I remind Senators that spokespersons will have 20 minutes and other speakers will have ten minutes.
Energy (Miscellaneous Provisions) Bill, 1995: Second Stage.
Question proposed: "That the Bill be now read a Second Time."
An Leas-Chathaoirleach
This Bill has its origins in a proposal for a Bill to provide for a variety of issues, including, principally, measures to facilitate the construction by Bord Gáis Éireann of the Ireland-UK natural gas interconnector. However, it became necessary to proceed with the provisions relating to the construction of the interconnector and these were enacted in the Gas (Amendment) Act, 1993. The remaining issues were deferred and these, with a number of additional issues which have arisen since then, form the subject matter of the Bill before the House which contains a range of provisions relating to BGÉ specifically as well as provisions relating to other aspects of the energy sector.
As its title indicates, the Bill deals with a variety of energy issues relating to the production, supply, sale, transmission, distribution and use of certain forms of energy and matters incidental to those activities. Energy plays a major role in our economy with economic and social implications. State investment in energy infrastructure is some £5 billion. Energy imports represent about 3 per cent of GNP and the annual final energy demand bill at approximately £2.5 billion is about 9 per cent of GNP.
As outlined in the Operational Programme for Economic Infrastructure 1994-1999, Irish energy policy has three primary objectives. The first is the supply of a choice of fuels to consumers as efficiently as possible at internationally competitive prices taking account of supply security, socio-economic and environmental considerations. The second is the consumption of this energy as efficiently as possible. The third is the production of as much national energy requirements from indigenous sources as is economically possible.
The final objective encompasses what are now called "renewables" and "alternatives"— wind, hydro and biomass. Some months ago I announced the results of the alternative energy requirement scheme. Assuming all the projects proceed, 111 megawatts of capacity would be installed. The electricity generated would represent a 35 per cent increase from present production from alternative sources and alternative energy would then supply about 10 per cent of our total electricity needs.
Our total final consumption of energy is increasing and more than half of the fuel for this is imported. As a result energy efficiency is very important and, as I stated, is one of the three main pillars of our energy policy. Ensuring energy efficiency involves raising awareness of its importance, ensuring efficiency and rational use of energy and providing incentives where appropriate. Initiatives in this area include the establishment of the Irish Energy Centre and the Energy Advisory Board. The Irish Energy Centre provides sound advice and expert guidance in relation to best practice in individual sectors, encourages the development of companies offering energy audit facilities and provides incentives to companies to invest in new systems and technology.
With regard to energy costs, the characteristics of the Irish energy sector place customers here at a competitive disadvantage compared to elsewhere in the EU. Our geographical situation on the periphery of Europe adds to the costs of energy supply, particularly electricity and gas. Because of its isolation, our national electricity system must maintain excess standby capacity as spinning reserve, so adding to costs. Another important factor is our population settlement pattern. Our population density at 51 per square kilometre is low by comparison with the EU average of around 150 per square kilometre.
This Bill is an important measure. It will provide important legislative bases and support for a wide number of areas, such as BGE, oil and gas exploration and pollution control measures, and it will remedy a number of identified defects in existing legislation. Many of these defects are of a technical nature and I do not propose to go into them at this point.
One important measure in the Bill is the statutory basis provided for the introduction of a system to allow BGE to transmit gas owned by another party through its gas network at a price to be negotiated. This is known as third party access. This provision in the Bill marks a watershed in the development of what is still a young but successful gas industry in this country. The provision will fulfil the Government's commitment in relation to the Moriarty task force on the implementation of the Culliton report.
IBEC has pressed for the early introduction of third party access to the gas network in accordance with the commitment in the Moriarty task force report. My first priority in the development of the gas industry is to ensure BGÉ remains a vibrant and progressive State body, with adequate financial resources providing a first class gas supply to its customers. It is against that background I have decided to provide for TPA. I am not satisfied it would be in the best interests of BGÉ or the gas industry generally that BGÉ should grant unlimited access to its network for gas transmission. Accordingly it should have discretion in the extent to which it is prepared to provide TPA.
The threshold prescribed for third party access is that contained in the draft EU Directive concerning common rules for the internal market in natural gas. In all the circumstances I deemed it the most appropriate. BGÉ customers who are above the threshold prescribed in the Bill for TPA account for approximately 75 per cent of its annual total gas deliveries, so a sizeable market is being made potentially available. To enable me to exercise my functions in regard to TPA, my Department is acquiring the necessary expertise and I hope to announce shortly the appointment of consultants to advise me on the charging methodology and other conditions relating to the granting of TPA.
The Bill also provides the statutory basis for an injection of £100 million in equity into Bord na Móna. This is the major part of the £120 million investment approved by the Government. The first tranche of £30 million cannot be invested in Bord na Móna until the terms and conditions specified by the Minister have been satisfied and the investment approved by the EU Commission. However, for budgetary purposes this tranche can be paid this year to a special account and issued from it when determined by the Minister for Finance, after consultation with the Minister for Transport, Energy and Communications.
As a number of sections deal with BGÉ I propose to give the House information about its performance and the major issues affecting the board at this juncture. Since its establishment in 1976 BGÉ has performed satisfactorily. It has developed the gas industry so that it now contributes 17 per cent of our total primary energy requirement, as against 6 per cent in 1980. It also contributes 26 per cent of the fuels input to electricity generation.
It supplies a varied market, including domestic, and industrial or commercial users, the ESB and NET. Domestic and industrial or commercial users account for 35 per cent of gas sales and 61 per cent of revenue. Gas deliveries to the ESB account for 42 per cent of total deliveries while those to NET account for 23 per cent. In terms of revenue, the ESB contributes 31 per cent and NET 8 per cent. Domestic customer numbers have increased by an average of 9 per cent per annum in the last three years and now stand at some 233,000, representing over 30 per cent of all Irish homes. BGÉ plans to have natural gas available to 40 per cent of Irish homes by the end of this decade, which would be the equivalent of 75 per cent of all homes within the area of the gas grid.
This progress has been achieved without the need for any State investment in BGÉ. On the contrary, the Exchequer has benefited to the tune of £394 million in contributions from BGÉ, so the whole economy, not just gas consumers, has reaped the benefits of its success. This success story is due in major part to the expertise and resourcefulness of the chairman, Dr. Michael Conlon, the board, the chief executive, Mr. Philip Cronin and the management and staff of BGÉ.
Under the legislation BGÉ has a statutory obligation to develop and maintain a system for the supply of natural gas on a commercial basis and any proposals for extension of the gas grid are assessed by the board in the light of that obligation. Only projects which meet the board's economic criteria are undertaken. In that context I asked it to investigate the economics of extensions to Shannon, Ennis, Tralee, Galway and other towns, as I am anxious that the network should be extended to other areas of the country where that would be commercially viable.
The gas industry has now reached an important milestone in its history. BGÉ has constructed an Ireland-UK gas interconnector, comprising onshore pipelines and facilities in Ireland and Scotland, an undersea pipeline and a compressor station in Scotland. All the onshore and under sea pipeline elements of the project have been completed, while the compressor station is expected to be completed by the end of this month.
The purpose of the interconnector is to provide gas supplies when the Kinsale and associated Ballycotton gas fields are depleted, which is expected to be in the next five years are so, and to provide an alternative supply in the event of any disruption of that source prior to depletion. If further indigenous gas supplies are discovered the interconnector could be used to export any gas surplus to our requirements. When the Kinsale-Ballycotton fields are depleted, BGE will have to purchase all its gas requirements on the UK-Norwegian markets unless adequate further indigenous supplies are discovered and developed in the meantime. BGÉ will have to import gas even before then. From October 1996 it will start to import gas to meet peak requirements for the domestic, industrial and commercial markets.
Since December 1993, when the pipeline part of the project was completed, the pipeline has provided security of supply facilities to protect BGÉ's core market of 240,000 customers should there be an interruption in supplies of gas from the Kinsale Head-Ballycotton fields. On 29 October this year the first commercial gas flowed through the pipeline.
The Bill also includes provision relating to exploration for oil and gas. The promotion of hydrocarbon exploration is an activity to which the Government attaches considerable importance in the context of national economic development. The current taxation measures and licensing terms are specially designed to attract the interest of exploration companies in the Irish offshore.
A strong interest has been stimulated in exploration and currently 24 exploration licences are in place. There has also been a steady increase in interest in licensing options and at present nine options covering 34 blocks or part-blocks are in force. It is expected that a number of those options will be converted to exploration licences carrying well obligations. The number of major exploration companies now turning their attention towards offshore Ireland gives me confidence that this renewed interest will result in a significant increase in exploration activities in coming years.
