Gas (Amendment) Bill, 1998 [ Seanad ]: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Public Enterprise (Mr. Jacob)

I will now give the House a brief account of the current state of the natural gas industry and the general direction of its future development. BGE has a de facto but not a statutory monopoly in the purchase, transmission, distribution and sale of natural gas.

In the relatively short period since its establishment in 1976, BGE has achieved significant progress in the development of the industry. It now supplies natural gas to 280,000 residential consumers and 10,000 commercial and industrial consumers. By the end of 1998, it hopes to serve 297,000 residential and 10,500 industrial and commercial customers. Natural gas now meets 20 per cent of our total primary energy requirements. BGE operates in a highly competitive market and must fight for market share against other fuels, such as oil and electricity.

A key priority for the energy sector in the Programme for Government An Action Programme for the Millennium is to extend natural gas as far as practicable to major towns and cities. BGE is currently arranging gas supplies to the towns of Fermoy, Carrick-on-Suir, Cobh, Annacotty, Ashbourne, Bettystown, Clane, Kildare, Dunshaughlin and Ratoath and extending supplies in Mitchelstown and Mallow, where natural gas has been available for some time. It is currently studying the possibility of extending the gas network to areas in close proximity to the network, particularly in Counties Louth, Meath, Kildare, Laois, Wicklow, Limerick, Tipperary and west Cork.

Surveys of the load potential for the residential and commercial markets in these areas are ongoing and should sufficient loads be identified for extensions to be economically viable, the projects will be included in the BGE programme. New areas are continuously being added for surveys as the network gradually extends to economically viable locations.

A proposal to extend the gas network to the midlands and west of Ireland, serving Trim, Mullingar, Athlone, Ballinasloe, Galway, Ennis and Shannon, was drawn up in the early months of 1997. The economics of the proposal are such that it would not satisfy BGE's investment criteria. In the circumstances, BGE was not prepared to undertake the extension without the assistance of £60 million in Exchequer funding. In May, 1997 the then Government decided that further inquiries should be made in respect of the State aids aspect of the proposal before proceeding further with the project. The necessary formal notification of the proposal was submitted to the European Commission in September, 1997. The Commission recently indicated that it will not raise any objections to the proposal. I am taking a further look at the details of the project in consultation with BGE and having regard to the current study of gas demand to the year 2025.

The natural gas market is one of the sectors being opened up to further competition. Last December, the EU Council of Energy Ministers reached political agreement on the terms of a directive which will introduce competition into the natural gas industry in the form of third party access to gas networks throughout the European Union. The competition will be introduced on a phased basis over a period of ten years. Following consideration of the draft by the European Parliament, which made no amendments, the directive was formally adopted by the Council of Energy Ministers on 11 May. Broadly speaking and allowing time for publication of the directive, member states have a period of two years to bring into force the laws, regulations and administrative provisions to comply with the directive.

Ireland has already provided for this form of competition and the necessary detailed operating rules are being developed. Our domestic legislation, the Energy (Miscellaneous Provisions) Act, 1995, which provides a legal framework for third party access by large consumers to the BGE gas network, is broadly in line with the draft EU Directive. This facility enables eligible gas consumers, such as the ESB and NET and other large consumers, to purchase their supplies direct from gas producers and to have the gas transmitted through the BGE network on commercial terms. The threshold in the 1995 Act is 25 million standard cubic metres of gas per annum. On the basis of that figure some 75 per cent of BGE's market is potentially opened up to this new form of competition, but the number of eligible customers is fewer than ten. The Act also provides for the giving of ministerial general directives to BGE relating to transmission and pricing aspects of third party access. I have prepared draft Directives and published them for comments. The comments received are now being examined. My Department has invited the various bodies which submitted comments to a meeting to discuss the comments. In addition, BGE, in consultation with interested parties, is busily engaged in the preparation of the technical and operational rules in a code of operations document.

Hydrocarbons play a significant role in Ireland's energy mix and, therefore, it is of considerable importance that we continue with the efforts being made to establish further Irish production. The economic benefits — royalties, tax, jobs, support services and so on — resulting directly from the natural gas produced from the Kinsale Head and Ballycotton fields illustrate the importance of indigenous energy supplies. As I have already stated, however, that supply of natural gas is depleting, resulting in an increasing dependency on imports. That is sufficient reason for us to continue to make every effort to promote the search for additional indigenous supplies and, whenever possible, to get discoveries developed.

I understand from my colleague, Deputy Woods, Minister for the Marine and Natural Resources, that we now have a high number of exploration licences in place. This is the result of the new licensing terms introduced in 1992, the consequent licensing rounds in 1994, 1995 and the most successful of all, the Rockall Trough Licensing Round last year, which gave rise to 11 new licences. At present 28 exploration licences are held and each carries a specific work programme involving a high level of exploration activity.

The licensees include many of the major exploration companies, several of which returned to Ireland in 1997 after periods away, while others reaffirmed their commitment to Ireland by taking on further licences and building on their existing positions. The number and quality of exploration companies now involved in offshore Ireland inspires confidence that the present level of exploration activity will be maintained in the coming years.

In 1996, Enterprise Oil discovered gas in their second well in the Slyne Trough but, despite their best efforts, they were unable to test this discovery because of mechanical problems. I understand that during 1997 Enterprise acquired new seismic data in the area of the discovery and that they propose to drill an appraisal well in the prospect shortly. During 1997 two exploration wells were drilled in the Porcupine Basin by Total and Marathon and another exploration well was drilled by Enterprise Oil in the Kish Bank Basin off Dublin. In addition 1997 was the busiest year for acquisition of new seismic data since records began with the acquisition of in excess of 28,000 kilometres of seismic data.

Ireland has a vast Continental Shelf and much of it remains under-explored. Deputy Woods considers it important that we see an exploration presence in areas in our offshore not currently subject to authorisations. One such area is the 156 blocks in the South Porcupine Basin which is now the subject of a licensing round, the closing date for which is 15 December 1998. Data acquired there in 1997 — 17,000 kilometres of seismic data, a high resolution aeromagnetic survey and a seep detection survey — shows it to have considerable interest for explorationists.

Deputies will note that the Bill is very short and straightforward and that there is no provision to deal with the future of the gas industry. As I mentioned already, EU member states have a period of about two years to bring into force the laws, regulations and administrative provisions to comply with the recently adopted EU directive on natural gas. This work will entail a major review of the Gas Acts and a substantial new Act will have to be drafted. It is my intention to have the widest possible consultation in relation to drafting the new legislation. Within the next two years, therefore, this House will have the opportunity to debate detailed proposals for new legislation dealing with not only compliance with the new EU directive but with the future structure of the gas industry.

