Thank you, Chairman, for the opportunity to speak to the joint committee. As I am not aware of the committee's legal advice, the Chairman should feel free to interrupt to indicate if I exceed it or cause a problem.
It is important to state at the outset that the development of the Corrib gas field as proposed has received all the necessary consents, approvals and permissions required by the Department in law. Approvals, consents and permissions were given after careful scrutiny by my predecessors and officials in the Department of Communications, Marine and Natural Resources. It was only after my predecessor was fully satisfied on technical, safety and environmental issues that he issued the consents involved. As not all of the expertise to make the decisions in question was available in the Department, consultants of international repute were engaged where necessary. This was particularly the practice regarding the gas pipeline.
The Department is responsible for the regulatory aspects of petroleum exploration and development and authorisations were granted for the Corrib gas field under a number of different provisions in law. Under the Continental Shelf Act 1968, authorisation was provided for the construction of the offshore installation within the continental shelf designated area. My predecessor also gave consent to the plan of development of the field under the Petroleum and Other Minerals Development Act 1960. Consent was provided under the Gas Act for the construction of a gas pipeline from the gas field through the offshore area to the terminal building. Permission and a licence was also required under the foreshore Acts. In addition, an environmental impact assessment was required to be submitted under EU regulations and directives with each application for consent and approval. It is important that we view the project in the above context.
Despite the above procedures, we are faced with the current scenario. I deeply regret that anyone should be committed to prison as a result of his or her opposition to the development of the Corrib gas field. I have no doubt it is very traumatic for those concerned and their families. Members of this committee and of the Houses will appreciate the fact that as a member of Government I cannot interfere with a High Court decision. I have made every effort to create conditions under which the men would feel free to purge their contempt of court and thereby secure their release.
I initially made contact with the men through an intermediary when they were imprisoned to discuss their concerns. As everybody is aware, the men were very concerned about safety. In response to these concerns, and following the conversations the intermediary had with me and them, I proposed a safety review by an independent body. We discussed various aspects of the review, including the terms of reference and the type of companies that might be engaged. However, despite the progress I thought was being made and despite the fact that I indicated my willingness to meet the men once they had purged their contempt, they did not agree with my proposal and they decided not to purge their contempt.
In spite of that, I went ahead with a safety review. I ordered a comprehensive review of the onshore, upstream gas pipeline to be carried out by independent and internationally-recognised experts. The company identified to do this, Advantica, was appointed on 25 August. It is a world leader in the development and application of advanced hazard and risk assessment technologies for gas pipelines. The company is well recognised as an expert in this field.
The terms of reference of the safety review are well known and are available on the Department's website. The company has been asked to critically examine all the relevant documentation relating to the design, construction and operation of the pipeline and all of the associated facilities. I note that a particular issue of concern for local people and residents has been the proximity of the pipeline to inhabited dwellings. Despite reports and statements to the contrary this will be addressed by the safety review. I have asked Advantica to identify deficiencies in regard to the safety of the pipeline and to make recommendations to me as to how any deficiency identified can be rectified.
I am conscious that people have views relating to the safety of the pipeline and I am anxious that they would have an opportunity to express those views to Advantica. To that end, Advantica has visited the Corrib site and I have organised a two-day public hearing to be held in Mayo next month to be chaired by the eminent senior counsel, John Gallagher. Those hearings will take place around the middle of next month.
The safety issue is one aspect of the matter. A second area of concern that was expressed to me related to the level of monitoring and supervision. This project had been operating on the basis of self reporting but because of the difficulties that arose and due to the fact that Shell exceeded its consent by welding some pipelines, I put new monitoring and verification procedures in place to try to ensure compliance by the developer with all the legal consents issued. We have assigned extra people to the petroleum affairs division in the Department. We set up a technical advisory group independent of the petroleum affairs division of the Department. It was established to advise on, monitor and verify the works being carried out on the project. In addition, authorised officers are now empowered to inspect the work on a regular and on-the-spot basis. All of this is included in the recent terms of consent issued to the developers.
A third area on which I want to touch briefly is that there has been quite an amount of ill-informed comment that there is no State agency with specific responsibility for on-shore upstream pipeline safety. That is simply untrue. As Minister, I have specific powers regarding the safety of the gas pipelines. I indicated before the House some time ago that I will use all of the legislative mechanisms available to me to ensure safety issues concerning the installation and operation of such pipelines are addressed and that the projects are properly policed.
There has been much debate on whether the site should be on-shore or off-shore. I have to deal with the reality that exists, that is, that the permission is for an on-shore terminal. I will not rehash and re-argue the discussion on this. It is on the basis of this decision that I must make any other decisions.
My final point, which is of more general interest to the committee and the Members of the House, concerns the wider issue of the State's policies on the exploitation of natural resources. There has been much comment on this, mainly by the media. It has been suggested that the terms we offer to the private sector are overly generous. I have a very simple and straightforward view on this. We have three choices in the matter. The first is to leave the resources untouched, in which case they will be of no benefit to anybody. The second is to choose to spend taxpayers' money on offshore exploitation and exploration and the third is to license the private sector to do so.
At present we are 80% dependent on imported gas. If we choose the first option we must remember that this figure will increase over the coming four or five years as our own supply of natural gas runs out. Much of our natural gas is imported through Britain and, increasingly, it will come from some of the most unstable regions in the world. Over the next few years, the British gas system will face severe constraints, as highlighted by the Commission for Energy Regulation. This will have an impact on Ireland. It is vital, therefore, that we have our own supplies to mitigate the impact of any such constraints.
As I stated, the second choice is to spend taxpayers' money on offshore exploration. I do not know how many people at this meeting would suggest and agree that we should spend €20 million, at a minimum, of taxpayers' money per well in the hope of hitting gas or oil, at odds of 30:1. At another committee meeting today, I am sure there will be much comment on the expenditure of taxpayers' money and how it could be better spent. I am not sure how many members believe that spending €20 million or €25 million per well, amounting to perhaps €80 million to €100 million per year, at odds of 30:1, represents a good use of taxpayers' money. I certainly would not be prepared to pursue that approach.
The remaining option, as far as the Government and every party in the House that has been in Government was concerned, was to license the private sector to undertake the risk and accrue the associated reward after the State took its tax take of 25%. Although not overly so, the terms we have are generous because they must be. They are designed to encourage exploration in Irish waters. If they were overly generous, I expect more than two companies would seek to avail of exploration licences, as happened in each of the last number of rounds. I have no difficulty in saying to members that if the position changes and Ireland emerges as a potentially productive area, the Government would introduce terms to secure a higher tax take for the Irish people. However, making such an argument currently is a pointless exercise.
I have tried as best I can to deal briefly with the specific issues relating to safety, monitoring, consents and the legal position concerning the Corrib gas field and have dealt with the wider issue of State resources. I am extremely conscious that residents in the vicinity of the Corrib onshore gas pipeline have concerns, which I share, relating to health and safety. I am committed to setting up the necessary mechanisms, which I have already done, including the carrying out of a comprehensive safety review and a public hearing process, to deal with those issues.