In 1993 the frontier licensing round in the Slyne and Erris Troughs off the north west coast of Ireland resulted in a positive response. The interest shown in that round was surpassed by that for the Porcupine licensing round which closed on 15 December 1994. Some 16 exploration companies submitted 11 applications for 35 blocks in the area and last March, eight licences were awarded to groups representing 15 companies in respect of 32 blocks. Ireland now has a good coverage of licences and effective exploration programmes have been committed over Ireland's prime prospective acreage, ranging from the Irish Sea across the Celtic Sea to the Porcupine and Slyne-Erris Basins off the west coast. The licences represent a good balance between shallow water and frontier areas. I hope the efforts in these basins will prove successful.
In addition to awarding licences under rounds it is my policy to operate an "open door" licensing system for acreage available for licensing. The use of both licensing rounds and the open door system has served Ireland well in recent years and it is my intention to continue this policy. However, I have decided that two areas should not be included for the present. The Porcupine Basin was not re-opened following the close of the round in December 1994. In addition, the Rockall Trough has been closed to encourage the acquisition of data and preparation of assessment reports so that its hydrocarbon potential could be properly assessed. I expect to be in a position to make an announcement of future licensing opportunities in the Rockall Trough in May 1996.
I take particular pleasure from the announcement of test results from the recent appraisal well drilled by Marathon just four and a half miles south west of the Kinsale Head gas Bravo platform. The initial results appear to indicate the present of "new" gas, that is gas it would not be possible to extract through the existing Kinsale Head field facilities. This encouraging news endorses the confidence already shown by oil companies in Ireland's offshore and further enhances the attractiveness of investment there. The test results are now being analysed with a view to establishing the feasibility of extracting the gas. Although further analysis of the data acquired during the testing period is required, the fact that the well has been suspended gives hope that it may be possible for Marathon to declare commerciality later this year.
At this point I will outline the main provision of the Bill. Section 2 of the Bill provides a statutory basis for the introduction of a system for what is called third party access to BGÉ's gas network. Under section 40 (1) of the Gas Act, 1976, persons other than BGÉ may not construct or operate a gas pipeline over or under the surface of land without the giving of previous and reasonable notice to the Minister. Section 3 of the Bill will extend that restriction to the sea bed in the territorial seas of the State or to a designated area within the meaning of the Continental Shelf Act, 1968. The need for the provision arises from the growing international trend towards the construction of international energy inter-connectors.
Section 3 also amends the definition of "foreshore" in the Gas Act, 1976, so as to bring it into line with that in the Foreshore Act, 1933.
At present, the Continental Shelf Act covers only pipelines that are laid in connection with the exploitation of the Irish continental shelf. Section 4 of the Bill extends the relevant provisions of the Continental Shelf Act to apply also to pipelines crossing the Irish continental shelf carrying gas and to electricity cables. The opportunity is also being taken to amend section 7 of the Continental Shelf Act in order to provide the Minister with the powers to make regulations to control discharge of polluting substances. As a consequence of this amendment, section 7 of the Bill amends the Sea Pollution Act, 1991, so as to exclude pollution from pipelines and cables from that Act.
Section 5 amends sections 5, 6 and 12 of the Continental Shelf Act so as to control the construction, alteration or improvement of any structure or works in a designated area and the removal of any object or material from a designated area without the consent of the Minister for Transport, Energy and Communications and the Minister for the Marine. The functions of the Minister for Transport, Energy and Communications relate to the orderly and proper use of a designated area while the Minister for the Marine's functions relates to safety of navigation.
Section 6 amends section 48 (1) of the Safety, Health and Welfare (Offshore Installations) Act, 1987, so as to extend that section to cover any provision of the Continental Shelf Act, 1968, rather than just section 3 of the 1968 Act.
Section 8 provides for extension of the powers of BGÉ to effect certain commercial transactions, for example to establish subsidiaries and to lend or advance money or guarantee repayment of moneys by subsidiary companies. For the most part, this section incorporates into statute the provisions of the Gas Act, 1976, (section 9)(Establishment of Subsidiaries) Order, 1990. The powers in that order have been extended to include the power to guarantee the contracts and obligations of third parties. This is deemed necessary to ensure that BGÉ is not placed at a disadvantage visà-vis its competitors at home and abroad. BGÉ operates in a competitive energy market and should have powers equivalent to those of a company incorporated under the Companies Act to engage in commercial transactions. From time to time in the course of negotiating its contracts, the board is required to give valid and effective guarantees and indemnities as a matter of commercial bargain and necessity.
The opportunity is being taken to clarify the arrangements for BGÉ on the establishment of subsidiaries, lending money or guaranteeing repayment of moneys by subsidiaries by providing that the exercise of such powers by the board shall be subject to the prior written consent of the Minister, given with the approval of the Minister for Finance. Sections 21 and 24 make similar provision in respect of the Electricity Supply Board and Bord na Móna respectively. These controls already apply in the case of Aer Lingus and Aer Rianta.
Section 9 provides for an extension of BGÉ's borrowing powers for capital purposes so as to enable the board to issue securities, for example the creation of stock or other forms of securities. BGÉ has informed me that the absence of these powers has caused some difficulty for the board in arranging for borrowings in the most attractive terms. For example, some bodies wishing to deal with BGÉ in this regard cannot do so because of the particular constitution of those bodies. The provision in section 9 will overcome this problem. All proposals in this area will be subject to the consent and approval of the Minister for Transport, Energy and Communications and the Minister for Finance.
There is a need to strengthen the Minister's powers regarding the inspection of energy infrastructures. The Minister's powers to inspect energy infrastructures such as exploration and production platforms at sea, electricity plants, powerlines, gas installations, oil refineries and pipelines are fragmented at present. The Petroleum and Other Minerals Development Act, 1960, contains some powers on petroleum leases and licences. Energy infrastructure is likely to become more widespread and diverse in nature and may increasingly be operated under the control of non-State bodies. It is important the Minister should have a power, through authorised officers, to oversee all energy operations capable of being a source of risk to the public or the environment and to ensure they are conducted in conformity with good industrial practice and in accordance with statutory requirements.
Section 10 of the Bill provides the Minister with the power to appoint authorised officers to inspect energy infrastructures and to oversee all energy operations capable of being a risk to the public or the environment. Authorised officers would be appointed following consultation with the Minister for Enterprise and Employment where appropriate and the powers and duties of authorised officers are set out in the Bill. The authorised officers will be empowered to enforce industry standards and statutory duties in the construction, operation or decommissioning of energy infrastructures.
Section 11 enables the Minister for the Marine to appoint authorised officers to exercise inspection and supervisory powers in connection with any matter for which the consent of the Minister is granted under section 5 of the Continental Shelf Act, 1968, as amended by this Bill.
Section 12 of the Bill will empower the Minister to order an investigation into an accident or incident involving an energy infrastructure. Apart from existing law relating to safety in workplaces, the holding of inquiries and in the case of the gas industry, the investigation of gas related incidents by BGÉ on his behalf, there is no power available to the Minister to examine the causes of major or serious incidents involving, for example, drilling rigs at sea and gas or oil production platforms. The powers under this section would be used where the procedures under the Safety, Health and Welfare at Work Act, 1989, are inappropriate and would provide also for ancillary powers relating to the holding of investigations and the protection of life and property following such incidents.
Section 13 details a number of restrictions on the exercise of powers on the holding of investigations. Where there is a power vested in a persons other than the Minister under any Act to conduct an investigation, the Minister is required to establish whether that person proposes to hold an investigation. If that person does propose to hold an investigation and if the Minister is satisfied that such an investigation will give enough information and facts as regards the matters of concern to him, the Minister would not hold a separate investigation. This section is designed to avoid duplication of investigations.
Section 14 provides for the formal vesting, by ministerial order, in Bord Gáis Éireann of the assets of the former town gas utilities acquired by BGÉ to consolidate ownership of BGÉ's assets. The conveyance of these assets would normally give rise to the imposition of stamp duties, which could amount to nearly £3 million. Section 14 obviates the need for BGÉ to rely on a legal conveyance and thereby avoid the payment of duty.
The utilities in question are Dublin Gas Company, Limerick Gas Company Limited, Cork Gas Company, City Of Waterford Gas Company and Clonmel Gas Company Limited. BGÉ took over the assets of Dublin Gas Company to secure the continued distribution of gas to Dublin in a safe, efficient and progressive manner. Likewise, BGÉ acquired the other four town gas utilities to ensure their customers continued to receive gas supplies.
Section 15 provides for the creation of offences and associated penalties relating to the theft of electricity and gas. The relevant provision of the existing legislation — the Larceny Act, 1916 — relating to this subject in so far as electricity is concerned, is being repealed. The legal experience in bringing prosecutions under the existing legislation was most unsatisfactory and much difficulty was encountered in securing convictions. Accordingly, new provisions are required in a single statute. Section 16 provides for the power of entry and search of premises where an offence under section 15 of the Bill is suspected. This power is deemed necessary because of the inadequacy of existing legislation.
