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Dáil Éireann debate -
Wednesday, 3 May 2006

Vol. 618 No. 4

Energy Resources: Motion.

I move:

That Dáil Éireann, concerned that Ireland's natural wealth should fully benefit the citizens of this State, notes (in this State):

—that oil and gas (hydrocarbon) taxation is seriously flawed and outdated;

—that our hydrocarbon legislation covered by the Finance Act 1992 which allows for a 25% corporate tax is the lowest in the world;

—that no royalties or other production related levies are demanded, with 100% write-offs for the oil companies' activities that can effectively wipe out any tax take to the State;

—that we continue to issue frontier licences to the oil companies for not less than 15 years;

—that there is no onus on the oil companies to use an Irish service port for their operations or to use Irish jobs, goods or services;

—the subservient attitude of the Minister for Communications, Marine and Natural Resources and his Department- PAD (petroleum affairs division) to the multinational oil companies;

—the meaningless public consultation process (strategic environmental assessment) announced by the Department of Communications, Marine and Natural Resources under EU Directive 2001/42/ EC (11 April 2006) (SI 435 of 2004 and SI 436 of 2004) with rushed timescale (25 May 2006) required prior to the next allocation of licences for offshore oil and gas exploration, and designed to exclude the public rather than include them;

and now calls for:

—recognition of the fundamental principle that oil and gas reserves within the control of the State belong to the Irish people and must be recovered and used in a way that benefits the great majority of the population rather than powerful corporate interests;

—the immediate scrapping of the "giveaway" 1992 legislation with the re-introduction of a realistic tax take, with royalties, and an automatic "stake" of 50% in any oil or gas discovery;

—the establishment of an independent oil and gas inspectorate to monitor closely all multinational oil company operations to ensure that this State fully benefits from all oil and gas exploration activities;

—a complete freeze on the issuing of any further exploration licences pending proper consultation with the Irish people (and until all relevant environmental data are gathered and assessed);

—proper and comprehensive assessments, including meaningful consultation with and representation of communities affected by oil and gas development;

—no more frontier licences to be issued — do it a better way;

—an independent official on behalf of the people of Ireland be installed on all multinational oil rigs to monitor oil and gas operations in Irish waters; and

—the establishment of a publicly owned gas and oil exploration and recovery agency to investigate the exploration and recovery of hydrocarbon resources without being dependent on multinational oil and gas conglomerates;

Nothing in this motion contradicts the reality of global warming and the finite nature of hydrocarbon resources making it imperative that the State invests massively in alternative sources of energy which do not damage the environment and are sustainable and available in Ireland.

I wish to share my time with Deputies Finian McGrath, Harkin, James Breen and Healy.

Is that agreed? Agreed.

I have long been upset about the scandalous giveaway of our natural resources. Article 10 of Bunreacht na hÉireann states:

All natural resources, including the air and all forms of potential energy, within the jurisdiction of the Parliament and Government established by this Constitution and all royalties and franchises within that jurisdiction belong to the State subject to all estates and interests therein for the time being lawfully vested in any person or body.

Article 6 of the Constitution states:

All powers of government, legislative, executive and judicial, derive, under God, from the people, whose right it is to designate the rulers of the State and, in final appeal, to decide all questions of national policy, according to the requirements of the common good.

How then is the common good being served by the ongoing and scandalous giveaway of our natural resources by our Government? Is it not time for the people to insist on the exploitation of our own resources for our own benefit because the common good requires it? Will it require a redesignation of the rulers of the State by the people for this to happen?

The State's right to an ownership stake in any oil or gas find has been abolished since 1987. There is also no longer any right to royalties, which were equal to between 8% and 16% of the value of any production, irrespective of the profitability of the development company, and a corporate tax level of 25%, the lowest in the world. This tax liability can be written off by the oil companies against their other activities so that they will pay little or no tax for the privilege of raping Mother Ireland for her natural resources.

It has been estimated that the Corrib gas field will be half exhausted in ten years' time before Shell will have to pay even one cent of tax. Oil prices, however, have increased dramatically in recent years. Since the Corrib gas field was declared commercial, its value has soared. Today a barrel of crude oil is worth a record price of $74.78. We must contemplate the scenario where we will be obliged to pay the same price for our own Corrib gas as we pay for gas which comes from the interconnector, as well as face increased petrol and heating oil costs. Shell will make a killing by forcing us to buy back our own gas at the same price that we pay for imported gas. Given that the imported gas includes higher transport costs, Shell will actually be charging us more for our Corrib gas than a North Sea gas producer will get for its gas.

Is it any wonder the people of Mayo are up in arms about the shenanigans of Shell and its partners when all we are getting is grief and no gain for our county? Despite this the giveaway continues with the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, preparing to license a further area of potentially rich oil and gas prospects on the west coast on the same terms. The oil companies have been invited to cherry-pick from an area of approximately 18,000 sq. km., stretching from west of Clare to due north of the Foyle estuary. It is an area equivalent to about a quarter of the Irish land mass. The Government has been dragged kicking and screaming into consulting the people about this by the EU. It has, however, ensured it is a meaningless consultation process with only nine days' notice — a complete sham.

The full extent of the scandal was highlighted by Colm Rapple when he recently outlined the ExxonMobil saga. Exxon had Irish offshore interests in the 1970s and 1980s but it had not applied for licences in recent years. Had Exxon been interested it undoubtedly would have been granted the licence that was instead issued in November 2004 to Sir Tony O'Reilly's companies, Providence Resources and Sosina Exploration. The US oil giant would have got preference over Tony O'Reilly's company if it had applied at the time. However, because it did not, it is now paying a high price for coming in late. The fact that it is willing to pay that higher price confirms the ridiculousness of the Government's licensing policy.

Providence and Sosina were able to demand a continuing 20% stake in the licence, although ExxonMobil will be paying all exploration costs, estimated to be over €100 million. Had the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, not issued the licence 16 months ago, he could have demanded a 20% stake for the people in any of ExxonMobil's finds. Instead that 20% will go to Providence and Sosina. In the meantime it would be irresponsible for the Minister to issue any more offshore licences until the people are fully consulted about what is going on and agree what they wish to give the oil companies, if anything. That should be the people's prerogative.

A recent report makes clear the Government intends to maintain the present licensing and taxation terms despite the fact that most of the exploratory wells drilled in the Slyne-Erris-Donegal areas have encountered oil and gas. It also indicates a high level of optimism for the future. Under these terms, however, the licensed companies effectively own any gas or oil they find. There is no requirement to land any gas or oil in Ireland. There is nothing to stop an offshore developer from allowing oil to be shipped away in tankers to refineries abroad. So much for the extra security which could come from having crude oil or gas landed in the State.

Where is the logic in the failure to reconsider the offshore licensing terms in light of spiralling energy prices and the recent Forfás report on Ireland's oil dependency which highlights our vulnerability to a looming crisis in liquid energy supplies? Enough is enough. Too much has already been given away to powerful corporate interests. The giveaway 1992 legislation must be scrapped. A realistic tax take must be introduced with royalties and an automatic stake of 50% in any oil or gas discovery. It is time the people demanded what belongs to them.

