Seanad Éireann debate -
Tuesday, 29 Jul 1975

Vol. 82 No. 10

Turf Development Bill, 1975: Second Stage.

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

Minister for Transport and Power (Mr. P. Barry)

The main purpose of this Bill is to empower Bord na Móna to borrow the amount necessary to finance their third development programme. Bord na Móna, following the 1973 fuel crisis, carried out a review of bog areas which had previously been considered incapable of economic development. As a result the board formulated their third major bog development programme.

The board's initial development programme adopted in 1946 had as its main features the production of one million tons of sod peat annually, improvements in the Lullymore briquetting plant and the establishment of the first generation of turf fired power stations. The second development programme launched in 1950 concentrated chiefly on milled peat production and since that date the annual milled peat output has been built up to around three million tons. The success of that programme led to the erection of four additional peat fired power stations and two new major briquette factories.

The third programme is being introduced at a time when the high cost of imported energy is inflating both domestic prices and the external deficit on the balance of payments. In a White Paper entitled A National Partnership laid by the Government before both Houses of the Oireachtas last November, the need to accelerate the development of domestic sources of energy was emphasised. Among the proposals listed in that White Paper towards that end was the board's third development programme.

Under the third programme, in addition to the 130,000 acres of bog already in production, it is proposed to develop a further 40,000 acres from which annual production will be available as follows:— milled peat, 1.7 million tons; sod peat, 44,000 tons; moss peat, 600,000 bales; briquettes, 80,000 tons. The additional milled peat supplies will be capable of sustaining 160 megawatts of electricity generating plant with the capacity to produce 700 million units of electricity annually. A new 80 megawatt unit will be erected at a site yet to be selected, additional units will be added to the milled peat stations at Lanesboro and Shannon-bridge and the lives of the stations at Ferbane and Rhode will be extended.

Because of the increase in oil prices the cost of production of electricity from milled peat is comparable with that of production from oil. Provided the present trend of world oil prices is maintained, it is expected that electricity generated from milled peat produced under the third programme will continue to be competitive with that produced from oil.

The production of briquettes from milled peat ranks next in importance to the production of electricity from milled peat. Since the rise in oil prices, briquettes have become more popular and production is now scarcely adequate to cope with the demand. To meet the increased demand the board propose to erect a fourth briquette factory at a cost of £3.5 million and an annual output of 80,000 tons.

Bogs at Coolnagun, Garrymore and Ballydermot will be developed at an estimated cost of £700,000 to produce 44,000 tons of sod peat annually. This will be absorbed by the domestic, industrial and institutional demand for sod peat.

As regards moss peat, four bogs at Gilltown, and Prosperous, County Kildare, Kinnegad, County Westmeath, and Ballivor, County Meath, are to be developed to yield a total annual production of 600,000 cubic metres of peat for processing at the moss peat factories at Kilberry and Coolnamona. This production will be used partly to meet increasing factory demands and partly to replace reductions in bog outputs where some production areas are being cut away.

The development involved in this programme will extend over Counties Tipperary, Laois, Offaly, Kildare, Kilkenny, Meath, Westmeath, Galway, Roscommon and Longford and will take about five years to complete. It should provide continuous all-year-round employment for an additional 1,500 men rising to about 1,800 men during the peak production season. The board at present employ 4,500 men on a regular basis, a figure which rises to 5,500 during the peak production period. The total cost of the programme, including the estimated cost of preparing the bogs by draining them, providing the necessary rail haulage services, production machinery, workshops and ancillary buildings, will be £28.5 million.

The necessity for this Bill arises because the board have almost exhausted their existing statutory borrowing powers. Under the Turf Development Acts the board may not borrow more than £28 million. Their borrowings to date in respect of previous programmes total £27.7 million. The Bill proposes to raise the borrowing limit to £60 million to cover the £28.5 million needed for the third programme and contingencies. The Bill provides that the additional borrowings may be made in any currency and that repayment may be guaranteed by the Minister for Finance in foreign currencies should the need to do so arise. The Minister is already empowered to guarantee borrowings by the board in the currency of the State.

In the case of the first and second programmes the necessary capital was advanced by the Exchequer but pressing demands on the Exchequer for other services could limit its capacity to meet the board's requirements in respect of the third programme. The board have, therefore, been having discussions with their bankers about the possibility of raising finance from banking institutions. No decision has yet been taken on how the programme will eventually be financed.

A major difficulty which the board must face is how to remunerate their capital investment during the initial five years while the bogs are being got ready. During this period there would be no production and hence no return to the board on the investment. In the case of the first and second programmes this difficulty was overcome by allowing the board a waiver of interest in respect of Exchequer advances for the initial five-year period and a deferment of repayment of capital until after the expiry of that period. The board have proposed that a similar waiver and deferment be granted in respect of Exchequer advances for the new programme. I am at present in consultation with the Minister for Finance about the whole question of the financing of the programme. Meanwhile section 3 of the Bill would enable a waiver of interest on similar lines to the earlier programmes to be granted to the board should it be found necessary to do so.

