Gas (Amendment) Bill 2008: Second Stage (Resumed).

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

I apologise to the Minister for not being here yesterday when the Bill was introduced. I am glad to be able to contribute to a Bill that is in need of support from this side of the House; we will facilitate the speedy passage of a piece of legislation which does a straightforward and simple thing, namely raise the borrowing capacity of Bord Gáis. The Minister will have the support of Fine Gael in passing this Bill through Second Stage and further Stages. To impose a time limit of 18 December, the last day we sit before the Dáil breaks up for the year, is not the ideal way to pass legislation.

From the point of view of Bord Gáis and the Government there should have been sufficient notice that Bord Gáis was running out of money in terms of borrowing capacity. I am not sure to whom we should apportion blame, neither am I sure it is relevant who is at fault. We need to increase the borrowing capacity of Bord Gáis from €1.7 billion to €3 billion.

When one looks at its capital investment plans for the next four or five years, there is clearly a need to dramatically increase the statutory borrowing capacity for Bord Gáis for a series of reasons. Perhaps that should have been done before now and not have to be facilitated in what could be a rushed manner. If we had a whole raft of emergency legislation to pass in the next month then this Bill would come under time pressure when going through the House and committees, and that would deal with legislation in an ill prepared way.

I want to outline why I think this legislation is worth supporting. We need to support Bord Gáis as a company that has the capacity to grow, as a well run and profitable company that can make a major contribution to supporting the Government strategy to create a more sustainable energy future for Ireland. The Minister has hope and determination to try to create a new energy future for Ireland and Bord Gáis, as a State-owned company, can play a vital role in achieving that.

We should not only facilitate that in terms of borrowing capacity but also by talking to it about its ambitions and the future ambitions of the State on the need for investment in renewable technologies, more sustainable forms of energy generation and the continued roll-out of a gas network as a piece of vital State infrastructure to every town in Ireland where it is feasible to do so. For that to happen Bord Gáis needs to borrow more money; it is as simple as that.

If one looks at how it spent its money since 2002, when the last increase was given to it, it can be been seen that with the exception of one area where criticism could be targeted it has spent money rolling out a gas pipeline across the country. This has been from Mayo to Galway, a North-South pipeline between Dublin and Belfast and a pipeline between Belfast and Derry. One interesting element of Bord Gáis is its ambitions north of the Border. It genuinely aspires to be an all-island gas supply and energy company and that should be encouraged. The Dublin-Galway-Limerick pipeline which cost €400 million should also be welcomed.

It is easier in hindsight to question the wisdom of spending more than €300 million on a second gas interconnector. That has been done and paid for and we should look for positives in that, particularly in view of our security of supply should anything happen to the other gas interconnector connecting Ireland to Britain. We are facilitating the future today and it is what we should be talking about.

Bord Gáis wants to be a dual fuel provider in the energy market and is making the transition now from a supplier and transporter of gas to domestic and commercial users to an energy company that has a significant energy generation ambition. It is also moving aggressively into the renewable energy sector, whether that is potential investment in wave energy projects off the west coast or purchasing and supporting wind energy projects in a range of areas around Ireland. That is important because for far too long we have tried to facilitate competition in the Irish market to compete with the ESB in energy or electricity generation. We have spent a lot of time, effort and State resources to try to create a competitive marketplace for energy generation and supply and we have not reaped the benefits in pricing, product or service choice of that effort for consumers.

The ESB now provides only 50% of electricity generation in Ireland and we have not seen the benefits one would expect to see from a competitive marketplace in terms of pricing. One effective way to provide that future competition produces results for the consumer is to ensure that State-owned companies compete with each other aggressively in the energy marketplace. That means a proactive role for Bord Gáis, Bord na Móna and Coillte to ensure they are competing and have the borrowing capacity to compete with the ESB in terms of producing power efficiently, sustainably and at the lowest cost they can achieve. Unfortunately, despite the competitive marketplace we supposedly have created through regulation, we have not seen its benefits.

There is an obvious role for Bord Gáis in terms of contributing to security of supply. Its plans for gas storage are exciting and ambitious but will require significant investment for which it will require borrowing. Projected capital expenditure by Bord Gáis is €15 million for this year, €80 million for 2009, €194 million for 2010 and €120 million for 2011. These moneys are allocated for capital expenditure in renewable and gas storage projects. It is most important for security of gas supply to ensure we can exploit the country's offshore natural resources. We must bring that gas ashore in a way acceptable to the local populations. More importantly, we must ensure we bring it ashore in a way that can supply consistent and attractively priced gas to our networks.

We must also consider gas storage capacity here. Currently, if the interconnectors between Ireland and Britain were to shut down in the morning, Ireland would only have approximately six days of gas supply. Our economy would grind to a halt after that. We need to consider the political stability of the areas from where our gas comes and the expected lifespan of the gas fields and should take a serious look at security of supply issues and give serious consideration to exploiting domestic resources and increasing our gas storage facilities. We have large empty gas fields off the coast of Kinsale that could be used for storage. They are currently used by Bord Gáis on a temporary basis to store gas and build up pressure within small gas fields and supply gas to the market in a way that supports the security of supply objectives of the Government.

My colleague Deputy Bannon will talk about the need to roll out gas pipelines into new parts of the country, rural areas in particular, to ensure everyone, where possible, can benefit from attractive gas prices for home heating and, possibly, electricity generation through small combined heat and power micro-generation. People should also be able to benefit from the convenience offered by gas.