This is an important motion on our natural resources and highlights the urgent need for all our citizens to benefit from them in a fair and just manner. I commend the Independent Members on uniting in tabling this commonsense motion in the taxpayers' interests. We have agreed the fundamental principle that oil and gas reserves in the control of State must belong to the people.

Hear, hear.

They must be recovered and used in a way that benefits the majority of the population rather than powerful corporate interests.

We need a Chavez approach, not a Ray Burke one. We need openness, accountability and a fair and sensitive approach to our natural resources. The conservative forces of the new right in society that want simply to hand over our oil and gas reserves to private speculators and their financial backers must be tackled head on. Our citizens need to know where their resources and taxes are going.

Access to information is fundamental to a healthy democracy. The Independent Members see their role as representing the taxpayer and the citizen. There is also a question of trust. I demand the establishment of an independent oil and gas inspectorate to monitor closely all multinational oil company operations to ensure the State benefits from all oil and gas exploration activities. Proper and comprehensive assessments, including meaningful consultation with and representation of communities affected by oil and gas exploration, must be introduced. This acknowledges the role of the Rossport five who I commend on their work on this issue.

The oil and gas giveaway must stop. There is growing evidence that Irish waters will yield more oil and gas finds. Despite this the Government is sticking to its policy of giving away the rights of these resources for a pittance without even requiring the finds are landed in the State. Some 33 wells will be drilled over the next six years and, of these, 15 have already identified oil and gas finds. Who will benefit from this exploration? The hydrocarbon legislation covered by the Finance Act 1992 which allows 25% corporate tax was further reduced in the 2002 budget to12.5%. This is the lowest corporation tax in the world. Successive Governments and Ministers have a subservient attitude to multinational oil companies. The tipping of the cap, or rather the complete rolling over, to these companies is a disgrace and is not effective or strategic Government planning.

The bottom line is we will see little revenue and may not even enjoy extra security from having crude oil and gas landed in the State. There is a lack of joined-up thinking, leaving Ireland very vulnerable to the looming oil crisis. Many are fed up that the great oil and gas giveaway continues. It is up to all Members to wake up to its reality. This motion is not just about our oil and gas reserves but above all a commonsense approach to the development of our economy.

Although the Independent Members' motion is about our oil and natural gas resources, it is also about a particular mindset. The Government, which we entrust with managing our taxes and providing for our future, is on a permanent selling spree as seen with Eircom, State-owned buildings and, soon, Aer Lingus. Either that or it is on a give away of our natural resources of gas and oil, as our Minister prepares to license further areas of the Atlantic on give away terms. I understand the oil companies must be offered a sweetener but the Minister is handing over the entire sugar bowl. The generous terms offered could perhaps be understood 20 years ago when there was no clear evidence of what lay under the Atlantic seabed. In recent years, however, we have found out the potential and there is no reasonable explanation for the continuation of such generous terms.

Looking at our counterparts in Norway and across the Irish Sea, we see a different picture. The Norwegian state has a substantial stake in Statoil and, coupled with a reasonable tax take, Government petroleum revenues will be approximately €40 billion in 2005 alone. To put this in context, when we launched the national development plan in 1999 for 2000-06, we were looking at expenditure of €40 billion over six years. We may or may not have the same reserves as Norway but we are not investing wisely or prudently like it did. We are not protecting the economic interests of this or future generations. We have a valuable natural resource that is running out worldwide and that increases in value every week but we still persist in giving it away.

The first line of the Government amendment states the development of Ireland's natural resources benefits the citizens of this State. This is patently untrue because of the extraordinarily generous terms offered to multinational oil companies. Equally, it is not true on a regional basis. Before the last election, two Ministers promised the delivery of gas to the west and north west, with Sligo and Letterkenny named. They used a Cabinet decision to that effect to garner votes in the election but since then the Government has continuously backtracked from that commitment.

In the final analysis, it does not matter where the gas is coming from, the pipeline must be built. The people of the west are being asked to take the risk with no guaranteed benefit in return.

For centuries this country has been blessed with a vast store of natural energy reserves. Unfortunately, little was done to preserve these national assets, as successive Governments failed to put in place long-term strategies that would have protected, preserved and maximised our resources. To compound matters, little has been done to maximise revenue collectable by the State from those who have exploited our energy reserves. The opposite has happened, with proper tax dividends that should be paid to the State reduced and no other levies being demanded of companies with worldwide budgets of billions of dollars. No operational structures to encourage those foreign multinationals to use Irish territory, ports, goods or labour markets were put in place.

Successive Administrations, however, have increased taxation on fuel for the ordinary consumer, resulting in the exorbitant prices we pay for domestic and motor fuels, with an occasional sop thrown to householders, as in the last budget where a slight reduction in duty on home heating oil was announced. If those foreign-based oil companies paid their fair share of tax, the already over-burdened taxpayer might think this Government was serious about an equitable tax system. They know, however, that is far from the truth.

While I accept the need to attract foreign investment, it should not be at the expense of ordinary citizens. We are merely the caretakers of the national assets of our country on behalf of the public. We should examine how to maintain investment while maximising the revenue entitlements of the State. It is time to abolish the ridiculous incentives which, however necessary they once may have been, now merely make us the industrial doormat of Europe. We are major international players so we should stand up and ensure proper safety standards are in place. We should stop selling ourselves short by the ludicrous granting of exploration licences which are then sat upon to prevent others from gaining such licences.

This Government has in the last year turned to every website and press briefing of those that understand the importance of fuel and energy markets and policies. It then cherry picks what it thinks sounds good and calls it its own. If this headless chicken Administration stood still for a moment and listened to the ordinary people affected every day by poor Government choices, we might have a fairer taxation system, more employment, a safer industrial environment and proper thinking on energy policy.

The opening sentence of the article Life After the Oil Crash reads: "Civilisation as we know it is coming to an end soon". This is not the wacky proclamation of a doomsday cult or conspiracy theory society, rather it is the scientific conclusion of the best paid and most widely respected geologists, physicists and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by the phenomenon known as global peak oil.

Given that we are one of the most oil dependent countries in the world, we must ask what we are going to do. It seems obvious that the first thing to do is to stop giving our reserves away. The scarcer oil and gas become, the more economic it will be to harvest smaller finds. What are we doing, then, issuing frontier licences? Those pursuing such a policy are in total denial. This motion calls for an end to this practice. There is no argument that can justify it. We must end the give away of something the Irish people, not the Government, own.

We must replace oil and gas by giving serious consideration to renewable energy. While measures like the new household grant scheme are welcome, we must be more ambitious and we must simplify the process by which people can avail of such schemes. Those trying to avail of these grants are running into red tape, with local authorities adopting different approaches to the need for planning permission for solar panels. It must be simple for people to be proactive. The Government must consider potential problems instead of expecting the public to work their way through the red tape. The Minister for the Environment, Heritage and Local Government must issue planning guidelines so we can maximise the take up.

Bringing gas onshore must be done with the co-operation of the public. They should not feel that their safety can be traded. Otherwise communities adjacent to finds will resist. What has happened in Rossport does not make people feel confident.