The adoption of this third programme of Bord na Móna represents an important step in our developing energy policy. The events of 1973 and 1974 brought home to us the vulnerability of our energy supply position. The availability of cheap and abundant supplies of oil from the Middle East led us in this country, as it did in many other western countries, into a position of overdependence on a single energy source. Moreover, it tended to stifle the incentive for the development of costlier alternative sources.

The curtailment of oil supplies in late 1973 demonstrated the great insecurity of undue dependence on Middle East oil. Moreover, the huge increases in oil prices added tremendously to the cost of energy, with repercussions on domestic consumers, industrial enterprises and almost all services. These increased costs added to the difficulties already being experienced by business firms and thus aggravated the recession affecting the economy. They also caused a sharp deterioration in the balance of payments position.

In the light of these developments there is a clear need for a diversification of our energy sources so as to ensure improved security and stability. In the pursuit of this objective, priority must naturally be given to our native resources, because of security considerations, because of the balance of payments advantages and because the development of our own resources confers additional social and economic benefits. An intensification of the turf development programme is fully compatible with these criteria. It has, of course, been a basic aim of national policy to encourage the development of our bogs. While the aim has been to pursue maximum economic development, the low price of oil which prevailed up to 1973 affected the scale and extent of previous bog development programmes. In this respect, we should perhaps recognise that one effect of the energy crisis has been to lift the economic constraints which previously prevented the development of certain bog areas. These previously uneconomic bogs will now be developed under the third programme.

The opportunity presented by this Bill is being availed of to provide in section 5 two small but desirable improvements in the terms of the board's general employees' superannuation scheme. That scheme was established under section 6 of the Turf Development Act, 1953. Under its terms pensionable service dates only from the date on which an employee enters the board's employment. Some members recruited at an age which precludes them from achieving the qualifying period for full pension are anxious to be permitted to purchase the additional years needed for such qualification by making additional contributions to the scheme.

Under the same scheme, pensions of members who die in service are payable for five years and pensions of members who die within five years of retirement are payable until the fifth anniversary of retirement. However, when the board introduced their widows' and orphans' pension scheme on 1st September, 1972, this facility lapsed for new entrants to the board's service as from that date. Employees already on the board's staff who had been contributing towards this benefit were given the option of opting out of payment or retaining the benefit if they were prepared to pay the board's share of the contribution as well as their own. If they decided to retain the benefit they would be required to pay an additional ½ per cent of their salary to the superannuation fund.

I strongly recommend this Bill to the House. It will make an important contribution to our energy objectives, as I have explained earlier. It will provide a social and economic boost to the midland counties whose prosperity is closely linked with the scale of activity of Bord na Móna. It will be a vote of confidence in the board which have always enjoyed the strong support of the whole community for the progress they have made down through the years. The board have earned a high reputation for technical innovation and development and they hold an important place in the fabric of rural life. I am confident that the House will join with me in commending the board for their initiative in coming forward with this programme.

Mr. Dolan

We certainly welcome this Bill on this side of the House. I am glad to be afforded the opportunity of saying a few words in praise of the excellent work performed down the years by Bord na Móna. I want to pay a special tribute to the pioneers in that respect, notably Tod Andrews, Chief Engineer Maguire, Donegan, McGovern and all the people who were connected with the board from the very beginning. They were a very dedicated staff. Bord na Móna accomplished great things for this country. Irish people are not fully aware of many of the things which they have done. They have been pioneers in the field of inventing special types of machinery for processing peat, and machines which were able to travel on soft peat and bog land. People from countries as far away as Russia were very glad to come here and consult with our engineers and experts in Bord na Móna who, at that very early age in the history of our State, were fit to instil confidence not alone into their own employees but into the Irish people in general.

They started at a difficult time in our history. By their painstaking efforts since they have built up tremendous confidence in their ability. They captured a great percentage of the home market for the sale of their well known briquettes and moss peat. In every way they have established themselves and their products have sold in competition with imported fuels. They were always keen to ensure that the less fortunate members of our community were able to buy a few bundles of briquettes. They brought comfort into many homes where the dearer materials would not find their way.

I am glad to see that the Government recognise the need for this expansion. We depend far too much on imported energy-creating material from abroad, in particular oil and coal. It was only natural in those years that the Government should look around and see what were the possibilities of providing some of that energy from the natural resources. Bord na Móna were set up as a result.

One thing that has been puzzling me is why Bord na Móna are being asked to go abroad to borrow this money. The Government are far too inclined to trot off to some foreign country to borrow money. Other State-sponsored bodies got very substantial grants from the Exchequer in the past to keep them in existence. I cannot see why Bord na Móna have now been asked to go with their hat in their hand to some foreign country to seek finances part of which should be readily forthcoming from the Exchequer. They are as much entitled to grants as any other State-sponsored body. However, the Bill empowers them to borrow abroad.

