Petroleum (Exploration and Extraction) Safety Bill 2015: Second Stage

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

Molaim an Bille seo don Teach. Before I introduce this new Bill to the House, I convey my apologies to Senators for the short notice in bringing it before them today. I know that this was the subject of debate last week and hope Senators got an opportunity to brief themselves on the information at their disposal since. As a former Senator, I am aware of the commitment and effort required by Senators to deliver robust legislation. I thank Senators for their forbearance and co-operation in endeavouring to meet the tight transposition deadline required in this instance.

I am pleased to introduce the Petroleum (Exploration and Extraction) Safety Bill 2015 for the consideration of this House. The purpose of the Bill is to transpose directive 2013/30/EU, known as the offshore safety directive, which is focused on safety of offshore oil and gas operations. Transposition of the directive will further strengthen the safety regulation of offshore oil and gas exploration and production in Ireland's offshore area. The offshore safety directive which was agreed under the Irish Presidency of the EU in June 2013 is the European Union response to minimise the risk of offshore accidents throughout the Union following its review of offshore oil and gas operations in Europe prompted by the Deepwater Horizon incident in the Gulf of Mexico in April 2010. The offshore safety directive seeks to ensure a consistent implementation of best regulatory practices in all European jurisdictions with offshore oil and gas activities and to strengthen the Union’s preparedness and response capacity to deal with an emergency that would potentially affect Union citizens or the environment.

It is an exciting time for the petroleum exploration sector in Ireland. In the past three to four years we have witnessed strong momentum in exploration interest, with the number of exploration licences in place currently at its highest level ever. This increased level of interest has resulted in a significant increase in the level of acquisition of new seismic data in the Irish offshore. In 2013 and 2014, more new seismic data were acquired in the Irish offshore than in the previous ten years. It is a positive indicator that acquisition of new seismic data is continuing at a high level again this year. We now need to see the this effort translate into increased drilling levels, as it is only through exploration drilling that the true potential of Ireland’s offshore area can be proved.

In September this year, the 2015 Atlantic margin licensing round will close. While the drop in oil prices is having a worldwide impact on investment decisions by exploration companies, feedback remains positive about industry interest in the licensing round. A successful round would be important to maintaining the positive momentum that has been established in recent years. It is also positive that the Corrib gas development is expected to come on stream later this year. Corrib will provide over 40% of peak demand for the island of Ireland in its first year of production.

The Government’s strategy for the exploitation of the State’s natural hydrocarbon resources is premised on industry rather than the State bearing the risk for exploration investment. In this context, it is important that the State provide the right environment to encourage the industry to take the risk associated with investing in exploration. One of the key components to creating a robust and transparent regulatory regime in Ireland is the implementation of the Government’s decision in June 2014 that Ireland’s oil and gas fiscal terms should be revised along the lines recommended by Wood Mackenzie. The key central conclusions of the Wood Mackenzie report were that there is scope for strengthening the current fiscal system in terms of providing for an increase in the overall State take, ensuring an earlier share of revenue for the State, and addressing what Wood Mackenzie consider to be inconsistencies in the current fiscal system.

Other initiatives in this sector include the conclusion of Ireland’s first strategic environmental assessment of the entire Irish offshore exclusive economic zone. This assessment will help to inform applications for both the current and future licensing rounds in Ireland’s Atlantic margin basins. This process will provide exploration companies working offshore Ireland with an environmental operational baseline against which they can conduct their work and ensure the protection of the marine environment.

In this context, I would also briefly like to mention the ObSERVE programme. This programme which is being undertaken by my Department in partnership with the National Parks and Wildlife Service is unique to Ireland in its proactive approach to ensuring that the best possible information is available with respect to protected marine species. This will mean that both regulatory authorities and the petroleum industry are well placed to make decisions in an environmentally robust and sustainable manner. It is particularly satisfying that the two international consortia that successfully tendered for this work were led by Irish research institutions and that Ireland’s national research vessel operated by the Marine Institute will play a key role. The ObSERVE programme will see extensive aerial surveys being undertaken by a team of researchers led by University College Cork. In parallel, a research team being led by Galway-Mayo Institute of Technology will deploy special underwater acoustic devices from the RV Celtic Voyager in Ireland’s offshore canyon systems, to explore their importance for whales and dolphins. I am pleased that this innovative Government initiative has been so positively received by industry.