Energy will form an important part of the manifestos during the next general election. The public will want a plan of action to deal with the ongoing petrol and diesel increases. There are obvious concerns already. The predicted regular increases for charges for ESB and gas will require more than a pedestrian response that aims for 13% of electricity to be produced from renewable sources by 2010. The looming decision prior to the allocation of offshore licences for exploration for oil and gas is critically important. Bringing gas onshore at any price is not sustainable politically.

I support the motion by the Independent Deputies calling on the House and the Government to recognise the fundamental principle that oil and gas reserves within the control of the State belong to the Irish people and that these must be recovered and used in a way that benefits the majority of the people and not just powerful corporate interests, and calling for the immediate scrapping of the give away legislation and the introduction of a realistic tax take with royalties and an automatic stake of 50% in any oil or gas discovery.

The current taxation situation is seriously out of date and flawed. The hydrocarbon legislation, which goes back to the Finance Act 1992, allowed for 25% corporation tax, which was then reduced to 12.5%, the lowest in the world. That may have been understandable in the early 1990s but when we now know there are huge oil and gas reserves off the west coast, it is unbelievable that the Government would continue to allow this.

A total of 33 wells will be drilled in this area off the west coast in the next six years. Up to 15 of those will be development wells sunk into identified oil and gas finds. Between six and ten wells will be drilled in areas already licensed to oil companies. There are huge oil and gas reserves in that area. The current situation is an absolute giveaway. This motion calls for the benefits of those oil and gas resources to be made available to the majority of the people, not just the powerful corporate interests, and that they be brought ashore in Ireland and used for the benefit of the people.

I commend my colleagues, the Independent Deputies in the Technical Group, for tabling this motion, which my party is happy to support. The principal clause in the motion concerns what our Independent colleagues are seeking, namely, recognition of the fundamental principle that oil and gas reserves within the control of the State belong to the Irish people and must be recovered and used in a way that benefits the great majority of the population rather than powerful corporate interests. I agree with that and it is important that we debate it as a principle in looking for oil.

Recently I read an interesting book, The Prize by Daniel Yergin, on the history of oil in the past 150 odd years since it was first discovered and developed in Pennsylvania and Pittsburg and obviously in Baccau in the Middle East and beyond the North Sea. That was an interesting read on the evolution that occurred during that time. This new resource that was discovered, this remarkable energy dense, transportable liquid, which transformed civilisation was initially there for all to grab. It was a Klondike situation where people kept whatever they could get. As the history of oil evolved one trend was clear, that the governments and the people who owned that land where the oil or gas was found gradually recognised if was their natural resource rather than the corporation that happened to strike a well and find it.

During the 20th century the ownership of that resource was increasingly recognised as belonging to the people by gradual stakes, 20% initially, then 50% which was a landmark decision until one reached the examples in Norway and elsewhere where it was fully under the ownership of the people. It is remarkable and sad that in that history of a greater evolving recognition, even by the oil and gas companies, of a share of that resource going to the local population, our history in oil and gas exploration has gone in the other direction. It has been well documented and outlined by others as to how a former Minister, Mr. Ray Burke, and the Taoiseach were active in allowing and engineering for that reversal of what has been the international trend. That position should be reversed again.

The Minister will say that our prospecting in terms of oil and gas discoveries have been poor and that is the reason for the giveaway that has been allowed. The circumstances are changing, as Deputy Catherine Murphy has outlined. We are in a different exploration world from the one that existed five years ago in terms of the need and urgency for companies to explore. I turned to advice in this area from Colin Campbell, a former geologist, who worked for many years in the Porcupine Basin and the other seas off the west coast looking for oil and gas and who takes a neutral independent position since he is retired. It is unfortunate, having listened to his view, that we do not have extensive resources and that we are geologically unlucky. We may find other pockets of oil or gas — hopefully he will be proved wrong — for the economic health of the country, but while there are possible reserves out there, there are not huge fields yet to be discovered.

I contend that what is out there should be developed in a manner that benefits the Irish people foremost and not the interests of an offshore exploration company. If we reassert that right to ownership and to a percentage share from such resources it will not dissuade companies in the current climate, where there is such urgency for them, to replace the dwindling resources they have. The current rate is, in effect, a giveaway. I do not believe that a fair share for the Irish people, in the current climate, would be inappropriate or would dissuade companies from exploring for the limited resources that exist.

It was interesting to hear Deputy Catherine Murphy speak about the concept of peak oil, an issue that is close to my party's heart, and draw attention to this issue in terms of energy resources and how we need to change every decision in Government on the basis that we are facing a geological reality of dwindling availability of such resources within my lifetime. The central message of the Forfás report, published two weeks ago, while it contained certain analyses on the exposure of this country, was lost in the separate media argument about whether we should go nuclear, and it did not address the fundamental issue. The fundamental issue for us is that we have to change every aspect of Government policy in recognising that gas and oil will be increasingly less available and that we are remarkably exposed.

On that basis we would welcome the development of the Corrib gas field. I am surprised there has not been more discussion on that issue this evening given that it is a topical issue on the day the Minister has, at last, published the Advantica report. It is the major gas resource that we have to bring ashore. It is topical that report is available today and I have a chance to comment on it. I have been frantic trying to read through the 170 odd pages to form an assessment of it. The consistent message from every page is that the local people were right. The issues of concern they mentioned, that this was a unique high-pressured pipeline and, therefore, should be treated with absolute care as opposed to the way it was treated by the Government, is borne out by this report of independent experts. Their concerns about the umbilical pipe going so close to the existing pipe are borne out in the report which describes as highly unusual the lack of information, lack of monitoring and lack of management by the Government.

It is clear from this report that the local residents were correct. What are the consequences of that? The main point which came through to me in this whole sorry saga of the development of the Corrib gas field is that the Government, being so closely wedded to the corporate short-term interests of a company in whose interests it is to bring gas ashore as quickly and as easily as possible, missed the bigger picture. It did not act as the arbiter and the representative of the interests of the people. The failure of the Government to monitor and set proper standards for the oil and gas companies has brought us to this difficult local position. It is that same attitude of the Government that it has to do whatever the corporate world says it should do that is outlined again in the Minister's amendment.

Our responsibility, first and foremost, is to the long-tern interest of and benefit to the Irish people. I do not believe the licensing arrangements and the management of the gas and other oil projects on hand do not fulfil that simple criteria set out in the motion.

I commend my Independent colleagues for tabling the motion. The Advantica report is worthy of a debate given what it states about the Corrib gas pipeline. It is only by proper open discussion, which the Government failed to allow, that we can lead to a proper resolution of the whole issue. I welcome the opportunity to say a few words on the report and commend the motion to the House.

Sinn Féin supports the motion and its intent. While most people are aware of the concerns of the Rossport community in regard to the health and safety aspects of the Corrib project, few are aware of the wider issues surrounding mineral exploration. This motion addresses those issues and suggests solutions. They are broadly the same as those proposed by my party in the past and remain the core of our policy on this country's natural mineral resources. The main issue for the people of Rossport is the safety of the pipeline, but those involved in the campaign have also voiced their views on how the Corrib field might be developed to the benefit of both the local community and the Irish people as a whole, rather than in the interests of the companies that currently hold the licences.