It is necessary to strengthen the Minister's powers on undertakings to grant exploration licences — known as licensing options — undertakings to grant petroleum prospecting licences and undertakings to grant petroleum leases. The existing provisions of the Petroleum and Other Minerals Development Act, 1960, do not specify the Minister may impose conditions when granting these authorisations and do not refer to their revocation when the holder fails to comply with the conditions attached. The amendment to the 1960 Act in section 17 of the Bill will enable the Minister to issue these undertakings subject to such terms and conditions as may be necessary.
Section 17 also ensures the Minister for the Marine retains full control over any foreshore which is involved in the grant of working facilities permits under the 1960 Act. The section also provides for the requirement to obtain the consent of the Minister for the Marine before the Minister for Transport, Energy and Communications authorises the abandonment of an offshore installation.
The purpose of section 18 is to extend the scope of the Fuels (Control of Supplies) Acts to broaden the definition of petroleum to include, for example, natural gas and to include the production of petroleum as well as the exploitation of the fuel resources of a designated area. These Acts provide for the regulation and control of the acquisition, supply, distribution and marketing of fuels, as well as the control of the import and export of fuels. The Minister's powers under these Acts can only be exercised when the Government has declared, by order, that the common good warrants such action. In other words, these powers are designed to deal with an energy supply emergency.
Section 19 provides for the removal of an anomaly in ESB superannuation schemes in respect of staff seconded to the Oireachtas. When an ESB staff member is seconded to the Oireachtas he/she has to pay both employer's and employee's superannuation contributions to the ESB for the period of the secondment. This amendment proposes that, in the event of the member being awarded an Oireachtas pension, the secondment period will be disregarded for ESB pension purposes and on retirement he/she will receive a refund of all contributions paid during the secondment period rather than just a refund of the employee's superannuation contributions, as heretofore.
Section 20 amends the Electricity Supply Board (Superannuation) Act, 1942 to provide for the establishment of a single fund to cover all employees and to provide for trustee discretion on fund investments. The Bill provides for the amendment of the Electricity Supply Board (Superannuation) Act, 1942 so as to provide for the amalgamation of the manual workers' superannuation scheme and the general employees' superannuation scheme. This was to be achieved by revoking the former scheme and transferring the moneys in that fund into the fund in respect of the general employees' superannuation scheme. This amalgamation actually took place in 1981.
Until 1981 superannuation contributions were divided on a 50/50 basis between employees and employer. Subsection 4 provides that this equal divide need no longer apply. The rationale behind the change was to allow the board to take on a greater portion of the cost to fund the changes required by the amalgamation of the two schemes.
Section 22 enables the Minister to recover from the ESB the cost of any reviews and consultancies which may be undertaken to advise on the provision and regulation of electricity. In the short term, the provision will allow the Minister to recover the cost of three consultancies — one which commenced in December 1993 and has since been completed, and two others which are at present under way. The combined cost of the three consultancies should not exceed £1 million. Since the reviews concerned all share the common purpose of improving the welfare of the electricity consumer, it is only reasonable that the cost of such reviews should be recovered from the ESB's revenues rather than being borne by the Exchequer.
The most significant of the consultancies relates to a major restructuring of the electricity sector approved by Government. This exercise is designed to stimulate efficiency and create a market which will respond effectively to the wide variety of customer needs. The most significant changes would involve the facilitation of competition in power generation and electricity retail supply. Restructuring is also an essential response to current proposals on the liberalisation of the European energy market. Work on the appropriate legislation and regulatory changes necessary to give effect to the proposals approved by Government is continuing with the advice and assistance of consultants. I would hope to introduce legislative proposals in 1996 with a view to achieving a new regulatory framework in 1997.
Section 23 provides for an amendment to the Turf Development Act, 1946 consequent on the moving of the headquarters of Bord na Móna from Dublin to Newbridge, County Kildare.
Good man, Charlie.
To the wrong constituency; they changed it since. Section 25 enables the Government to make an equity investment in Bord na Móna. At present, there is no statutory basis for any equity investment in Bord na Móna. The section provides for the establishment of a special account out of which the moneys will be paid. The purpose of this is to enable the first tranche of Exchequer funding, i.e. £30 million, to be paid out for budgetary reasons before the end of this year.
Section 26 is a simple amendment proposed by the Attorney General and agreed by the Department of Health to resolve a conflict between a section in the Radiological Protection Act, 1991 relating to the medical use of ionising radiation and provisions of European Communities legislation. Advice given to my Department was that legal difficulties could arise from a conflict between the primary legislation which prescribes the role and functions of the Radiological Protection Institute of Ireland and the European Communities (Ionising Radiation) Regulations, 1991 if this conflict was not resolved. Briefly, section 7 (2) of the Radiological Protection Act, 1991, as it stands, imposes a general restriction on functions of the institute by excluding the medical use of ionising radiation from these functions. However, the Community legislation on the other hand places no such restriction on the institute's functions in respect of the use of radioactive substances and appliances other than that the institute should consult with the Department of Health in respect of medical use.
The provision in the Community legislation is considered to be more appropriate and the legal advice is that it must prevail over alternative provisions which conflict with Community legislation. Therefore, section 7 (2) of the 1991 Act is being amended, as proposed in this Bill, to remove the inconsistency between the two pieces of legislation. Section 27 ensures that the Foreshore Acts are not prejudiced by either the Gas Acts or the Petroleum and Other Minerals Development Act.
Section 28 provides for necessary repeals and revocations, including most of the Turf Development Act, 1981. That Act provided for payment of bog development grants which have now been discontinued. The private bog development grant scheme was introduced by the Turf Development Act of 1981. The scheme was designed to stimulate the development of private peat resources, and provided grants towards access roads, drainage and machinery for bog development. Under the scheme, which was funded by my Department, applicants submitted development plans to Bord na Móna which administered the scheme on behalf of the Department. The scheme proved successful as it brought private turf production to an annual level of approximately 1.5 million tonnes from a previously low base.
The scheme was terminated in October 1987 having been deemed to have achieved its purpose and Bord na Móna has not accepted any new applications since that date. It has not been possible to terminate financial outlay as there remains work approved which has not yet been completed due to delays caused by bad weather and also a shortfall in funding in recent years. Only when work has been completed can the funds be paid to projects. I understand from Bord na Móna that all outstanding grants will be paid during the current year.
I commend the Bill to the House.
This is a very comprehensive Bill. In fact, quite a number of areas are covered in the Bill which could form the subject matter of a separate Bill. We are dealing with very important bodies like Bord na Móna, Bord Gáis Éireann and Bord Soláthair Leictreachais. These bodies have made a significant contribution to the development of our economy including job creation, the development of new technology and the opening up of new areas of opportunity. They have also made a major contribution to social development since their establishment.
I compliment the Minister on bringing forward this legislation which contains an amount of detail. It covers areas such as gas exploration, the interconnector, the possibility of further oil exploration and sea pollution. The Bill, which will give us plenty of opportunity for discussion, is welcome and opportune. There is a need for a comprehensive look at some of the semi-State bodies in terms of modernising the legislation which deals with their activities. They need to be given new opportunities and new drive and the Bill is welcome from that point of view.
I compliment the Minister on the detailed explanation he has provided. We will co-operate fully with him on the various Stages to endeavour to improve the legislation. I also compliment Bord Gáis Éireann on its achievement and the important development work it has undertaken. The interconnector is an example of where top class, high technology has been used to create a longterm link which will benefit this and other economies.
Will the Minister outline further gas exploration activities? He referred to a number of new licences which have been issued and the interest in offshore oil exploration. There has been much interest in the Porcupine Basin off the west coast of Clare. It is understood that much activity will take place there next summer. The extent of the operation that will be undertaken is not clear, but I believe plans have been made to open up new opportunities in the exploration area. While this is welcome, we must ensure it is done in a careful and balanced way and that care is taken to protect the environment.
We recently passed the Harbours Bill, 1995, which offers harbours a mandate to become involved in such ventures. Offshore oil exploration can make an important contribution to port activity. I would like to hear the Minister's views on how offshore oil exploration will be developed and serviced by ports like Cork or the Shannon Estuary. Will there be opportunities for new activities?
Developments in the ESB have been the cause of anxiety for some time. Detailed and protracted negotiations between ESB management and unions were recently concluded. I compliment the outgoing chairman of the ESB, Mr. Paddy Moriarty, and I express our appreciation of his work during his chairmanship and management of the company. He made an outstanding contribution to the development of the company at a critical time when large scale investment was taking place.