I will speak about the issue of pricing before I conclude my contribution, but I would like to focus on an area in which the Minister is interested, namely, the contribution Bord Gáis can make towards reducing our emissions and ensuring we fulfil our commitments and achieve our targets for the reduction of our greenhouse gas emissions. Last Friday, I and the Minister's colleague spoke at a conference in Cork organised by an organisation called Partnership for Change. The topic of discussion was climate change and the challenge Ireland faces. We face an awesome challenge.

Currently, the State does not invest enough capital in driving changes in consumer behaviour so that we move away from a carbon economy towards a more sustainable one. The reason for this is that we do not have the money to do this. We have some projects, for example, the warmer homes and greener homes schemes and energy schemes for homes and businesses. We are also changing building regulations. While all of these projects are welcome, we need to ensure there is significant investment in driving change in consumer behaviour and in the way we enjoy power and electricity. We must also invest in the linkage between power generation and the transport sector, which is the problem sector with regard to growth in emissions over the past ten years.

The reason the issue of transport emissions is relevant to this Bill is that Bord Gáis has the capacity to make a positive contribution in that sector if is allowed borrow money to do that. When the State does not have the money to invest in the area — unlike the position for the past ten or 15 years before we got to where we are now — we must facilitate successful, efficient and ambitious State-owned companies, particularly those with CEOs like the CEO of Bord Gáis who understands the principles of sustainable energy, and encourage them to borrow responsibly to drive this issue and support the policies being brought forward by the Minister, but which he does not have the capacity to drive with his Department's budget or that of the Department of the Environment, Heritage and Local Government.

Bord Gáis needs to and will compete with the ESB, not only in power generation with a conventional plant, like that being built in Whitegate which is a new power plant that will be driven by gas, but also in the renewable sector. The projected capital expenditure of Bord Gáis up to 2011 demonstrates this is an area Bord Gáis is taking seriously. It must be encouraged to continue along this line.

The role of Bord Gáis may expand even further. I would like to explore with the Minister the need to try and link the energy and transport sectors. The Minister will need to work with the Minister for Transport on this. I am aware the Minister has been speaking to companies like Better Place and others in order to try and promote electric vehicles. He should take an ambitious approach towards making a seismic shift in the way our transport system works. We should move away from petrol and diesel as our main fuels towards electricity, gas, bio-diesel and ethanol, but the bio-fuels are small players in comparison to what could be achieved by the shift to electricity and gas.

The models exist for us to make this shift. If we could make this change successfully, we could shift the emissions obligation from the non-traded sector for which the State has responsibility into the traded sector where energy generators will trade in an emissions trading scheme with other large emitting companies across Europe. This kind of radical thinking is needed if we are to meet the targets set out for us.

Bord Gáis can play a significant role in providing the power, gas or electricity that will be required to power up to 50% of our car fleet over the next ten years and to make the shift from diesel and petrol engines to electric engines. It can achieve this shift in a convenient way for consumers. This would be preferable to messing around with small pilot projects such as free parking for small electric vehicles or recharge points at St. Stephen's Green or wherever.

This must happen on a massive scale to make the kind of impact that is possible regarding Ireland's emissions. The Minister has considered the models that are being proposed in Israel, Denmark and certain regions of Australia. I refer to the Better Place model which, while it is not the only model extant, constitutes a good starting point. The management of Bord Gáis, who can see the potential in this field, should be encouraged by the Department to consider such options aggressively and ambitiously, as well as the borrowing that would be required to facilitate it.

Moreover, engines in the transport sector that are driven by gas alone should be considered. For example, why not set a target whereby, from the start of 2010 onwards, all our public transport vehicles would be operated in a carbon-neutral manner either by gas or electricity? Bus Éireann or Iarnród Éireann should then be told to make this happen. They should ensure the buses they buy thereafter all were carbon-neutral in respect of emissions. The State companies, such as Dublin Bus and Bus Éireann, should lead by example and work with Bord Gáis to try to facilitate this and make it happen.

As for gas pricing, the decision on whether gas prices will increase further in January should rule this out. I believe that before the end of this month, Bord Gáis will request that there be no increase. If this is the case, one could argue that domestic gas prices should be reduced from January onwards. I encourage the Department of Communications, Energy and Natural Resources to discuss the matter with the regulator in an attempt to facilitate such a reduction. The Commission for Energy Regulation has a responsibility to Bord Gáis and the ESB to ensure fair pricing to enable those companies to survive, prosper and make necessary investments. Equally however, it also has a responsibility to consumers and businesses to ensure energy and gas is as cheap as possible to enable Ireland to remain competitive. I am unsure the commission is taking this responsibility as seriously as it should.

I welcome the opportunity to make a brief contribution on this important legislation, the Gas (Amendment) Bill 2008. It is great to see such interest in Dáil business demonstrated in the Gallery although unfortunately I do not have any cousins or relations in Stradbally, County Laois. Nevertheless, it still is good that such interest is being demonstrated. I am sure the Minister's heart is as gladdened as mine.

I compliment the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, on his work and am proud of what he is doing. Given the comments of Deputy Coveney and others, I sense the Opposition also is reasonably satisfied by his actions. Deputy Coveney should not attack me as I merely was interpreting his speech. However, it is welcome that Members are positive regarding legislation on an issue that concerns everyone. Deputy Coveney made a good point about a partnership approach in government. Undoubtedly, the business under discussion falls within the remit of both the Minister for Communications, Energy and Natural Resources and his ministerial colleagues in the Departments of the Environment, Heritage and Local Government, Social and Family Affairs and Transport, as noted by the previous speaker. It is important to make this point. Recently, as Vice Chairman of the Joint Committee on Social and Family Affairs, I have had the opportunity to welcome a number of groups before the joint committee to discuss issues that are of concern to them pertaining to this Bill's remit, to which I will refer later.