It was interesting that while the men were held in prison last summer, not only were people angry over the reasons they were being held, but they were genuinely astounded by the terms and conditions governing the exploitation of our oil and gas reserves. They could not believe that the State offers the lowest tax rate on oil and gas profits in the world or that the tax can be written off. Nor could they believe that the State does not take royalties. The frontier licence scheme effectively hands over control to whatever company is issued with the licence for a particular exploration block.

When people were told this they were understandably annoyed. When they were further informed of whom some of the key characters involved in framing the terms were, they were even more upset. That is the reason I have on several occasions called for a full investigation of the issuing of licences and changes made to tax and royalties regulations for the benefit of the exploration companies. One of the ways this might have been done was to expand the remit of the Flood tribunal to examine the role of the discredited former energy Minister, Ray Burke, in this sorry affair.

Whenever I or others have raised the terms and conditions that govern the exploration sector, we have been told that the giveaway terms are necessary to entice the multinationals to drill oil wells to take control of the "potential" vast reserves that lie off our coast. I use the word "potential" because the truth is that no-one, except, perhaps the companies that have conducted exploratory drills, knows what is out there. I can speak from personal experience as I worked on oil rigs for a while and know of the secrecy surrounding tests where a find or traces of a find are made.

It is of vital importance that there is a State body to oversee the sector and to ensure that we are not completely dependent on the multinationals. It is not the case that as a result of the State taking a proactive role or of increasing the tax take and imposing royalties none of the exploration companies would be interested in becoming involved. It is clear from the experience of other countries that increasing the role of the state does not have a detrimental effect.

Norway is a good example of a state that has followed a very different route to that of this state. So successful has Norway's approach been that it has enabled that country to enjoy an unprecedented period of economic growth and prosperity, one that has funded substantial social spending. It has also enabled Norway to resist the temptation to join the EU. Thus, it has managed to retain considerable national sovereignty over its economy, not least its natural resources. The experience of the Norwegian fisheries in contrast to the decimation of the Irish sector under the Common Fisheries Policy is another case in point. We are all acutely aware of the detrimental effect of that policy on our coastal communities.

A few facts will illustrate the potential benefits of implementing proper public supervision of the exploration sector. Since the discovery of the first oil find at Ekofisk in 1969, the industry has brought hundreds of billions of euro into the Norwegian economy. Currently, the industry brings in approximately €30 billion per year, and in 2004 accounted for 21% of GDP.

Due to the role of the state, through the state company Statoil, and through direct and indirect taxes a high proportion of the value created from the sector goes into the public purse. In 2004, the state's net cash flow from the petroleum sector amounted to 28% of its total revenue. Since 1969, net revenues to the state have amounted to approximately €700 billion in current terms.

When we consider that the Corrib field has been estimated to be worth up to €21 billion, we can see the potential benefits if a similar regime was applied in this State. We would be talking of more than €10 billion from Corrib alone, not to mention the Kinsale field or the possibility that oil and gas will also be brought ashore at other locations. Imagine how far that would go in solving some of the problems this Government claims it does not have the money to solve. If we utilised properly the resources we have available through exploration and developed a proper tax and royalty system, many of the social problems of the State could be alleviated by the moneys generated.

It is also significant that it was a Norwegian company Hydro that made the first oil find at Ekofisk in 1969. Although there are non-Norwegian companies involved no Norwegian Government of any political colour has ever believed that such an important natural and national resource ought to be handed over in the shameful manner that has been done here. Nor have there been any serious ideological objections to the central role of Statoil nor any campaigns by other than the lunatic right wing fringe — the Nordic equivalent of the Progressive Democrats one might say — to sell off this valuable asset to friends as, no doubt, the Progressive Democrats would do. At least in Norway, the friends in question would probably be Norwegians rather than from Texas or Royal Dutch Shell.

I will briefly refer to the reports released this afternoon by the Minister on the safety aspects of the Corrib pipeline. As Dr. Mark Garavan has already stated, the reports do not address the central concerns of those who object to the pipeline and who demand that the process takes place off shore. No doubt the Shell consortium will attempt to use the reports to justify recommencing work on the pipeline. As long as this does not have the support of the people of north Mayo whose concerns have not yet been addressed, this will be a grave error on its part.

The people of north Mayo are not satisfied that their safety concerns have been met. They will resist any attempt to impose on them a pipeline that puts their lives and those of future generations in jeopardy. I commend them on the courage they have shown and the role they have taken in standing up to multinationals. They are ordinary people from rural Ireland who were shamefully abandoned by the system and the State. They had to go to prison to show the country and the world that they would not be walked over by Shell oil or anybody else. I commend them for that. I have no doubt they will continue to stand up against any impositions on them as a result of this report.

I urge the Minister to take into consideration what I have said, particularly with regard to our natural resources and their shameful sell-off to multinationals by a person in Government of very questionable character. That person should be investigated as to why he allowed our natural resources to be sold off — given away for nothing — without benefit to the people.

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"—recognises:

—that the development of lreland's natural resources benefits the citizen of the State:

—that the present fiscal terms for petroleum are based on the present perception of prospectivity in offshore Ireland and recognise that we compete with other jurisdictions for exploration investment;

—that the State is in receipt of royalties in relation to its major production facility at Kinsale;

—that the completion of a comprehensive (and expensive) work programme is a requirement of frontier licences and failure to complete such a programme will result in either relinquishment or revocation of the licence;

—that in practice Irish ports are widely used by petroleum companies but an obligation for the compulsory use of Irish ports would be anti-competitive and contrary to EU law;

—the need for the State, as part of its energy policy, to increase the share of petroleum to be provided from indigenous resources in offshore Ireland; and

—the implementation by the State of its requirements under the strategic environmental assessment directive (2001/42/EC);

notes:

—that work is already under way by the Minister for Communications, Marine and Natural Resources on a review of the State's present fiscal terms to ensure that the State receives its appropriate share;

—that the Department of Communications, Marine and Natural Resources is engaged in the monitoring of petroleum exploration and production operations to ensure that the State is fully informed and fully benefits from these activities;

—that proper and comprehensive consultation is carried out in relation to petroleum activities; and

—the continuing enhancement of policy in relation to renewable and alternative energy;

rejects:

—a freeze on the issue of any further exploration licences including frontier exploration licences which would not be in the national interest;

— the need for the establishment of any new agency or inspectorate in light of the structures currently in place and being put in place; and

—the need for any change in existing Government policy in relation to petroleum activities other than the review of fiscal terms currently under way and any changes which might be necessary following the publication of the Advantica and other reports."

With regard to Deputy Ferris's final comment on people's character, the phrases "people in glass houses" and "throwing stones" come to mind.

The Government has one aim in managing Ireland's oil and gas resources, namely, to benefit our citizens. If we do not harness these resources, the State makes nothing out of them and the citizen does not benefit at all. Despite the fairytale world in which most of the Deputies who have spoken live, oil and gas are notoriously difficult to find——

We live in the real world.