I will now return to the purpose of this Bill, to repeal section 37 of the Gas Act, 1976. Subsection (1) of section 37 provides that all natural gas landed in the State, or got within the jurisdiction of the State, for consumption therein, by the holder of an exploration licence or the holder of a petroleum lease shall be offered for sale to Bord Gais Éireann on reasonable terms. It also provides that any gas which is so offered to and purchased by the board shall, unless a consent is given by the Minister for Public Enterprise under section 8(7) of the Act to export the gas, be disposed of by the board for consumption in the State. All natural gas produced to date from our indigenous reserves has been consumed in the State and no consents under section 8(7) have been sought or given.

Subsection (2) of section 37 provides for an exception to the foregoing. It provides that the requirement to offer gas for sale to BGE shall not apply in cases where the Minister, in approving a plan for the development or exploitation of a deposit of natural gas, requires that the gas be offered for sale to a person other than BGE for a specific industrial purpose. That provision has never been used. In any event, I have reservations about its compatibility with competition rules. Subsection (3) provides for a dispute resolution mechanism for dealing with disputes regarding the reasonableness of terms on which natural gas is offered for sale to BGE.

Section 37 of the Gas Act, 1976, is clearly anti-competitive and incompatible with the competition requirements of the Energy Charter Treaty. That section is also in conflict with EU competition rules. I commend the Bill to the House.

Mr. Yates

This is a very short Bill which my party will support and I am interested in facilitating its early passage through the Dáil. This debate, particularly on Second Stage, gives us an opportunity to consider a number of very important energy and gas issues which have not been debated in the House. The question of gas may seem boring to people but, compared to oil, coal and other resources, gas is the most competitive energy resource.

Therefore, energy prices per se, as part of our overall competitiveness, including electricity prices based on gas, are critical to the future growth of the economy and require careful consideration. During my brief contribution, I will comment on the Bill, third party access, the future competitive environment in terms of gas, the potential expansion of the gas grid and the need for further interconnectors north and south and east and west. We must all avail of the dynamic European developments in the international gas market.

We are obliged to pass this Bill to repeal section 37 of the Gas Act, 1976 to enable us ratify the Energy Charter Treaty. I understand that treaty was designed primarily to facilitate international trade in gas between the EU and east Europe, but as a member of the European Union we are obliged to ratify it. Even if we were not, it is fundamental to providing a legal framework for the type of competition we want in the area of gas supply. Unlike the Air Navigation and Transport (Amendment) Bill, which we will traverse later, this is not a Bill that requires amendment, but it provides an opportunity for an important debate.

I understand that in April the Government published draft ministerial directives to Bord Gáis Éireann governing third party access to the national gas network. The Minister referred in some detail to the provisions of the 1995 Act whereby an organisation that consumes more than 25 million standard metres of gas per annum could have access to Bord Gáis Éireann's pipeline and stated that this represents 75 per cent of its customers. These customers, which are fewer than ten in number, include the ESB, NET and other major employers and providers of services in our economy.

The directives are seriously deficient in various respects. If they comprise the bible for access to gas, they require political scrutiny. I refer in particular to the directives concerning standard service transmission and standard service pricing. While I welcome the publication of the directives for public comment, I want the Minister to clarify a number of points. He stated that we have two years to put the legislation in place. Will this be done by way of primary legislation rather than directive so that Members will have an opportunity to scrutinise it? I am working on that assumption.

There is a conflict of interest in this because the Minister is the shareholder and regulator of Bord Gáis Éireann. There could not be a more fundamental conflict of interest. I am not necessarily calling for the privatisation of Bord Gáis Éireann. Gas was found in the Porcupine Basin in Kinsale and it was worth a lot of money. The State was able to realise the asset by utilising it through Bord Gáis Éireann and that was the correct way to proceed. An asset in the ground gave us a licence to make money. We now have an opportunity to buy gas from Europe as we face the prospect of the gas in the Kinsale field drying up in three years' time. Competition will be fundamental to future energy and electricity prices. If the ESB decided to build a new generating capacity, in its opinion the cheapest and most efficient use of energy for electricity would be natural gas at European prices.

I am concerned about a number of points in the Minister's draft directives. He did not set out a clear framework for price determination. The directives also state that we should operate on the basis of a ten year framework of regulations. Charges need to be reviewed annually to get the maximum benefit in terms of lower cost. The directives do not make a clear statement on a procedure for appeal or dispute resolution. For example, if the ESB wanted to use Bord Gáis Éireann's pipeline for gas bought from, say, Georgia, a dispute could arise about the cost of transmitting it through the pipeline. The Minister should provide a procedure for appeal and dispute resolution. The directives do not refer to the appointment of an independent regulator to oversee this area. In the context of telecommunications, Deputy Stagg and I debated the role of a regulator as being fundamental to policy determination. The Government and Europe have some serious thinking to do on this matter. In making its observations on its memorandum to Cabinet, could the Department of Finance state it is not going to do something that would write-off profits of a wholly owned subsidiary of the State, namely, Bord Gáis Éireann? The Minister must act as regulator and place the assets at one remove or — the more likely option — appoint an independent regulator. Does the Minister intend to appoint an independent regulator?

Policy decisions are implicit rather than explicit in terms of the rate of return to Bord Gáis Éireann in the standard service pricing directive. Is the rate calculated on the basis of cost recovery of the asset, with or without EU funding, or is some other cost formula used? In other words, could gas prices in one part of the country be different from those in other areas? An Post claims the economic cost of delivering a letter to Malin Head is different from that in Dublin. Will there be more than one tariff? I support a unified tariff and uniform gas prices for the entire island.

There is also insufficient information in the pricing directive to assess the reasonableness of the pricing proposals. How will the asset value be calculated? What will be included or excluded? Will it be independently assessed? Will Bord Gáis Éireann determine the cost or will outside experts be appointed to determine the price? If, say, Aughinish Alumina wanted gas, how would future planned investment by Bord Gáis Éireann be calculated?

That brings us to the question of the treatment of depreciation. There are a number of different approaches, including straight line depreciation, but it depends on what way this goes. It is just like getting a phone connected; there is a cost to access the system and a tariff rate. It is not clear to me how this price review will be undertaken. How much of the recovery of the price will be in the connection fee or will it be built into the usage tariff, including the ratio of fixed and variable costs?

As a general principle, I would like to see the maximum level of transparency, either through an independent regulator or through Departmental guidelines, so that an explicitly transparent formula is established and an appeal mechanism put in place.

