Deputy O'Malley is in possession and has 20 minutes left.
Gas (Amendment) Bill, 1993: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time".
I have a difficulty in that I cannot get a copy of what I said before so I am sure there will be repetition.
That difficulty should be resolved very soon.
One of the remarkable features about the Minister's speech in introducing the Bill was his general overview of the natural gas scene as it applies in Ireland now. However, he did not deal with how the interconnector will be financed and I would have thought that if the House is asked to approve very substantial increases in borrowing and guarantee limits, it should be given details of the financial package. I understand that, some months ago, the financial package was not completed and put in place. For that reason it is important to know the present position. I assume it has now been completed and put in place and we should be given the details and how it is made up. Even though the Minister made a lengthy speech in moving the Bill he did not deal with that aspect of the matter.
One of the points which struck me in particular about the Minister's speech was that he anticipates that the current market of two billion cubic feet per year will gradually rise to five billion cubic feet per year. He went on to say that he anticipated the main growth sector would be electricity generation. He also said that gas is an ideal fuel for electricity generation. However, many people would take issue with that remark; I agree that gas is an ideal fuel for electricity generation provided it is peak shaving because it is the best fuel by far to bring on very quickly and does not require a lot of preparatory time, as a number of other fuels do, before the generating machinery begins to work. On the other hand, natural gas, which is a very valuable and special fuel, is clearly not suitable for base load electricity generation. As far as I can see, in recent years the ESB has been using it for that purpose and I query their wisdom because it is using something which is in itself valuable and which can be substituted for by other fuels for long term base load production of electricity.
I question, in particular, why the ESB does not complete the fourth set of 300 megawatts at Moneypoint because Moneypoint is by far the cheapest and most efficient generator of electricity. I know there are some environmental drawbacks to it but the fact is that we are committed to 1,200 megawatts at Moneypoint, of which 900 are in production. A great deal of work has been done on the fourth 300 megawatt set and it seems foolish not to complete it. Anything that raises steam will generate electricity and it does not have to be a very valuable fuel like natural gas.
The efficiency factors in converting natural gas are disappointingly low where it is used for the generation of electricity. Even though they have improved — the Minister mentioned they are now at a level of 50 per cent — nonetheless that is a very low conversion factor, bearing in mind that gas has virtually 100 per cent efficiency when used for specialised purposes, such as cooking, for example. We are in danger in some of the terminology the Minister uses — probably inspired by Bord Gáis Éireann — of getting into a situation where a board like BGE will try to sell the use of gas at all costs and the ESB will try to sell electricity and advocate its use, almost at all costs, and, in particular, for purposes which are inappropriate. This is an instance where a national energy policy should be laid down by the Minister for Energy and the use of particular fuels or sources of energy for inefficient purposes should be prohibited in the overall national interest. That has never happened here — it is a cause of some regret that it has not — but it should now happen. Otherwise we are liable to fritter away this very valuable and finite resource of natural gas.
In the debates that took place in 1976 on the first gas Bill, Members were talking about unlimited supplies virtually. The whole atmosphere was different. We did not think we would be facing a situation which is a great disappointment, that our supplies would run out in or about the end of the century, unless there is a further discovery. I mentioned the last day the necessity for an accelerated exploration programme offshore Ireland and, indeed, onshore if there were any prospects. The then Minister, Deputy Molloy, signed an agreement with Marathon to drill seven new wells. That was quite an achievement when one bears in mind that Marathon, and others, had not drilled any wells for some years.
Nonetheless, the drilling of seven wells over a five year period is not a particularly exciting programme. I recall when I was in the Department of Energy there were years when ten or 12 wells were drilled offshore Ireland and we regarded it as the norm. They were the days when people were a great deal more optimistic than now. They are much more sanguine now as a result of much unsuccessful drilling. To this day, however, I remain convinced there must be further reserves, both of gas and oil, off the Irish coast and I would very much like to see more intensive exploration for it. It is a great shame that we have to import the amount of energy we do — in all we import approximately two-thirds of our energy requirement. The advantages that countries like Britain and Norway have are inestimable compared with us and a number of others. It underlines the degree of failure in the British economy that even though they are self-sufficient in oil and gas — indeed almost net exporters of both now — they are still in dire trouble. It would certainly transform this country if we were self-sufficient in oil and if we had enough gas to ensure that we could distribute it throughout the country.
There are a number of references in the Minister's speech to the position in regard to NET. I recall Deputy Ahern dealing with that in detail when she spoke the last day. It certainly is not satisfactory but on the other hand, I do not think we can turn our backs on it. The Minister referred to the 1987 agreement, in particular, under which Bord Gáis Éireann supplies gas to NET who in turn sells it on to what is now IFI. That arrangement between IFI and NET is one of the most improvident agreements ever entered into by the Irish State. What it has done is mind boggling and the consequences of it, and trying to deal with it later, have proved appallingly difficult. It is very serious indeed.
