As Senators are, no doubt, aware, the Government have decided to embark upon an experimental development of the industrial alcohol industry in the Saorstát. The industrial alcohol industry has been established in a number of countries and various agricultural products are used for the purpose of producing the alcohol. It can, in fact, be produced from any vegetable product, but those most frequently used are potatoes, beet, and sometimes corn. There is a market for industrial alcohol as such —a market in industry—but not any very substantial market in this country at present. In order to encourage its production and to confer upon the agricultural communities the benefits arising from its production, various Governments have adopted a system of requiring the compulsory admixture of home-produced industrial alcohol with imported petrol for motor fuel purposes. It was the experience of those countries which decided us to examine the matter here and, following that examination, to engage upon a certain experimental development, because we found it impossible to arrive at any firm conclusion as to the possibilities of the industry here from a mere examination of data or the position in other countries.
It was accordingly decided to erect a number of small distilleries capable of producing between them about 600,000 gallons of industrial alcohol and to base our calculations as to whether there should be a larger scale development of the industry in this country upon the experience gained from the operations of these distilleries. The total quantity of alcohol to be produced under this scheme is, of course, a very small proportion of the amount of petrol used for fuel purposes at the present time. Deducting from the quantity I have mentioned the amount of industrial alcohol that can be sold as such, replacing the alcohol at present imported, and the possibility of securing an increased use of it following various industrial developments here, the amount available for admixture with petrol for motor fuel purposes will be not more than 1½ per cent.
The original intention was to establish this group of distilleries in the North Louth and adjoining areas because of the difficulties experienced by farmers in that area, which, as Senators are aware, is a scheduled black scab area, in disposing of potatoes under the present circumstances. Certain modifications of the original decision have had to be made. It was intended to have five small distilleries, capable of dealing with about 7,000 tons of potatoes each per annum, with one central refining plant. It has now been provisionally decided to have two distilleries in the area I mentioned and two in County Donegal, one distillery in each case being of a somewhat larger size than originally contemplated, that is, capable of dealing with 10,000 tons of potatoes per annum instead of 7,000 tons.
The distillery which will be established in the Cooley area will, we anticipate, be capable of dealing with the entire potato crop in that area. There will be another distillery somewhere in County Monaghan, although it is not yet definitely certain that the supply of potatoes which will be required to operate that distillery will be regularly available from that county. The other two will be in County Donegal. The peculiarity of North Louth and Donegal in respect of potato growing is that these areas have always grown potatoes for export and have apparently been satisfied to continue growing potatoes, even though they have secured in the past substantially lower prices than farmers secured elsewhere, or would grow potatoes for elsewhere.
It is not possible to give any firm indication of the price at which the alcohol will be available. That will depend upon a number of factors which are at present unknown. One of the principal factors is the starch content of the potatoes which can be grown here. We have, of course, tested the starch content of various varieties of potatoes grown and we have got widely different results. In some cases the starch content was as low as 6 per cent. and in other cases it was as high as 22 per cent. It is hoped we will be able to secure, in the areas in which these distilleries will be established, a supply of potatoes with a starch content averaging about 18 per cent. If potatoes can be secured with that starch content and at a price not less than the price which has been prevailing in these areas for potatoes during the past few years then, taking into account the present prices payable for the other products necessary, such as barley and coal, and also the prevailing rate of wages, we should be able to make the alcohol available to the petrol importers or refiners at a price possibly less, but certainly not more than, 2/- per gallon.
That will depend upon the possibility of disposing of the by-product of the alcohol, which is called wash and which is used extensively on the Continent as a cattle food, at a price equivalent to a halfpenny a gallon. It is the intention during the experimental period to have the State purchase the wash from the distilleries at that price and either dispose of it to the farmers by sale, or else dispose of it free. So far as the industrial alcohol scheme is concerned, we are guaranteeing in respect of it that the price of the alcohol will not be increased by reason of difficulties in disposing of the by-product. The Dáil has voted the necessary money to acquire land, erect buildings and purchase machinery. It is proposed to operate this experimental development as a purely State scheme. The various matters in connection with it will be-carried out by the Minister for Industry and Commerce directly, advised by a Committee, provision for which is made in the Bill. The money required in the initial stages has been voted and certain progress has been made in the preparation of plans, the location of sites, the formation of the Committee and the examination of other problems likely to arise. The matter could not proceed further in the absence of legislation, because it is necessary to confer on the Minister powers to acquire land to erect the distilleries, to sell the alcohol and so forth, and particularly powers to enter into a contract with a firm of technical experts in order to secure their advice and assistance throughout the operation of the experimental scheme. That is the main purpose of this Bill.
Section 4 is the operative section and it empowers the Minister to do all the things set out in the first sub-section—that is, to acquire land, to purchase, hire, or otherwise provide machinery, to purchase raw materials, to enter into contracts and so forth. Sub-section (2) indicates the nature of the agreement we contemplate making. It provides that the contractors shall prepare the plans, supervise the purchase and erection of the machinery, enter into certain undertakings as to the efficiency of the plant they erect, appoint for the period for which they will be under guarantee the managing director and the biological engineers and so forth. It is necessary to give the contractors that power, because they will be required to guarantee the efficiency of the machinery. If the machinery should prove to be less efficient than they indicate, then certain penalties will be payable by them, and in order to enable them to ensure that the machinery will give the best results they must have the right, for a period at least, to nominate the persons responsible for its operation. The skeleton contract also provides for the training of Saorstát citizens in the various technical processes of the industry.
Part 2 of the Bill is similar to corresponding parts in other Bills of this nature and it provides for the compulsory acquisition of land, the payment of compensation and power to operate transport works which may be necessary in connection with the scheme. Part 4 of the Bill makes provision to enable the Minister for Industry and Commerce to require the petrol importers, and refiners, to purchase the industrial alcohol available from the distilleries in whatever quantity it may be available and at whatever price may be fixed. Provision is made for the establishment of an Industrial Alcohol Advisory Board. That board has been constituted of certain officers of the Department of Industry and Commerce, an officer of the Department of Agriculture and certain Irish experts in chemical matters. They have consented to act with the managing director appointed in accordance with the provisions of the Bill on the nomination of the contractors.
The financial provisions are quite simple. It is proposed that every year there should be voted from the Exchequer all the moneys required in connection with the operation of the distilleries and that all the sums received in respect of them should be paid into the Exchequer, so that the fullest possible financial control over the whole business is retained for the Dáil. Various doubts have been expressed about the wisdom of proceeding with this development mainly because the price at which industrial alcohol is available in other countries, where similar schemes are operated, appears to be high. It is not possible to find out with any degree of certainly what is the actual cost of producing industrial alcohol in other countries. The only information we have got is the price actually fixed, the price at which petrol monopolies are required to purchase it. That varies from one country to another, the lowest being 1/6 and the highest 3/6 per gallon. There may be, and probably there are, various factors which will reduce the price in one case below the actual production cost and increase it in other cases above the production cost.
