of 68 per cent to 70 per cent coal in the sample, with the slate, stone and excessive ash content contingent on a situation of this kind. This seriously affects the economics of working and the practical and technical aspects of burning this coal, as well as environmental aspects in the huge ash deposits to be removed and stacked.
I mention these things in passing because I believe it is vitally important that everyone realises the enormous contribution which has already been made in support of the Arigna area over the last 32 years.
Let me now turn to the present situation.Back in 1983 in their strategic plan the ESB proposed to close the Arigna power station in 1985. Later on, in revised proposals accepted by the Government in May 1984, the ESB decided to keep the station operating until suitable local coal supplies were exhausted. At that time this was expected to happen by 1986 or 1987. In October last year the ESB announced that they proposed to operate the station for about two more years and that they would stop taking coal deliveries in April of this year. The power stations would be needed for the remaining time to burn off the large stock of coal which had accumulated there. The decision to stop taking coal was reached between the ESB and Arigna Collieries who were the main suppliers of coal, and representated a mutually satisfactory arrangement in the context in which the main coal seam was virtually exhausted and the cost of extracting the remaining coal would rise sharply.
Indeed, it is clear that this is a situation which was recognised by the employers, the mining companies themselves. It was because their situation was foreseen that extensive studies were undertaken and consideration given to the possibility of using fluidised bed burner technology and a totally new station, expected at that time to cost close on £100 million was considered by various Ministers for Energy and their advisers in 1980 and thereabouts. That, of course, was against an expected rising oil price scenario and the possibility of a continued squeeze on oil supplies, both of which did not, happily, materialize.
The motion proposed by Fine Gael in my opinion, is a meaningless gesture put before this House for blatant political, opportunistic reasons. Its intention is to convey a message of the need for this action as the saviour of the community affected by the decisions to close the mine by a mine owner and consequent inevitable closure of the power station by the ESB due to the non-availability of coal following the closure of the mine. The reality, however, is that an enterprise fund is not needed because the Government have indicated quite clearly on a number of occasions — I have done so in the other House and here — that we will be most generous in supporting any identified viable proposal to supply alternative employment in this region.
The second part of this motion proposes that the ESB continue to purchase coal. How can they do that if the mine is closed? Mine owners say there is no coal there. I heard Mr. Leyden say recently on television that the Minister was wasting money in having carried out the study I will refer to later, that he knew the mine better than anybody else.
If, as Minister for Energy, I was to do only what is suggested by Fine Gael in this motion I would, in my opinion, be making a pathetic response to a major crisis for the people of Leitrim, north Roscommon and south Sligo. I know these areas. I have travelled them. I have been in the people's homes and in the power station there. I am as conscious as anybody in this House that closure of the mines and the power station would mean the end of the long mining tradition in Arigna and would cause hardship to very many people. For that reason I have taken a much more positive and worthwhile step than the one urged by Fine Gael in this motion.
I announced last February in the Seanad that a task force had been established under the chairmanship of the Roscommon County Manager to facilitate the identification of suitable alternative employment in order to explore to the utmost any possibility of mining and generation on any even half reasonable basis. I also asked the Geological Survey office to undertake further work to ascertain the quality and quantities of reserves of coal that might be available in other seams. I did that against the advice that was available to me from the mine owners and from previous surveys which showed that there were no such coal reserves there. I still insisted, as I announced in the Seanad, that an extensive, comprehensive survey would be carried out to determine and settle this matter once and for all. At that time, at my request, the ESB agreed to continue to take coal until the end of this month, July, to give the task force time to complete their work. I have now received the Geological Survey office's report. I expect to receive the task force report before the end of July.
From the preliminary findings of the Geological Survey Office it has now been established that there are substantial additional reserves of coal in the Arigna area. However, the important matter to be determined is the suitability of the coal for use in the Arigna power station. I have, therefore, asked the ESB and the Geological Survey Office to advise me on the feasibility and cost of mining and using these substantial additional reserves. I expect to have that report within a month. I must warn, however, that as things stand now, first indications from tests carried out on samples of the coal from the sources now believed to exist in reasonable quantity, are that this coal will be at a low quality level and this is not an encouraging sign. It could, on the other hand, simply mean a continuation, and at even increased cost and with the certainty of the need for quite extensive capital costs by the ESB, of the totally unsatisfactory situation that has persisted there since the early eighties.
