Written Answers. - Development of Energy Resources.
Patrick McCartan
Question:
70
Mr. McCartan
asked the
Minister for Energy
the steps which have been taken to implement the commitment given in the Programme for Government to give particular priority to the maximum development of indigenous energy resources; and if he will make a statement on the matter.
The development of indigenous energy resources forms a crucial element of the Government's energy strategy, since it improves the security of supply, leads to a greater diversity of fuels and improves our balance of payments.
In the area of alternative energy development, I recently announced that agreement had been reached with the ESB to increase the price which the board pay for electricity supplied to the grid from non-fuel renewable energy sources. This price increase reflects the benefits of the power produced from these indigenous renewable sources which, of course, are pollution free.
The two alternative energy sources generally regarded as having the greatest potential are hydro and wind energy. Most of Ireland's hydro potential has already been exploited and many of the remaining sites will undoubtedly be more difficult and costly to develop. The prospects for the limited number of remaining hydro sites will also depend on changing economic conditions and other issues such as concern for the environment.
In regard to wind energy, the Deputy may be aware that I announced in April that a consortium involving Irish and Danish interests had been chosen to undertake the construction, operation and maintenance at Bellacorick, County Mayo of Ireland's first wind farm to supply electricity to the ESB.
This wind farm project is being grantaided under the EC Valoren programme which is designed to assist the development of certain less favoured regions of the Community by exploiting indigenous energy resources. Other areas which have benefited under this programme include peat development by Bord na Móna, energy conservation campaigns and small-hydro schemes.
As regards peat development, the Government's policy is that Bord na Móna must continue their efforts to place the company on a sound financial and commercial footing in order to ensure the viability of the organisation into the next century. The steps taken in recent years by the board have had the effect of returning the company to profitability and this positive operational performance is projected to continue. The Government are determined to ensure that Bord na Móna will continue to carry out their role as a commercial peat development company so that peat will continue to provide a significant proportion of our energy requirements and so that the company will remain an important contributor to the Irish economy.
One of the important aspects of the development of indigenous energy resources relates to the ongoing efforts to discover new sources of oil and gas offshore. There were four exploration wells drilled in 1989, four in 1990 and I anticipate that up to three wells will be drilled this year. One of the 1989 wells, drilled by Marathon in the Celtic Sea, located the Ballycotton Gas Field. Development work on the field is now complete and the first delivery of natural gas from Ballycotton took place last Thursday, 4 July 1991. Although modest in size compared to the Kinsale Head Gas Field, Ballycotton has a particular significance in that it is the first commercial development of hydrocarbon reserves offshore Ireland since the seventies. It is also the first time that hydrocarbons are being recovered off our coasts by means of a subsea well-head production system.
In order to stimulate exploration effort in our deep water, so-called "frontier areas", I recently announced that a licensing round will be held in 1993, covering areas of the Erris and Slyne Troughs off our western seaboard. This will give interested companies adequate time to acquire, process and interpret the additional seismic data over the areas in question which will be necessary to enable them to make decisions relating to licence applications, and supporting work programmes, under the round. This will be the first licensing round to have been held in relation to acreage offshore Ireland since 1985.
Consistent with encouraging hydrocarbons exploration and ultimately production offshore Ireland the Government have decided to incorporate petroleum taxation legislation within the provisions of the Finance Bill, 1992. Although a Bill in this area was published in 1985 it was not proceeded with and lapsed. Consequently Ireland has currently no petroleum taxation legislation. Continuing doubt in this area impacts negatively on promotion of Ireland as a location for hydrocarbons exploration and places this country at a disadvantagevis-à-vis others with clearly defined taxation regimes in seeking to attract mobile exploration investment. The Government's decision to bring forward legislation in this area in 1992 will serve to eliminate an important element of uncertainty experienced by the industry as regards the risk-reward relativities of operating in Ireland and as such should play a part in encouraging further exploration effort. Work on preparing the detail of petroleum taxation legislation proposals is underway, now that this year's Finance Bill has been enacted.
I have decided that it is time to take another look at our offshore licensing terms, which were last revised in 1987, to see if there are any adjustments which might be appropriate, consistent with promoting exploration effort through the nineties. The review will be conducted over coming months. I have asked my Department to look into all aspects of the terms and to pay special regard to the particular circumstances of exploration in deep-water "frontier" acreage. I see all of these measures as furthering the commitment contained in theProgramme for Government to facilitate accelerated drilling programmes. The continued development of markets for indigenous natural gas is an important element of the Government's energy policy. Bord Gais Éireann have a statutory responsibility to develop and maintain a system for the transmission and distribution of natural gas and to earn a reasonable return on capital investment. Mindful of these obligations, the board are currently involved in drawing up a programme for the connection of non gas housing estates in the greater Dublin area and other urban centres. Under this programme 8,000 homes will be offered a supply this year.
Planning is now well advanced for a proposal to extend the gas grid this year westward from Dundalk to serve industrial-commercial customers in counties Louth and Cavan. This project will be eligible for EC funding under the Commisson's border areas programme.