Returning to regulatory robustness with regard to safety, the offshore safety directive specifically provides for the institutional separation of regulatory functions relating to offshore safety and the environment from those functions that are focused on the economic development of offshore resources, such as licensing and revenue management; a goal-setting approach in major accident prevention based on thorough risk assessment and reliable management systems; clarity on environmental liability in the event of a major accident; and emergency preparedness and response arrangements. The deadline for the transposition of the directive is 19 July 2015. The Bill is a relatively short one as the approach to transposition involves integrating the directive requirements with the safety regulatory system for oil and gas exploration, and production activities in Ireland introduced under the Petroleum (Exploration and Extraction) Safety Act 2010.

The 2010 Act conferred the Commission for Energy Regulation, CER, with responsibility for the safety regulation of petroleum exploration and extraction activities in Ireland, including a requirement for the CER to establish and implement a petroleum safety framework. The petroleum safety framework is the system that the CER uses to regulate the safety of petroleum activities carried out by petroleum undertakings licensed to carry out petroleum exploration and extraction activities. The framework was designed In line with best international practice with petroleum undertakings required to reduce all safety risks to the internationally accepted level that is as low as is reasonably practicable, ALARP. In conferring this new responsibility on the CER, the 2010 Act gave effect to a key recommendation of the report produced by Advantica following its safety review of the Corrib gas pipeline. At that time, Advantica had recommended that a new risk assessment-based safety framework with respect to gas pipelines, in line with best international practice, should be developed and implemented in Ireland.

This approach is now the commonly accepted methodology for managing safety worldwide. The Commission for Energy Regulation has successfully operated the petroleum safety framework since December 2013.

The key requirements of the directive are broadly analogous with the provisions of the 2010 Act. These requirements are the institutional separation of safety regulation from the economic development of oil and gas resources and a goal-setting approach to major accident prevention. A significant element of the transposition of the directive involves the introduction of consistent terminology and language. The main regulatory implications of the directive that are required to be addressed in the Bill are the establishment of a national competent authority, provision for the assessment of potential major environmental hazards offshore within the scope of the safety case regime, clarity on industry liability in the event of a major accident, and specific obligations to be placed on both operators and owners of petroleum infrastructure.

Before turning to the detail of the Bill, I refer to hydraulic fracturing, an issue about which Deputies might be concerned in the context of these proposals To clarify, the directive the Bill seeks to transpose relates only to oil and gas activities offshore. As such, it is concerned solely with the safety regime applying to petroleum exploration and production activities in the offshore area and has no implications whatsoever for unconventional gas exploration and exploitation.

I shall now outline the detail of this quite technical Bill. For the convenience of the House, a detailed explanatory memorandum has been published, which provides a synopsis of the Bill’s provisions. There are 24 sections in the Bill. Part IIA of the Electricity Regulation Act 1999, as amended by the Petroleum (Exploration and Extraction) Safety Act 2010, relates exclusively to the regulation of petroleum activities by the commission. Almost all of the sections of this Bill amend Part IIA of the Electricity Regulation Act 1999, save for section 23, which amends the Petroleum and Other Mineral Development Act 1960, and section 24, which amends the Continental Shelf Act 1968. I will deal first with all the sections amending Part IIA of the Electricity Regulation Act 1999 before dealing with sections 23 and 24.

Section 1 is a standard provision concerning definitions. Section 2 replaces section 13A of Part IIA of the Electricity Regulation Act 1999 with a new interpretation section that is consistent with the terminology and language of the directive. Key new definitions include those for "operator" and "owner". Currently, under Part IIA, statutory safety responsibilities are placed on petroleum undertakings as licensee only. The directive provides for three related regulated entities, namely, the licensee, operator and owner, each of which has different responsibilities. The definitions of "operator" and "owner" in the Bill enable the obligations under the directive to be placed on the relevant entity and integrated with the existing safety regulatory framework for petroleum safety. These obligations are reflected in various sections throughout the Bill.

Section 3 inserts a new section 13GA, which establishes the CER as the independent competent authority under the directive where it prescribes the functions of the competent authority. The principal objective of the CER as competent authority is the effective safety regulatory oversight of operator and owner compliance in reducing the risk and potential consequences of major accidents offshore to a level that is as low as reasonably practicable.