I am glad this Bill has come before the House because last April in my own home county of Cavan I was trying to induce many Fine Gael members on our county council to put forward a resolution to the Minister for Local Government and the Minister for Finance to provide us in that area with special grants for making roads into private bogs. They were not of a nature which would attract in Bord na Móna. I think Bord na Móna will eventually become interested in them because they have a smaller type of machine that could operate in those areas. The Fine Gael members at that council meeting were dead against anything to do with turf. They were 100 per cent against the very provisions now in this Bill. I hope they will get a copy of The Anglo Celt and read what the Minister has to say about the capabilities of turf to provide us with extra energy.

There is another area—I am not sure whether it comes directly under Bord na Móna—in north-west Donegal where home produced turf is used to generate electricity. Is the turf exhausted in that area? It may be hand-won turf but at least there is an employment content in it, and it is used for creating energy.

A request was made long ago that the Government and the Minister for Transport and Power should investigate the possibility of establishing a second coal-briquette burning station at Arigna. Perhaps that does not come within the ambit of this Bill. It is something that people will be asking questions about and rightly so, because these are areas where this energy is known to exist underneath the surface. It is not miles out from Bantry Bay or the Waterford coast. It is in the country. The Government should be using part of their expertise and resources in trying to locate, pinpoint and use an energy material they already know is there in abundance. With modern methods of excavating open-cast mining, and so on, it should not be beyond the competency of modern experts to deliver coal to that briquette factory at a reasonable price.

The production of briquettes from milled peat ranks next in importance to the production of electricity from milled peat. These briquettes are very popular. I am afraid that with the way inflation has hit this country and, in particular, by virtue of the fact that Bord na Mnóa are being asked to borrow abroad, the interest rate eventually will become top heavy for the board. The board will not be able to repay the capital and interest and they will be forced to increase the price of these briquettes. That would be a disaster because we are depending a lot on the consumption on the home market. These briquettes are clean, well packed and very popular. I would not like to see Bord na Móna being put in the unenviable position that they would have to price out of the market a very popular product which has made many a drawingroom fire and many a kitchen fire very pleasant places to sit around on winter nights.

Anyone who travels through the midlands cannot but observe the tremendous change that has taken place since Bord na Móna were founded. It is very pleasant to recall names like Coolnagun, Garrymore and Ballydermot. All these names are fairly common and find a place in our school geographies. It is a great tribute to Bord na Móna that this has taken place. They have catered all down the line for the nation, but they have also seen to the workers. They have provided living accommodation for them. They have built up little towns and created various social amenities and made it very pleasant for the workers and their families who have to live in what some people might call backward places. They are ordinary accessible places in the very centre of our country. They were very right to do that and they set the headline for many other industries in that respect too. Anything that we can do in the diversification of energy sources here should be welcomed. What the Minister proposes in this Bill is to expand as far as possible what he calls the third programme so far as bogs are concerned, to provide extra energy.

I would like to say a word regarding pensions mentioned here in the Minister's statement. It refers to widows, orphans and so on. It is only right that an institution such as Bord na Móna would have a scheme to cater for their dedicated workers who worked with them in the past. They must take tremendous pride in the fact that they have produced this product. Whether we be at home or abroad we must see peat moss and briquettes being exported from this country, a product produced here, neatly packed, well advertised and now being sold in many European countries. Since our entry into the EEC these packets of peat moss have become familiar sights abroad, which is a great achievement. Instead of feeling abashed at the old insulting remarks that we were bogmen, we can be proud now of that fact; that we are able to turn our bogs into something of great benefit to the nation and which will help also to reduce this terrible unemployment mountain which has come upon us in 1975.

I welcome this Bill. I would be thankful if the Minister would refer to some of the points I have raised, not by way of criticism but by way of welcoming the Bill.

Mr. Russell

Like Senator Dolan I would like to give the Bill a warm welcome and to join with the Minister in praising the initiative of the board in bringing forth this third programme. At first sight it might seem a tremendous jump from a £28 million borrowing limit to £60 million. The Minister has made a very sound case, as presented to him by the board, for raising the limit to this very substantial figure. As everybody knows we are probably the most vulnerable country in the world as regards energy. The fact that at present something like 70 per cent of our energy requirements are generated by imported oil gives some indication of the situation in which we found ourselves two years ago when the Middle East oil crisis struck us, as it did the rest of the world. It is vitally important that the Government should press forward with every possible effort to find substitutions for imported energy sources and our natural resource, turf, is an obvious one.

In addition to developing a basic natural resource, turf development gives employment in areas where it is most badly needed. The Minister said in his speech that the midlands and other areas always have been areas of high unemployment. Anything that can help to increase the employment content in these areas is to be heartily welcomed even if the question of supplying more of our energy requirements from natural resources never arose.