——in the real world. It is especially difficult to find and exploit in the waters off the west coast of Ireland. Historically, exploration companies come here with a 20-1 chance of even finding oil or gas, and that is at a huge cost. Even to drill one exploration well can cost in excess of €20 million.

(Interruptions).

At least eight speakers spoke from the Technical Group, all without interruption. The Minister is entitled to the same courtesy as was afforded the members of the Technical Group, and the Chair will insist that he gets it. The Minister to continue without interruption.

Thank you, a Cheann Comhairle. Even to drill one exploration well can cost in excess of €20 million in the area we are talking about. What the Deputies are proposing is that the Irish taxpayer foots this bill on a 20-1 chance.

My anxiety increases when we examine other aspects of what the Deputies are saying in the motion. They appear to be unable to grasp the timing in this issue. Oil prices are high. That makes it more worthwhile, as some Deputies said, to explore in areas like Ireland's waters that were previously out of bounds due to cost. I accept that many oil and gas companies are beginning to look at Ireland again. It is inevitable that technological changes in hydrocarbon production and use are driven on by periods of relatively high oil prices such as the one we are experiencing now. Those advances make profitable exploration more likely in areas such as those we are talking about off the west coast of Ireland. It is at times like these that we must use our available policies to best effect to take advantage of the interest in discovering the resources we have at our disposal. One day, no doubt, the world will have moved beyond using hydrocarbons. At that point the resources will be of no use to us, or anybody else for that matter.

That the Deputies opposite appear to be unaware of these realities is of concern. They would prefer that we would spend these vital years, when oil prices are as they are currently, creating a monster of a State oil exploration agency. I do not know if they have any idea of the length of time it would take for such an agency to be able to fulfil even the most basic of the technical functions it would need for oil and gas exploration in our waters. That is a good example of the woolly thinking and wrong-headedness in this motion.

I am nearly 20 years a Member of this House and I have never seen a Private Members' motion that was so badly prepared, badly researched and based on such misconceptions.

The Minister's performance is abysmal.

I am prepared to accept that the Deputies opposite were caught on the hop with the bank holiday weekend. How else could one explain that in the initial draft of the motion——

Attack is the best method of defence.

Allow the Minister continue without interruption.

——the proposers did not know that the corporation tax on exploration was 25%, not 12.5% as they originally put in their motion? How else can we explain the fact that they do not know royalties are still being paid for the Kinsale gas field or the statement in their motion that we "allow oil companies to sit for up to 20 years on exploration and still do no exploration"? That statement is untrue and they had to amend it. Is that ignorance or wilful ignorance? I am prepared to be charitable and say that is what happens when a group of Deputies from many different ideological backgrounds or none come together.

The Minister is defending the indefensible.

Based on that level of ignorance the motion asks us, at a time of growing concern over the availability and price of hydrocarbons, to freeze the issuing of any further exploration licences and the establishment of procedures and bodies that would ensure no indigenous supplies of gas or oil would come to this country virtually ad infinitum. This group of intrepid parliamentarians appear to believe we should leave ourselves at the mercy of the volatile market situation we face currently and refuse to exploit our own natural resources for the benefit of this country.

For the benefit of corporate interests.

This State has a relatively clear set of choices when it comes to the exploitation of oil and gas resources. The Deputy should bring himself up to date and get his facts right. What he said tonight was wrong.

We are not wrong.

Deputy Healy, allow the Minister to speak without interruption.

The first option we have is to do nothing and leave the resources where they are because to touch them means there would be some impact on the environment or whatever. Some people, admittedly a small minority — I am not sure if there are any on the opposite side of the House — advocate that course of action. Given that it is clear that the commercial production of oil and gas can make a major contribution to Ireland's economic development, that is not a sensible or logical course of action and it is not one the Government would pursue. The positive contribution made by natural gas from the Kinsale Head and Ballycotton fields alone demonstrates that.

To refer to a point I made earlier, in an era of substantial energy price volatility and in the face of pressing security of supply concerns, access to our own resources is now more critical than ever.

We do not control them. The Minister is giving them away.

On that basis, the Government is fully committed to realising the full potential of oil and gas resources in offshore Ireland.

The Minister is giving them away.

Deputy Cowley crying about the fact that the Corrib developers will get more money because this project has been delayed is a bit rich when one considers the role he played in it over the past two or three years.

At least I stand up for my constituents.

The second choice that faces us is to prospect for, extract and process these resources ourselves, as advocated in the motion and as some people on the Opposition benches would have us do. That would be a huge, costly and very risky exercise. The risks for the State, financial and otherwise, of such a course of action would be immense.

The Minister should think of the return.

We have seen that Ireland has proven in the past to be a very difficult territory in which to prospect successfully. That is because of geology and geography, with less than one in 20 exploratory wells resulting in commercial finds. It must be remembered that these highly expensive wells are only drilled after extensive and expensive geotechnical surveys.

Even if such a State company were to be successful in locating commercially viable wells where so many international companies have been singularly unsuccessful, the company would then have to make massive investments in machinery, equipment, recruitment and training to put itself in a position to exploit this putative resource before any of that resource could be extracted. All that time, our energy dependence on other countries would be growing. The costs of doing this ab initio, particularly in maritime environments as harsh as those found off the Irish coast, would be astronomical. We would end up paying the very firms the framers of this motion resent millions of euro in consultancy fees as the State agency tried to set up and upskill.

If we had such a company, one can imagine the reaction I would get from the very Deputies who tabled this motion if I had to go to the Minister for Finance every year looking for €100 million or €150 million to drill exploration wells off the west coast of lreland, rolling the dice with less than a one in 20 chance of success.

The Minister is losing millions.

I can think of many more productive uses for public money than speculating in this way. It is for this reason that option two is not an option as far as I or the Government is concerned. The third option I mentioned has been the foundation of Government policy in this State for decades and has been supported and embraced by all Governments for many years. We have encouraged competent private sector companies to invest in the search for and production of oil and gas in Irish waters and have benefited financially from that. We spread the risk across these agencies and as a result, derive some benefit from our natural resources. The Opposition, which framed this motion, would have the taxpayer take all the risk.

The Minister should visit Norway and examine the situation there.

In the scenario favoured by the Opposition, a find in one field would be negated by 19 inevitable failures.

Have the Norwegians got it wrong?

The Minister, without interruption.

The Opposition would have us start from square one, with no experience, no equipment and no structures in place in one of the most challenging marine environments on the planet.

The Minister should look at Norway.

I have a piece of advice to the Deputies opposite — stay out of the casinos and away from the ponies. I do not think they would make too much money on them.

The private sector is recognised as having the resources, expertise and practical experience essential for such a task. These companies have decades of experience of this type of hazardous and financially risky operation, while this State does not. It is not a difficult choice to make. Some of my Opposition colleagues have a habit of stressing the need for greater self sufficiency and yet, for some strange reason, they think that stopping all prospecting in Irish waters is going to help.