Section 4 replaces the existing section 13H with a new section 13H which integrates the competent authority functions under section 5 and the directive requirements within the context of the CER's general petroleum safety functions. The matters to be considered by the CER in carrying out its functions are also set out and include minimising the potential for overlap or duplication of effort. Emergency preparedness and response constitute an important element of the directive. In accordance with the Sea Pollution (Amendment) Act 1999, the Minister for Transport, Tourism and Sport is responsible for preparing a national contingency plan which specifies the measures to be taken by the State resulting from discharges of oil from ships, offshore units and oil-handling facilities. Offshore units operating in the State are required to have in place a plan for the prevention and minimisation of damage arising out of an oil pollution incident occurring on an offshore unit or oil-handling unit facility. This plan is called the oil pollution emergency plan. Responsibility for administration of the national contingency plan and assessment of oil pollution emergency plans is a matter for the Irish Coast Guard.

Section 5 further strengthens the existing emergency preparedness and response arrangements through inserting a new section 13HA, which provides the CER with the power to direct industry to conduct emergency exercises and tests and take adequate measures to ensure the continuing safety of designated petroleum activities. Section 6 amends section 13I to align with the terminology and language of the directive. Section 13I requires the CER to establish and implement a risk-based petroleum safety framework through which it will exercise its petroleum safety functions. As set out, the CER has successfully operated the petroleum safety framework established under the 2010 legislation since December 2013.

Section 7 which deals with obligations on petroleum undertakings, operators and owners inserts three new sections, 13KA, 13KB and 13KC, to reflect the general and specific obligations of each of the three related regulated entities under the directive. These are: the licensee, described in the 2010 Act as the "petroleum undertaking"; the operator, who is appointed by the licensee to carry out oil and gas operations; and the owner, who is the legal entity with operational control of the non-production installation. Key obligations on petroleum undertakings include the appointment of an operator prior to the carrying out of any designated petroleum activity and financial liability for the prevention and remediation of environmental damage caused by offshore petroleum activities carried out pursuant to a petroleum authorisation. Key obligations on operators include ensuring the risk of all major accident hazards in carrying out designated petroleum activities is reduced to a level that is as low as is reasonably practicable. Key obligations on owners include ensuring the risk of all major accident hazards related to the non-production installation carrying out designated petroleum activities is reduced to a level that is as low as is reasonably practicable.

Section 8, concerning safety case guidelines, replaces section 13L with a new section that requires the contents of the safety case guidelines published by the CER to be consistent with the specific information requirements of the directive.

Sections 9 to 11, inclusive, replace the existing sections 13M, 13N and 13O with new sections 13M, 13N and 13O which impose an obligation to submit a safety case. Section 12, which concerns notifications, sets out the regulatory process for the submission, assessment and acceptance or refusal of design notifications and combined-operation notifications by operators to the CER in accordance with the offshore safety directive. Sections 13 and 14, on safety permits and the refusal or revocation of those permits, amend the existing sections 13P and 13Q to reflect the CER's assessment of safety cases submitted by operators and, where relevant, owners, and the capacity of the operator or owner, as appropriate, to carry out a designated petroleum activity.

Sections 15 to 18, inclusive, amend the existing sections 13S, 13T, 13U and 13V and relate to the notification of petroleum incidents to the CER by operators or owners, the further investigation and-or taking of enforcement action by the CER regarding the notified petroleum incident, and the issuance of a report by the CER to the Minister with respect to each petroleum incident that results in the loss of human life, serious personal injury, damage to third party property or a major accident. This section also makes it an offence for an operator or owner not to comply with its obligation to notify the CER of a petroleum incident.

Section 19 which deals with improvement plans and notice amends the existing sections 13Y and 13Z to extend the existing power of the CER to issue a direction requiring the submission of an improvement plan or the serving of an improvement notice upon petroleum undertakings to apply to operators and owners. Section 20, concerning access to safety case information, amends the existing section 13AC to put the obligation on the relevant operator to provide a mechanism by which a copy of the accepted safety case can be made available to any member of the public who requests it.