It is clear that the drift of the motion put down by the Opposition implicitly recognises this and that the preferable course, unless we receive far more fortunate indications than are now thought probable, is to look for viable alternatives of good, durable employment and to extricate ourselves from this heavy loss situation which, as the earlier figure shows, means a cost to the economy of around £2 million to £3 million a year for a continuation of this electricity generation.
I am, however, anxious to take decisions in the light of all known facts and it is for this reason that I have ordered the studies to which I have adverted, and it is for this reason that I wish to wait until the full results of the analysis and advice are available to me. I will then make recommendations to the Government.While I will keep an open mind on the matter until I receive the final report, it would be wrong of me to hold out false hopes of continued mine operations given the diseconomies which surround the present operation and indications that things may get substantially worse.
I appreciate that closure of the mines and power station will disrupt the lives of everybody closely involved. The main unemployment impact will fall on about 130 mine workers in the 20-40 year age bracket. However, I do not think if that situation were to come about that the prospects are nearly as bleak as they were in the 1950s. The whole approach to job creation has changed. There is much greater awareness of the important contribution which is made by thousands of very small businesses. There is also a greatly more sophisticated economy and infrastructure to support regional and local development. The achievements of the IDA over many years in attracting high-tech industry to Ireland have created many opportunities for supporting industries.They have also created awareness among both customers in Ireland and abroad and among people creating new businesses of the existence of a much wider range of business opportunities.
The Arigna Task Force which I set up have been considering a number of initiatives which might provide alternative employment opportunities. They have consulted a subsidiary of the British Steel Corporation, which have extensive experience of helping areas to adjust after the closure of steel making plants in the UK.
Because the people directly affected in the first instance, would be mineworkers, the task force arranged with FÁS and the Irish Productivity Centre to conduct a skills audit and counselling service among the workforce in the mines to establish their skills, ambitions and aptitudes for alternative employment. I understand that there was an excellent response to this initiative.
The IDA have prepared a brochure specifically aimed at promoting industrial development in the area. There is already an IDA advance factory in Drumshanbo and the IDA are hoping to have an industry established there shortly.
It would be hard to find a better example to illustrate the wide range of opportunities which should be considered than a boat building project which is already under way with financial assistance from the ESB and the IDA. Kennedy boats will be constructing steel hulled cruisers from the Shannon with a view to supplying a more durable product than the glass fibre hulled boats which are currently in use.
Other possible developments which the task force are aware of include precision engineering, mushroom growing, coal briquetting and tyre remoulding. It is also planned to establish enterprise centres at Arigna, Drumshanbo, Drumkeerin and Ballinamore to facillitate small business development in these areas.
Deputy Nealon referred to the wood pulp project which is under consideration now. It would seem at this stage that such an industry, wherever located — and it is the Government's preference that it would be located in the north-western region — would require a marine outfall because of the type of polluting effluent which will be discharged from such a plant even with modern day treatment. I just want to correct some of the things the Deputy said in support of the difficulties mentioned by the other spokesperson, Deputy Jim Mitchell, at some other meeting.
The ESB are, naturally very conscious of their social responsibilities arising from the closure of the mines and power station.They have been contributing to the cost of these initiatives and also plan to contribute to the establishment of projects under the auspices of the Leitrim and Sligo enterprise funds which have been established by the International Fund for Ireland.
The general feeling among the task force is that there are good prospects for establishing many new employment opportunities in the area. Because these will involve many diverse businesses the area will no longer be so critically dependent on the success of any one of them. In addition, because these businesses will be trading on a normal commercial basis, the general prospects for long-term prosperity in the region will be much enhanced compared to the present situation when everything depends on the subsidy implicitly provided by the ESB's customers.
To sum up, what I am saying is that the surveys I have undertaken are not completed and when I have all the facts I will bring the matter to Government for decision. I hope to do that in about four weeks' time.