The tone of the standard service transmission directive appears to be anti-consumer. There seems to be no incorporation of quality standards or what householders are entitled to in terms of efficiency, customer care and codes of conduct.

I am not clear as to how the Minister of State's proposals marry with the EU gas directive. Perhaps he can clarify whether they are totally synchronised.

To summarise my position, I am looking for a clear commitment to separate the Government's conflict of interest between the regulation and ownership of Bord Gáis Éireann. We should have a policy of getting gas for the cheapest possible price. Such a policy would achieve a great deal.

As part of the ESB's cost and competitiveness review it sought a 3 per cent electricity price increase but the Government said "no". The Government, however, cannot have it every way. If it says "no" to price increases — and, of course, there is public support for a rejection of electricity price increases — it must facilitate cheaper gas to the ESB instead of maximising the profits of BGE.

Third party access is the most critical area of the entire gas industry. The ten year review, the absence of a regulator, transparency and answers on the basis of how we arrive at cost and value must be set out.

The Minister of State should circulate to Opposition spokespersons his considered view on these points before decisions are made. This is a crucial matter and I would not like to see a fait accompli.

On the gas grid itself, I was told by a reliable source that there would be a major announcement this week concerning the extension of the gas grid to the midlands and the west. However, knowing the Minister for Public Enterprise, Deputy O'Rourke's local geographical interest and the way in which these things work, I would say that a bigger and better splash is being planned in a further announcement. I see that Athlone, Ballinasloe, Galway and Mullingar were mentioned in the Minister of State's speech.

Mr. Jacob

And Wicklow and Wexford.

Mr. Yates

I will come to Wexford. I have a bigger and better plan for Wexford.

Mr. Stagg

The Deputy can get his own gas down there.

Mr. Yates

We have no gas there at the moment. I understand the EU has now given clearance for an Exchequer grant of £60 million which will be required to extend the gas pipeline into the midlands and the west. I support the maximum extension of the gas pipeline. Given that we will move into a new era where 75 per cent of the customers of Bord Gáis will have new rights in two years time, now is the time to put the structure in place. If we do not do so, there may be huge peripheral disadvantages for the location of manufacturing companies and other large scale users.

We have discussed the massive development of the greater Dublin area — including the adjoining counties, where one third of the population lives — and its transport problems. We will, however, reinforce the peripherality within the State if we do not have an extended gas network. I support that project and I look forward to the announcements that will be made about it.

The question of gas interconnectors, however, is a more important one. The Minister of State in his speech said:

A joint North-South study of the feasibility of providing a natural gas interconnector between Dublin and Belfast was completed last year. The study report concluded that such an interconnector is technically possible and represents the most cost-effective means of the potential solutions considered in relation to gas supply issues for both sides of the Border.

The Minister of State also said the study report formed a basis on which to proceed. I support that. A two-way flow of gas prices is fundamental to a competitive dynamic in the market. The Minister of State should not become bogged down in a paralysis of analysis. I see that a further report on gas demand is now being considered. The interconnector plan is important as part of the prevailing peace process.

Our own natural gas reserves represent an exhaustible resource. While there may be future gas discoveries and notwithstanding the exploration that is going on, Irish gas reserves are finite. Given the potential competitiveness of gas, a second interconnector must be constructed on an east-west basis. The previous interconnector was built in 1990 for £265 million.

Mr. Stagg

It was opened 14 separate times. I opened it twice.

Mr. Yates

The type of tunnels we have now are different from the ones we had then. Given the projected growth in energy consumption, particularly electricity, a link from Wexford to Wales can no longer be deferred. It would have the side benefit of providing natural gas to my county, but the main point is that it can link up to the grid. This project must be included in the next round of EU Structural Funds after 1999, whether or not the resources are meagre.

If one looks at the geography of gas resources in Europe, from the Urals to the Atlantic, one can see there is real potential and a competitive force for the exploitation of gas. Once the super-structure is there to link into the UK system we could obtain the full benefit of the cheapest possible prices by making on the spot purchases. The UK has gone further down the road than any other EU member state in terms of privatisation and all the rigours of competition. British and Irish gas prices are substantially out of line, as are electricity prices.

The existing pipeline capacity cannot meet demand. In any case, this needs to be done because of the exhaustion of the gas fields. A second gas interconnector should be the major infrastructural project during the Minister of State's tenure in the Department. There is no longer any security threat to such a project from terrorism. It is imperative and will create a real basis for us to improve our energy-based competitiveness into the new millennium.

I support the Bill and will facilitate its passage. If the Minister of State wants to expedite Committee and Report Stages I see no difficulty in moving forward on them.

Mr. Jacob

Thank you, Deputy.

Mr. Yates

Third party access is not clear cut and, as it stands, it is not satisfactory. I know the Minister said there will be further consultation. I hope the political process will be part of such discussions. I hope we do not lose sight of the proposal to extend the gas grid, which is politically and geographically pleasing, and the east west connector. The technical, planning and investment requirements to make that happen should be put in place sooner rather than later.

Mr. Stagg

I wish to share my time with Deputy Penrose.

Acting Chairman (Mr. Briscoe)

Is that agreed? Agreed.

Mr. Stagg

I presume his presence in the Chamber is indicative of some of the remarks made by the Minister and Deputy Yates.

I introduced the Energy (Miscellaneous Provisions) Act, 1995, which gives the Minister of State, Deputy Jacob, the weapons to introduce these regulations. He was a senior member of the party which accepted that Act. I deliberately retained in that legislation the power of regulation for the Minister in the full knowledge that the regulatory situation was being examined separately. The intention at that time was to introduce legislation with the regulatory commission which would set up a super powered regulator who would have more power than the Taoiseach and the Minister for Finance. I am glad we at least blocked or delayed that during my period in the Department and I hope it is not resurrected in that form. Because that was in the offing, we retained the power of regulation for the Minister in the Energy (Miscellaneous Provisions) Act, 1995. The Minister is now making regulations under that legislation.

We must decide if we want State companies to be profitable and commercial and to do the best they can to get every pound for their shareholder or to be a social service. We cannot tell Bord Gáis Éireann to cut its profits because if it is profitable, it is charging too much for gas. It should get the best price it can for gas because it is in competition with other energy sources. Do we want it to give gas away at 4p per unit, which is approximately what it buys it for, or sell it at 8p per unit? It currently sells it at 62p per unit because that is competitive. Because Bord Gáis sold it for that price, it was able to pay for the interconnector and the expansion of the grid and to give approximately £300 million to the Government over five years. We must make a choice about which we want it to do. As a shareholder, the Government could direct Bord Gáis to sell gas at cost price and make no profit. That would reduce energy costs but it would also reduce the Government's income. I presume it would have to collect that income through taxes.