The Minister referred to the large number of central heating customers who have been connected in the past couple of years. I am glad of that as it is one of the optimum uses of this fuel. As a user I should like to tell those customers who were connected in the past few years that when the third year is over they will get a sudden sharp shock because the price at which natural gas is sold to the domestic customer after the third year is extremely high and must be extraordinarily profitable for BGE. I get the feeling that domestic customers may well be subsidising, in effect, many of the very large customers such as the ESB and NET because the prices charged are quite frightening. Bord Gáis Éireann should look at that because they are losing a great deal of use because people suddenly come to the realisation that as it is very expensive in the domestic sphere they will have to consider going back to other fuels. That is a great disappointment because it is an efficient use of gas. It would be a great pity if there were a decline in the demand for it at that level.
The Minister said that the question of third party access had not yet been finalised and the directives relating to it are not yet in place. That is very important. Access should be given to third parties and I hope there will be agreement on that shortly at the Council of Ministers.
If the ESB is going to be the main user of gas in the future, as indicated by the Minister, and of most of the projected increase, particularly after the inter-connector comes into use, it should be making a major contribution to the cost of this. The former Minister sought to have this done and it was not possible to reach agreement between the two bodies. It seems remarkable that a body who is going to be a major user — even though I believe it should not be and should be only a peak shaving user — is apparently not making any contribution. That is why it is important to know what the financial package is and what the exposure is in regard to the Exchequer. We know what the potential exposure under the guarantees and borrowings are, but we should have some details on that so that we can give the matter further consideration. We should also have an explanation as to why the ESB has not made a contribution if it is to be as significant a user as the Minister suggests.
I would ask the Minister also to deal with the point I raised the last day we discussed this matter in that I had a very unhappy experience with this board at the end of the seventies when it gave me an estimate for the cost of the Cork-Dublin pipeline. That estimate turned out to be excessive by a factor of between five and six times. We went elsewhere to have the pipeline built and it was built satisfactorily for a small fraction of the estimate I was given in 1979. I hope there is no repetition of that in regard to the under-sea interconnector because the amount of money involved is a great deal higher.
I reiterate my plea that the Department of Energy would stop a number of these State monopolies trying to expand at the expense of one another and insisting that their particular fuel or energy could be used for all possible purposes rather than for the purposes for which it is most efficient. The advertising which the ESB, in particular, indulge in, in telling us how important electricity is, is totally unnecessary; it adds to the cost and to the monopoly mentality which is part and parcel of its outlook on life and is of very little value to the consumers.
There has been an expansion of pipelines within Ireland but sometimes not to the most obvious places. For example, even though there is ample gas in Limerick city, it is disappointing that it has not been expanded to Shannon Airport where there would be many valuable customers and relatively heavy users. It is disappointing also that it has not been found possible to extend it from Patrickswell to Aughinish Island, which is a relatively short distance. This involves more than the physical piping of the gas to Aughinish, the question of price also arises. That company is a very large user of imported HFO and some calculations should be done on the national benefit of substituting natural gas for the imported heavy fuel oil used there at present. We are in the somewhat unhappy position of having no real user of energy of any significance. The biggest energy user is Aughinish Alumina at Askeaton whose total demand for electricity is only the equivalent of the output of 32 megawatts. That is amazing when one realises that there are single manufacturing plants throughout Europe and the world which often require the equivalent of an output of 1,000 or 1,500 megawatts. We have no smelting industry and no refining of any commodity takes place here, other than a small oil refinery in Cork Harbour. We are never likely to have such facilities until we get our energy costs under control.
While it is marvellous to have our own natural gas and the back-up from the European gas grid, gas is an essential part of industrial costs and if it is being supplied at too high a price it makes no contribution to the increased competitiveness of Irish industry; if it is not doing that, we are not making full use of it. We face so many disadvantages from the point of view of industrial production and industrial costs that where we have some advantages, for example, in having our own gas, we should seek to maximise its use and that means keeping its price at a reasonable level to redress some of the balance which is so heavily weighted against so many aspects of Irish industry.
Our transport and telecommunications costs are very high and we do not seem to be able to bring them under control. At the industrial tariff level our electricity is very expensive which means we have no large user of electricity. The one natural advantage we have compared with a number of other countries is that we have our own natural gas; there are only five or six other countries in Europe who have their own natural gas. Therefore, we should make the fullest use of this resource and reduce its cost inequities and imbalances from which we suffer and some of which we can do nothing about.
Tá cúpla rud le rá agam i dtaobh an Bhille seo. Tá cónaí orm cóngarach don áit a dtagann an gas i dtír — Loughshinny a ghlaotar ar an áit in aon rud a léigh mé but it would be more accurate to say the entrance to this plant is between Rush and Loughshinny, alongside St. Catherine's estate. From that point of view, it is both a local and a national project with major implications for my area. The local people had a certain amount of apprehension about what was involved in regard to the pipeline. While, in general, I am aware of the need for it and welcome the connection, in future Bord Gáis Éireann and similar organisations should consult the local population well in advance about what is planned, as the thought of a high-pressured gas pipeline running close to people's homes makes them ask questions. Two years' ago, when Bord Gáis Éireann said it would be consulting the local population in the form of a public meeting, I was happy, but nearer the time I learned with dismay that no moves had been made to have a local meeting although local representatives were met and I welcome that. However, those questions have been answered and I am glad to say that the local population is much more reassured at present.