I come from an area a few miles from Moneypoint and I acknowledge work done by the ESB in planning and building that project, which has made a large contribution to our energy requirements, and to the development of the economy in the mid-west region, in particular west Clare. I would like that type of initiative to continue. Mr. Moriarty knew it was necessary to move forward with new projects and ideas. With that in mind the ESB put in place a plan to develop the potential of further coal-handling and transshipment at Moneypoint. We recently saw details of a major project at Moneypoint which would create additional employment opportunities in that type of activity. This is important because there is anxiety — not only in Moneypoint, but in other areas — that the new arrangements which will be put in place for the transmission and generation of electricity will have serious implications for personnel in the ESB.
It has been suggested that the number employed in Moneypoint could drop from 400 to 200. This would be a significant job loss in an area which could not sustain it. Nevertheless, new procedures will be put in place and there will be agreement between unions and management on how to proceed. It is important that in any restructuring of the ESB that sight will not be lost of the unique possibilities it has because of its location in areas like Moneypoint to develop new and sustainable employment opportunities in activities relating to electricity generation.
Proposals at Moneypoint include further investment in jetties so that coal imported there could be handled, regraded, sold off and exported. Because of the huge quantities of coal being imported to Moneypoint, it is possible to have a viable coal-related activity there which may, to some extent, offset the job losses being forecast as a result of the new policies being put in place in the generation business.
It has been suggested that work done by staff of the ESB at present would be subcontracted. I would like the Minister to outline decisions being taken on restructuring, employment, new opportunities and further development in the ESB which will enable it to continue the same dynamic leadership which it has given in the generation of energy since its foundation.
I pay tribute to Mr. Moriarty on his work and I wish him well in his retirement. I also wish the new chairman and personnel success in the future. Although it will be a traumatic time, the ESB will be rise to the occasion and will not be found wanting in terms of its responsibility to the economy and welfare of the community.
I welcome the decision to invest £100 million or £120 million in Bord na Móna.
The £100 million is the first part of the £120 million.
I notice the Minister proposes to do something similar to what the Minister for Health is doing in relation to the hepatitis C issue.
It is not the same.
It looks as if this is more creative accounting on the part of the Minister.
Some years ago the Senator was very much against that type of thing.
We would never deny that we are professionals in this business. I was a member of a Government from 1987 to 1989 which is now being applauded by all parties. Ministers had to take tough decisions and face the public which was hostile. It paved the way for the healthy state of the economy at present. Senator Enright would not deny us that.
Live now and pay later.
It was almost short-lived because we risked political survival.
I would like the Minister to outline the end result of this investment. I presume this investment will be made in the interests of employment and further development. Bord na Móna has been innovative as regards some of the initiatives it has taken, although it has had difficulties in the midlands, to which my colleague Senator Cassidy will refer. I do not want to dwell on Bord na Móna other than to query the Minister about this issue of the £100 million, £120 million and the £30 million and the special accounts and to ensure at the end of the day that this investment is made. This side of the House would welcome an investment of equity in Bord na Móna, which will use it well and wisely to develop more employment opportunities and economic prosperity. I will try to deal with a number of issues raised in the various sections although I do not have them in the same order.
The Minister mentioned issues such as radon and the problems with radiological protection. The Minister said that he was making a very minor amendment, but it was to deal with a very complex issue between the Department of Health, the Radiological Protection Institute and the European Community. I am not clear about what the Minister is trying to achieve here or the purpose of the section, but I want to highlight one very important issue. There is an unacceptably high level of radon in many houses, particularly in the west and in areas of north Clare, which we mentioned earlier in connection with problems of flooding, as well as areas like Salthill in Galway and Galway city. Some areas on the west coast where testing has already been undertaken have shown very clearly an unacceptably high level of radon which needs to be dealt with urgently.
I compliment the Radiological Protection Institute on its work. It carries out a test on a private dwelling for around £15. This is a good investment, especially in high risk areas. Perhaps we could avail of the opportunity to impress upon people in such houses the desirability of having radon testing done.
Radon testing is free.
Yes and the testing of domestic houses should be encouraged so that we can get a clear picture of the overall situation. The institute is conducting a national survey at the moment and I hope we will have the result fairly soon, but financial support for people who have a problem with radon is also necessary. My understanding from the Department of the Environment, the institute and the Department of industry and energy is that, to insulate a dwelling with a very high radon level against radon an investment of between £900 and £2,000 might be necessary.
I strongly urge the Minister to bring forward a scheme to provide assistance to the less well off sections of the community, those on low incomes and those who have very high levels of radon so that an overall scheme could be put in place to, prevent, reduce or eliminate radon levels in houses. This would also help to prevent lung cancers and other problems arising from high radon levels.
In relation to insulation generally, the ESB and the Government had a very comprehensive energy conservation programme which saved millions of pounds for the taxpayer. However, that scheme seems to have run out of steam, I am not certain whether it has been abandoned, but it is not promoted as enthusiastically as in the past. I would like some information about that. The Minister of State will be aware of recent reports that poor insulation in dwelling houses was blamed for the untimely death of many elderly people and that it could be possible to eliminate problems by energy conservation through better insulation. I strongly suggest to the Minister of State that if he were to look favourably at introducing financial measures to deal with issues like energy conservation related insulation for the elderly, and measures to reduce radon levels in domestic dwellings and other places such as public national schools, he would have widespread support in the community and the Oireachtas.
The Bill has raised a number of issues in relation to foreshore licences and foreshore law; this is a very complex area. On Committee Stage, we will deal in more detail with how it is hoped to deal with what the Minister proposes here without necessarily interfering with foreshore rights and access as this is quite a complex business.
The main thrust of this legislation is towards development and improvement in the energy resources and development of the State. It is important from the point of view of economic progress and prosperity, employment development and generation that we have healthy institutions such as Bord Gáis Éireann, Bord na Móna and the Electricity Supply Board.
In dealing with this Bill we want to show the Minister of State our total committment to dealing effectively and speedily with these issues. We will, on the other hand, very carefully examine every section in this legislation and if we feel it is necessary to make amendments on Committee Stage to improve the legislation we will do so. Overall I welcome this legislation, I compliment the Minister of State on bringing it in to the House and I assure him of our whole hearted co-operation and support in getting it through speedily.
I wholeheartedly welcome the Bill and commend the Minister for bringing it before the House so expeditiously. It shows considerable initiative, enterprise and innovation by the Minister, Deputy Lowry, and his Minister of State, Deputy Stagg.
This Bill covers quite a large number of areas in relation to energy distribution, generation, and the overall funding and cost for energy. There is a State investment of approximately £5 billion in energy infrastructure The energy imports to this country represent approximately 3 per cent of GNP. I listened attentively, as I am obliged to do, to many people who are highly critical of the workings of the ESB and Bord na Móna. Many people criticise the debt of Bord na Móna and the work it does. However, it is important to bear in mind that the workings of Bord na Móna reduce the cost of imports and similarly, Bord Gáis also helps to reduce the import of costly energy resources.
The Bill covers many aspects and areas. It deals with a large number of Acts. It deals with the Gas Act, 1976, a considerable extension of powers of Bord Gáis Éireann and the gas interconnector between Great Britain and Ireland. I welcome the limit on the amount of gas coming through this interconnector which can be utilised on a commercial basis. The ESB, Nitrigin Éireann Teoranta and four other semi-State companies use approximately 75 per cent of the gas imported into Ireland. I would not like to see an open-ended extension of the gas interconnector. If such scope were given, it would place Bord Gáis Éireann in difficulty.
The provisions in relation to the Turf Development Acts from 1946 onward are of particular importance to my constituency and the midlands area and for Bord na Móna and the ESB who have significantly improved the standard of living in the midlands. They provided much needed and well paid jobs and have benefited the Exchequer. They had an important influence on employment in the midlands and have made an important national contribution in the supply of energy.
I welcome the provision to Bord na Móna of £100 million to repay debts. The provision of equity to Bord na Móna for funding is long overdue. Bord na Móna's overhanging debt prevented its development and effectively crippled it. The current debt is approximately £163 million. Annual repayments cost Bord na Móna approximately £18 million to £20 million per annum.
It is important to examine how such debts occurred. During the energy crises of the 1970s and 1980s, Bord na Móna and the ESB were directed by the Government on future development and incurred a considerable level of debt. For years I have requested an injection of equity to Bord na Móna. I felt that the debt had to be drastically reduced or wiped out. Mine was a lone voice for many years but I am glad my requests have been acceded to.
It is important to remember that, before many other State companies, Bord na Móna realised that major changes were essential for survival. To ensure a solid commercial future, Bord na Móna embarked on a major programme of rationalisation and change. It employed 7,100 people at its peak in the mid 1980s although the annual average of those employed by the company was 4,500 which included full-time and seasonal workers. During the past five years staff numbers in Bord na Móna have been reduced by 2,200 and at present, the company employs in the region of 2,100 to 2,300 people. I saw the effect of these job losses. I can state categorically they have had a very serious and damaging effect on the midlands where whole communities have been devastated. Significant numbers of shops closed and houses were left empty. Large numbers of people have either left the area or become unemployed.