Section 21 which sets out miscellaneous amendments makes a number of consequential amendments to the Act of 1999 to, among other things, extend the CER's existing enforcement powers to apply to operators and owners in addition to petroleum undertakings and enable the CER to charge operators and owners a safety case fee. Section 22 amends the Petroleum and Other Minerals Development Act 1960 to require an assessment by the Minister for Communications, Energy and Natural Resources of the technical and financial capability of applicants for an offshore petroleum authorisation in line with the offshore safety directive. This section also makes provision for ministerial approval of the appointment of an operator proposed by a petroleum undertaking.

Section 23, an amendment to section 6 of the Continental Shelf Act 1968, modifies the definition of a "designated area" under that Act to align with Article 6(7) of the directive, which requires the establishment of a safety zone in the vicinity of an offshore installation. Section 24 makes the usual provision for Short Title and citation.

The Bill is an important measure in the continued strengthening of the overarching regulatory framework governing offshore exploration for oil and gas and the production thereof in Ireland. The Bill comprehensively transposes the relevant directive in a manner that will enhance the safety of the Irish offshore oil and gas sector, build on the regulatory model successfully implemented in December 2013 under the 2010 Act and operate at least cost to the industry and the public service.

This legislation will contribute to the achievement of the policy objective of a safe offshore petroleum exploration and extraction industry in Ireland.

I hope this outline of the provisions of the Bill has been of assistance. I look forward to listening carefully to the views of the Members of this House on this important legislation and to their assistance in progressing this Bill into law prior to the directive transposition deadline of 19 July 2015. Táim ag súil go mór le ceisteanna agus le moltaí na Seanadóirí.

I welcome the Minister of State and the delayed Bill to the Seanad. As the Minister of State will be aware, only 2% of the laws made in this country every year actually come before the Dáil and the Seanad. Most of the laws that come into effect in Ireland are EU directives, EU regulations or statutory instruments, signed by Ministers directly into Irish law and they never receive the scrutiny they deserve. This is one of the few occasions when a directive has to come to the Houses of the Oireachtas to be scrutinised before being passed. However, as we see, we have less than four weeks to do it, even though the directive started out in 2013.

This and previous Governments have failed to put in place systems in this House, meaning that directives from the European Union, many of which are excellent and much needed, are only dealt with at the last minute and do not receive the scrutiny they require. In 2009 there were 47 Acts of the Oireachtas, yet there were more than 1,200 EU regulations, 547 EU directives and nearly 600 statutory instruments. The legislators only looked after 47 Acts and the rest were done by Ministers and civil servants.

The Bill is to be welcomed. In the light of the disaster in the Gulf of Mexico where nearly 8,000 barrels a day, which is nearly 100,000 litres, disappeared in the first 24 hours, increasing to 6 million litres per day at the height of the disaster, obviously it is very important to have legislation of this nature. With the estimated 10 billion barrels, 1 trillion litres, in oil and gas reserves off the Irish coast, having a proper safety and regulatory system is important.

The Minister of State outlined the Bill excellently. When industry welcomes a Bill introducing safety regulation, we should be concerned. While the Minister of State has said there is no cost to the Exchequer, was any regulatory impact assessment carried out? The programme for Government promised that the Department of Public Expenditure and Reform would carry out regulatory impact assessments of Bills such as this. Obviously, we do not want to put an undue burden on oil and gas industries or suppliers, but it is important to know what the regulatory impact assessment would be.

I have concern over the decommissioning of oil and gas platforms. It is great for the taxpayer that we would get the revenue from it. However, if a company decides to fold its tent and close up its operations in Ireland, there is no entity to chase for the decommissioning of the platform. In fact, all the money we might have got from the taxation and the levies applied on the industry would then be spent on decommissioning oil and gas platforms.

I believe the Minister of State will also be concerned that certain sections of the Bill refer to a maximum amount of money to be applied in fines. The term "as low as is reasonably practicable" is very much open to interpretation. I know that they are talking about best practice, but I am sure other jurisdictions would have a definition of what is "as low as is reasonably practicable" regarding the prevention of major accidents offshore.

We do not have much time. I know this is a little like Committee Stage. We will ram through Committee Stage and I do not blame the Minister of State for that; it is just the way the Bill has come in. Section 8 deals with safety case guidelines. It refers to "the appropriate technical principles and specifications relating to ... decommissioning of ... infrastructure". Should a bond not be put in place whereby as the Department gives out a licence it also asks the company to put a bond in place in order that if it goes to the wall at least we would be able to get the money from the bondholder to decommission the infrastructure? The concern is that that would be a massive cost on the taxpayer into the future.