I notice that in the list of counties listed for development under this third programme no mention is made of Clare, Kerry or west Limerick. I wonder if the reason is that the turf resources in these areas are now coming to an end. I hope not. Indeed if there are viable commercial deposits of turf still in these areas I would urge the Minister to include them in his development programmes or, through him, to urge the board so to do. They are also areas of very high unemployment. Any development, based particularly on native resources, would be very welcome in these areas.

The Minister did not say in his speech what are our resources of turf in toto. Probably it would be very difficult to give even a reasonably accurate figure. But I do remember reading some years ago that our resources of turf were limited. The fact that the whole price structure has changed with the enormous increase in the price of oil and, consequently, the value increase in the price of turf, coal and other energy-producing materials may make it possible to extend our resources of turf. This is quite a normal situation not only in turf but in other natural resources all over the world where the rise in prices brings into the list of reserves or resources materials formerly regarded as uneconomic. I would like to think that the same situation has happened in this country. It would be nice to think that there was an increase in the value of turf vis-à-vis the price of imported oil and other energy materials and that the price of turf will result now in a substantial increase in our native resources.

Perhaps the Minister, when replying, would indicate whether the price adjustment and the price value of turf means a more economic future for some of the small turf-burning stations in places like west Clare and elsewhere which, if they are not actually closed down, were certainly in danger of so doing. In addition to opening up new turf-burning stations and new briquetting factories, an investigation should be carried out of the smaller turf-burning stations which were gradually—I think I am being correct in saying—being phased out under the board's programme but which now, due to the changed circumstances, may have become viable once again.

It is a sensible step, although one I would not normally commend as good commercial practice, to waive the interest on the loans over the initial developing period of up to five years. The substitution of native sources for imported sources is so important to this country that we should not hesitate to give every possible financial help by waiving or deferring of interest during the years of development. In a case like this where it is a question of developing our own resources, I would not hesitate to borrow abroad. It is good, sound economy. If our own financial resources do not run to financing a development of this kind, we should not hesitate to borrow abroad. We are borrowing to develop our basic, natural resources. I cannot think of a better investment.

I wonder if any consideration has been given to borrowing from some of the EEC sources of funds, from the World Bank or from the European Investment Bank. I understand that these financial institutions are concerned primarily with the development of natural resources and have given massive help to the Third World countries. We could make a very good case for getting hold of some of these funds to further develop our turf resources. I think this is a Bill that will be unanimously welcomed in this House. The Minister and the board are to be congratulated on their initiative in pushing ahead with this third development programme.

Cáit Uí Eachthéirn

I do not wish to go into details. I was not here when the Minister made his introductory remarks. Coming from an area which has a considerable amount of bog, and having been born in a large bog area, I welcome this Bill which is to provide extra funds for Bord na Móna or indeed for any institution interested in the development of our bogs.

I agree with Senator Russell. I am very sorry that north and south Kerry, especially Lyracrompane, and indeed the other small bog areas, and the west Limerick bogs have not been mentioned. In this critical time of the oil crisis we should be interested in small as well as large-scale ventures. To many thousands of families this will mean the difference between life and death, especially for the older people during the coming winter.

As Senator Dolan said, there are several county councils which submitted schemes to the Minister before this Bill was mooted asking that some portion of the local improvement scheme money would be spent on bog roads and drains. When oil was cheap many people stopped using turf and neglected bog roads and drainage. Many bog roads are now impassable and there is no way of getting the turf cut until the bogs are drained and the roads improved. We should concentrate more on schemes for the smaller bogs, not the grandiose ones planned for the Bog of Allen where briquettes are made. I would ask the Minister to devise some plan under which money would be channelled into these backward places where there are thousands of acres of bogland which could be opened now, as was done during the last war. I would appeal to the Minister to give that plan serious consideration. We have been told that the local improvement scheme money cannot be used because the standard required is very high. We are not asking that grandiose schemes be carried out on those bog roads; we are not even asking that they be surface dressed. We are asking that some fund be set up and given to county councils for the improvement and drainage of those bog roads.

Unfortunately, this Bill has come too late for anything to be done this year but even if something could be done next year, I would regard it as better late than never. There are no commercial bog areas in north Kerry and west Limerick. I appeal to the Minister to give our cause some consideration.

Mr. Moynihan

Like other speakers, I welcome this financial expansion for the Turf Board. They are worthy of the highest commendations for their work in peat and bogland areas since their foundation. Anyone going through the midlands today would be proud to notice the change in the economic and social life of people living there brought about through the board's developments.

While we all abhor the situation brought about by the oil crisis in 1973 and 1974 with its balance of payments problems and so on, one lesson we must have learned was that, until that time, we had all forgotten that we had within our own territory large energy resources. We had completely accepted the fact that oil was to be the whole basis of our future energy production. That situation led the Turf Board into serious problems. Fortunately, for the country's sake, the board continued their work and are now on the fringe of expansion, so urgently required for the country's energy situation and its balance of payments problem.