It is to the credit of the board and staff of Bord na Móna that work practices within the organisation changed radically with little publicity and job losses were accepted. Many of the staff felt changes had to be made in order that the company survive. They were anxious the board should have a competitive future and be able to provide milled peat, turf and briquettes at a competitive price. They have succeeded and Bord na Móna has become more efficient in its core activities.
The £100 million being provided under the Bill will be of direct benefit to the taxpayer. The ESB will benefit from a reduction of approximately £6 per tonne in the cost of milled peat available for use in its five generating stations at Ferbane, Rhode, Shannon-bridge, Lanesboro and Bellacorick. This reduction will bring the price for milled peat into line with the projected long-term price of gas and oil. The ESB will, therefore, be able to purchase milled peat at a competitive price.
The moneys allocated under section 25 will help to relieve Bord na Móna of the massive bank interest payments it has been obliged to pay to date on its bank loans. As a result of this cash injection, the total savings will be approximately £13 million per year. This is a case where Government investment will be a direct relief to electricity users who are also taxpayers. This Bill, and the moneys granted thereunder, ensures that Bord na Móna can supply peat to the new electricity generator in the future, at competitive prices. In excess of 100 million tonnes of peat can be economically extracted from bogs in the midlands in counties Offaly, Kildare, Meath, Westmeath, Tipperary, Mayo, Galway, Roscommon, Longford and Laois. I am glad this natural resource, which is a great source of wealth to the country, will be utilised. It is also important to note that these bogs are in counties, many of which have no strong alternative industrial base.
It is important to bear in mind also that we have three stations in County Offaly — Ferbane, Rhode and Shan-nonbridge. I urge the Minister to ensure his Department makes every effort to ensure these stations are upgraded, improved and maintained at a proper level so that employment can be maintained. The communities in these areas are waiting and watching attentively because their future, to a large measure, will be dependent upon the decisions taken and whether or not investment is to continue.
I warmly welcome the building of this new 120 megawatt power station. Across County Offaly and the east-midlands——
County Westmeath?
——this power station has received widespread support. The £30 million European funding shows this project can stand on the merits of its case. There will be many doubting people who are highly critical of this proposal. It has been closely examined by the Department, the Government and the EU and has received the green light from all of them. This shows the merit of the case for building this new station.
Deputy Cowen played a big part there.
I must be more than generous in accepting what the Senator says as Deputy Cowen showed a lot of initiative.
I am pleased it has been approved and I am sure Bord na Móna welcomes this project. In replying to Second Stage, perhaps the Minister can tell the House when tenders will be sought for the building of this new station. I would not like to see this matter proceed with the provision of a procurer for the electricity first and the tendering process at a later stage. If I might borrow a phrase from elsewhere, I hope there would be a twin-track approach on this matter so that it can proceed in tandem and tenders can be sought at an early date. We could then see an early start to the project because the funding will run out in 1999, if my memory serves me correctly, and that is why it is so important.
The building of this station is important from another viewpoint. We ought not forget that much of the world's reserves of energies, such as oil and gas, are held predominately by countries which have been political unstable in the past. Many of these areas, such as Russia, the former Soviet Union, the Middle East and north Africa, have had political problems in the past and, as a result, our supplies have been seriously affected. That is why we must have some resources of our own available.
There is also the matter of the depletion of the gas reserves off the south coast of Ireland. I understand most of these reserves will be exhausted by the end of this century unless we are lucky enough to find alternative supplies in the meantime. This country must ensure it is not 100 per cent dependent on energy from outside the State.
This Bill will ensure the survival of Bord na Móna as a vibrant natural supplier of energy for electricity well into the next century. The resource of 100 million tonnes of peat guarantees the supply of electricity until at least 2020.
There has been much progress in Bord na Móna over the last number of years. Workers have made many sacrifices, particularly in the last ten years, and a lot of changes have taken place due to their dedication and efficiency. By granting this equity injection of £100 million the Minister has recognised the sacrifices of the staff. While these moneys may recognise retrospectively the sacrifices which have been made, the removal of this debt burden from the shoulders of the company and this injection of equity shows the Government is committed fully to maintaining our own independent, native energy supply. It is essential that we continue to work and strive for that objective.
I believe the Minister has a clear policy on energy supply. I welcome the new 120 megawatt power station. I see a great future for Bord na Móna and the ESB. I wish the Minister well in his work and congratulate him on his enterprise and work to date.
An Leas-Chathaoirleach
I call Senator Mary Henry.
On a point of order, is it not two Senators from each of the main parties before the other side?
An Leas-Chathaoirleach
No. I am sorry, Senator, that is not the case. I must call Senator Henry. There has been one speaker from Fianna Fáil and one from Fine Gael. I am now obliged to call a Senator from the Independent benches.
I can assure Senator Cassidy that I will be brief. Turf, coal and oil have been dealt with satisfactorily by Senator Daly and Senator Enright so the only area on which I want to comment is section 26, which relates to the medical use of ionising radiation. I am glad the Minister has included that section. I do not think anyone really knew why the Radiological Protection Institute of Ireland was not empowered to cover ionising radiation for medical uses when the 1991 Act came into effect. I presume the Minister's professional experience must have shown him how important it was to introduce this.
I welcome its introduction but I hope he will ensure there is sufficient equipment and personnel to monitor this because the Minister will be only too well aware, again from his background, that ionising radiation is being used more and more in procedures, research and with new medical tests which are being brought into the medical area on a daily basis. While I welcome it, I would like to be sure the Department will see that the Department of Health is in a position to monitor it carefully under the safety and health regulations which, after all, are not only important for those patients on whom it may be used but are extremely important to those workers who may use it. The latter are in daily contact with such radiation whereas patients come in contact with it, we hope, on a once-off basis only.
I welcome the Bill as it seems to cover a great deal of important work.
One of the great advantages of being on the Government side when Bills of this sort are being introduced is that there is always a consensus when it comes to throwing public money at semi-State bodies and it saves anybody who is not in favour of that particular activity from voting against it. Apparently, once again, there will not be a vote on an issue of this sort because everybody is agreed it is a good idea.
The Senator should not be so presumptuous.
It will be a good idea for Senator Cassidy because it is a local issue for him——
He breezed in here.
An Leas-Chathaoirleach
Senator Ross without interruption.
——and he is a fine local public representative. As a result, he will, of course, support this Bill.
It affects my people.
Of course. If the Senator listens to what I have to say, I am singing his praises as I always do in this House and I will continue to do so. If the feeling is not mutual, I am sorry. There is nothing I can do about it but I feel what Senator Cassidy is doing in supporting this Bill is something which he must do.
It is your Government.
It is something about which I do not feel so strongly because I am not from his part of the world. I want to look at the matter a little more globally than he does to see whether this Bill is in the interest not just of the people of Castlepollard but of the Irish people.
I do not share the consensus of approval which greets this Bill because of sections 23, 24 and 25. Those final sections are by far the most important. I do not understand why this Bill, which is aptly named the Energy (Miscellaneous Provisions) Bill, should have £30 million of public money tucked away as though it was not worthy of great priority.
It is £100 million.
There is £30 million in this but £100 million in total. There is only £30 million this year.
Cooking the books.
It is for the £30 million that this Bill has been introduced and the hurry is because the Government needs the £30 million this year. The rest of the Bill is a mishmash that has been put together to include different companies and different issues. However, before Christmas the Government will pay £30 million to Bord na Móna. It is typical.
We should not be paying £30 million to Bord na Móna; we should not give anything to that body because, as the Minister knows, Bord na Móna is bust. It is a bankrupt company and has been such for as long as I or the Minister can remember. Instead of putting forward constructive projections and plans for Bord na Móna we are told that this £30 million is part of £120 million which will go to the company courtesy of the taxpayer. It will tide us over the next little problem in the semi-States and we will put in a bit more next year and the year after and we will see how it develops. If it does not do well the Minister knows what will happen — the Government will put more money into the company when the £120 million has run out.
The problem with this is that it sends all the wrong signals to the other semi-State companies. This company has been allowed to behave in a profligate fashion, guaranteed and supported by successive Governments. Loans have been guaranteed and subsidies have been given for years and the place is being used as artificial jobs blotting paper. Politicians have not had the guts to say that it is a bankrupt company and it should be tackled. That is the problem.
Staff numbers were reduced from 7,100 to 2,200.
That has not solved the problem.
The Senator's party leader has a problem.
An Leas-Chathaoirleach
Senator Ross, without interruption.
The problem is still there and it is in all the semi-State companies.
The problems are being tackled.