I am concerned about the lack of sanction over not carrying out requirements by the new authority and also about a limit on the fines. One of the sections refers to "on conviction on indictment, to a fine not exceeding €3,000,000”. I do not know why we would limit an oil company to a fine not exceeding €3 million. The cost of the clean-up for the Gulf of Mexico disaster has now reached €14 billion and it has still not finished. Every now and again BP issues an announcement that the clean-up is finished and then the US Coast Guard states it is not done and there is still more clean-up being done.

Section 15 deals with a reportable petroleum incident. That is why I highlighted the first 24 hours in the Deepwater Horizon disaster. The Bill refers to the requirement for "information and particulars as may be prescribed by the Commission, without delay, and no later than 24 hours after taking those measures". That relates to the reporting of an incident. One of the issues with the Deepwater Horizon incident was that it was not reported early. The fact that it went on for years was obviously a huge issue. Section 15(2) states that they do have to report anything within 24 hours and make the State aware. Failure to do this incurs a fine of €1 million. One hopes they would do it. These companies deal in trillions and we are imposing an on-the-spot fine that is equivalent to a parking fine for some of them.

The Minister of State spoke about the issues of transparency. The Bill provides that "The Commission may, with the consent of the Minister, publish a non-confidential version of the reports". However, there are also confidential versions, which would lead to a lack of transparency.

Obviously, I am concerned over the limited amount of time we have - we had two years to do this and we are doing it in four weeks. This has happened before and I have spoken many times in this House about the lack of process when it comes to what is essentially a good directive. I am not giving out about the concept of the directive, but we are missing opportunities, one of the most important of which is consequences for the operators not doing what they should do.

We talk about the safety measures required, including fire tenders and other equipment, but do we actually have that in place? How many fire brigades would be required? Obviously, because it is mostly offshore, we will need boats that can deal with incidents at sea. The fire services are provided by the local authorities and do not have these boats hanging around the place. How many do we have? How many are required? If there is an incident and we do not have the equipment, whose fault is it? To bring it in from the Gulf of Mexico or the North Sea would take days. Those are the lessons that should have been learned from the Gulf of Mexico disaster - the equipment was not deployed in time.

I wanted to make those points. I know that we are supposed to be discussing the generality of the Bill, but in reality we do not have much time to get this right.

Counties Donegal and Kerry could be badly affected by oil rigs just sitting there, which has happened in California and other places because there is an issue around who is going to pay for them to disappear. We should have a bond system in place on which the Government at least would be able to call in the event of a company no longer being in existence, as that would mean there would be money to pay for the decommissioning of such rigs.

I welcome the Minister of State, Deputy Joe McHugh. First, I wish to point out that the Bill was published after the Government had signed off on it on the morning of 16 June. We were originally due to speak about it last Thursday. I was told the reason for the short notice was the delay in getting guidance from the European Commission on liability issues, yet we have to transpose the Bill into Irish Law by 19 July. Surely the Commission with all of its resources could have given this advice earlier. That is not a reflection on the Minister of State.

This is a technical Bill which follows on from the EU offshore safety directive, Directive 2013/30 EU. One could ask what caused the European Union to introduce the directive. The answer simply is safety. Two particular tragic events have brought home to us why we need such legislation. The European Union reacted to the tragic deaths of 11 oil workers when there was an explosion on the Deepwater Horizon exploration rig in the Gulf of Mexico in April 2010. This oil production platform had a crew of 126 at the time of the explosion and the disaster could have been worse and resulted in a greater loss of life. It was also an environmental disaster. We must transpose the Bill into law to prevent such tragedies from happening in European waters. The Deepwater Horizon oil rig which had cost $560 million to build had only been in operation since 2001. It had been designed to operate in deep waters. Some of the oil and gas prospecting companies off the Irish coast also operate in very deep water. In September 2009 the Deepwater Horizon rig had successfully drilled the deepest oil well in history when it drilled to a vertical depth of 35,000 ft., in water that was more than 4,000 ft. deep. The rig was due to move to a new location when the explosion happened. The fireball was seen more than 40 miles away and resulted in the largest ever oil spill in US coastal waters. A US federal judge ruled in January this year that BP was responsible for the discharge of 3.2 million barrels of oil into the gulf. The clean-up could potentially cost $13.7 billion.