The issue must be considered at a national level and the Green Party, as people may be aware, favours a reduction in the use of fossil fuels to which we committed ourselves at the Earth Summit in Rio de Janeiro, which would alleviate the problems associated with global warming. We would also favour the development of more renewable sources of energy, but it is important to note that gas has a very important role in the transition economy which may, with political will, take about 50 years to put in place, an economy which depends more on renewable sources of energy than on finite resources and fossil fuels.
I would like to refer to the gas interconnector project environmental statement which describes in some detail exactly what is involved with this interconnector. Detailed as it may be on certain issues it omits very important background information which would be useful in this case. Such information might include the wider world trend towards interdependence of energy, particularly gas. There is a pipeline ranging from Siberia to Russia, through Poland and into Czechoslovakia and there is already a pipeline between France and Germany. In that context it is timely that Ireland as an island nation is connected to the wider grid throughout Europe and Asia. There is a limited number of years supply left of our own gas field and it is very important that we take steps to prevent a crisis in the event of an interference with that supply.
Another omission from the information on this interconnector is the failure to address the issue of energy efficiency. A number of speakers said we should be careful in the way we use our gas. We should also challenge the marketing policy which encourages the consumer to use more gas, thereby becoming a super saver. That of course does not refer to saving gas but rather to saving money. It is a travesty to encourage people to consume more gas than they need. It should not be allowed in this country nor in any economy which values finite resources.
Conservation does not seem to feature prominently in the background information to this interconnector. Market projections seem to forecast and even encourage more use of gas. Some speakers have suggested that to use more gas is something to be proud of. That could be a very short lived pride as we have to pay prices for imported gas over which we have no control. The alternatives have not been considered with any great seriousness — I hope some of these alternatives, such as nuclear power, would be ruled out. Nonetheless, the ESB had an option of investing a small amount of money with considerable return in Cape Clear, agus in Oileán Chléire tá muileann gaoithe faoi láthair agus níl aon chóras ríomhaireachta ar fáil mar a bhí. Is trua é sin mar bhí seans ann an t-oileán sin a dhéanamh neamhspleách ó thaobh fuinnimh de. It is important in general that the whole area of investment in renewable resources be taken as seriously as we are taking this interconnector.
I disagree with some comments made by the Minister. He said, as did a previous speaker, that the best use of gas would be in generating electricity. One would not need a great scientific background to realise that to use gas to generate electricity renders it much more inefficient than using it as a primary fuel. The best use of gas is as a primary fuel and not as a generator of electricity, which is only about one-third as efficient and therefore is not an ideal use of fuel.
In saying that gas can best be used in farming one is not looking at all the options. As regards employment potential there is a case to be made for organic farming methods which are much more labour intensive and do not require the use of gas, as is the case in, for example, making artificial fertilisers. It would be highly inefficient to generate electricity from gas without a system of combined heat and power, a system which ironically is in use, as I discovered recently, in places about which we have little good to say, such as Sellafield. The combined heat and power system in operation there uses heat to heat buildings. This would be very practical, particularly near centres of population where the heat could be piped quite easily.
There are some references in the interconnector project environmental statement which need examination. It states: "It is thought that the total primary energy requirement will increase from around 10 billion tonnes of oil equivalent in 1990 to nearly 15 billion tonnes of oil equivalent in 2015." This assumption needs to be questioned. Are we sufficiently committed to using energy effectively and how are we contributing towards tackling global warming, as we said we would do at the Earth Summit in Rio? This does not tie in with examples in other countries where the use of energy is being carefully monitored. It has been shown that it is possible to generate more wealth using less energy by applying all our knowledge to conserving the energy we use. The statement refers to the ESB becoming very reliant on imported oil. It states: "Will Ireland (ESB) be able to meet its commitments with respect to the Helsinki Protocol on sulphur dioxide emissions, and also the Large Combustion Plant Directive on SO² Limits?" These are questions which are not being taken into consideration in this overall debate.
I mentioned the use of energy and the reference in the statement to the increase necessary to become wealthier and more prosperous. I question that seriously and will give examples to prove my case. Japan has achieved a greater output in terms of economic growth and wealth creation per unit of energy. This flies in the face of projections that we have to increase our dependence on fossil fuels if we are to become more prosperous. It is not enough to say that a 2 per cent increase in gross domestic product will result in a 2 per cent increase in energy consumption. We could do a lot better than that. From the point of view of overall consumption, industry has done better than other sectors in terms of energy efficiency. This is in stark contrast to the domestic sector which has become more inefficient despite the talk about energy conservation. Perhaps this has something to do with the type of advertising campaign to which I referred where it appears that you save money by using more fuel.
Overall energy usage has, as one might predict, increased from six to seven million tonnes of oil equivalent in 1980 to nine million tonnes of oil equivalent in 1990. But is it acceptable to say that that trend will continue and that by the year 2005, consumption will be 15 million tonnes? It is time we searched carefully, bearing in mind all the information and the technical expertise we have, and acknowledged that we can create more wealth for less energy, and work towards that as a rule of thumb. If we do not do so, we will walk ourselves and the next generation into a crisis of a sort we can only imagine at this stage.