Let us look at how Bord na Móna behaves as a semi-State body and how it behaves following an announcement that it will receive £30 million this year and a total of £120 million from the taxpayer. One of the first things the company did was buy a corporate hospitality box in Croke Park. What an extraordinary thing for a bankrupt company to do. It was announced that the company would get £120 million and off it went and bought a corporate box for its clients in Croke Park. It laid on plenty of champagne and smoked salmon courtesy of the taxpayer and there was not a whisper from the Minister or anybody else. Good luck to the company but the wrong message went to the other semi-State bodies.
There are many other semi-State bodies — including bankrupt semi-State bodies — doing the same thing. The first thing they will do when the Minister makes another announcement is go and buy a corporate box in Croke Park with Bord na Móna. Guess who is sitting beside Bord na Móna's wonderful hospitality box in Croke Park? Telecom Éireann. It only has a debt of £1,000 million so why would it not spend £150,000 on corporate entertainment? Good luck to that company too. Telecom Éireann is under the Minister's Department and there has not been a whisper from the Minister about it. Who else decided that corporate entertainment was a good idea? CIE. Why should it not? It only loses £85 million or £90 million a year.
An Leas-Chathaoirleach
We are not discussing CIE this evening.
I am drawing parallels with Bord na Móna and the semi-State companies.
An Leas-Chathaoirleach
The Senator's comments must be relevant to the Bill before the House and the Senator has three minutes left.
I will make them as relevant as possible. I am trying to demonstrate that although Bord na Móna is bankrupt it does not appear to take its bankruptcy terribly seriously. There are many private companies which are making plenty of money but they do not seem to think they can fork out £150,000 to entertain their clients in Croke Park at a football match. However, apparently it is perfectly all right for a semi-State company to behave in that way. That is up to it because it is not answerable to anybody. The Minister does not reprove them, the taxpayer cannot do anything about it and nobody mentions it in this House because we are going to put £30 million through on the nod. Does the House know how many corporate boxes they could buy with £30 million? It is about 200. They might as well because nobody will stop them.
This company is unfortunately not answerable to anybody; none of the semi-State bodies in reality are answerable. I wrote to Bord na Móna recently to ask what was the attendance at their board meetings. It is a reasonable question for a Member of the Oireachtas to ask of a semi-State company which is in debt to the tune of £180 million. It is fair enough to ask if the board members are turning up for their meetings. They sent back a garbled extract from the annual report and financial statement giving a few global figures but the company would not give me the facts about the individuals concerned. It is right that these people should be answerable. The chairman is paid £6,000 per year and the directors are paid £4,000.
An Leas-Chathaoirleach
The matter the Senator is raising is not relevant to the Bill before the House.
Of course it is. This money will go towards paying the directors fees. Where else does it come from, the air? That is what the semi-State companies think. It does not come out of the air, it comes from taxpayers and each one of the directors who gets £4,000 is getting it from the taxpayer. That is why it is relevant. This £30 million and the other £90 million which the Minister is asking us to vote through will also come from the taxpayer.
Accountability is the great maxim of this Government. I have demonstrated — to some extent in a frivolous way although I am making a serious point — that accountability does not exist in Bord na Móna. There is no promise in the Minister's speech of increased accountability in Bord na Móna in the future. I can see a possible case for putting what is euphemistically called "equity" into Bord na Móna — it is a case I would reject but I can see that a case could be made for it — if Bord na Móna was going to be accountable, open and transparent in the future. However, we all know that this is just the first of many payments. The quid pro quo for this — a totally inadequate one — which is that the relationship between Bord na Móna and the ESB should be on a commercial basis is long overdue.
It is a great pity that we talk in this Bill about restructuring and that we talk in glowing terms in the annual report. Neither Bord na Móna, the Minister or anybody else is prepared to face up to the reality that Bord na Móna is a bankrupt company. We are skimming over the problem with taxpayers money and this is only the first payment of a series. Bord na Móna should be launched into the commercial world or should be allowed to die. This, unfortunately, is not being done in this Bill which seeks to tide us over into next year. It will solve a political problem.
It is in a commercial world and it will survive.
It will solve a political problem for people like Senator Enright because it will get him over his local difficulty but it is not in the interest of the nation.
I am tempted to call a vote to see if Senator Ross will join this side of the House this evening. The late Paudge Brennan, who was a prominent politician in Wicklow, the constituency for which Senator Ross tried to be elected, said that there is never a wrong time to say the right thing. Senator Ross had already put the views he has expressed here in his favourite Sunday newspaper but there is another side to Bord na Móna. Since 1946 the company has brought life to the midlands, to counties Laois, Offaly, Longford, Westmeath, Meath, Cavan and Kildare, etc. It has brought a social dimension to these areas which did not exist before. It provides good employment. At one time it employed over 7,100 people. At peak season now it employs over 4,500 people.
How much is it losing?
Its losses are not enormous compared to the money paid in dole. In my area Board na Móna ceased production of sod turf at Coolnagun leaving us having to travel 50 miles for such fuel. Some 180 people were employed there by Bord na Móna but the current workforce is only six. The population of the area has fallen by 28 per cent. It is better for life in rural and urban Ireland that people are working rather than on the dole.
Senator Ross reminds me of a true socialist; he wants to share everything with everyone when he has nothing himself. I am not saying the personally has nothing but his philosophy is bankrupt. From the way he is performing here I do not see him being elevated in his own party to any position where decisions might have to be made in areas such as the one we are discussing.
I became a Member of the House in 1982, and I recall that at that time Bord na Móna began experiencing difficulty. Approximately £20 million was required to pay interest on the company's massive debt which had been there for years. When people are involved in an industry which depends on the weather — only those who create employment would know about this — they cannot predict whether the season will be good——
So the problem is the weather.
An Leas-Chathaoirleach
The Chair must give Senator Cassidy the same protection it gave to Senator Ross.
It is a pleasure for me to educate the Senator on the difficulties for an industry which depends totally on the weather being favourable. The midlands area get little from Government by way of resources to create employment. Most of the money available goes to the east coast with large amounts being directed to the south and west. Despite that, the midlands are being advertised as the undiscovered beautiful part of Ireland. It was a tragedy for the people of the area that the previous Taoiseach had to resign. During his term of office there was substantial investment and development in the area.
An allocation of £120 million to Bord na Móna is a step in the right direction towards eliminating its debt. Any job creation initiative in the midlands would be a major advance on unemployment. There is nothing more soul destroying than waking up in the morning and not having a job to go to. Senator Ross and all of us here are fortunate to be Members of this distinguished House, to hold positions as legislators but there are some 300,000 people who do not share this fortune, temporary as it may be. There is massive social need for Government to create employment. Bord na Móna has played its part since 1946. I support the Bill.
The Kinsale gas pipeline is one of Ireland's great achievements of the past 20 years. The oil crisis in the early 1970s brought the country to its knees. Being partly self sufficient in energy because of Kinsale gas is very advantageous. The Minister's local area and mine might adopt a joint approach with regard to this gas. He may be able to tell us when it is proposed to bring the gas pipeline to Leixlip, Maynooth, Kilcock, Mullingar and Athlone? This would give these areas advantages, particularly in manufacturing, which other parts of Ireland have already. Urban renewal has been of much benefit in the creation of employment but rural renewal is also important. I hope the Minister will consider an extension of the gas pipeline given that by-pass roads have been constructed around Leixlip, Maynooth, Kilcock and Mullingar.
I welcome the proposed generating station for the midlands. I would like it to be located in my county while the Minister would like it to be in Kildare. This station will be a step towards our being self sufficient for the next 30 years. Senator Ross may think that £180 million is a great deal of money but it is minuscule compared to amounts by way of dole.
The Bill proposes the elimination of development grants for private peat producers. Private producers are trying hard to survive. Those grants allow them develop and drain bogs so that the machines can be used to cut turf for local people. Being practically self sufficient in this regard, it is too soon to eliminate the small grants available for private producers. There may be a case for doing so in areas where Bord na Móna operates but there is no such case in areas like north Westmeath. As I have said, the company has ceased production in Coolnagun and the area is totally dependent for turf on the two or three small peat producers there.
As usual, I was bemused with Senator Ross's contribution. He will only be satisfied if he becomes dictator of this country because he will then be able to decide everything. I disagree with his opinion of semi-State companies. He has many blind spots when it comes to this issue and he is selective in his quotations. For example, he condemned this Bill for giving money to Bord na Móna, but he forgot to inform us that the Exchequer benefited to the tune of £394 million in contributions from Bord Gáis Éireann. It might help if Senator Ross had a little balance in his approach to the semi-State companies.
He also spoke about Telecom Éireann. Its report states that Telecom Éireann is a profitable company which in the financial year 1993-94 reported operating profits of £173 million; after paying interest and currency costs the figure was £81 million. It also states that the Government's take from Telecom Éireann is high. In the period between 1991 and 1997 it is estimated that the total amount received will be £1.88 million. I am tired listening to Senator Ross's trendy journalistic approach to serious issues such as semi-State companies.