In April 2010 the Commission for Energy Regulation, CER, was made responsible for safety regulation after the Petroleum (Exploration and Extraction) Safety Act was passed. It is ironic that the Act was passed when the Deepwater Horizon tragedy was unfolding. Closer to home, on 6 July 1988 the explosion on the Piper Alpha oil rig in the North Sea cost the lives of 167 oil workers. On the morning of 6 July a pressure safety valve was removed from a condensate pump for routine maintenance. The original paperwork stated pump A was due for routine service. It was one of two pumps on the rig used to pump oil 128 miles by pipeline to Scotland for refining. The on-duty engineer filled in a permit which stated pump A was not to be used under any circumstance. The day shift ended at 6 p.m., but, unfortunately, the engineer failed to inform the new shift of the off-line status of pump A. The paperwork was located in another part of the platform. At 9.45 p.m., a simple fault in the gas compression system resulted in a blockage in pump B and the pump could not be restarted. At 9.52 p.m., the shift manager found the original paperwork which stated pump A was due to be serviced, but he did not have the paperwork which stated it was now out of service and not to be used. He turned pump A back on, unaware of what was about to happen. Three minutes later, at 9.55 p.m., gas that flowed through the unsafe pump A leaked out and there was an explosion which caused several fires and further explosions. The flames from the fires could be seen 100 km away. It took three weeks for the fires to be put out by a team led by the famous firefighter, Red Adair. By 12.45 a.m. on the morning of 7 July the complete platform was destroyed, with the loss of 167 lives out of a total crew of 226. A simple breakdown in communication and bad safety procedures caused massive loss of life. That is why we need to have a vigorous safety enforcement regime in European waters to protect both workers and the environment.

The amendment to the 2010 legislation will further strengthen the current regulations governing offshore oil and gas operators. Safety inspections must be regular and robust. I urge the Minister of State to ensure that whatever resources are needed to ensure inspections take place are provided in order that we do not have more tragedies.

I echo the point made on bonds by Senator Mark Daly who has left the Chamber. Having a bond is a good idea to ensure we can deal with the problem of left-over rigs. A fine of up to €3 million is very small money when it comes to the cost of cleaning up following an oil spill. I urge the Minister of State to consider these points when making his concluding remarks.

Cuirim céad fáilte roimh an Aire Stáit. Tá brón orm go raibh mé beagán mall ag teacht anseo. Tá mé sásta go bhfuil an Rialtas tar éis admháil go raibh sé mí-cheart agus go raibh sé ag teacht isteach lena oiread fuadair agus lena oiread deifre air leis an reachtaíocht seo. Tá an reachtaíocht seo thar a bheith tábhachtach agus tá sé fíor-thábhachtach go bhfaighimid deis ceart é a phlé trasna an Tí.

Directive 2013/30 EU which the Bill seeks to transpose into Irish law was published more than two years ago on 12 June 2013. We wondered why the Government had sought to rush the Bill through the House last week. There are certain elements in Irish society which are concerned when they see something about oil and gas, in particular, coming through with such haste. I am pleased that the Government has given us more time to ascertain the impact of the Bill on oil and gas operations in this country. It is not appropriate to carry out business in this House in that manner and I am pleased this has been acknowledged and that the Leader has provided more time for us to reflect on the legislation.

This House has a history of rushing legislation through in a haphazard manner. The bailout of the banks and the winding down of IBRC immediately spring to mind. Neither does this House have a good record concerning offshore oil and gas safety operations. An example of where engagement with the community seriously failed is the Corrib gas project and the effect it had on the community of Rossport. The Rossport project is important because it involves a dispute about ownership and the use of natural resources. It illustrates the threats posed to local communities by a powerful coalition of State and capital interests and as a consequence raises serious questions about the link between politics and power. Locals opposed to the development frame their opposition in terms of safety and health. They claim the pressure of unprocessed gas in the pipeline will be too high; that the pipeline will be too close to people’s homes and that the environmental effects of gas transportation and processing will be devastating to the place, people and wildlife. They want the gas to be processed offshore. I note the sad death of Lars Wagner in a workplace incident in the Corrib gas tunnel in 2013. I wonder whether the Bill under discussion would have addressed the situation that led to his death. Has the Government received a full report on the incident and, if so, will it make it available to us?