Like Senator Uí Eachthéirn and Senator Russell, I regret that the boglands of the western counties are not mentioned. In Kerry there are very large areas of bogland still capable of development. The Turf Board have had a tradition in Kerry, in so far as they have been involved in two areas, Lyracrompane and Barna, the latter still a central point of development. I would ask the Minister to urge the board, now that opportunities exist for sales of peat and peat products, to expand into those areas of the west where there are still adequate boglands for development. This will result not only in extra native fuel but will give a fillip to employment.

There are also the smaller ESB turf-burning stations. One of the original ones was established in Caher-civeen. This station is supplied mainly through private turf production. I would ask the Minister to urge on the board that it is vital to areas with an increasing demand for electricity that they, with private producers, step in and ensure that not only are the present requirements of these small stations met but, if at all possible, that they be expanded. This would have a beneficial effect on the balance of payments, on employment and on the general level of economic and social life of the community.

There is the other aspect also, the resumption of a substantial volume of private turf production following the substantial increase in the price of oil and other fuels. This is something which the Department of Finance and the Department of Local Government must consider in the same light as the turf board are doing, that is, with a view to expansion. This can be done only if additional financial facilities are afforded to local authorities for road and drainage development in bog areas.

I welcome and support the Bill. I would urge the Minister to ensure that in its implementation, the board will expand their operations to all those bogs capable of development with a view to increasing their productivity, making more native fuel available and increasing employment.

Mr. O'Toole

I should like to compliment the Minister on the introduction of the Bill and Bord na Móna on the work they have done since their establishment. I come from an area in which the name Bord na Móna is synonymous with employment and a sense of well-being. Much of North Mayo, until recently, was dependent totally on bog development for employment.

Like Senators from Kerry, I am disappointed that Mayo has not been mentioned in the Bill. We have had in Mayo major development of turf by Bord na Móna in supplying milled peat to the power station at Bellacorick. Naturally, we should like to see further development because we understand that there is room for expansion in that area. One has only to look at present development and see bog stretching to the horizon on all sides.

I should like to mention one rather ludicrous point which shows that Bord na Móna have progressed a long way since their early days. I remember some relations of mine being brought to the midlands to work for Bord na Móna on bog development. En route they passed through 30 miles of solid, blanket bog. After some short years Bord na Móna saw fit to commence development in the Bellacorick area of north Mayo. It goes without saying that the days of having bogland referred to as wasteland are gone. Bogland, as such, here could become a veritable goldmine in so far as resources for energy are concerned. We all know the consequences of the 1973 oil crisis. It did one good thing, as the Minister mentioned in his statement: it brought to mind how important was bog development; indeed it may have been an incentive to us. The Minister said that the 1973 crisis was an incentive to the formation of the third programme of expansion by Bord na Móna.

There is one aspect of bog development I should like to mention. It concerns the cut-away bogs. I know that An Foras Talúntais have undertaken an in-depth survey. In fact they have established a research station to ascertain how feasible it is to develop bog along agricultural lines, what crops and so on might be suitably planted in bogland. This is an area where Bord na Móna are not involved in bog development. As time goes on, Bord na Móna will be left with a vast acreage of cut-away bog on their lands. I wonder if the Minister has any policy in mind with regard to the further development of cut-away bog. In some instances, it is being used for sheep grazing, a very worthwhile project. I wonder could cut-away bog be used by local people? Could it be divided among local farmers, or would the extent to which it would have to be fertilised be prohibitive for local farmers to ensure that the fertility rate of the land would be maintained? These are matters about which I know little. They are questions with which Bord na Móna, or some other agency connected with them, should be concerned.

There are vast areas of bog here which could produce energy at a price competitive with that produced by oil. If we are to believe economists and accept their prognostications, we must assume that the cost of imported fuel will increase and continue to increase. We have proved, through Bord na Móna, that we have manpower and the technical "know-how". Senator Dolan mentioned that the technical "know-how" of the employees of Bord na Móna is second to none. As far as I know they have proved their capacity for inventiveness, both at home and abroad, in producing new machinery and new innovations for the development of bogs, which have been acclaimed by people in places as far away as Russia. The production of turf as a source of energy, be it in milled sod or briquette form, is to be commended. I often wonder if we have been doing enough in the past to expand this native source of energy, which is traditional and about which we all know so much. There are very few of our people who have not at one time or another during their lives used turf.

The increase from £28 million to £60 million is to be welcomed. I hope that in this expenditure the Minister might see his way to including a further expansion of the work at Bellacorick producing milled peat for the power station. With the proposed local industrial expansion my logic tells me—my knowledge of electricity is negligible—that if a source of energy is produced at local level it will cost less. Any further expansion of native resources is to be welcomed, in that it will provide employment, will show that our boglands are not wastelands but a very definite national asset there to be used.