In considering the Bill, I contemplated my family history from the perspective of how energy and everything relating to it have evolved through my lifetime. I am a Dubliner of a generation that remembers different modes of transport. I even remember horse-drawn vehicles and how heating was a greater challenge than it is at present. For example, as a small child I remember how my grandmother put coats on our bed to keep us warm. I should note that I look back on such times highly positively. Nevertheless, the Minister is aware that I am concerned about our future direction in respect of energy provision and costs. I wonder what will have happened in respect of energy and related issues in 50 years' time, when I presume most of those present, with the exception of the people in the Gallery, will not be here. In fairness to the Minister, he understands this challenge. Members should focus on the point that what they do now will be important for future generations. Even in these challenging economic times, it is appropriate for the Government to make decisions and to create a vision for the future, even the distant future.

I note the Bill was published to amend section 23 of the Gas Act 1976, as amended, to provide for an increase in the statutory borrowing limit of Bord Gáis Éireann from €1.7 billion to €3 billion. The Bill, which I understand was published by the Minister on 12 November 2008, is short, comprising two sections. Its sole objective is to increase the statutory borrowing limit of the company. It is hoped, subject to normal procedures, that the Bill will complete all Stages in the House. While researching that point, I was interested to learn that the Christmas recess in the House is set for 18 December.

It also is important to understand that connections to the gas network have grown in number from 412,000 in 2002 to more than 570,000 at present. I noted the counties now connected to the gas network include Cork, Limerick, Tipperary, Clare, Waterford, Galway, Mayo, Louth, Meath, Wicklow, Kilkenny, Carlow, Laois, Offaly, Kildare, Westmeath, Monaghan, Cavan, Derry, Antrim, Down, Armagh and my native Dublin. When people learned I intended to contribute on this Bill, they asked how I proposed to slip Tallaght into the debate. Even though this natural resource is present in neither Tallaght nor Dublin as a whole, Dubliners are major consumers and this point should be noted.

Previously, I mentioned my role on the Joint Committee on Social and Family Affairs. It is important to deviate from the direct provisions of the Bill, to which I will return later, to discuss the challenges regarding fuel poverty in particular. The Minister will be interested to learn that, under the chairmanship of Deputy Healy-Rae, a range of interest groups have appeared before the joint committee. The sessions, some of which I chaired, included meetings with the Combat Poverty Agency, the Institute of Public Health in Ireland, Sustainable Energy Ireland, the Society of St. Vincent de Paul, Age Action Ireland and others. It was important to provide such groups with an opportunity to come before the joint committee. As chairman of an Oireachtas joint committee, the Acting Chairman is aware of the importance of facilitating groups which, like Members, have the interests of the public at heart. Such groups are facilitated to enable them to raise their concerns with Members. In fairness to the aforementioned groups, they would admit the joint committee members were aware of the issues they raised. Nevertheless, it was useful to hear their presentations and to hear them articulate the issues that are of great concern to people. Energy provision and fuel poverty issues are matters to which those organisations have paid particular attention.

I often have stated, to paraphrase the former Taoiseach, Deputy Bertie Ahern, that at a time when all boats are rising, one must remember the little boats. Those Members who are particularly committed to social inclusion certainly always have made this point. At present, we are in different and challenging times in which we face a global recession. At times when one is afraid to turn on the radio or Sky News and when all boats are struggling, one must remember the little boats. It is important the Government should continue to do this and I already have referred to the various Departments that have a clear role to play in this respect. The Minister will support this statement. Where fuel poverty poses challenges and concerns for families, I hope we will continue to pay attention.

At the most recent meeting of the Joint Committee on Social and Family Affairs, a number of members referred to the presence of the ESB and Bord Gáis and put on record our acknowledgement of the fact that, while those companies must keep an eye on the bottom line, they are sympathetic towards families in difficulty. Ways should always be found to ensure services are not cut off from families in need. When my co-workers and I contact the companies directly from my busy Tallaght constituency office, they show sympathy. I appeal to them to continue working with families in difficulty to ensure people are not left without fuel or energy. I expect the support of many in saying this. During a presentation, Age Action Ireland was keen to stress this point. I am proud of Fianna Fáil's record of taking care of the vulnerable and families in need over many decades. It is important we do so given the issues of fuel poverty and energy provision.

The point on public transport is interesting. The previous speaker referred to the need for the Minister to have a relationship with the Department of Transport in respect of issues at the top of his list of priorities. I support the Minister in this regard. I make a small contribution, as I do my best to come to work on public transport, particularly the Luas. However, I must sometimes use my car. For example, I came to work this morning through Ballyfermot. If the Acting Chairman tells no one, I will tell him that I had the opportunity to open a new Iceland store in Ballyfermot on behalf of a Tallaght-based company. People must wonder why I was in Ballyfermot, but it was a great day for job creation in difficult times. I needed to use my car in this instance, but it is important that we try to use public transport.

Perhaps the Minister will report me to the Minister for the Environment, Heritage and Local Government, Deputy Gormley, for not deciding on how to deal with the cycling initiative. As some Deputies know, I try to keep fit — I am looking at Deputy Deenihan when I say that I do not jog — because I had a health scare approximately nine years ago. However, I have not reached the point of using a bicycle. Those who drive to Tallaght know that, given the inclining road, cycling to there would not be easy.