This legislative measure repeals section 37 of the Gas Act, 1976. The repeal of this section will allow Ireland to ratify the Energy Charter Treaty and the protocol on energy and efficiency and related environmental aspects which accompanies the treaty. Ireland is one of only three EU members which has yet to ratify this treaty and, in that context, this legislation is welcome.

This is one of the shortest Bills to come before the House and I do not intend to spend long discussing it in detail. However, its introduction allows us to have a timely debate on the future of the gas industry in Ireland and how best to harness that resource for the benefit of the island.

The contents of the Bill are straightforward. Legal advice from the Attorney General indicates that section 37 of the Gas Act, 1976, is in conflict with the Energy Charter Treaty and an obstacle to its ratification. It is also worthwhile to note that the anti-competitive nature of section 37 is probably in conflict with EU competition rules and will have to be repealed on that basis. The administrative act of repealing section 37 is contained in the Bill but it goes no further than that.

One important point is that when section 37 is repealed there is nothing proposed to take its place. We are creating a legislative vacuum. Senator Costello raised this valid point during the debate on the Bill in the Seanad. This aspect of the Bill smacks of the old Thatcherite liberalisation regime of total unhindered free markets or the policy of "survival of the fittest and damn the weakest".

The intention of the Energy Charter Treaty is to regulate the market but this Bill will give us a free for all. What would happen if a company made a large gas discovery in the Porcupine Basin and decided to build a pipeline directly to mainland Europe, to France, for example, and bypass this country? This is not only possible but likely. What advantage would Ireland get from such a discovery and exploitation of our natural resources? The answer is little because the exploration and production terms are so generous, there would be little or no benefit to Ireland or the economy from such a discovery unless the product is landed in Ireland with the consequent economic activity that would generate. I urge the Minister to examine this as part of what he is proposing to ensure Ireland's interests are safeguarded as far as possible.

The deletion of section 37 effectively removes the legislative obstacles to competition in the gas industry. It removes the obligation for all gas landed in the State to be offered for sale to Bord Gáis Éireann. This requirement was necessary and beneficial during the early years of BGE's operation. However, it is no longer tenable in the new competitive European environment.

Taken in tandem with the provisions of the Energy (Miscellaneous Provisions) Act, 1995, which allow for third party access by large consumers to the BGE network and open up 75 per cent of BGE's market to competition, we now have the basic legislative framework to allow for competition in this sector of the market. During his contribution in the Seanad, the Minister alluded to the fact that a draft directive on the introduction of competition into the natural gas sector has been agreed by the Council of Energy Ministers and is now being deliberated in the European Parliament. I would be obliged if the Minister would expand further on the contents of the draft directive agreed by the Council of Energy Ministers and how it will impact on the natural gas sector in Ireland.

The threshold for competitive consumption in the 1995 Act is 25 million standard cubic metres per annum. This enables the largest gas consumers in the State to avail of a competitive market. Does the draft directive substantially alter this threshold? In his Seanad speech the Minister stated that our current domestic legislation was broadly in line with the draft EU directive. I ask him to outline the areas where the draft directive differs from our national legislation and what further changes he envisages implementing to accommodate the terms of the directive. While I appreciate that the European Parliament may propose significant changes to the directive, the Minister should outline the Government's intentions on this matter.

In its relatively short history, Bord Gáis Éireann has a tremendous record in developing our gas infrastructure. BGE now serves approximately 280,000 domestic customers and over 10,000 commercial consumers of natural gas. It has secured 20 per cent of the energy market in Ireland in the face of strong competition from other sectors. I am confident that BGE can continue to thrive as the energy market is further liberalised. I do not agree with the view that our semi-State industries should feel threatened by competition.

BGE is a well managed company. It is headed by its chairperson, Dr. Michael Conlon, and chief executive, Mr. Phil Cronin, and staffed by dedicated professionals who have a progressive attitude to the energy industry and the future role which gas will play in that sector. BGE has been to the forefront in developing our gas infrastructure. This has ensured that the maximum number of customers are connected to the natural gas network and that the future supply of gas from indigenous and foreign sources is secured.

The recent decision by the EU Commission to approve proposals for a natural gas trunk line from Dublin to Galway and west Limerick is welcome. I was deeply involved in this project when I was in Government and I am delighted the EU Commission has no objections to it. I spent two years fighting with the officials in my Department and, when I had convinced them, with the officials in the Department of Finance and with BGE about the merits of the project. I am delighted we got it to the point where it was technically approved by the Government subject to EU approval of its State aid aspect. I am also delighted that the Minister of State said positive things about it in the House today. I expect a further announcement by the Minister for Public Enterprise, Deputy O'Rourke, whose constituency will be directly and positively affected by the proposal in the near future. I was pestered during that period by my colleague, Deputy Penrose, as to why I was not getting the project on the rails. I am pleased all the work during that period is coming to fruition. I expect the Minister will invite all those involved in the project at any stage to the announcement which I hope she make shortly.

The construction of the Dublin to Galway-Limerick trunk line will be of great benefit to both domestic consumers and industrial interests throughout the whole of the midlands, the midwest and the Shannon area. It will also provide a great boost to industrial development throughout the whole region. For too long lip service has been paid to the needs of the midlands and other areas outside Dublin. When in Government I was determined to take effective action that would produce long-term benefits for communities outside the immediate Dublin area. The gas trunkline project is a prime example of how a major infrastructural project has the potential to reinvigorate a whole region. It has the potential to attract further investment into the area. As well as this it makes the towns along the route more attractive to reside in and may, in the future, relieve the population pressures on the capital city and address the severe depopulation affecting many rural areas. It is important when a major infrastructural development of this nature is being developed that we have a broad vision of the future.

The telecommunications revolution continues at an incredible pace. It is possible that work practices and methods which today we accept as essential may well lose their central role in the coming decades. For instance, modern telecommunications may remove the need for workers to attend office buildings in central locations every day. This is already happening to some extent. It is quite common for academics and professionals, particularly in the software sector, to co-operate on projects across huge geographical divides. This process will undoubtedly filter down through mainstream industry and business. The future work patterns of people may well differ significantly from what we take for granted today and highly skilled workers may quite easily work on projects in their home or local office while communicating effectively with their colleagues. This would make residing in towns beyond the traditional Dublin commuter belt a more attractive option for thousands of workers. It is essential that we invest now in the infrastructural projects that not only recognise the needs of the future but actively encourage certain social shifts that we deem beneficial.