Gas has a very important place in the transitional economy between our huge dependence on fossil fuels and a more benign economy where renewable energy has a more important part to play. There is a case to be made for gas in this regard because it is cleaner than other fossil fuels, it can be used more efficiently as a primary fuel and also when it is used as part of a combined cycle system in generating electricity. There is a need in the meantime to depend less on fossil fuels wherever we can and to have less pollution as a result. Balancing that we should have a more efficient use of the fossil fuels we use and encourage more dependence on renewable energy sources as time goes on.
At the moment our huge dependence on oil is largely dictated through the prices fixed internationally for oil based on supply and demand. That is quite inefficient. In terms of fuel usage for generating electricity oil is between 30 and 35 per cent efficient. That contrasts with gas which comes out quite well at 50 per cent efficiency in generating electricity. Already gas has an important part to play from the efficiency point of view as well as being cleaner.
If we are using fossil fuels we should concentrate on systems whereby all the energy is used and not wasted. Heat generated in the generation of electricity should be used with a combined heat and power system so that we can make the optimum use of the limited resources at our disposal. The primary use of gas, that is to say using gas for direct heat as in cooking with gas, is far more efficient than first turning it into electricity and then back into heat again. One could have almost 100 per cent efficiency with using gas directly. That ought to be encouraged. I am sure Bord Gáis will encourage that.
The future is important and it has not been mentioned yet. We must bear in mind that with the best will in the world and all the connectors and interconnectors throughout the world, there will be a more difficult time when the amount of gas available will not be as plentiful and consequently the price will not be as attractive. Having the pipes in place is important in the transition economy which will lead us towards a time when our dependance on renewable energy sources as well as energy conservation measures will allow us to turn the electricity generated by wind power, for instance, through a system of electrolysis into hydrogen gas. This has already taken place in Germany where, in the Ruhr Valley, a very highly industrialised area, there is at present a 100 kilometre length of pipe where hydrogen gas in being used.
Given that the components are simply wind and water one could not imagine a more benign form of gas. Hydrogen is more than simply a form of energy, it is an important component in some of the pharmaceutical processes carried out in the Rhur Valley. There are other spin-off advantages from hydrogen gas. Ireland would benefit from that, given that we have an important pharmaceutical sector, some companies being better than others. Nonetheless, hydrogen gas would indicate progress in terms of its effect on the environment. That is looking quite far into the future, so I will not go any further.
The interconnector is extremely important from a national point of view as it ensures that any rupture in the present pipeline coming ashore will not be catastrophic in terms of its effect on our economy and there is the option of using gas from other countries, perhaps as far away as Siberia which, as the way things are going, I can see being connected in the near future.
The price of gas to some of the growers in north County Dublin, for instance, is quite high. Because it comes ashore in north County Dublin, the gas pipeline is a topical issue there and is very relevant because it is so close. It is ironic that the price of gas to many of the growers in north County Dublin is cruel. Many regret changing over to gas because the transition cost them so much and now keeping themselves in business is costing them so much. We need a review of pricing. NET at the moment are a great beneficiary but it pays far below the market price and produces an environmental down side. That should make us consider more investment in and development of organic farming.
I welcome the interconnector and hope it can be used wisely on the basis of the general energy objectives that I have spelt out. We ought to look more comprehensively at our overall energy policies so that we do not run around at a great rate like lemmings using what we have available and suddenly come to the end of the cliff and wondering "what next?". We must bear in mind that fossil fuels are not forever.
Mr. Byrne
I welcome the purpose and the principle of the Bill. Potentially it secures the future of our gas industry into the next century. The construction of a gas interconnector with Britain is essential and must be welcomed. However, I am disappointed that Dublin rather than Wexford was chosen as the site to land the gas. Listening to Deputy Sargent I wonder whether he is happy or unhappy that it will be coming ashore in north County Dublin. Dublin already has a gas grid and an infrastructure that is the envy of the rest of the country. By not building the interconnector in Wexford an opportunity to redress the imbalance, and, if such idealism is not naive, to treat all the children of the nation equally, has been missed.
Wexford's claims are not only based exclusively or even mainly on calls to equity and justice. Given the geographical location of the county, with proximity not only to Britain but also to the continent, and also that that part of the continental shelf is most likely to yield future finds, I question the choice of Loughshinny in County Dublin. Realistically, however, I also acknowledge that the selection has been made and this House must set about managing the end of an Irish sacred gas industry for the foreseeable future. In so doing, it is essential that we manage the winding up of our resources, and the plans for their subsequent replacement, far better than we managed their exploitation.
In 1976 when the then Minister for Transport and Power, Deputy Peter Barry, set up Bord Gáis Éireann, several fundamental mistakes were made, the effects of which still reverberate. In the debate in this House then, it was plainly stated by Fianna Fáil that proposals to provide low priced gas to certain industrial users was grossly wasteful of our first, and so far our last, new energy source in centuries. By 1987 when the Gas (Amendment) Act of that year was being debated Fine Gael's Deputy Richard Bruton had also arrived at the same view. In effect we are now almost at a stage when we will have no gas with which to subsidise chosen State enterprise. Our gas supplies will come via our interconnector from the open market at market prices. NET, and the ESB, will have to face a reality that the State has, in my opinion, foolishly sheltered them from for 20 years; the reality being that in a modern world there is no cheap energy. If the Minister wants further elaboration on my views on this singular relationship between BGE and NET he need go no further than the Culliton report where it is expertly stated.