Senator Ross should look at what is happening in Britain as regards privatisation. While people may make a profit if the State does not have control in these areas, the system we have is a good one if people want properly run companies which provide essential services. A lot of good work has been done trying to solve the problems in these companies as regards the services they supply. Bord na Móna is a good example. This money will be well spent if it maintains jobs in the areas where Bord na Móna operates.
This legislation was not introduced to provide money for Bord na Móna. The Minister said this money would have been provided earlier, but it was necessary to bring in legislation for the natural gas interconnector. The other issues were then included. This legislation was not introduced to throw taxpayers' money away.
Bord Gáis Éireann has been a success story. The Minister indicated that 40 per cent of homes should be supplied with gas through BGÉ by the end of the decade. He also highlighted the benefits to the Exchequer. I welcome the parts of this legislation which deal with BGÉ and the continuation of a supply. The legislation provides for third party contributions to the supply, a provision which was instigated by business representatives. I hope Senator Ross is pleased that the Government is responding to the needs of business.
We hope that the gas explorations will be successful. The Minister stated that 24 licences have now been granted in this regard and others are pending. He indicated that Marathon Petroleum Ireland Limited hopes to produce increased gas supplies which would make it easier to provide this source of energy in the future.
I use natural gas as I live in an area where I can receive it. I support those people who have called for its extension to other parts of the country. It is a good form of energy for heating homes.
I welcome the section in the Bill which gives the Minister the power to inspect lines, infrastructure, etc. We are all concerned about environmental safety and we must ensure that proper safety measures are in place.
The ESB is facing its problems and ensuring it will be able to supply our needs in the future. I welcome the fact that the Minister is committed to supplying a certain percentage of our energy through alternative sources. I am interested in hydroelectric power as I live a couple of miles from Ardnacrusha, which pioneered the use of electricity in this country. People marvelled at its construction at the time. I hope we continue to have a commitment to hydroelectricity as opposed to the other methods because it is an environmentally friendly and good method of producing electricity. Although we must use the other methods available to us, I hope we do not turn our backs on the system which supplied us with electricity when we did not have other options.
I welcome this Bill, particularly the provisions for Bord Gáis Éireann and Bord na Móna.
Senator Ross seems to have struck a chord with the Labour Party and with some members of his own party. However, he is needed to bring realism to the debate.
For too long we have accepted the theory that semi-State or State companies would survive. They may have done so in the past, but they must now meet EU criteria. Many things have happened in semi-State companies which must be questioned. All is not rosy in the garden as far as the semi-State sector is concerned and I have said this on a number of occasions at the Joint Committee on Commercial State-sponsored Bodies. I cannot understand why many decisions are taken.
I agree with the claim that there is secrecy in semi-State bodies. I find it extraordinary that a request by Senator Ross for information on board meetings was not made available. As a member of the Joint Committee on Commercial State-sponsored Bodies, I remember we wanted to know the salaries of those who worked in RTÉ. However, Government members or members of the Opposition were not entitled to that information. If that is the case, we should question the use of public funds in this regard. If semi-State bodies want the support of the Houses of the Oireachtas and if taxpayers' money is being used, then there must be accountability and people must know what is happening.
I am not happy about the level of information from some areas. I would like to know why a matter which I brought to the Department's attention 12 months ago was not considered. It concerned small fuel merchants who were being put out of business because of the prices Bord na Móna was charging. If one buys 500 tonnes from Bord na Móna one receives a rebate of approximately 80p a tonne. However, if one buys 20,000 tonnes, one receives a rebate of £5 a tonne. It is not hard to understand that the small operator will go out of business as long as that system is maintained.
If one buys and sells briquettes in Ireland, one pays VAT at the rate of 12.5 per cent. However, fuel merchants across the Border in the Six Counties can pick them up without paying 12.5 per cent VAT and they find it easy to sell them in the midlands and west. This puts our fuel merchants out of business. What is the Minister doing about this? This type of practical issue should be addressed. It is fine to introduce Bills on various matters but fuel merchants are being put out of business because of inaction and abuse in some cases in the purchase, distribution and sale of products produced by Bord na Móna. This matter should be addressed.
The Bill concentrates on energy and I appreciate the Minister's interest over many years in this matter. I have no personal criticism of the Minister because he inherited some of the difficulties. However, the person in office must respond to queries which arise. I appreciate the massive energy cost faced by the country — £2.5 billion which is approximately 9 or 10 per cent of GNP. Representatives from the ESB recently attended the Joint Committee on Commercial State-sponsored Bodies. The company is interested in many issues, one of which is that the new procurers, which must be available under EU criteria, should be answerable to the ESB. This is extraordinary.
I recently visited Finland where there is not only approximately 120 different energy companies but two different national grids. However, in Ireland, the ESB is seeking to make the procurers answerable to it. The company also has an interest in the new power station. The interest of the semi-State company in the new power station is not in the best interests of the country. It may be able to do it on a commercial basis, but with what will it compete in the future?
Another aspect disturbed me following my visit to Finland. I met senior officials of the state body there but, when they visited Ireland, they were only shown two possible sites for the proposed new peat power station. This is extraordinary. I wanted to know whether they visited the site in Ballyforan which was developed for a briquette factory. However, they were not shown the site in Ballyforan or the Derryfada bogs, which is part of Bord na Móna's third phase. What type of half book were they shown with regard to their interest in a power station in Ireland?
They are recognised experts in their country and internationally in relation to peat power stations and they are interested in designing, building and commissioning the new station in Ireland. However, it is extraordinary if they are not given the full facts. In addition, they were not too happy with the proposed design of the factory and they wondered why we had not expanded into using combined heat and power in the past. I chaired a task force which included a submission from an expert on this matter and I mentioned it in the House previously. Although some attempts have been made in that regard, the issue has been placed on the back burner. It is most successful in other countries but it has not been used in Ireland.
Bord na Móna is to receive £120 million and I said on many occasions that it required equity. I supported this move but I am not sure the company and Governments have acted in the best interests of those who supplied the raw materials, such as small farmers. Land owners surrendered their bog for nominal rates — it was confiscated. In my area, 15,000 acres was confiscated for as little as £3 an acre. In return, there will be nine workers in 1996 whereas there were 228 workers in 1982. The bog was confiscated on the basis that a power station or briquette factory would be established to provide jobs for the sons of farmers who surrendered the bog. When Bord na Móna got the bog, the company and the Minister — the Taoiseach was the Minister at the time — pulled the plug on the proposed factory. Nobody has a job there and Bord na Móna has the people's property.
It is all Fine Gael's fault.
An Leas-Chathaoirleach
The Senator has one more minute.
I could do with a week on this issue. There have been many scandals involving and interferences in the lives of the public by the semi-State sector and none more so than in my area of County Roscommon/east Galway. Perhaps the Minister could find out why a contender of such standing for the new power station was not shown the site in Ballyforan. Why was he not informed that there is approximately 20,000 acres of untapped resource in the area which is in the hands of Bord na Móna? Is there a political agenda with regard to this site? Is it not extraordinary that the site of the new power station is so close to the east coast? Is it the case that the new power station will replace the old and run down stations in the midlands? Does the Department of Transport, Energy and Communications have an agenda on this matter? In the future the answers may become clear.
The Department is not in the business of hand holding.
The Department takes decisions and has always done regarding infrastructural development.
The location of a power station is not the Department's business.
It was a ministerial decision not to proceed with the briquette factory in Ballyforan. It was also a ministerial decision to close down Allenwood. Ministerial decisions were taken on many infrastructural developments with regard to Bord na Móna. I appreciate EU criteria must be met on this occasion, that EU money is involved and there is a period for evaluation. However, the two semi-State companies appear to be deeply involved, either on their own, if possible, or in co-operation with another operation.
Why not show all the sites to all the applicants when they visit Ireland? It should be established whether it is in the best interest of Ireland to set up one power station on the east coast or perhaps a small station on the east coast and another small station on the west coast. The position is not clear and the issues have not been fully debated. I intend to seek a more comprehensive debate on the new peat power station because all the issues have not yet been fully discussed.
As the Minister said, the purpose of the Bill is to provide for a variety of issues, including measures to facilitate the construction by Bord Gáis Éireann of the Ireland-UK natural gas interconnector. This is the main point. Energy plays a major role in our economy and Bord Gáis Éireann should be congratulated. The Minister mentioned its chairman, Dr. Michael Conlon, who was the manager of Cork County Council for many years. I was a member of the council when the Kinsale gas field was initiated. However, I am disappointed the Kinsale and associated Ballycotton gas fields are expected to be depleted in the next five years. I thought there was more potential in the Kinsale gas field. Perhaps that point might be clarified.