With the clearance of the EU secured the Government must act swiftly to ensure this project commences as soon as possible. I would be obliged if the Minister of State would outline his intentions in this regard. I am aware that his immediate superior, the Minister, Deputy O'Rourke, has a habit of producing grand schemes with no budget, no start date and no prospect of competition. I hope this policy malaise has not pervaded the entire Department. Perhaps the Minister of State can provide us with a firm timetable for the construction of this trunk line to towns such as Trim, Mullingar, Athlone, Ballinasloe, Galway city, Ennis and Shannon. Spur lines to Longford, Sligo, Roscommon, Ballina and Castlebar would then be a real possibility.

The supply of gas to these towns will bring the type of benefits that the original rural electrification scheme brought to Ireland outside of Dublin. In office I prepared the scheme in great detail and it is now ready to go ahead. I note it was included in the Fianna Fáil election manifesto. I urge the Minister to grasp the nettle without further delay and seek Cabinet approval for this project which will bring wealth and comfort to areas that have long been neglected.

On the issue of securing gas supplies from indigenous and foreign sources I welcome this Bill so far as it enables Ireland to ratify the Energy Charter Treaty. This treaty, which should prove beneficial to all signatories, has the ability to increase co-operation specifically between the European Union and the emerging democracies in Eastern Europe and Russia. The expanding European gas network, which includes the interconnector between Ireland and Scotland and the British European interconnector, provides Ireland with a secure source of natural gas in the future. It is extremely important given the completion of the Kinsale Head Ballycotton field.

I am in favour of continued exploration of our continental shelf and tapping into our indigenous natural resources. However, it is vital to secure supply from such large gas fields that exist in the former eastern bloc countries and the Soviet Union. This should be possible under the terms of the Energy Charter Treaty.

Perhaps the Minister will expand on the contents of the protocol on energy efficiency and related environment aspects that accompanies the energy charter. The protocol is crucially important to future energy exploration on the continent of Europe and beyond. However, I have concerns regarding the implementation and monitoring of this protocol, especially when one considers the huge degree of destruction that energy production methods pursued in Eastern Europe countries have inflicted on the environment there. There is an attempt to establish international environmental standards for energy production but what procedures are in place to enforce these standards? We cannot accept exploration companies that trade in the east, utilising cheaper and more environmentally damaging methods there than they would use to exploit resources in the west.

The Labour Party does not oppose this Bill. I accept the suggestion that we take all stages together. While we are prepared to accept it as a necessary administrative act to comply with our international obligations, further actions are required to protect consumers in the evolving competitive energy market. We are determined to ensure that the people, through their elected representatives, have a central role in establishing the basic social principles to which a new liberalised market must adhere. We must ensure that the operation of that market remains accountable to the democratically elected representatives of the community.

Mr. Penrose

The reason I am here is well known. I thank the House and my colleague, Deputy Stagg, for allowing me a few minutes to make a short contribution. I will not go back over the ground covered by Deputy Stagg in relation to the central thrust of the Bill which basically is the repeal of section 37 of the 1976 Act. This is necessary to conform with EU rules governing competition policy in the energy sector. Given that it would be deemed under Article 86 to be in breach of EU competition rules, it requires to be repealed and the Minister has brought forward the Bill to do so.

I note the concerns expressed by my colleague, Deputy Stagg. Obviously the repeal of section 37 leaves a legislative vacuum because there is nothing put in its place. The unfettered liberalisation aspect of the repeal is a matter of concern to us in the Labour Party and I ask the Minister to examine it. Frequently we hear that liberalisation brings many benefits but there are also some drawbacks. It is easy for people in the marketplace to say certain industries and companies had monopolies, especially in the State or semi-State sectors. These are often important industries where competitors come in, take the most profitable lines or routes and leave the area with few services. For example Bus Éireann serves rural people whom other companies may not serve. That is the focus of my concern in relation to this matter. In our rush to liberalisation I want to ensure people are not left behind. We must ensure our natural resources are for the benefit of all as opposed to the gainful profit of a few.

The Minister of State, Deputy Jacob, said this Bill does not deal with the future of the gas industry but certainly it will help. I was pleased the Minister of State took on the task initiated by my colleague, Deputy Stagg, in Government concerning the proposals put forward for the funding of the natural gas trunk line from Dublin to Galway-west Limerick. This trunk line will pass through the midlands and serve a number of the main towns en route. I was pleased to hear the Minister of State confirm that the EU Commission has cleared these proposals. It is now up to the Government to ensure the necessary Exchequer funding. The Minister said this matter would go back to Government and that the level of Exchequer funding will have to be examined. My understanding is that we are talking about an injection of £60 million over a 20 year period. That is small fry in relation to the overall moneys required and the benefits that will flow from it are extremely significant.

The proposal involves the construction by Bord Gáis of a trunk line from the gas interconnection at north County Dublin through the midlands and south to Limerick. The corollary of that will bring forward the supply of gas to towns on the corridor of this trunk line which include Trim, Mullingar, Athlone, Ballinasloe, Galway, Ennis and Shannon. The spur lines will be completed by means of open competition and that is necessary under EU rules, but we are talking about a small amount of money. Our economy is growing and we hear a great deal about the fruits of the Celtic tiger. This is an area the Government could examine, on any cost benefit analysis, with a view to injecting the necessary funding for this project.

Towns in my own area of Mullingar and Athlone would receive a tremendous boost if this proposal were put in place. It is important that rural people receive the benefits and that they do not feel excluded. We talk about proposals that are inclusive. This is one way of ensuring that the benefits of a natural resource are fed down along the line to facilitate the maximum number of people.

When he was in office I pestered the former Minister of State, Deputy Stagg, to the point of distraction about progressing this proposal. I am delighted the Minister was in a position to give the news that it has been given the green light from Europe. I note this proposal was in his party's manifesto and I am even more heartened because I trust it will be honoured in full. It is important that the Minister of State pursues this matter with his senior colleagues with a view to getting work started without delay.

There should be a time frame in regard to when the work should begin because last week I spoke to two industrialists in Mullingar who are waiting on the commencement of this project. As far back as 1993 people spoke to me about a project like this, and they are anxious to know when an announcement will be forthcoming. I hope the Minister will be in a position to indicate it will not be too far down the line.