This morning, I listened to a debate on cycling on Pat Kenny's radio programme. While it may be two-faced of me, I support the opinion that people should get on their bicycles. The Minister is cycling and I saw his colleague, Deputy Gormley, cycling through the gate last night. People sometimes guffaw, but it is important that bicycles be used, given the issues of public health and the environment. Perhaps I should take on the challenge of cycling to work. I will try to follow the green agenda.

A number of groups met the Joint Committee on Social and Family Affairs in respect of fuel poverty. The Minister shares the responsibility with a number of his colleagues, but it is important we continue to focus on the issues. In other debates, reference was made to the question of a fuel allowance. I am pleased with the progress made in this regard and I will continue to campaign to have the Minister for Social and Family Affairs consider the challenges posed by that aspect of Government policy. We should try to help those who need assistance with fuel bills.

The current fuel policy is to pay for 30 weeks, an increase on last year's amount of 29 weeks. The value of the allowance has been increased to €18 and approximately 300,000 households are in receipt of it at a cost of €156 million per annum. It is positive that expenditure has been increased, but fuel poverty is a structural problem and often relates to heating systems and housing quality.

Recently, I read a report that referred to the fuel allowance as heating the sky. The Minister understands this claim better than I. It was made on the basis that, when someone buys and burns a bag of coal, the heat efficiency of which is 20%, 80% of the value dissipates. It is like pouring water in a bucket with a large hole at the bottom. It will not fill up because there is a structural problem that must be fixed. This highlights the need for a multifaceted response from the housing authorities, which is South Dublin County Council in my case, the Departments of the Environment, Heritage and Local Government and Communications, Energy and Natural Resources, the energy authorities and the social welfare groups.

The Minister will agree that each Department has a vested interest. For example, the Department of Social and Family Affairs would be keen on the savings achieved through improvements in the basic problem. Similarly, other interests would have improved benefits were the problem addressed. There is a strong case for the Departments and Ministers to put their heads together to determine what can be done. I suspect the Department of Social and Family Affairs might argue that it is not the lead Department, in which case the matter will be open to question. At the Joint Committee on Social and Family Affairs, I took the initiative and asked to have correspondence sent to the different Departments to ensure the issue is addressed. I ask the Minister for his support in this regard.

The fuel allowance is a household payment and, as it is means tested, only some households are eligible. In recent years, many Members have witnessed a greater reliance on the fuel allowance as a policy instrument, but there are those who argue that the policy is flawed in terms of poverty traps and who can benefit. There are limits to what one can expect from a fuel allowance as a policy response. Increasing mainline welfare payments might be a better approach. The Minister for Social and Family Affairs, Deputy Hanafin, will wrestle with this suggestion. It is important that all of our eggs are not placed in one basket.

I hope I am getting across the message that, while the Bill might seem simple on first reading, it is also important. As the debate has evolved, we have been able to express the different points of view and relevant issues. The opportunity to do so has been vital. It is good the Minister has been able to stay in the House and listen to contributions. He will be encouraged by our across-the-floor support for his attempts. At the same time, however, everyone has highlighted the challenges that exist and the fact that an integrated approach should be adopted by the Government Department with an interest in this matter. I often wonder how this issue will be dealt with in 50 years' time. In that context, we owe it to future generations to take an interest in it.

Bord Gáis Éireann's need for an increase in its statutory borrowing limit has been brought about by the continued growth in the scale of its business. The company will reach its current statutory borrowing limit early in 2009. An increase in this limit is required in order that the company might continue to fund its capital expenditure programme over the next five years. The programme to which I refer includes the ongoing expansion of the company's core gas business and its development as a major energy company.

It is important that the Minister should achieve his goal of having the Bill passed by both Houses before the end of this session. As already stated, Bord Gáis's borrowing limit is expected to be reached early in the new year. The company clearly needs to obtain access to the funds necessary for the proper development of its business in the competitive market in which it operates.

During the course of my contribution, I did not refer to any great extent to my constituency. However, I am always happy to represent the people of Dublin South-West, including those who live in Tallaght, Greenhills, Firhouse, Templeogue, Bohernabreena and Brittas. Deputy Deenihan knows Tallaght well.

I played rugby there.

That is correct. I know the people of my constituency would have wanted me to make the points I made earlier, particularly in respect of the attitude of Bord Gáis and the ESB.

I wish the Minister continued success. This is important and pioneering legislation and I wish him well with it and with all the issues that are of concern to people. I am glad to be in the Dáil for a debate in which so many Members are expressing support for the legislation under discussion.

I wish to share five minutes of my time with Deputy Deenihan.

This Bill, which amends existing legislation, will increase Bord Gáis Éireann's borrowing limit to €3 billion from €1.7 billion and allow the company to fund its expansion plans. The natural gas distributor and supplier is expected to reach its current borrowing limit early in 2009 and requires further cash to fund a five year capital spending programme, which will ultimately alter its profile.

Since 2002 Bord Gáis Éireann's remit has been the expansion of the gas transmission and distribution network nationwide. For most parts of the country, this has held true. Unfortunately, however, Fianna Fáil cronyism intervened some years ago in respect of my constituency, Longford-Westmeath, and we are not holding our breath in respect of a proposed phase 3 link-up. I wish to place on the record of the House the fact that Longford-Westmeath has been shamefully disregarded in respect of the gas expansion scheme and has, to the detriment of its economic development, suffered from protracted Government neglect.