Mr. Ferris

This Bill has given all sides of this House an opportunity to pay tribute to Bord na Móna, a fitting tribute to a body that, down through the years, particularly in periods of economic depression in rural employment and so on, has always had the respect of the community, particularly the rural community, so dependent on them to provide employment in areas which would not benefit from industrial employment, as such. This wealth of energy is God-given. They are the producers of this energy. They produce fertilisers which are used extensively in the horticultural world, and the valuable by-product of peat moss is used extensively in rural areas as bedding.

Under all headings, the board have produced an excellent product which has always found a ready market, even in times of very cheap alternative fuel.

We talked about the possibility of borrowing in the Bill. Senator Russell quite rightly said there was nothing wrong with borrowing, especially borrowing from abroad, to develop our natural resources.

Senator Dolan was incorrect in stating that the Minister was insisting, asking or ensuring that the board would borrow abroad. My interpretation of the Minister's opening remarks was that it was optional for the board to borrow in any currency of their choosing, foreign or otherwise, if the need arises, and nothing could be clearer than that. If anybody in this country wishes to invest in Bord na Móna, the board will welcome that investment. An investment in the board would give an extra impetus to them to develop our natural resources. This is a much sought-after resource, especially if we consider the situation in regard to oil. If we are not prepared to develop our own natural resources, not alone of oil but of turf and so on, it would be a very bad fiscal policy of any Government if they did not allow such borrowing to take place. To borrow to develop the natural resources is certainly a much better financial policy than to allow payments and a draining of our reserves on the importation of oil to be used in this country.

The third programme, as it is referred to, is most desirable and it will be possible, with this additional capital which is in this enabling Bill, to raise the borrowing limit to £60 million. I am pleased that my own county of Tipperary is included in this development programme. The location as has been mentioned previously in other announcements, is considered to be the Littleton-Ballingarry area of County Tipperary. This is very significant, of course, in view of the fact that that is adjacent to the Ballingarry mining area which is another producer of home energy but, unfortunately, has closed, and closed before it was realised how important it would have been to have Ballingarry mines in operation just now with our fuel crisis. An extension by Bord na Móna into this area will certainly give a tremendous boost to employment which has been depressed in the area and the area has been specified by the IDA as a designated area for employment purposes.

Reference has also been made by the Minister to the relevant comparable price vis-à-vis oil and the home-produced products like turf. In view of the continuing unsettled Middle East situation, we should join with the Minister in commending the board on such confidence in their product as to carry out such a massive programme of expansion as outlined.

Many of our institutions, county council offices, health board offices, hospitals and so on, have changed over to oil for heating and cooking in the last decade. They did that at that stage for economical reasons and convenience. It is now rather embarrassing for us members of such institutions and those of us responsible for their economic running to realise that most of these conversions have now taken place and we will not be able to benefit as fully as we should have done from this increase in production of our native turf.

However, we must consider ourselves fortunate that our other home producer of energy, the Electricity Supply Board, are geared in such a way that they can avail fully of the increase in home-produced energy. We also welcome the fact that the Minister for Local Government made recent stipulations that in future all council houses will have chimneys. The home consumers of turf can look forward to an adequate supply of the commodity which it is accepted will bring life to any room in a house.

I also welcome the improvements the Minister has outlined in the pensions scheme. There are, I understand, some further anomalies remaining, and I would look forward to some legislation in the near future which would enable such anomalies to be cleared. I welcome this step forward towards that clearance.

Mr. McGlinchey

It could be described as ironical that the Government may in the near future borrow £30 million from the oil sheiks to invest in turf production in this country. While I may feel that it is ironical, nevertheless like other Members of this House, I would welcome investment in turf production from borrowings at home or abroad. Investments of this kind and borrowing for investment of this kind are much more useful than borrowing abroad to pay the day-to-day expenses the Government incur.

I do not intend saying very much on this subject except to express my disappointment that there appears to be no mention whatsoever in the Minister's speech of any of the £30 million the Government propose to invest in the time to come being spent in my own native county of Donegal, a county that has as much bogland as any county in this country. We hear the lip service being paid to the west and north-west of Ireland, but the Government could divert some of this money there. In other branches of the industry good reasons may be put forward why it would be an uneconomic proposition to invest too much money in certain parts of the western seaboard, but surely as far as turf production is concerned, this cannot be said. It would appear the most of the money is being spent or will be spent in Kildare, Westmeath and Meath. I would urge the Minister this evening to pay particular attention to my own county of Donegal where, even yet, thousands of acres of bogland are untapped and unused.

In recent years there has been a tendency on the part of the Forestry Division to buy up good parts of bogland, land or bogs, that would be much more useful if developed for peat. The forestry have other fields to explore. There is plenty of land in Ireland unsuitable for any purpose other than forestry. I would suggest to the Minister that he should have consultations with the Forestry Division and discourage them, if possible, from buying land that is suitable for turf production. While I recognise the importance of the plantation of trees, this could be done in the areas that would not interfere with turf production.