Rural areas have suffered severely from depopulation and degeneration. I have no doubt the announcement of a major infrastructural project of this nature will accelerate the reversal of this process. I come from the midlands where we lost 2,000 jobs in Bord na Móna, and many words have been spoken and written about the need to develop the infrastructure of the midlands from that time. A supply of natural gas will give an important boost to the prospects of the areas affected in attracting industry and creating jobs. It will also give households a choice of energy which creates competition in the energy area.

In Athlone, Mullingar and other rural areas a level playing field will be created between the midlands and the areas currently served by natural gas. That will be a tremendous boost, both for consumers and industries, in these towns. It is time for action and this project will be a major move. In that respect, today's announcement is welcome.

Obviously the Minister will try to secure Exchequer funding for this project but a natural resource should be made available to areas which otherwise would be deemed to be economically inaccessible. When the cost benefit analysis is done in the Department, the Minister should make a strong case for Exchequer funding to be forthcoming without further delay.

We must ensure that we pursue policies that permit the maximum level of participation of our people as consumers of natural resources. We do not have many natural resources but there should be a level playing field in regard to those we have. People in isolated rural areas should enjoy the beneficial effects of the natural resources enjoyed by those in large urban areas and hinterlands.

I thank the Minister for bringing forward the Bill and giving us the opportunity to speak about a matter that is probably not directly related to it. I am sure he will understand the reason we are making contributions on the EU Commission proposal to approve funding to supply natural gas to the midlands. I hope the Minister will be successful in securing the necessary Exchequer funding. He will have support from this side of the House in those endeavours.

Mr. Gilmore

This is a small Bill and what I have to say will be correspondingly short so I do not anticipate using the 20 minutes available to me.

I do not share the general welcome for this legislation before the House. It is a very short Bill and in so far as the text is concerned, it is difficult to find, as one would with more extensive legislation, specific provisions with which one might find fault or about which one might be critical. There are a number of grounds, however, on which the Bill needs to be examined in a more critical manner.

As Deputy Stagg pointed out, the Bill repeals section 37 of the 1976 Act which provided for the sale of natural gas to Bord Gáis Éireann and provided for the controlled use of the natural gas resource. I understand the repeal of that section is necessary because it is in conflict with the competition requirements both at EU level and those of the Energy Charter Treaty. However, it is not being replaced by any kind of regulatory framework and it seems to me that what is being put before the House today is probably the baldest piece of legislative free marketeering we have seen for a long time. Section 37 will be repealed and it is open season after that with regard to where, to whom or how the natural gas may be sold.

In his contribution the Minister did not give any indication as to the source from which any competition might come. On the face of it, one could say this legislation is anti-Bord Gáis Éireann since, up to now, it exclusively had the right to purchase natural gas. I am not here to bat for Bord Gáis Éireann, but it would be helpful if we had some indication of from where the source of this competition will come. If it is argued, for example, that it is to come from areas of the private sector, I would have to say that the private sector, particularly in the area of gas distribution, has had a poor record in recent times. It is not that long ago, as many Deputies will recall, since the risk to which the then Dublin Gas Company put domestic users of gas in this city when that company was in serious trouble and Bord Gáis Éireann had to bail it out. It is a pity that the opportunity has not been taken to put in place some kind of regulatory framework for the competition which is anticipated for the sale of gas rather than the free market which will result from the bald repeal of section 37 in isolation.

I also regret that the opportunity has not been taken to rebalancing to whom the gas is sold. In particular, I refer to the use by ESB of 50 per cent of the national gas resource for conversion to electricity. There is a strong body of opinion which would argue that that is a wasteful use of the scarce natural gas resource, that there is a certain degree of absurdity in converting one form of energy into another in this way, at considerable cost, to generate electricity. It is a pity that that aspect of our natural gas resource has not been addressed.

The Bill arises from the requirement to ratify the Energy Charter Treaty. As I understand it, the motivation for the negotiation and agreement of that treaty arises from the need to provide for competition essentially in the Siberian gas fields. I want to make two points about that treaty. First, the treaty was negotiated, agreed and signed in 1994 by the then Government. The Minister stated that this country agrees with the treaty and strongly supports it. We are now being presented with a fait accompli. We are being told that we must pass this Bill to ratify the treaty. As a Member, I resent that approach to the negotiation of international treaties, the presentation of the consequences to this House as a fait accompli when they have been negotiated, agreed and signed, and to be told on the introduction of a Bill that it must be passed quickly so that the treaty can be ratified. I do not recall — I stand to be corrected on this — that there was any debate in this House about the Energy Charter Treaty prior to its negotiation. We should move to a situation soon in the way we do our business here that if a Government is to negotiate a treaty on behalf of the people of this country, there should be a requirement that the Minister leading that negotiation should inform the House that it is proposed on behalf of the people to negotiate a treaty, outline the general principles and issues involved, enable the House to express its view and give, or if need be withhold, a general approval for that process. It is not acceptable that the way in which we deal with the ratification of international treaties is that the Government engages in negotiations over a number of years and then at some point late in the day presents the result to the House when we are told essentially that we have no choice at that stage but to ratify it. I remind the Minister that there have been a number of occasions when that approach to the negotiation of international agreements has landed this country in considerable difficulty and local conflict. For example, difficulties arose in relation to abortion as a result of the Protocol which was slipped into the Maastricht Treaty during its negotiation. There have been repeated opportunities to revisit the proposed Loran C mast in County Clare which resulted from an agreement which was negotiated before it was brought before this House. The mast has not been built and it is still causing considerable local grief. More recently, there was the agreement by the Taoiseach when he was Minister for Finance to sign away the duty free arrangements, which again are now the subject of considerable difficulties. Therefore, as a general principle, before agreements and treaties of this kind are negotiated there should be prior discussion here so that the House can express an opinion, first, on whether it is a good idea to proceed with that particular treaty and, second, on its contents.

With regard to the contents of this treaty, I do not accept the assumption that competition for the exploitation of gas resources is a good thing per se and that we should all acquiesce in that general view. This treaty is essentially about competition for the exploitation of natural gas in Siberia. It is about the various big players in the hydrocarbons industry exploiting the natural gas resource in Siberia. The argument repeatedly made for competition is that it reduces price, increases efficiency and is ultimately good for the consumer. As a general principle, I accept that. However, with regard to the exploitation of hydrocarbons there is a further dimension which should be taken into account in this equation which is that, inevitably, competition will increase economic activity and result in an increased pace in the exploitation of the resource. If there is competition in the exploration for and exploitation of natural gas in Siberia, it means that natural gas will be taken out of the ground at a more accelerated pace. Will the Minister state how that is squared with the high aspirations which are repeatedly expressed by the Government, the European Union and the international community on the need to reduce the use of hydrocarbons and fossil fuels, to reduce the level of greenhouse gases in particular, and to deal with the problem of climate change?