The looming problems I refer to do not take account of the losses suffered by the taxpayer because we have chosen to literally discount a scarce natural resource. Similarly, BGE will have to brace itself for a new world. It will not get another Marathon deal. I can only hope that its projections are entirely realistic. It is the absolute duty of the Minister to rigorously cross-check that they are. It is anticipated that in 1993 Bord Gáis Éireann will yield a dividend of £15 million to the Exchequer. I have stated that the Minister has a duty to guard against false optimism on the part of Bord Gáis Éireann. Equally he, and his successors, have an obligation to keep their fingers out of the till. The capacity to pay back borrowing of up to £350 million, allowed for in this Bill, is based on projections, one of which is that the company is not going to be rated by the Exchequer. Let us not be tempted to repeat in any form the mistakes that were made in the seventies. Bord Gáis Éireann is neither the way nor the means to subvent either semi-State industry nor, indeed, the Department of Finance.
This legislation facilitating our interconnection with the British system and the North Sea market is essential if we are to have a gas supply beyond the end of the century. It is estimated that the pipeline has a potential life of about 50 years, the same as North Sea supplies are expected to last. Of great potential interest is the fact that via the British system we can potentially link with the European grid. I understand that a feasibility study is being carried out at present as to the viability of a link between Britain and France. If this were to happen it would give us access to Siberian supplies. The prospect of an almost global gas grid is neither far-fetched nor far off. Ever widening access to broadly based energy markets is essential if we are to protect the huge investments that have been made in gas technology here. This investment is not only in industry but in tens of thousands of homes around the country the interconnector is literally a lifeline and has to be welcomed.
I would now like to comment on the nature of the commercial lifeline that is our national gas grid. It is a limited and selective one. By effect, if not by design, it causes even further imbalance in our already unbalanced regional structure. In Wexford — I live on the Hook Peninsula — we can look across Waterford harbour and see the gas lamps of relative prosperity, yet only a few miles away we are denied a chance to link into this valuable energy source. Whatever the causes the effect is certainly discriminatory.
The net effect of this discrimination is that Wexford has the third highest unemployment rate in Ireland; 25 per cent of our people are on the dole. There is a perception of Wexford as being prosperous, the land of milk and honey. It is interesting to note that even with last week's Digital disaster the unemployment figures for County Galway are 24 per cent. It is difficult for most people to understand that our unemployment levels are as high as those in areas west of the Shannon but that is a fact. It is well known that the economic health of any county or area can be judged on its unemployment. Some of my colleagues from the west pointed out to me many of their people are abroad but so too are many Wexford people. I have two daughters in England.
Unfortunately, our county is plagued by unemployment. Machines have replaced people on our farms; the industries that serviced agriculture have either declined or disappeared. Pierce's in Wexford town and Wexford Agricultural Machinery in New Ross are no more. Albatros Fertilizer which once employed 480 people now employs only 50. The county's produce is largely processed outside Wexford. Wexford produces one third of Ireland's sugar beat crop but the processing factories are elsewhere. No manufacturing base has been established to replace employment in agriculture and its subsidiary industries. The model county — as we are known — is on the verge of stagnation and, possibly, worse.
Today I ask not for subsidy or subvention because those are not long-term solutions. Wexford is not asking for cheap gas but rather for gas at market prices. Deputy Sargent said that gas was too dear in north county Dublin but we would gladly have it. To justify the initial capital outlay, capital grants are necessary. We need a shot in the arm, not dole and not butter vouchers. During the next few years substantial funds will be coming into Ireland for the purpose of regional development. This is the last hope of getting poorer areas on their feet. We in Wexford demand the chance to compete on equal terms with the rest of the country and with Europe. I ask the Minister to do his utmost to make this interconnector a reality not just for a few but for everyone. Effectively, this can only be done by extending the national grid and the arguments for doing this are compelling.
I am sure the Minister will take up the point made by Deputy Byrne as to why Loughshinny was selected as the location where the interconnector should come into the country. I am sure there are many and varied reasons for doing this, and the environmental statement issued by Bord Gáis makes a good case for the line coming in at Loughshinny in north County Dublin. It probably has something to do with cost, the geology of the sea bed, etc.
I welcome the installation of the gas interconnector between Britain and Ireland and, in general, the European grid. I think it is widely accepted that natural gas is the least environmentally damaging of the fossil fuels — it has very low SO² and NO² levels, the "SOX" and "NOX" as they are referred to. It also emits a smaller proportion of CO² for a given unit of heat output than other fossil fuels. It is important that such an environmentally friendly heat and energy source is available to the Irish people.
At present, approximately 15-16 per cent of our primary energy requirements are met by natural gas. As we all know, this supply comes from the Kinsale field. I think there is a small subsidiary satellite field at Ballycotton to supplement the Kinsale Head field. In the main, our gas supply comes from the Kinsale field. We know from present usage that gas supplies from the Kinsale field will be exhausted by the year 2000 and that unless we make new discoveries we will have no natural gas supply. Therefore, it is important that we recognise the need for gas. It is also important to recognise that this will be a two-way interconnector and that if we are lucky enough to have another gas find off our coast it may well be that we could be a supplier of gas into the UK grid and elsewhere in future years. One should not look at the interconnector as a one-way system; obviously gas can flow in either direction.