I would agree with Senator Ferris in his reference to the use of oils in hospitals, county council offices and State institutions. The time has come, with the price of oil being so expensive, when Government Departments must urge the various bodies, both State and semi-State, if possible, to change to the use of turf. It would not alone help to give employment at home but would have a very important effect on our balance of payments.

Minister for Transport and Power (Mr. P. Barry)

As I expected—and I am very pleased about it—this Bill has been welcomed by the Seanad. A number of speakers have referred to the fact that our appreciation of the value of the turf we were walking on came very late. It took an Arab oil embargo and a quadrupling of the price of oil in the last 18 months to bring us to our senses in this regard. As I said in my opening speech, and as Senator Ferris and Senator O'Toole said, there is the effect of this on our balance of payments in that we have to find £150 million extra every year to pay for this oil. £150 million is approximately £50 per head per annum of the population. I myself have six children which means I have to find £8 per week to pay for that oil. What we should have been doing is working harder to earn that £8 per week, but we have been paying £8 per week, without producing anything to compensate for that. That is one of the problems of the inflation we have at the moment.

This law applies not just to an individual or to a household or to a business, but to the country as well, that if we are going to pay £150 million a year extra for the increased amount of oil we are importing here, we have got to produce £150 million worth of goods extra to export to pay for that. We can ask ourselves whether we have been doing that or not. Certainly this third development programme of Bord na Móna goes some of the way towards reducing the £150 million by bringing into production another 40,000 acres of boglands in the country on top of the 130,000 already in existence. Senator O'Toole asked me what we were going to do with these cut-away bogs when they are finished, and somebody said we may overcut them and overproduce from them, with the result that what is left of the bogs is not of much use.

I again found in the Dáil, when we were putting this Bill through, that there was a little bit of confusion here where people are inclined to think that this third development programme is to cut the bogs further down. In fact, it is not; it is to cut them further out—in other words, bring into production increased boglands.

This is being made possible by the increase in the price of oil. Senator Aherne used the phrase which I still hear used fairly frequently, that is, "while the oil crisis lasts". This crisis may last forever. This is not something we can wish away. We have to wake up to the fact that we are going to have to pay increased prices for the oil and energy we import for as long as we can see. It will not even suit us to have that increased price dropped too dramatically. We must remember that the generation of electricity from oil up to October, 1973, was very much cheaper than the generation of electricity from turf at that stage. Figures in this connection may be of interest to the Deputies. At the moment we generate about 63 per cent to 65 per cent of our electricity from oil, about another 24 per cent from peat or turf, and only 10 per cent from hydro, the baby from which the whole electricity network in the country grew, and the balance of 1 per cent or 2 per cent is from imported coal or coal from the Arigna mine.

This has been reversed in the last 18 months. The price of electricity generated from turf is now cheaper than from oil at the inflated price we are now enjoying. This of course, carries another bonus, in as much that oil available at under one dollar a barrel in the Middle East did not make people form queues outside the door of the Department of Industry and Commerce looking for exploitation licences for our Continental Shelf for oil and gas. I saw, in fact, a figure recently indicating that probably the cheapest oil that will be produced in the North Sea—we have no figures yet or indeed oil; we have gas off the south coast—runs between three dollars and four dollars a barrel to produce. That is four times the cost of the Middle East production. If the price of Middle East oil goes back to two dollars a barrel those licences are only to paper the walls with, because nobody is going to invest their money to put rigs and platforms on our Continental Shelf to bring oil ashore at a price that is four times the price at which it can be got in other parts of the world.

Even though we complain about the disruption of our lives because of the quadrupling of oil prices, it has its bonuses for us, the development of our Continental Shelf and the third development programme of Bord na Móna. When we get the natural gas ashore in 1978 or 1979 what we are allocating to the ESB should provide about 30 per cent of our then needs of electricity, that on top of the existing 24 per cent. As the demand grows that 24 per cent will not alter in ratio until the total demand gives us over 50 per cent to 55 per cent generated within our control and reduces this hopeless dependence we still have on imported oil.

There has been criticism of me and of the Government—and I would like to answer those criticisms as I have done on a number of occasions here and in the other House and outside it —because of our decision to allocate portion of the find off the south coast for the generation of electricity. The expert opinion available to the critics in the press, and elsewhere of the semi-wastage of using natural gas to generate electricity is just as much available to the Government. The Government knew this criticism would be levelled at them, but they took the decision on the basis that security of supplies for the generation of electricity as an energy source was a number one priority and that we should fight our way to a 100 per cent self-sufficiency in energy. We must never again allow ourselves to be in the position where decisions taken thousands of miles away by people over whom we have neither influence nor control could totally disrupt our economy, not just in the short time or, as Senator Aherne says, "while the emergency lasted" but for our lives and our children's lives and our children's children's lives. These are the considerations that motivated the Government. Even though you can get efficiency of over 90 per cent by using natural gas for the manufacture of fertiliser or for direct use through pipelines into kitchens for cooking and home heating, while the use of natural gas for the generation of electricity will be somewhere over 40 per cent, we made our decision because we decided the first priority was self-sufficiency in electricity generation. It is for this reason of self-sufficiency that I welcomed and brought before the Houses of the Oireachtas, and that the Dáil and the Seanad have welcomed, the third development programme of Bord na Móna.