In 2002, the now Taoiseach intervened in the proposals and despite the existence of a firm commitment and a system designed for the purpose, the pipeline did not come through the Longford-Edgeworthstown- Mullingar region as promised. Instead, it was quietly and mysteriously diverted to Clara, County Offaly — the Taoiseach's homeland — among other areas.

In 2006, Bord Gáis, as directed by the Commission for Energy Regulator, CER, implemented a new gas connections policy to determine the economic viability of connecting towns to the gas network, either on their own or as a part of a regional group. Longford, Edgeworthstown and Mullingar would have fitted the bill in this regard. Longford is now under consideration for the final phase — phase 3. It has again been place on the hind tit by this Fianna Fáil Government, which has brought such devastation to our county in recent years under the watch of Deputy Kelly.

As early as 2002 there was considerable anger among public representatives, those in the business community and members of the public following confirmation that neither the town nor the county would be connected to the natural gas network in the immediate future. This blow to the economic well-being of the region came in the wake of years of lobbying to bring natural gas to Longford, in the interests of local people and to encourage inward investment. Despite promises and the fact that the system had been designed to accommodate a spur from the planned Galway ring main, we were disappointed.

At that time, a Bord Gáis statement said detailed engineering and technical evaluation of Longford town was ongoing and, pending an economic viability study, the area would receive a gas supply by the beginning of 2004. That deadline passed almost five years ago, which is extremely disappointing. The people of Longford are still waiting to be connected to the national gas network. The news of the sell-out on this particular commitment was broken to the Longford Chamber of Commerce by, of all people, the then Minister for Public Enterprise, Deputy O'Rourke, who as usual failed to deliver for the people of the midlands. Nonetheless, she managed to bring home the bacon to Athlone. There are no prizes for guessing from where Deputy O'Rourke comes.

The spur to which I refer would have been a huge boost to Longford-Westmeath which is part of the under-funded BMW region. During the period in question, the cost to businesses of using gas was 25% lower than that which applied in respect of other forms of energy. The BMW region and, particularly in this case, Longford-Westmeath were placed at a considerable disadvantage. Contrary to expectations in 2002, Mullingar was also left out of the loop. The only provision made was the putting in place of a spur to Athlone.

The ill feeling people in Longford and Mullingar experienced almost seven years ago in respect of this issue has not abated. In light of the current economic climate, we are experiencing even greater disadvantages as a result of the failure to run a spur into the county. The cost of bringing natural gas to Longford — which is only 25 miles from Athlone — in 2002 would have been €16 million. The failure to do so shows that someone was extremely shortsighted at the time.

As a result of what happened in my constituency, where stand Government plans for regional development? Not only has County Longford failed to obtain a supply of natural gas, it was also omitted from the national spatial strategy and recently suffered the loss of Connolly Barracks in Longford town, the court service in Granard and Cardinal Health, which was supposed to bring 1,300 jobs to the county. A number of small businesses have gone to the wall during the term of office of this Fianna Fáil Government.

The latest commitment to be given is that Longford is under consideration for phase 3 connection, with a report on the matter due in January 2009. In light of the fact that phase 2B of Longford-Westmeath General Hospital has been promised for the past 12 years — some €57 million was ring-fenced in respect of this project in the run-up to the 2002 general election but it has not been progressed — I have particular suspicions about the phased system. As we have seen in respect of the hospital to which I refer, Government policy is now to divide phases into sub-phases, thereby delaying completion to a ludicrous degree. Promises are cheap and, as everyone is aware, under this Government, delivery is a moveable feast.

The numbers on the live register are rising. In Longford alone, there has been a 47% increase in unemployment during the past 12 months. Businesses in the midlands have been particularly hard hit by recent events and require every possible advantage to survive. The necessary incentives must be put in place to encourage inward investment into the area. Bord Gáis Éireann, under the provision of extended borrowing power granted by this Bill, intends expanding its business to become a dual electricity and gas supplier to private consumers and businesses and will, through these developments, compete with other companies such as the ESB and Scottish Southern. Also, we are told, it intends to invest heavily in renewable energy projects.

The Bord Gáis strategy is, according to the Minister, in line with the three pillars of energy policy, namely, security of supply, competitiveness and environmental sustainability, an area of particular concern to me. I welcome any initiative that will increase our environmental sustainability profile. The decision to facilitate a further 3,900 MW of renewable power to the national grid by 2020 will help to ensure that Ireland meets the recently announced renewable target of 40% of electricity consumption from renewable sources by 2020. There are currently 1,300 MW of renewable power in the system. The total installed capacity from diverse power sources currently stands at 7,800 MW and the Commission for Energy Regulation, CER, has described the effort towards renewable energy as a positive and ambitious strategy that will lead to a reduction in Ireland's reliance on fossil fuels for power generation.

The Gate 3 connection initiative is a commitment to the development of renewable energy that will facilitate the tackling of climate change in Ireland, which to date has not made the required progress under the current Government and which has, by and large, ignored its commitments to the Kyoto targets. We must, of course, not forget to highlight the increasing cost of gas for domestic and business users, the cost of which rose by 21.3% for domestic use, and that business tariffs will increase by up to 27.1% for heavy users, as outlined by Bord Gáis a few months ago with further increases due in January. It appears Bord Gáis is being granted a dual mandate of funding increases, in terms of increased loan capacity and increased charges, at the expense of the consumer.

Looking at the broader picture of power provision, particularly in terms of sustainability, progress is being made on a countrywide basis but this could, unfortunately, be a case of too little to late. Such green initiatives from the wilting Green Party is progress. Natural gas provision for Longford-Westmeath remains an extremely contentious issue which could now, more than ever, given the current economic climate, decide the viability of Longford-Westmeath and is a matter requiring urgent resolve.