As we know, the gas interconnector will also supply gas to Northern Ireland, which has no supply of gas at present. I understand a connection from Britain will be made from the same landfall on Moffat across to Northern Ireland. Obviously that will improve the position in the North also. When talking about this issue one must look at it in the context of making facilities available to the entire island of Ireland. This is why many speakers in this debate and elsewhere have expressed disappointment at the fact that there is no electricity connection between the North and South. One would hope that the Minister would try to re-establish such a connection. I know there would be security problems involved in such a connection — there may also be a security risk in terms of the gas interconnector — but I believe the facilities which would be put in place would protect such a connection.
It is important to note that with the introduction in 1990 of a ban on the use of bituminous coal, particularly in Dublin and its surrounding areas, to comply with EC environmental requirements, there has been a bigger dependence on gas. For that reason I welcome the Bord Gáis Éireann assertive and aggressive policy of marketing gas into non-gas estates, the NGEs, in Dublin city and county. I recognise that it must be economical for it to do this, but it must also take into account all the circumstances and the future potential of extending its supply to the many housing estates in County Dublin, particularly in the sprawling suburban areas. It needs to get in first when these housing estates are being built and developed so that gas is a viable alernative to the other forms of heating and energy available. Obviously it is cheaper for householders to have the gas supply connected when the house is being built. It is also cheaper for Bord Gáis Éireann to install the necessary infrastructure when a housing estate is being built.
Recently in my town of Malahide, a large hotel which does excellent business and the developer of the Marina site got together with Bord Gáis Éireann to extend the gas supply to the town. The extension of the supply to Malahide looked somewhat dodgy for a while because the first housing estate on the Swords Road did not seem to have the potential to take up the gas supply. However, as a result of the initiative of the developers of the Marina site and of the hotel owner, the gas supply was extended to Malahide. This will be of benefit to Bord Gáis Éireann who will be able to market its products in many estates in the town, particularly the older estates where heating systems are obsolete or where people are considering changing their heating systems. These kind of initiatives are very welcome.
I know when he is replying to the debate the Minister will give the House an assurance about the security of this pipeline, particularly where it comes into the country at Loughshinny in north County Dublin. I see Deputy Ryan is in the House and Deputy Sargent has already spoken on this issue. Concern has been expressed by the people living near Loughshinny about this issue. They want absolute assurances, to the extent that assurances can be given when one is dealing with a product like natural gas, that there will be no extra risk to the people living in that small community through the location of the interconnector landfall site close by their houses, farms, schools, church, pubs, etc.
I have attended meetings in the area and I know that the officials of Bord Gáis Éireann have met with the local people. It is extremely important that those contacts are kept up and that the management of the interconnector project are conscious of the sensitivities of the people living near the interconnector landfall site. There is always a risk, when one is dealing with a natural product such as gas, which can be easily ignited, that if it is not protected it will become a target. In this connection, I should like to get an assurance from the Minister — I realise this issue cannot be talked about openly — that every effort will be made to have proper security plans in place at Loughshinny. Both the local gardaí and gardaí from other stations should have an involvement so that the area is kept under close scrutiny and is protected from people who might have some evil vested interest in using the interconnector to disrupt life and society. For that reason I hope there is liaison between the Garda Commissioner and the other relevant people. There should also be a system of alert and monitoring if anyone gains unauthorised access to the small plant which will be built there. I understand that the plant will not be very visible — there will be some pipes over the ground with a good land bank around them. Nevertheless the local residents are worried and they do not want to be made a target by any subversive elements.
I have studied the environmental statement issued by Bord Gáis. I want to pay tribute to it for its comprehensive statement. I am not sure, but I do not think it was obliged by law to prepare such a statement; rather it recognised the need to do so.
The area of Loughshinny, Skerries, Rush and Lusk is rich in archaeological sites. The remains of many ancient settlements lie beneath the ground and will be discovered in the course of excavations for the pipeline. Eight sites in the area are classified as nationally important. Of these, none is close to the pipeline but three are complex monuments which are expected to have extensive remains outside the immediate area of the pipeline. It is extremely important that archaeologically qualified people should be involved in this project. I remember the difficulties in Dublin when the civic offices were being built and the lack of sensitivity to archaeological remains which caused such trouble. We have had assurances from Bord Gáis Éireann that archaeological considerations are being catered for and I would welcome further assurances from the Minister in this regard. Bord Gáis Éireann might also fund improvements and security around these archaeological sites so that they will not be lost for ever.
This is an enormous and very expensive project, the overall cost of which is almost £290 million. Bord Gáis Éireann must recognise that they have a role to play in regard to the local community. It is not every community that would accept the disruption which is happening in that locality. Many of the lands are being traversed and farmers have not been able to plant. I accept that they will be compensated and I welcome the fact that an agronomist has been appointed who will be available for up to five years after the completion of the project to monitor the effects of the land works. There should not be any reluctance by Bord Gáis Éireann to recognise that this is a major intrusion into a small community. There are instances in other areas where small communities have been up in arms and have delayed projected developments. The people of Loughshinny have been extremely co-operative and I hope that any reasonable requests made by their vibrant representative body will be listened to and, if possible, complied with. There is a suggestion that a scenic walk could be planned along the cliffs. Bord Gáis Éireann should be prepared, in liaison with Dublin County Council, to fund the laying out of such a walk for the people of the area and for visitors. Such minor requests should be met.