Ireland imports approximately 85% of its gas requirements, which is in stark contrast to the position ten years ago when approximately 95% of our gas requirement came from indigenous supplies through the Kinsale field. We need an indigenous gas supply for the very obvious reason that, in the future, Ireland will be at the very end of a very long supply chain bringing gas from Russia to Europe. As a direct consequence of this, we will be vulnerable. We have witnessed some of the effects of this recently.

Even the EU is becoming increasingly reliant on imported oil and gas, much of which is sourced from geopolitically volatile regions. In addition, increased demand has highlighted deficiencies and bottlenecks in transportation networks, further contributing to price instability. Increasing energy costs are already having an effect on our economy. They are a central factor in driving inflation, which in turn has an adverse effect on our competitiveness and our ability to create jobs.

As Deputy Catherine Murphy noted, we can offset some of the effects of our reliance on imported energy by turning to renewable and sustainable sources. We have doubled our renewable generating capacity over the past two years and now have 846 MW of capacity in renewable energy. In the same vein, I recently announced measures to double the amount of renewable electricity on the grid by 2010 through the renewable energy feed in tariff system, or REFIT, a programme which will cost €119 million over the next 15 years.

New measures to grant aid domestic renewable heating — the greener homes grant programme — have also recently been launched by my Department. Following the 2005 pilot mineral oil tax relief scheme for biofuels, which will see the introduction of 16 million litres of biofuels placed on the market, a further package of €205 million has been agreed for the period until 2010, which will enable us to reach the target of 2% market penetration by biofuels in 2008 — 163 million litres of biofuel.

Despite this, we will be reliant on fossil fuels in several important sectors of our economy for the foreseeable future. Therefore, we must do everything in our power to reduce our dependency on imports of these fossil fuels. In that context, the Corrib project must be seen as strategically important for our long-term security of supply. Existing gas resources, including that of Corrib, are only capable of making a substantial contribution to Ireland's requirements for a number of years. Given current demand, these will quickly decline and must be met from elsewhere. The proposal to freeze future licensing rounds, thus removing the possibility of discovering further resources, is both mad and bad for this country and its people. If, as some Deputies claim, they are interested in making Ireland more self-sufficient, why are they trying to insist that we remain dependent on imported energy and remove the possibility of discovering our own supplies of oil and gas? Future licensing is an imperative if Ireland is to deal with security of supply, an issue that is becoming more acute by the month.

There has been much uninformed comment and insinuation about the fiscal terms under which exploration companies operate in this country, much of which is patent nonsense which fails to recognise any of the realities we have discussed today. I politely ask the Opposition at least to carry out some research in this area. The current licensing terms are merely a reflection of the relative difficulties experienced by those prospecting for hydrocarbons in Irish waters in the past. In other words, they are set to attract the only companies in the world capable of finding and drilling our natural resources and thus benefiting the Irish consumer.

The Minister is giving these resources away and getting nothing for them. It makes no sense.

This fact has been accepted by every Government that has taken power since 1992. The situation facing those prospecting for oil and gas off the Irish coast bears repetition. Out of a total of 121 exploration wells drilled in Irish waters since the 1960s, there have been only four commercial finds.

That the Minister is aware of.

Up to 1987, when the present terms were introduced, Ireland had made one commercial find. Over the same period, Norway had made 60 commercial finds and, on average, each was significantly larger than Kinsale. A comparison of success rates for exploration drilling carried out for my Department in 2003 showed that the UK and Norway had 1 in 8 and 1 in 10 success rates respectively between 1982 and 2001. In the same period, Ireland had a 1 in 20 success rate.

This lack of success has been reflected in past difficulties in sustaining exploration effort. For example, in January 1999, there were a total of 25 offshore exploration licences, including 19 frontier. Today, there are 13 offshore exploration licences, including 11 frontier. The conclusion is that the industry does not regard attractive terms as compensating for the lack of prospectivity. This conclusion is supported by the facts that all the eight frontier licences which were issued in the 1995 Porcupine round are now relinquished. All but one of the 11 licences issued in the 1997 Rockall round are now relinquished.

In addition, the cost of drilling exploratory wells in Irish waters is high because environmental factors require the use of deep water drilling rigs, which are much more expensive to operate than shallow water rigs. In the North Sea, the average water depth is less than 200 metres and an exploration well costs approximately €8 million. The last two exploration wells drilled offshore Ireland were in 1,500 metres of water and cost in the region of €20 million each.

The relative lack of existing infrastructure for handling these resources means the cost of exploiting the fields, should finds be made, is much higher. The rationale behind the current terms is to encourage exploration in the Irish offshore. Despite the fact some people view them as excessively generous, there have been very low levels of exploration in the past 30 years and much of our offshore remains underexplored. Some Deputies seem to have a whole range of information that not even the oil companies had. The Department would welcome the opportunity to get the information, seismic data and so on that Deputy Cowley has, but that——

Dead ducks had this information.

——no one in the Department or oil companies seems to have.

If we were as generous as the ideologues and Deputies claim, we would have a greater response and more interest, that is, unless one believes in the conspiracy circulated by Sinn Féin. It believes that there are considerable quantities of oil and gas off our shores, the Government and companies know about them and we are intent on giving these supposedly large reserves to multinationals for nothing. However, the reality is that it is still difficult to sustain interest in prospecting in Irish waters. Of the 26 frontier exploration licences awarded between 1994 and 1999, each to run for at least 15 or 16 years, 21 have been relinquished. If we were sitting on these large reserves, would people be handing back their licences?

There are indications that current prospects may prove to be more successful. One can only assume that commercial finds would increase the attractiveness of Ireland to those looking to prospect. On that basis, the licensing terms are and always have been open to review. If a reform of the Irish fiscal system to redress the balance or obtain a greater share of petroleum rent for the State is necessary at some point in the future, it will be done. If it is possible to extract a royalty payment without killing off interest in exploring Irish waters, it will be done. However, before we get to that point, we must have a viable sector to tax. I remind Deputies that 40% or 50% of nothing is nothing.

We are getting nothing at present.

The fiscal regime in place must be sufficiently progressive to accommodate future variations in oil and gas prices and the high cost of deep water field development. In this context, I have recently put a review of the current scheme in motion and my Department will shortly seek tenders to have an expert review of proposed changes to the Irish exploration and production fiscal regime.

The Minister has seen the light.

However, these licensing terms were not always the same. Until 1987, the terms did not exempt gas and oil developments from royalty payments. The Kinsale gas field paid, and still pays, royalties. While that field is now in its depletion stage, royalty payments received to date amount to approximately €150 million.

That amounts to nothing.

However, by 1987, prospecting had almost completely dried up in Irish waters because the terms were regarded as unfavourable compared to those in operation in other jurisdictions. The decision was taken to change them. The changes tracked changes made in other north-western European countries. Royalty payment schemes ceased to apply in the United Kingdom, Norway, the Netherlands and Denmark, the major oil and gas producers in north-western Europe. When these countries, each a much more inviting prospect for oil companies, changed their tax systems, Ireland had no choice but to do likewise.

I will briefly explain to whoever drafted this motion exactly what the situation is in respect of frontier licences.