I plead with the Minister, on behalf of my constituents in Longford-Westmeath, to ensure this spur is expedited as quickly as possible. What is happening under the current Fianna Fáil-led Government is detrimental to the people of Longford. I have been contacted by more young people in the past three to four months in regard to their obtaining visas to get out of the area owing to a lack of job opportunities in the midlands, which is shameful and disgraceful. The Taoiseach, Deputy Brian Cowen, on his election as Leader of the Fianna Fáil Party was seen as the white dove of hope for the midlands. However, this is no longer the case in the counties of Longford-Westmeath, Laois or Offaly. People feel completely let down by him and the manner in which he is running the affairs of this State.

Deputy Bannon has become an expert on all four counties.

People are disgusted about this disgraceful situation. Come next year's European and local elections, Fianna Fáil will get the greatest hiding it has ever received in the history of this State because of its inaction on behalf of the people of the country. People will be waiting in the long grass to give them their answer. I have no doubt they will do so come the European and local elections following which Fine Gael will be on the other side of this House for decades to come.

I share Deputy Bannon's ambition and thank him for sharing time.

While we are in challenging times in terms of energy supply, we are also in exciting times. I am heartened by what I have heard recently in regard to alternatives. While we often fail in this House to be magnanimous as regards people on the Government side, I would like to recognise the overall approach of the Minister for Communication, Energy and Natural Resources, Deputy Eamon Ryan to energy development and his accessibility to those of us with ideas in this area.

I am particularly heartened by the fact that a group from the Silicon Valley is visiting Ireland and is to hold a major seminar in Trinity College. The group met earlier with the President and will meet later this evening with the Taoiseach who will make an address at their dinner. The group concerned is considering applying its technology to green energy given the abundance of sun in California. More and more companies are being set up to harness this advantage. Much of the noise in the Silicon Valley at the moment is in regard to green energy, alternative sources and so on. It is hoped this group will meet like-minded people and the Minister while here. One man has a major project for the Shannon Estuary and will attend the announcement to be made tomorrow at 10 a.m. in Government Buildings. It is hoped something good will come out of this initiative.

County Kerry has many options to offer be it wave, tidal or wind energy. This is one area where we can make considerable progress. I was heartened to read last Thursday the announcement by the Commission for Energy Regulation that it is proposing to facilitate a further 3,900 MW of renewal power to the national grid by 2020, which is a long time away. It is hoped that deadline can be brought forward. However, the announcement is positive. This decision will facilitate the connection of an additional 3,900 MW of mostly wind-generated power to the electricity system and will ensure that Ireland can meet the recently announced renewable target of 40% of electricity consumption from renewable sources by 2020. I believe this is realisable provided the will exists to do so and people can get connections to the grid. Currently there are approximately 1,300 MW of renewable power in the system. This will increase to 6,700 MW by 2020, which is to be welcomed.

I welcome the Bill. As Deputy Coveney stated, Fine Gael supports it. Bord Gáis is an exemplary, well-run, profitable company. It has always done its work right as is the case in regard to the ESB. These are State companies of which we should all be proud. This provision will enable Bord Gáis to roll out its proposed capital expenditure of more than €1.5 million over the next four years. I am heartened that €700 million of this money will be spent on the development of the gas networks and include extension of the networks to parts of the country not currently being serviced. An article in theIrish Examiner identified certain towns in County Kerry that would benefit from the roll-out. On 10 May, Bord Gáis announced it was considering 34 towns for connection to the natural gas network, including Killarney, Tralee, Listowel and Newcastle West. I ask that consideration be given to these towns in light of their dependence on the tourism industry and their significant energy needs. Gas would provide an alternative energy option for many operators. By making gas available to Kerry Group, the viability of this major Listowel based industry would be strengthened.

Shannon LNG presents the prospect of an exciting development for the Shannon landbank. I am aware that concerns about the development have been expressed locally but I hope these will be allayed so that the project can proceed. The terminal has been cleared but issues remain in respect of the pipeline. If the pipeline is approved after a hearing by An Bord Pleanála in Listowel, the Shannon LNG plant can be connected to the national grid at Aughinis in Askeaton. It would offer another means of improving supply in this country, thereby making us less vulnerable if our existing interconnectors closed. When Shannon LNG is up and running, it will meet a large proportion of our energy needs.

Yesterday, I met representatives of Tarbert Island generating station who were on their way to meet the Spanish company that has purchased the plant from the ESB. This is a welcome development because when the ESB announced its intention to close the plant we were concerned about the future for its 127 employees. It is hoped that a large number of these jobs will be retained. The station will be upgraded and possibly converted to gas and, if Shannon LNG is in operation one mile downstream from the station, supplies will be readily available.

I am aware that the development of wind energy is not a simple process. However it is important in the national interest to give hope to people such as the investor from the Silicon Valley who has the money and a project ready to roll out but cannot proceed without access to the grid.

The country faces major economic challenges but these are exciting times in the area of energy because we are being forced to consider alternatives to oil. We are all in this together and, when it comes to renewables, I welcome that the Government is listening to Members on this side of the House, and particularly those of us who are involved in significant renewable projects.

I wish to share time with Deputy Chris Andrews. I welcome this Bill and note the positive reaction it has brought from all sides of the House.