The Minister indicated that domestic and industrial-commercial use accounts for 35 per cent of gas sales. In Mallow we have natural gas for industrial purposes only. We were told it may be too expensive to extend the main line. In Cork city there is contention and concern about what I might describe as a minimum payment. The matter was raised publicly by a colleague, Councillor John Kelleher of Cork Corporation, and I would like the matter looked into. The Exchequer has benefited to the tune of £394 million in contributions from BGÉ and I hope that will continue.
Senator Ross made an outrageous attack. When he was writing to Bord na Móna did he do so as a Member of the Seanad or as a well paid journalist? He has a double salary as a journalist and Member of the Seanad. He is seldom here and when he is he attacks people on social welfare or the semi-State bodies. That day is gone. This country is progressing. Senator Ross is like a little dog barking at the moon. An attack was also made from the other side of the House. From its inception Bord na Móna has made a significant contribution to the State.
I have always been loud in my praise for BGÉ. The Minister said that section 14 provides for the formal vesting in BGÉ of the assets of the former town gas utilities, including Dublin Gas. We know how inefficient it was. The Bill is a welcome development.
Although not wishing to sound a discordant note, I hope the Minister is not being over optimistic when he refers to the objectives for renewal or alternative energy sources, such as wind, hydro or biomass. In Mallow we have goethermal wells which we have connected to the swimming pool. However, it has not had any great impact at the end of the day. Perhaps the potential is there and hopefully such sources of energy will be a success. I am not too confident but I am sure the Minister of State will explore it to the utmost.
I will refer briefly to the provisions of the Bill dealing with Bord na Móna. About seven or eight years ago I attended a public meeting in Lanesboro, County Longford, and a call was made by the unions and the workers of Bord na Móna for equity for Bord na Móna. Prominent politicians from the midlands were at the meeting and some of them strongly voiced the view that when a change of Government occurred in 1987 there would be support for the demand.
There was a myth that if a particular political party was not in power it would be bad for Bord na Móna. We have heard shades of that view this evening. However, we have to deal with facts: this Government has delivered to Bord na Móna that which was sought for the past few years. In latter years Bord na Móna has diversified and this boost will give it the opportunity to expand, develop and experiment with the various aspects of its operations.
I agree with Senator Finneran that Bord na Móna acquired a lot of bog at a low price. However, many farmers got employment from Bord na Móna and did well out of it. Bord na Móna has given a lot of employment in the midlands and the west. I am glad it will now have a chance move forward. Many of Bord na Móna's problems through the years were the result of bad weather. In some of the areas into which it will diversify perhaps it will not be as subject to the weather. Bord na Móna's expertise has been called upon abroad. In many ways we can be proud of Bord na Móna.
I welcome the Bill, particularly the section dealing with Bord na Móna.
I will try to deal with the various points made. I thank Senators for the positive response they have given to the Bill. I do not propose to deal in any great detail with what Senator Ross had to say. It was the usual extreme right wing rant we have come to expect from the Senator. Most of what he said was entirely irrelevant to the content of the Bill; I would describe it as unadulterated rubbish. I read the same rubbish from Senator Ross in the Sunday Independent every week.
I reject every point he made: he said nothing with which I could agree. His ignorance of the subject is culpable. He is not an ignorant person arriving unknowingly to the issues. He ignores the House and is ignorant arising from that. He was not here for the opening speech but seemed to think he is capable of dealing with the matter without having read the Bill, heard the opening speeches or waited for the response to his comments. He will remain culpably ignorant.
British Gas, which was forced to do what he suggests we do to our company, will lose £1 billion this year — not over a period of ten years — directly arising from the imposition of the type of policies Senator Ross says we should apply to our companies. Enough of Senator Ross.
I was surprised at the unusually and uncharacteristically negative response from Senator Finneran. Most of the points he made are outside the remit of the Bill and outside my remit as Minister of State. I have taken note of the points made and I will come back to him personally when they have been examined. As they are outside the remit of the Bill I do not propose to respond to them now.
I concur with Senator Daly's remarks about Dr. Paddy Moriarty, former ESB chairman. He gave great service not just to the ESB but to the country over many years.
Many Senators asked what exactly was involved in the funding of Bord na Móna. We propose to provide in this Bill a legal facility so that money can be transferred to Bord na Móna which it will not have to repay to the State. There is currently no legal basis for giving money which does not have to be repaid to any State body. The Minister will now have power to invest in a State company. The amount of £100 million in the Bill is the first tranche of the £120 million and it is envisaged that will be paid in 1995, 1996 and 1997. I assure Senator Daly this is not a similar proposal to that which found disfavour in the other House recently.
The Senator also raised the issue of radon gas, which is not directly pertinent although there is a section in the Bill which deals with radiation. A national survey is currently being undertaken and when it comes to a house-holder's area, he or she may have his or her premises tested free of charge. I have prepared proposals, which I am pursuing with the Government, to provide assistance to remedy the presence of radon gas in houses. The gas arises from the decay of uranium naturally in the soil and it collects in houses and other buildings. Studies indicate it gives rise to a high incidence of lung cancer — the figures for deaths arising from radon in Britain are frightening. I welcome the support of the House, from the Opposition as well as the Government side, for measures we are behoven to take to remedy and eliminate radon gas from homes, schools, etc.
Senator Daly also covered insulation and conservation of energy. The Irish Energy Centre supports Energy Action. a community based organisation involved in the insulation of houses of less well off people, mainly the old. Other measures are being taken by other Departments in regard to insulation but energy conservation is a much wider area which I covered in an earlier statement to this House and will discuss again at a later stage.
Senator Enright asked when the new 120 megawatt power station would be likely to be notified for indication of first interest; I understand this will be done in January this year. We also propose a second power station, of 30 megawatt capacity.
Where?
There is no location, the builders will decide that, as they will in the case of the 120 megawatt station. The successful bidders will decide the location, it will not be decided by anyone else.
Is this an off-loading of responsibility for where the station will be located?
No. If the successful bidders want to build the new power station in Kerry — which is highly unlikely, because there is not enough turf to supply it——
There is in Tralee.
——that would be where it would be placed but all elements would be taken into account, including the location and the economics of it. In my opinion, it would be in the east midlands as that is where the main supply of turf is. Likewise, I will announce the details of the 30 megawatt biomass station tomorrow morning. It will also be open to competition; the successful competitor will decide where it will be located and there are a number of possibilities.
I thank Senator Henry for spotting the difficulty between our primary legislation and European legislation on radiation. Senator Cassidy mentioned the extension of the gas network. As I said in my initial contribution, the Government has given BGÉ a criterion that any extension of the network must be commercial. That does not take into account the social element in the extension. The same point was made by Senator Sherlock. That being said, I have asked the board of BGÉ to look specifically at a number of towns. I hope to see a circle from Limerick to Shannon, Galway and through the midlands to meet the gas pipeline. It has been extended to Maynooth now because Intel attracted it, not because I am there. The decision was made about that before my time.
Long before it.
Intel, the major user in the area, made it possible to extend gas to Maynooth and Leixlip and I will raise the possibility of extending it to Mallow, as gas is already in that town.
Senator Sherlock also mentioned the tariff whereby one must buy a certain amount of gas — one could say one had to waste gas — to reach the cheap level. The review of the tariff has been completed and we will announce a new pricing system for gas in early January. The waste element will be taken out.
I am sorry to have to confirm to the Senator that Kinsale Head gas, even with the associated Ballycotton field, will run out in about five years at our current level of usage. That is quite a long time as far as the exploration is concerned and I am hopeful we will have found other resources within that time. Even if we have not, we will be able to buy gas and import it through the interconnector we have now provided, which is a great security. We now have two points of supply. We are also discussing with the Northern Ireland authorities the possibility of an interconnector to them — they are building an interconnector to Scotland, which would also provide security of supply in the event of a breakdown.
I assure Senator O'Sullivan of my support for hydro power and for a continuation of it where possible. It is not true, as she mistakenly thought, that it is entirely environmentally friendly. There are some problems with spawning rivers where we have put in small hydro schemes and we are looking at new systems which avoid the damage done and allow further small hydro plants to go ahead.
We will continue with the alternatives from wind, for which we have an application for 73 megawatt capacity. That amount of energy would, in one year, prevent 73,000 tonnes of CO 2 sulphur dioxide and other pollutants which would arise from the burning of fossil fuels. That is the measure of saving — for every megawatt produced from alternatives that do not involve incineration, such as wind and hydro, we prevent 1,000 tonnes of atmospheric pollution.
I think I have dealt with most points raised by Senators. I thank them for their positive contributions and we will deal with the more detailed points on Committee Stage.
Question put and agreed to.
Committee Stage ordered for Wednesday, 20 December 1995.