Recently there were statements in this House on the Kyoto Summit. The Minister for the Environment and Local Government explained the laudable position which the Government took at that summit. He spoke of the progressive EU position that greenhouse gas emissions would be reduced and that there would be a reduction in the use of hydrocarbons. He spoke of how if people continue to use fossil fuels as they do at present — pumping them into the atmosphere and overheating the planet — the known horrendous consequences of climate change, rising sea levels, flooding, and the El Nino effect which we have seen over the course of the past year or more, will be reproduced exponentially in the form of the emission of greenhouse gases into the atmosphere. We know, for example, that if we continue to use greenhouse gases at the present level, within the course of the next century some coastal regions in this and other continents will be flooded and will effectively become part of the sea.

On top of that, we know the awful consequences of an erratic climate. It is not just a question of warmer summers. An average rise of 1 per cent in global temperature would have horrendous consequences in different places. The imperative to reduce the use of hydrocarbons is extremely strong. Natural gas contributes 12 per cent to greenhouse gases, and here we have an international treaty, to which this country enthusiastically subscribed, which provides for the accelerated exploitation of that resource. That does not square with the objective of reducing the use of hydrocarbons as a source of energy.

I make that point because of the inconsistency of on the one hand signing up to ecological and environmental objectives and, on the other hand, negotiating and signing up to treaties that provide for an accelerated exploitation of these resources. It also has economic consequences for us. The Minister referred to our objective as an economy to exploit oil and gas resources off our own coast. The day will come when we will be told we cannot do that. The international requirement to reduce the use of hydrocarbon resources may prevent us from exploiting the oil and gas resources off our coast, because we have signed up to a treaty which provides for an accelerated exploitation of them somewhere else in the world. It is very short-sighted to simply go along with the idea that competition for the exploitation of natural gas in Siberia will inevitably be good for this country.

Another factor is the exhaustibility of these resources. If we continue to take natural gas resources out of the seabed, at some point they will be exhausted. It is an object lesson in the exhaustibility of these resources that the Kinsale-Ballycotton field will be gone in five years' time. We all recall when it was discovered. There was a great deal of excitement. It was what sparked the establishment of Bord Gáis Éireann under the 1976 Act which we are now amending. The Aghada plant in Cork and the national gas pipeline were all about bringing ashore the Marathon field. We were told at the time that it would last for 30 years. Thirty years seemed a long time in the early 1970s. That time is almost up. The gas is almost gone and it cannot be replaced. The same will happen in relation to every other gas field that is exploited. In the interests of conserving the resource, does it make sense to encourage competition in the kind of free market unregulated way that the energy charter treaty prescribes and which it is proposed to put in our domestic legislation? I would argue that it does not. It is something about which we should express a degree of caution before simply going along with the idea that signing up to the Energy Charter Treaty is a good idea, that competition for the exploitation of a scarce resource, particularly one that contributes to enormous environmental crisis on the globe, is necessarily a good idea.

Since all politics is local, I will return to one or two more immediate considerations. I congratulate Bord Gáis Éireann on the excellent work it has done over the years in the provision of natural gas, and on the success of the company. There is one small gripe which may appear tangential in the context of what we are discussing. It is probably more about contractors used by Bord Gáis Éireann than about the company. I refer to the difficulties that arise in reinstatement of roads, footpaths and so on after natural gas is supplied in many urban areas. There has been a poor record of reinstatement on the part of the contractors engaged by the gas company. Inevitably, as the grid is extended, as more homes are connected to natural gas, that is something that will need attention. I am very happy for Deputy Penrose that natural gas is coming to County Westmeath, but I would hate to see him having to come in here repeatedly on the Adjournment to raise with the Minister for the Environment and Local Government the state of the roads after the work has been done. I would appreciate it if some attention could be given to that.

Minister of State at the Department of Public Enterprise (Mr. Jacob)

I will endeavour to be as brief and comprehensive as possible. I thank the Deputies who contributed and will give careful consideration to their views.

The Bill is simple and straightforward. Its purpose is to repeal a single section of the Gas Act, 1976 to enable Ireland to ratify the Energy Charter Treaty. There is an urgent need for Ireland to ratify this treaty as it is a valuable mechanism for ensuring the provision of secure energy supplies and facilitating investment in energy projects in the former Iron Curtain countries.

Ireland is one of only two EU member states that still have to ratify the treaty. France is the other one. Security of supply is the bell that rings most urgently with me. Gas production from the Kinsale Head and Ballycotton fields is already in decline. Unless there is success in the discovery of further commercial reserves we will be totally dependent for gas supplies on external sources within the next five years. The Minister for the Marine and Natural Resources is continuing to provide every possible encouragement and is providing a range of incentives to companies that wish to explore for natural gas on our Continental Shelf and onshore so that further reserves of a commercial nature can be discovered and developed.

Bord Gáis Éireann is a highly successful commercial State body which has performed satisfactorily since its establishment in 1976. Deputies paid a well deserved tribute to BGE. The company has served the country well in developing the natural gas industry. It supplies a varied market including residential, commercial and industrial users, the ESB and NET. The gas industry supplies 20 per cent of our primary energy requirements compared with 6 per cent in 1980. This progress has been achieved without any State investment.

On the other hand, the Exchequer has received over £400 million in contributions from BGE. Therefore, not only gas consumers but the whole economy has benefited from BGE's success. I congratulate the chairman of the company, Dr. Michael Conlon, the board, the chief executive, Mr. Philip Cronin, and the management and staff on their excellent work, expertise and resourcefulness.

The future holds formidable challenges for BGE. The advent of further competition in the form of third party access to the gas network will provide both a challenge and an opportunity for the company to continue to show its mettle in the highly competitive energy sector. An EU directive has recently been adopted detailing the establishment of common rules for the internal market in natural gas. As well as establishing common rules the directive requires the phased introduction of third party access to gas networks. I am committed to the promotion of competition in the gas sector. Ireland is to the fore in this respect in that legislation is in place for third party access. The Department and BGE are busily engaged in the drafting of the necessarily detailed and technically complex operating rules for third party access. This important work is designed to contribute to the growth of the economy through competitive energy pricing and quality of service.

As I stated in my speech, the House will have an opportunity in the next two years to debate detailed proposals for new legislation dealing with compliance with the EU gas directive and the future structure of the gas industry. In addition, BGE is importing an increasing amount of gas and the cost of this gas is adding to the company's operating expenditure. BGE is developing new products and services and is engaged in a major transformation programme in consultation with staff and unions. In other words, the company is taking a proactive approach to preparing for the new competitive and challenging environment.