Bord Gáis refutes the tiresome cliché that the private sector is a model of competence and efficiency whereas the public sector is a model of the opposite. I was a customer of the old Dublin Gas Company and, as an official in the late 1970s and early 1980s, had some responsibility for energy matters. Governments of all types went to enormous lengths to prop up the private Dublin Gas Company, which was inefficient and required subsidies. These efforts were ultimately unsuccessful and the company was nationalised in 1987. Bord Gáis is a vast improvement on its previous incarnation. I pay tribute to this company not only for extending the network and operating more efficiently but also for the substantial dividends it has paid to the Exchequer.

Gas is an attractive and efficient fuel. It will not solve the problem of road transport but it has a role to play in electricity generation, heating and industry. It is the ideal fuel in many ways because it comes via a pipeline and does not require transport or special delivery. It is clean, has a good safety record and is not in unduly short supply. At current estimates, gas reserves are probably much greater than oil and other hydrocarbons. It is also an environmentally-friendly fuel, which makes it superior to coal for electricity generation from that point of view. I recall the debates of 20 and 30 years ago regarding the appropriateness of gas for electricity production given its high wastage rates. Perhaps, however, environmental considerations take precedence over strict energy efficiency calculations. Gas turbines are particularly useful from the point of view of peaks in demand. The previous speaker addressed the issue of wind turbines, the output of which is variable. It is necessary not only to generate sufficient electricity for base load demand but also to meet peaks.

With minimal exceptions due to weather and, in the past, industrial disputes, energy providers have ensured security of supply in Ireland. I recognise, however, that we have been living somewhat dangerously recently in terms of our high growth rates. I assume the fact we are now in recession means the pressure on energy supplies will be rather less than it was when we had high single-digit growth.

I very much welcome what Bord Gáis is doing to upgrade the existing network for domestic supply which is improving safety. Avoiding leakage improves safety, reliability and efficiency. I commend it for that work. I am also very supportive of the extension of the national grid to more parts of the country. When Kinsale gas came on stream, we started with a quite limited network, involving Dublin, Cork and some towns in the south east. That is gradually extending to more towns throughout the country. Clonmel was one of the first towns to be connected in 1987, following the construction of the Cork to Dublin pipeline. As it is an important business and industrial centre, it was of great benefit to residents, and business and industry. Carrick-on-Suir benefited from 1998 and what is effectively a new town built around the small village of Ballyclerahan in the vicinity of Clonmel was also connected in 2003.

I read remarks attributed to Deputy Coonan from north Tipperary, an area for which I am not directly responsible, suggesting that there were no towns in north Tipperary that were connected to the gas network. That is not strictly accurate, but he may have been misreported. Ballina was connected in 1998 and Newport in 1999. However, I accept that some of the major towns in north Tipperary are not connected and need to be.

Natural gas has become available since last month in Cashel. I was supposed to carry out the turning on ceremony that day. However, pressure of business not to mention the Opposition in the Dáil, prevented me from attending that event. The cost of the construction project was €4.7 million. Cahir, which along with Cashel benefits from being on the new Dublin to Cork motorway, is scheduled for connection in 2009.

Bord Gáis now seems to have an active policy to utilise its gas network better throughout the country and pursue growth opportunities for extensions to other towns. It is easier to connect towns that are close to the existing network, which is extending outwards. I understand that Tipperary town, which is probably the only major town in the south riding not connected, and Thurles, which is in the north of the county, will be considered for connection under phase 3 of the new towns analysis. This report is due for publication early in the new year. I am sure the people and businesses of both County Tipperary towns would warmly welcome such a development, which is long overdue. In a semi-private capacity as a civil servant dealing with energy matters, I remember giving a talk about natural gas in Tipperary in 1981. A long time has passed since then. As in many of these matters, it is better late than never.

In an official capacity I first became involved in Northern Ireland and North-South co-operation through the issue of gas. In the late 1970s there was a question of Kinsale gas being piped to the North. Indeed a deal was negotiated by Albert Reynolds when he was Minister for Industry and Energy in 1982 with Adam Butler, who was a junior Minister in the North. Unfortunately Mr. Reynolds struck such a good deal that two years later Margaret Thatcher vetoed it and it did not proceed. Since then in much more recent times, the ESB has also been involved through the Coolkeeragh project. Those connections have been established from North to South, from Northern Ireland to Scotland and also directly from Scotland to the east coast of this State. There is another connection — I am not sure if it has happened or is about to happen — across to Letterkenny in County Donegal.

Associated with the Corrib gas project will be the connection of towns in the west and north west where there has been a very significant gap in the map. Like everybody else I would hope that before too much longer there will be a resolution of that dispute. Efforts at mediation are taking place. All of us accept it was badly handled at the beginning. The State has a very strong strategic interest in getting it operational from the point of view of security of supply. I hope that dialogue with some of the groups in what has become a very embittered dispute will lead to a resolution. While there are local rights, the entire country has an interest in it coming to fruition because it will reduce our proportion of imported energy. Matters other than safety have come into play in this matter. Some people want to raise the issue of conditions of supply, taxation and so on. People sometimes talk in terms as if we were like Norway — we are not. We are not in a position to dictate conditions. Recently there has been a tightening of conditions for future supplies.

I refer to the importance of energy conservation, not least in State-owned buildings. The system for monitoring consumption in place in buildings requires attention. We need to be concerned not merely about security of supply, but also efficient usage of the energy we have. We need to be economical in going about that.