Landowners also took issue with a high pressured pipeline running through their land and protested against what they believed to be an infringement of their rights. As a result, in March 2005, Shell applied to the High Court for an order restraining landowners from interfering with the laying of the pipeline. An injunction was given and five local people were imprisoned for interfering with the work of Shell. These people became known as the Rossport Five. Many maintain that the Government was complicit in the failure to engage with the local community. Local people believe they were ignored by the Government and that private business was allowed a free hand in developing energy infrastructure as it wished. This European directive appears to be well meaning. We will examine it and introduce amendments on Committee Stage.

In May 2012 the Oireachtas Joint Committee on Communcations, Natural Resources and Agriculture published a fairly comprehensive report and made recommendations on the industry. I have not seen much progress by the Government on the issues raised. The 11 recommendations include the following:

1. Having good basic law in which policy principles are enshrined can greatly assist a country in developing and benefiting from its petroleum resources.

There should be a clear and transparent fiscal and licensing regime, which provides certainty for the State and industry alike.

The Joint Committee recommends that a simple and transparent system be put in place which is underpinned by clear law. To this end, the Petroleum and Other Minerals Act 1960 should be reviewed.

2. Retrospective changes to fiscal and licensing terms can risk long-term reputational damage. Existing agreements should be adhered to irrespective of changing circumstances.

In contrast, future agreements can reflect policy changes necessitated by significant changes in the policy context and circumstances, for example a large increase in the number of commercially viable finds or the size of fields.

3. Recognising that fields may be subject to corporation tax and profit resource rent tax (PRRT), the State should seek to maximise tax revenues from petroleum exploration and production without deterring petroleum investment.

In addition, the report stated: "4. The Joint Committee strongly believes that the State should keep fiscal and licencing terms under constant review." It concluded:

The obtaining of geological data from all licensees is of paramount importance ... This would entail mandatory unified operations for a field extending over different contractual zones by different operators and offers advantages including better resource management.

Eleven recommendations were made in total. Will the Minister of State, please, outline where we are in terms of their implementation? There is a great rush to get the Bill through the House. An Oireachtas joint committee's report has been sitting on the shelf since 2012 and it does not appear that any action has been taken. There has been a complete lack of action.

There is a fear that in that void the oil companies are being laissez-faire. I note the Ballyroe oil find off the coast of Cork is 1.7 billion barrels. Can the Minister of State outline what other oil finds there may be and the potential tax income for the State? If the Government took on board the recommendations of the joint committee would there be a much greater income for the State? There were very specific recommendations around the tax take in particular and we need to ensure the natural resources of the State are used for the benefit of all the people and that the oil companies pay a greater share of the profits they make.

I welcome the Minister of State and commend him for bringing forward the legislation. It seems to me that in some quarters one is damned if one does and one is damned if one does not. The legislation is in the House but not before its time and there is a deadline on it. It is important that it is passed in the interest of public safety, the people who work in the industry and, of course, the broader environmental issues that are at stake. In his address he set out in great detail the provisions of the Bill. On the face of it, the legislation that has emerged appears to be thorough and robust. It is vitally important that is transposed into Irish law.

Senator Tony Mulcahy has set out two examples of the kinds of incidents that can occur with devastating and disastrous consequences for the workers and the environment. Therefore, any measures that can be put in place to prevent such incidents should be put in place. We have only to get these things wrong once and then it is too late. We are dealing with the area of prevention. Once an incident occurs it is too late to address it. Colleagues across the floor have made valid observations which should be taken into consideration. A bond is a good idea. Who is going to chase down the developers of the sector and the industry once a rig or a well has expired and run its course? It is important that the infrastructure is not left to rust at sea or in close proximity to the shoreline and whatever other infrastructure is in place. The onus is on anybody who has developed rigs and wells to put things back as they found them and to decommission the facilities properly. There have been incidents around the country where that has not always been the case. It has happened in the case of mining developments and in the chronic situation in Cork where the taxpayer continues to pick up the tab for restoring facilities in the former Irish Steel plant in Cork Harbour. Again, the taxpayer has had to clean up a really dangerous hazard and environmental mess left behind by the industry when it closed down. It is important we do not have these kinds of scenario.