As Senator Dolan said, Bord na Móna have been for nearly 40 years innovators, experimenters, huge employers in areas where there was not much other employment and where it was difficult to entice other industry to go. Bord na Móna pioneered in that field. As Senator O'Toole said, they invented and put together machines that people have come from all over the world to see and purchase, even from Russia. However, the objectives and ambitions of Bord na Móna are wider and greater than their desire merely to have plaudits thrown at them here by me. They want to increase their employment; they want to extend bog development and they want to devise a policy for 30 or 40 years' time.

Senator Russell wanted to know how far we had to go in regard to bog production. It is little better than an educated guess as to what will happen to those cut-away bogs afterwards. They are now thinking in those terms and they have at the moment cultivated cut-away bogs for sheep-grazing, cattle grazing, growing shrubs and a number of things, on about 700 acres, which may be small when you take into account that their total acreage is 160,000.

I have outlined the philosophy behind the introduction of this Bill. I am very pleased with the welcome it has been given by both sides of the House and also the welcome it was given in Dáil Éireann.

Senator Dolan asked why we should borrow money abroad. Senator Russell took the opposite point of view and said that all sources of borrowing should be open to Bord na Móna. That is correct. Up to now Bord na Móna were not allowed to borrow except from the Exchequer. To broaden that field they were allowed to borrow money from other sources. They are in consultation at the moment with the European Investment Bank and with a number of banks in the United Kingdom and in Europe about the availability of funds. They would not get grants anyhow. They would have to repay and pay the interest on the money they borrowed from the Exchequer. A waiver of interest and repayment was given for the first five years while the bogs were got into production.

Senator Russell, Senator McGlinchey and a number of other Senators referred to the fact that some of the bogs were not being developed. Bord na Móna will not rest on the third development plan. They will move on and are very much alive to the bog areas which they have not yet covered. Hopefully, there will be a fourth, fifth and sixth development plan by Bord na Móna. Economics play a part in this. There are bogs which at present prices can now be economically developed. There are other small bogs which it would not be economic at the moment to develop. Circumstances change and, hopefully, the other bogs will become economic in the future.

As regards the bogs in Kerry and Clare they are considered too shallow and are not suitable for development by the board's present methods. In Kerry the gradings are too steep. There are outcrops of rock which make it very difficult for the machinery to be used on these bogs.

As regards the local authority grant for bog roads, the only grant for bog roads that comes within my Department is for the development of roads for the delivery of turf to the existing bogs or to existing stations at Gweedore, County Donegal, Screeb, County Galway, Miltown Malbay, County Clare and Cahirciveen, County Kerry. I understand the position in Local Government is that they give local amenity grants to the various county councils. It is up to a county council to allocate those grants.

Mr. McGlinchey

They were cut badly this year.

Mr. P. Barry

They can be used on bog roads or on draining bogs or whatever other way the county council decide with the sanction of the Department. It is not a function of my Department and I am not familiar with the situation. The only bog roads that are included in my Estimate are those leading to the four power stations I named for the delivery of turf from the bogs to them.

Mr. Dolan

Perhaps the Minister would have a word in the ear of the Minister for Local Government. The money was not available at local government level to make these bog roads unless we took it from the local improvement schemes, which we are reluctant to do.

Mr. P. Barry

I am not sure, because it does not come within my Department. It is a function of the Department of Local Government.

Mr. McGlinchey

The receiver is moving into the Custom House.

Mr. P. Barry

The only other point I should like to make is in regard to the use of cut-away bogs. There are 700 acres of them at the moment. The selling of shrubs from these bogs alone has proved quite a profitable business for Bord na Móna in the last number of years. A decision as to what will be done with the bogs at the end of their life need not be made by Bord na Móna. The debate, the argumentation and claims of different sections of the community for the use of these bogs can be put forward. Bord na Móna's claim is that they have an existing work force there when the bogs are finished and that it is desirable to get employment for them. As against that an argument could be put forward by agricultural interests that these bogs should be taken over by the Department of Agriculture and Fisheries or the Department of Lands and that they should be divided among farmers or farmed collectively. This debate could go on without any commitment on anybody's side for the next five or seven years before a firm decision has to be taken as to what can be done with them.

I should like to thank the Seanad for the very warm and very informed welcome it has given to this Bill. I agree with all the speakers regarding the marvellous work that has been done by Bord na Móna. They have a very bright future. There is such a high level of intelligence and ingenuity in the board that even without the oil crisis, which allowed this third development programme to come into operation, they would have devised other means. It would not have been beyond their capabilities to devise other means of utilising their labour force, their engineering capabilities and the natural resources under their command.

Question put and agreed to.

Agreed to take remaining Stages today.