I welcome the opportunity to speak. The purpose of the Bill is to increase the statutory borrowing limit of Bord Gáis from €1.7 billion to €3 billion. I wholeheartedly support its speedy passage through the Dáil. Bord Gáis Éireann has clearly performed very strongly in 2007 and revenues were up 10% on 2006 figures to €1.2 billion. Connections to the gas network have grown from 402,000 in 2002 to more than 570,000 today. As a previous speaker mentioned, there may be difficult times in the economy in general but there are great opportunities and challenges within the energy sector.

The increase in the borrowing limit is required in order that Bord Gáis can continue to fund its capital expenditure programme over the next five years. This capital expenditure includes, among other issues, the expansion of its core gas business and its development as a company. It is important that Bord Gáis is able to engage in expansion. In recent months we have been reminded of just how important it is for us to have security of energy supply. Ireland is a small energy market on the edge of Europe, with a very limited indigenous supply of energy - a position this Government is committed to changing. It will not happen overnight.

Over 70% of our energy is imported and we depend on external sources. It is imperative that we protect our own resources in a sustainable way. Russian troops still remain in Georgia after the conflict there, which reminds us geopolitics could potentially endanger continued supply. During the week we have seen the hijacking of an oil tanker by Somali pirates, which had an immediate impact on the price of oil. The commodity's value is balanced very delicately and it does not take much to disrupt it. To ensure we have a proper, well-managed and proactive system in dealing with energy is very important.

It is said one only misses things when they are gone. On a recent visit to the Gaza Strip it was evident Israelis had restrictions on fuel and power coming through to the ordinary families and people working there. One could see how important energy is and how a restriction on the flow of energy can have an effect. When we visited there were power cuts, which caused chaos for the people relying on fuel, energy and power. We visited a hospital and could see first hand an impact where babies were in incubators. When there were power cuts the incubators could not be heated, which had a detrimental effect on the children.

No more than in Gaza, if we have difficulty with our power supply for some reason, it would have significant impact on ordinary people's lives. It is very important that we protect the supply.

Bord Gáis has performed strongly over the years. Environmental sustainability is a cornerstone of the Government's energy policy framework and I strongly advocate continued investment in renewable and alternative energy supply. Development of renewables will enable us to meet our greenhouse emission targets, as well as improving energy security, which as I have said is very important. Bord Gáis has a commitment to investment in this area, which I welcome. I commend the Bill to the House and urge other Members to do so also.

I welcome the Bill as a contribution to increasing the capacity of one of the most successful public enterprises in this State. It is also hoped that the increased activity of Bord Gáis in the energy sector will provide a much needed boost to the economy and to employment in general at the current time. There are, however, a number of points that need to be made on the whole issue of energy in this country, and in particular with regard to the gas reserves which lie, for the greater part unused, off our coast.

There are estimates, including one from the petroleum affairs division of the Department, that 10 billion barrels of oil are lying off the west coast of Ireland, valued at an astonishing $700 billion dollars at the price of $70 per barrel. That is in addition to a natural gas reserve, estimated to be 50 trillion cu. ft., sufficient to supply the whole of western Europe for some time. Some 200 km off the coast of Kerry lies the Dunquin gas field, which is estimated to contain 25 trillion cu. ft. of natural gas and 4.13 billion barrels of oil. The gas alone would meet our gas needs, at present consumption levels, for the next 62 years. Dunquin is licensed to Exxon and partners, who estimate it will come on stream after 2013.

Off the coast of Clare there is the Spanish Point field with known reserves of 1.25 trillion cu. ft. of gas and 206 million barrels of oil, valued at €30 billion. That is hoped to begin production in 2011 with the gas piped ashore. Off the coast of Mayo is the Corrib field, which has an estimated value of anywhere between €12 billion and €100 billion. That does not include the Porcupine Bank, where exploration was carried out a number of years ago and other fields off the west and east coast of the country.

Although this is good news, particularly at the present time of economic uncertainty and concerns over energy supplies, we need to be concerned over the manner in which this huge resource will be developed and the benefits that it will bring to the Irish people. Unfortunately, because of the ludicrous and indeed dubious deal handed to the multinationals in 1992 the people of Ireland would gain very little from our oil and gas wealth under the current arrangements. Tax rates are extremely low and most of the current 25% tax on profits can be written off against exploration and operating costs.

I appreciate that the Minister was successful in having a new rate of tax of 40% introduced but this rate only applies to new exploration licences and does not cover the existing oil and gas licences over which most of our reserves are currently held. It should be extended to all licences to ensure that when the gas and oil comes on stream, it provides, as it can, a huge revenue boost to the country with all the implications that would have, especially during an international economic downturn. It is possible to renegotiate deals that were carried out in the 1990s up to the latest tax increase to 40%, and this should be proactively pursued.

With regard to offshore development, there are knock-on effects, particularly to employment in supply ships from shore taking supplies to rigs, stand-by vessels for safety issues, on-shore drilling supplies, transport and equipment taken to and from ports. This affects the local economy and there would be a long-term benefit when the line is brought onshore. This is very significant and should not be lost as we pursue our objectives.

We have many benefits for those looking to offshore exploration. There is the significant advantage of political stability, particularly compared to places which house most of the energy reserves such as the Middle East, which can be very unstable. We have a highly educated and trained work force and many people in our coastal communities have in the past or currently work in offshore exploration. We have the necessary ports. This could generate significant revenue in local economies and be beneficial for Irish industry and domestic holdings.

There is also the potential that the development of oil and gas can have to establish security of supply. At present we import 85% of our energy needs, and we are also at the end of a supply line that extends all the way from Russia across western Europe, Britain and Ireland. This makes future supply dependent on all sorts of factors which are outside of our control. Our oil and gas reserves are a factor which we can control if we wish to.

Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.