On leaving my office this evening I received information to the effect that there is some hiccup on the Irish side about the provision of a road. This is causing some problems for the Scots, who are afraid the project will be delayed. Perhaps the Minister will look into this matter.
The prime concern of local residents is the safe operation of the pipeline. They want an assurance that every conceivable safety feature will be built into this project. I see from the report that there was an examination of the benefits of a leak detection system. Is the Minister satisfied that cost has not been the deciding factor in regard to safety features, especially in view of the enormity of the project and the potential destruction which could be caused by a major leakage or fire? Could there be a blowback of gas trapped in the pipeline if there was a fire on the land side? Local residents are anxious to know if there is a cut-off valve which could be activated in the event of something going wrong. I understand it is necessary at all times to keep the pipeline filled with gas but there would have to be a fail safe value half way along the pipeline which could be opened to allow the gas to dissipate in the water around it. Assurance is very important in this respect.
The Minister said a commission would be appointed comprising representatives of each Government to oversee the smooth operation of the pipeline. The agreement also deals with the status of the Isle of Man, through whose territorial waters the pipeline passes. This project is of mutual benefit to the Irish and the British. If we buy gas from them, it is good for their economy. If the gas is reasonably priced, that is good for us. If we make further finds of gas we could be a net exporter of gas through the European grid. Has the commission been set up? Who is to be a member? Could local representatives be involved, in view of the land fall site?
I realise that this is a main gasline which cannot be tapped into to provide a supply for local houses. Perhaps the Minister would suggest to Bord Gáis Éireann that they bring a line from the closest spur connection at Ballough to Loughshinny as a recognition of the co-operation of the local community. Perhaps the Minister could take that up in view of the ease with which this project has gone ahead. I warmly welcome the project.
The proposal of Bord Gáis Éireann, which had the full support of the previous Government in 1991, to connect the Irish national gas field into the British grid is of vital importance to the future economic and industrial development of this State. This can be looked at in the context of Ireland being at present dependent on coal and oil imports for two-thirds of its primary energy requirements. The balance is provided by depleting stocks of indigenous fuels such as peat and natural gas. Given that there is a doubt as to whether Bord Gáis Éireann is statutorily empowered to carry out works outside this State, I fully support this Bill and I hope it will get the full support of the House.
The demand for natural gas to meet the growing energy needs of this country is increasing daily. I understand that the potential demand is three billion cubic metres and it is expected to grow to four billion by the year 2000. This demand is increasing as more industries with access to the gas transmission network switch over to natural gas. I understand that 90 per cent of industries along this route have already made that connection.
The Bill passed in the last Dáil which banned the use of bituminous fuel in the Dublin area is still further increasing the dependency on gas. In the absence of further major discoveries, our indigenous natural gas supplies from Kinsale and Ballycotton will be largely used up by the year 2000. Given that more than 30 per cent of the State's electricity is generated by gas and 90 per cent of industries with access to the grid have switched over to gas, this is a matter of grave concern. In 1991 a previous Minister for Energy signed an agreement with Marathon Petroleum Limited under which the company undertook to drill seven exploratory wells over a period of five years. To date only one of these test holes has been drilled. I understand the result of this test drilling was, unfortunately, not very encouraging. Given the demand for natural gas, I am asking what is holding up further exploration in this field. I know the Minister is hopeful of positive results in the remainder of the drilling programme. I presume he knows more than he is telling us. I hope so. In this context I request that he use his influence with the company to have further tests carried out as a matter of urgency.
In the absence of further significant discoveries of gas during the next 15 to 20 years this country will be very dependent on the UK as its single source of supply. In that event would the Minister agree that this State would be very vulnerable to any interruption of gas supplies for whatever purpose or from whatever source? The possibility of terrorist attacks whether here or in the North Sea can never be disregarded. I hope that will never occur. The Minister, when responding, should outline some of the alternatives he has in mind in such a doomsday situation.
The Minister mentioned that an agreement completed last year between Bord Gáis Éireann and National Power in the UK will give access to supply. Can he assure us that when we are connected to the British grid, as will happen when this process goes through by means of a gas interconnector project, we will not be held up to ransom at some stage in respect of the cost of the gas? I would like the Minister to confirm what arrangements have been secured in this regard. Can we be assured that the European Commission, which has grant-aided this project to the extent of 35 per cent of approved costs, will protect our interests in that regard?
The onshore pipeline will be approximately 9 kilometres in length and extend from the existing transmission system at Ballough in my own constituency to the landfall at Loughshinny in County Dublin. There will also be a shore station at Loughshinny with a facility for metering and pressure reduction. In the County Dublin development plan, the area through which this pipeline runs is described as (1) an area of scientific interest, (2) an area protected for archaeological reasons and (3) areas protected for scenic views. Each of them is very relevant.