Neither the Government nor the Minister for the Marine and Natural Resources can do anything about the difficult physical environment in which exploration for hydrocarbons takes place in Irish waters. Nevertheless, the Government is anxious that our natural resources should be discovered and developed for the nation's benefit, cognisant of the fact that there has only been one commercial find after more than 30 years of exploration.

Deputy Yates was concerned about the uniformity of the tariff for third party access. I assure the Deputy that it is the intention to introduce a single postalised tariff irrespective of location or area of consumption for third party access. The Deputy will remember buying fertiliser by this method. I was involved in its distribution and it was a meritorious system which worked well, offering a standard price anywhere in the country. The Deputy raised a range of other issues which will be examined.

Mr. Yates

Will there be an independent regulator? That is a fundamental issue.

Mr. Jacob

I will endeavour to address that issue. A number of Deputies also mentioned the interconnector between the UK and Ireland. As I have stated, the Government and BGE are urgently examining the optimal gas infrastructural transmission requirements to cater for the accelerating growth in the demand for gas. Consultants have been engaged to produce a report on the required infrastructure and that report is expected by September.

Deputies Stagg and Penrose raised the issue of the gas extension to the midlands and the west. They are supportive of the proposal and strongly argued for spur lines for transmission to other towns. I am looking again at the proposal in consultation with BGE and having regard to the study of gas demand up to the year 2025 which is under way. Therefore, I cannot give a timetable. However, the Government will have to reconsider the proposal now that the EU Commission has cleared the State aid aspect. I compliment and congratulate Deputy Stagg on his initiative on the westward extension of the network during his time as Minister of State. He was instrumental in driving that issue. Perhaps his colleagues in Government were not all that supportive but the Deputy did all possible to put this in motion and the Government will now examine the matter.

Deputies Stagg, Penrose and Gilmore expressed concerns about the new regime following the repeal of section 37. The repeal of section 37 of the 1976 Act will not cause a problem for the purchase of natural gas supplies by BGE. The board will still be able to bid for the purchase of natural gas whether discovered within the jurisdiction or otherwise and to continue to transmit, distribute and sell the gas for industrial, commercial and residential purposes. In the event of an energy crisis and where there would be a need to control the use of energy sources, there is provision in the Fuels (Control of Supplies) Acts to enable the making of orders governing the acquisition, supply, distribution and marketing of natural gas.

Some Deputies were concerned about the EU gas directive. The directive will introduce competition into the natural gas market in the form of third party access to gas networks throughout the EU. Initially 20 per cent of the gas market will be opened to this competition. This will increase to 28 per cent after five years and 33 per cent after ten years. Gas-fired power generators, irrespective of their natural gas consumption level, and other final customers consuming more than 25 million cubic metres of gas per year on a consumption site basis will be eligible for third party access. Member states have until the year 2000 to implement the directive.

Deputy Gilmore is concerned that the Energy Charter Treaty is a fait accompli and is objecting to it on the basis that the House will not have an opportunity to agree to it. The terms of the Treaty were approved by the House in November-December 1994 as required under Article 29 of the Constitution.

The Treaty creates the conditions necessary to encourage investment in the energy sector and facilitates economic recovery in the former Iron Curtain countries. In doing so it opens up opportunities for Irish enterprise in consultancies, joint ventures, construction and equipment supplies. It contributes to the security of oil and gas supplies for the west. Much of the world's oil and gas supplies are located in eastern Europe in the former Soviet Union countries. It is important that the necessary investment to exploit these resources is made in a way that promotes long-term co-operation in the energy field. The legal framework created by the energy charter allows this to happen.

Deputy Stagg referred to the Protocol on Energy Efficiency and Related Environmental Aspects. Article 19 of the Energy Charter deals specifically with the environmental aspects, embodies the "polluter pays" principle and encourages the promotion of market oriented pricing which reflects environmental costs and benefits. The Protocol has the specific objectives of promoting energy efficiency policies consistent with sustainable development and creating conditions which induce producers and consumers to use energy economically, efficiently and in an environmentally sound way. Its detailed measures place binding obligations on contracting parties to ensure energy efficient policies are co-ordinated among all the responsible authorities; to encourage the adoption of new methods and approaches for financing energy efficiency and energy related environmental protection investments; and to encourage commercial trade and co-operation in energy efficient and environmentally sound technologies.

On competition, Deputy Gilmore expressed reservations. The customer must come first. I am committed to competition for industrial and domestic consumers. Natural gas is the cleanest and most environmentally friendly fossil fuel. While the Minister for the Environment and Local Government has the lead role in relation to greenhouse gas emissions, the Minister for Public Enterprise has a major contribution to make to national policy in that area. The exploitation of gas reserves is a matter for the Minister for the Marine and Natural Resources, Deputy Woods, to whom I will convey the Deputy's comments.

Deputy Gilmore raised the matter of pipe laying. I took this issue up with BGE after it was raised in the Seanad. BGE has informed me that while a degree of inconvenience to the public during street works is inevitable, it endeavours to keep this to a minimum by providing suitable notification of works to adjacent residents and business owners, setting agreed standards and monitoring the performance of its contractors. BGE is aware that a uniformly high standard of reinstatement and site husbandry is not always achieved during construction operation undertaken on its behalf but it has assured me that steps are taken to rectify the matter where its contractors under perform. A high standard of operation is required for all gasworks.

For logistical reasons it is not always practicable to lay a permanent reinstated surface over excavations at the end of a day's work. In such cases temporary "delay set" macadam is laid to secure the excavation which is replaced with a permanent reinstated surface as soon as conditions allow. BGE has taken note of adverse comments about this temporary surfacing and plans to keep its use to a minimum. It has advised me that account should be taken of the fact that Telecom, Esat, the ESB, the local authorities etc. are extremely busy with ducting and pipe laying activities and that it has received complaints about problems which, on examination, were not caused by Bord Gáis.

Mr. Stagg

Spread the blame.

Mr. Jacob

BGE is conscious of the poor image created by untidy work areas and substandard work. A consistently high level of workmanship is required at all Bord Gáis works. Continuous efforts are made to ensure this is achieved. I share Deputy Gilmore's aspiration that the matter be addressed. I will continue to raise it with BGE. I said in the Seanad that one cannot make an ome-lette without breaking eggs. Gas pipelines should be laid with great care and consideration for local people.

Acting Chairman

Is that agreed? Agreed.

Dáil Éireann debate -
Wednesday, 27 May 1998