Hear, hear.

There is nothing wrong with the motion. What is wrong with it? The Minister is picking hairs.

In particular, Deputy Healy did not seem to know the position.

The Minister is trying to find fault with the motion because he cannot answer the argument.

There seems to be some confusion about what is involved when an operator obtains a frontier licence. It is impossible for an oil company to hold a licence without undertaking any exploration. The licences are premised on the completion of an ongoing work programme, which must be agreed by my Department in advance. The Department monitors the progress of the licences and insists on regular reporting.

Exploration licences are not issued without work programmes. In most cases, the programmes include an obligation to drill an exploration well. Under the current licensing terms for offshore oil and gas exploration and development devised in 1992, it is impossible for a company to hold on to an exploration licence for its full term without drilling at least one well. In the case of frontier exploration licences under the 1992 terms, the drilling of two wells would be required to enable the licences to last full term. All but five of the 26 frontier licences granted between 1994 and 1999 have been relinquished. Why would the oil companies surrender these licences if they had no requirements to undertake exploration work?

Deputies also came up with the bright idea of forcing companies to use certain Irish ports. As these Deputies should be aware, the government of any EU member state may not demand the use of certain ports by petroleum companies or anyone else. I do not know how the Deputies came up with this idea. EU Directive 94/22/EC of 30 May 1994 addresses anti-competitive measures by national governments in the prospecting, exploration and production of hydrocarbons. It is simply not an option for the State to demand that companies operating in Irish waters base in one port or the other. For reasons of practicality, a number of Irish ports have been used in recent years by exploration companies and this is likely to continue. For example, Killybegs has been a major beneficiary, as have Cork and Foynes. Cork harbour has been used to service the Kinsale gas field since the field began construction.

I would like to address some of the nonsense being propagated about the public consultation process for the next allocation of licences. It is alleged and repeated in this motion that we did not meet our obligations under the strategic environmental assessment directive, but that is plainly untrue.

That was a total sham.

My Department advertised the process in the Irish Independent on 11 April and local papers in counties Donegal, Sligo, Mayo and Galway later that week.

There were only nine days notice and no meetings.

It held regional consultative meetings in Sligo on 20 April and Galway on 21 April. Three meetings were held in Dublin on 18 and 19 April for the industry sector, non-governmental organisations and the State to present the draft report to explain its methodology and conclusions and to hear concerns.

There were no meetings in County Mayo. The people were not asked to make submissions. That is hardly a consultation process.

The report was made available on the Internet and in county libraries and a four-week period for the receipt of responses to the report was allowed.

It was a complete non-process.

I take this opportunity to emphasise to the House that our regime for the governance of oil and gas exploration and production is the best fit for our particular circumstances.

It is a total giveaway.

Current high energy prices present us with a series of challenges and opportunities. The challenges are obvious but the opportunities may be less so. We have an opportunity to foster a new environment for oil and gas exploration in our waters. Through careful use of the policy instruments available to us, we can take advantage of increased interest in areas such as Ireland because of high prices and new technologies in deep sea exploration and, with a little luck, dramatically reduce our dependence on imported hydrocarbons. However, this can only be achieved if we continue to strike the best balance between royalties for the State and the possibility of greater energy independence. Equally, the State must retain the confidence of its people in its competence to deal with any international company that operates in this jurisdiction.

As I have explained in this House a number of times, there is a complex and comprehensive range of regulatory and legal instruments in place that must be fully complied with by any company if it is to operate in our waters. It is clear that there is a comprehensive and thorough regime in place for the management of any projects that come our way. As Deputies are aware, developments are in train in respect of the Corrib project that will further strengthen this area. However, because of the concerns expressed by local residents and the fact that this was the first use of that type of pipeline in the country, and notwithstanding the list of consents it needed to go through, I ordered a safety review of the onshore pipeline in August last year.

Advantica, which is a world leader in the field of pipeline safety, was appointed to carry out this work.

It conducted an exhaustive and highly professional review of the project as a whole——

There are causes which the Minister has denied.

——looking at all aspects of the design and manufacturing procedure. In addition, with the aid of my Department's technical advisory group, it conducted two separate phases of public consultation with the community in the area. The first was to elicit general queries on the subject and the second was to present a draft report and to hear responses.

As Deputies are aware, I received its report today. I have published the Advantica report, as well as two technical advisory group reports. Advantica found that proper consideration was given to the route and design of the project and if the conditions outlined are met, that the project "should be accepted as meeting or exceeding international standards". It also set out a series of recommendations which I accept. A central recommendation is that setting a pressure limit of 144 bar on the pipeline would, in combination with the extremely thick wall of the pipeline, dramatically reduce the risk to those living in the line's vicinity.

The technical advisory group report accepted all the Advantica recommendations and, in addition, made some recommendations in its own right. In particular, it made a recommendation in respect of the redesign of the landfall isolation valve to incorporate a further stage of pressure limitation over and above Shell's current design proposals. The effect will be to demonstrably guarantee that Advantica's recommendation on limiting the pressure will be achieved in practice.

Moreover, on the recommendation of both the Advantica and technical advisory group reports——

The Minister should conclude.

The reports have been published and are publicly available. They have been delivered in County Mayo and it remains for those involved in the mediation process to work together to resolve any further difficulties they might have. It is crucial that this project succeeds and that all sides engage constructively in the mediation process.

The Minister scuppered the mediation process today.

This motion is timely in that it provides Members with the opportunity to reflect on an issue which currently engages public and private minds, both nationally and internationally. This is beneficial and should be done. The motion provides Members with time to reflect on the available options, our experiences to date and on alternatives are for the future.

I am somewhat disappointed that the motion does not dwell sufficiently on the development of alternatives, which must be done. It is Fine Gael policy to ensure that we develop our natural resources to the best of our ability and for the benefit of the State and its people, in all possible ways. The faster and more effective we are in respect of the exploration process, the more beneficial it will be to our economy. This debate takes place at a time when Members are informed that there are no unlimited resources available. Hence, it is important to proceed in such a fashion.

Members should consider our experiences to date. It is interesting that the Advantica report has been published when this motion is before the House. Simultaneously, international oil reserves are in question due to political instability and oil prices are escalating on a daily basis, which is of enormous benefit to oil companies. Each time some well-meaning and concerned expert makes a pronouncement regarding the lack of security of future fuel supplies, I am uncertain that the oil companies do not rub their hands in glee and go to the bank immediately on that basis.

I refer to the Corrib gas field and our experiences in that regard. I fully accept and am fully conversant with the concerns expressed by the independent group. Whatever happened and whatever procedures were followed, not everything was done in a desirable manner. It would have been beneficial for the Minister to have acknowledged that point tonight and I hope he will do so before the debate ends.

He will not. He will simply shoot the messenger. That is what he does.

Even in the best run societies, mistakes can be and have been made. It was unfortunate that insufficient cognisance was taken of the needs of local people and the community dividend during the initial stages of the development of oil and gas exploration for resources which are as yet unknown. This was a simple matter which should have been taken on board. While no one expects buckets of gas or oil to be handed out to local people — it does not work that way — the needs of the local community should always be borne in mind.