In view of these classifications, and the potential for tourism in the area, the residents, through their community associations, expressed concern at the possible effects on the environment. As their public representative I share their concern and I hope to get assurances in relation to some of them. Two elements in particular have given rise to concern. One is the shore station which, for technical reasons must be located close to the landfall and interfere with the scenic views. That has been taken on board by BGE but every effort must be made to minimise the visual impact of this structure by the provision of a screening arrangement so that it will not restrict the view across the Irish Sea.
Dr. A.A. Ryder for RSK Environment Limited in a summary in the environmental statement stated that the construction of the landfall may also be a cause for concern and could give rise to significant environmental impact. The boulder clay cliffs at Loughshinny, a very important feature of that area, have been selected as the landfall location. This is an area of scientific interest. All of us, particularly in our role as local authority representatives, would be concerned that that be protected. Every effort must be made to ensure that the cliff lands suffer the minimum amount of environmental impact. The area between Ballough and Loughshinny is predominantly one of market gardening. It is at the centre of Ireland's horticultural industry and, by its very nature, its landholdings are relatively small in size. Those market gardens are very important, however, and there is no doubt that the laying of pipes will have an impact on the gardens.
Given the commitment made by Bord Gáis to enter into meaningful negotiations with the farmers and the growers of the area, whether individually or through IFA representatives, I am disappointed that the Minister found it necessary on 7 February last to sign 34 CPOs on the landowners in question. The case has been made very clearly that the vast majority of farmers believe that, because of the value of the land, the importance of their activity and the way in which that activity will be affected, the deed of easement agreement of £11 per metre is insufficient. As I have said, the holdings in question would be between 20 and 40 acres. Bord Gáis maintains that it cannot distinguish between one part of the country and another when valuing land to be affected by the laying of pipes but there is a major difference in the impact that would be experienced on a small holding — and we could perhaps be talking about a field of two to three acres — and that experienced on a landholding of 200 acres in the midlands or further down by Cork. In my view, there are grounds for reconsidering the effects and financial impact on the landholders involved and it should be possible to resolve this issue through consultation.
For a moment I wish to refer to the problems of a constituent of mine, a small landholder who is trying to rear a family, who feels very aggrieved at the current proposal as it affects his 48 acres. Three years ago the north-eastern pipeline was laid through the field in which his home is located, fairly close to the gable end of his house. My constituent is still getting over the effects of that, so one can understand the frustration he feels on being informed by Bord Gáis that the current pipeline proposal will run right through the same field and will in fact go even closer to his home. It seems that my constituent is to be surrounded by pipes——
And gas.
That is correct. On top of all that, the plans also affect the only site my constituent had available on his small holding on which a house could be built for his daughter. My constituent appealed to the Minister and to Bord Gáis that they take cognisance of his concern and if posible relocate the proposed pipeline. The reply received was that his objection was frivolous and he would not be granted an oral hearing or an appeal. On behalf of my constituent, I say very clearly that his complaint is not frivolous but reflects a major problem. I ask the Minister, notwithstanding the issue of CPOs in this respect, to contact Bord Gáis officials with a view to trying to reach some accommodation with my constituent.
Several points were raised during a recent meeting between public representatives and local community representatives. One issue concerned security, which was referred to earlier also. I should like the Minister to confirm that there will be ongoing security provisions, particularly for areas of potential risk. It is a condition that an emergency plan be produced in conjunction with the local authority and emergency services? Will there be an opportunity for involvement of representatives of the local community in the production of that plan?
I realise that there is to be a release valve provided on land in Ireland. Representatives have asked what would happen in the case of a leakage between the Irish coastline and Scotland. With the technology available now, would it be possible to provide a release valve to the pipeline under the sea?
In relation to the Ballough station, in the past few years there have been complaints about leakage. In order that the issue may be clarified once and for all, I should like the station to be examined. It would be preferable if all public representatives serving the constituency were informed of such an examination so that the people could be reassured.
I acknowledge and appreciate the support given in recent months by the Ministers of State, Deputy Hyland and Deputy O'Shea to attempts to bring about a realistic pricing structure for the horticultural industry and the growers in north County Dublin. An anomaly still exists. Further compensation to the larger growers would help to resolve the problem and I ask that the matter be dealt with.
A study of the annual reports of Bord Gáis Éireann shows clearly that great strides have been made in terms of profit. Everyone in the country should be able to avail of the provision of natural gas. I ask the Minister why natural gas has not been provided to all local authority estates in the growth areas? Perhaps there is a difficulty but those who live in local authority estates should not be excluded from the benefits of our national assets. Careful consideration should be given to making that facility available in local authority housing estates.
I welcome this Bill and I hope it will mean that we can provide for our needs in the short term. I also hope that at some stage we can export natural gas, if that happened this Bill would indeed have been welcome.
I also hope it will be possible to provide some facility for the local residents in Loughshinny. I know contact has been made by Bord Gáis with a view to giving a commitment to the local community to provide some sort of facilities. I ask the Minister and Bord Gáis Éireann to work with the local residents and Dublin County Council to ensure that this happens. I look forward to a favourable response to a community which has worked very closely with Bord Gáis Éireann and who have put up with inconvenience. I hope they will get the response which we, as public representatives for the area, regard as necessary.
Debate adjourned.