For example, it would be crazy to lay down a water main in any part of the country and to exclude local people from it. Hence, if one wishes to reconsider this case, it would be a simple matter to examine our consciences carefully and ask whether we did the right thing. With all due respect to the Minister and everyone else involved, matters should have been handled slightly differently.

They were obliged to go to jail for 94 days to have their point of view considered.

As someone with some knowledge of both the inside and the outside of prisons, I am familiar with the circumstances. People should not be obliged to go to such extremes to make their point. However, one should remember that those remaining outside will tell them that they are doing a great job. It is somewhat different for those who are inside. All Members should be conscious and careful of the sensitivities.

I do not agree with the call for no more frontier licences as we must carry on with exploration. However, it is important that the Minister should regularly review the degree to which returns go to the State or to the oil companies who carry out the explorations, as the case may be. We have two options. For example, as was suggested in the motion, the State could take over all oil, gas and other mineral exploration. I do not agree with this crazy notion. It would result in a cost of endless billions to the State and unfortunately, economic circumstances would dictate whether any exploration took place. Undoubtedly the oil, gas and other exploration companies are best placed in this respect. Hence, the technique that is required is to be able to define the precise level at which they should be rewarded or otherwise and at which the State can get royalties from their efforts. I am familiar with the debate that has taken place in respect of——

What about Norway?

I will come to Norway shortly. The situation there is not exactly the same.

It is important to find the correct level at which to intervene to avoid killing off the goose that lays the golden egg. No one will be interested in anything we might have to offer unless some incentive exists. This is the way of the world and is how profits are made. Unfortunately, in recent weeks, Members have even seen a bank sell its own premises for money. This is the way we are and it is a manifestation of the "enterprise" State. It is important to find the correct level and to develop the industry to the best of our ability, while ensuring that it is done equitably and with regard for the future.

It is true that Norway has done extremely well. It remained outside the European Union, following a strategic decision made in the knowledge that it had resources which were clearly available to it at the time. Hence, a slight difference exists and it is not exactly comparable to our case. The Norwegians knew 20 years ago that they had resources available and made the strategic decision to remain outside the European Union. From their perspective, that was a good decision. However, somewhat different circumstances apply in Ireland. Our economy and population have grown dramatically in the past ten to 15 years. Prior to that, the population and the economy were going in the opposite direction. We are in a different situation from many Scandinavian countries. Whether we like it or not, their economies have not expanded.

In 1987, the then EFTA countries, which included Norway and Switzerland, had a higher per capita income than any of the European member states, with the exception of Luxembourg. These were outperformed only by the United States, Japan and Western Germany. Explorations indicated that resources were evident in the region at the time and they had the information that stood them in good stead. Our situation is not the same as Norway. We presume we have resources, but we do not yet know the full extent of them. They may be greater or lesser than we think.

However, the crucial factor from the Minister's point of view is to remember the following. Any future arrangements entered into should bear in mind that, in the event of any further agreements with exploration companies, at a certain point, there should be a condition whereby the Government could intervene and say a situation has been reached where the State should be getting more or whatever the case may be. There must be revisionary clauses which, if put in place, would benefit the State and safeguard the country and the Government. This would address the issues raised by the Independent group. There must be an ongoing review of progress which will be to our benefit.

The Minister of State referred to a figure of 163 million litres. I am preoccupied with the reference to litres because I tend to talk in old figures. If one divides the figure by four, one will get gallons, which does not sound as impressive. It would be a great help if Ministers could repeat these measures in old fashioned gallons. In the old days, we were familiar with a gallon of water, a gallon of oil or whatever.

We have moved on.

When one went to buy diesel or petrol, one dealt in gallon measures. Litres are interesting from the point of view of people who want to magnify the figures.

We must continue with exploration licences in the future and encourage and support enterprise. We must ensure it is done in a way that will encourage the investor, on the one hand, with sufficient return for his or her investment while, on the other, protecting the national and natural resources. As we proceed into the future, increasing emphasis should be placed on alternatives. I congratulate the Government on the paper it produced recently. It agreed with almost every aspect of the Fine Gael proposals on alternative energy. It took the Government six months to produce the paper, but I congratulate it on a great job.

We do not have to depend on Fine Gael.

It took the Government six months but it did a reasonably good job. However, it does not propose to spend as much money. I will give the Minister of State some advice. If, for example, oil at the pumps dries up at some stage, if one turns on the switch in the morning and nothing happens, or if one plugs in the kettle in the morning or evening and the only thing that purrs is the cat, that will concentrate minds. I congratulate the Government on belatedly adopting the Fine Gael policies on the development of alternative energy resources.

Fine Gael has no policy.

We priced them, which is more than the Government did. The fact that the Minister expressed that opinion is a clear indication that he has not even read them. Someone must have read them. The Government's researchers must have read them because it adopted our policy. I congratulate the Government on doing so because it is a positive sign. It is an indication of change and that the Government recognises the need to prepare for such a scenario. I do not believe the Doomsday scenario because there is ample space for technology to overtake the difficulties that lie ahead and for alternatives to be developed. It is the natural road to go to develop these alternatives. As the Minister of State will be aware, a number of people are already involved in that area in his county of Wexford.

It is important to have a policy in place. It must be an evolving policy because circumstances may change from month to month, week to week or certainly from year to year. There must be an ability to change dramatically over a three or four-year period. Therefore, it is very important that whatever policies are adopted in that area in the future, clear thought is given to the ability to roll over the policy, to go from a four to an eight, 12 or 16-year period as required. There is no point in the Government saying that because it has a four-year policy, it has done its job. It will not work like that.

While the oil companies are laughing all the way to the bank, they have the ability to damage the alternative energy industry. They need only drop their prices, which they can do at any time, and leave the alternative energy industry high and dry, so to speak, which happened in the past. In the evolution of an energy policy, it is imperative for the Government to take account of this fact and continue with the research and development programme which is necessary. Otherwise, the day will dawn when people will press the switch and nothing will happen. I would like to be a fly on the wall in the Minister of State's kitchen at that time to see his reaction.

We will be in Government in four years' time.

If the Minister of State thinks the reaction in the kitchen will be bad, wait until he sees the reaction of the public. This is a serious matter. If all the electronic gadgets in offices, households and so on throughout the country grind to a halt at a particular time, there will be fun.

It is imperative for the Government to emphasise to a greater extent than it has done in the past the whole area of alternative energy. It should try to ensure that some provision is made. It should not operate on the same basis as in the past, namely, that everything will be all right on the night and, if we continue down the road we are on, we are sure to find a turn off that will go in the right direction. It does not happen that way.

I have reservations about the motion because some of the points are based on ideological grounds only. This is not about ideology; it is about practicality. It is about industry, jobs, the future, security of supply and the independence of the economy of the country in the future.

It is in safe hands.

I am not sure about that. I have seen some funny things happen in recent years. How can the Minister of State say this, coming from a party in the House that gave this country electronic voting which resulted in €60 million going down the drain. This money was wasted and squandered and proved nothing.

Debate adjourned.
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