We have a pitiful record in terms of enforcement of regulations from child safety to financial regulation to charities regulation. I do not have any confidence whatsoever in the Environmental Protection Agency in terms of how it goes about its business. I am glad it is not the assigned authority in this instance. The CER has been selected as the competent authority. In terms of resources, competence, skill sets and staffing how will it police the legislation? How will it ensure compliance? In recent decades basic building regulations were not adhered to or respected. We can have all the rules and regulations we want but if they are not enforced and policed, they are virtually pointless. We found out after the building boom was over that only a small percentage of building developments were inspected by planners to ensure that the conditions that had been applied had been adhered to.

This is important, robust and timely legislation but it will not be worth the paper it is written on unless the competent authority, in this case the CER, has the resources to ensure and insist on compliance and that, as colleagues have pointed out, the penalties for non-compliance are sufficiently imposing to ensure shortcuts will not be taken. As we have noted in the House, the consequences for human life, wildlife, sea birds, fish stocks and the broader environment and ecosystems could be devastating in the extreme for generations to come should an accident occur.

It is welcome that this legislation is before the House and it is important that we tease it out here, but my concern is that the regulations as set out should not be dealt with in a light touch, self-regulating or self-policing fashion. The CER should have the teeth, the personnel, the skill sets and the resources to police this legislation and to ensure it is enforced and complied with.

Cuirim fáilte roimh an Aire Stáit. The Minister has been a regular here for many years. We get on very well together and he puts a lot of effort into his work and it is good to see him back again.

I note that this particular directive is about minimising risks of offshore accidents throughout the European Union, a move in the right direction, but I want to make some comments on the area of safety. I wonder if companies involved in risky operations could put up some sort of insurance in order that a quick clean-up operation could happen if an accident did occur. I understand that such companies would have insurance but perhaps there could be a dedicated environmental fund in case an accident that affected the environment occurred. Given that this is a directive, we have some flexibility on how the legislation is transposed into Irish legislation and perhaps we should include such a provision, particularly when we consider some of the disasters that have occurred in the Gulf of Mexico and off Alaska. Those large companies were probably well able to cover it but that would not always happen. If we were to approve some test for hydraulic fracturing in Ireland, we could get companies to pay into an environmental fund to give extra assurances, especially to the local population, that the environment around them would not be neglected. I heard what the Minister said earlier about fracturing, and I will come to that shortly.

The new legislation calls for all EU member states to prepare external emergency response plans covering all offshore drilling installations within their authority. While I do not doubt that our national authorities can draw up such plans, I wonder if we have the necessary equipment to put them into practice. For instance, I know that if we had a spill we could rely on the Air Corps to do some sort of aerial assessment but could it do such a job even more effectively if it had resources such as more unmanned aerial vehicles on which to rely? I do not know. Someone can fly over it and see where it is but if we cannot do something about it, without getting access using boats or whatever, having the knowledge but not having the equipment would be a disadvantage. Being able to cope with possible offshore accidents may require more investment. The Minister of State might comment on that area.

I was disappointed to hear the Minister of State say shale fracturing had no implications onshore in Ireland. I am disappointed that we are not even discussing it. We should discuss it. In terms of wider safety, this month, the Environmental Protection Agency said that its two year study into the safety issues linked with hydraulic fracturing for shale gas in Ireland is due to conclude in July 2016.

That means that even if fracking was deemed safe, no exploratory application would likely be received until close to 2018. That seems to be a very lengthy period. I do not wish to sound as though I am encouraging, proposing or believing in it, but I believe we should be discussing the whole question of hydraulic fracturing and I do not think we are. In the United Kingdom the Prime Minister is aiming to cut red tape for companies which want to conduct exploratory hydraulic fracturing. I cannot say that fracking is either right or wrong but we are moving extremely slowly in this area. When one considers the benefits the United States has had since the 1940s and 1950s with practically no disadvantages, it seems to me they have been able to solve the oil and energy crisis on that basis. I believe we should be discussing it at least. Perhaps the Minister of State might be able to tell me whether we are planning to discuss it.

Hydraulic fracturing has been around since the 1940s and it seems that Ireland will not go down that route, as things stand. It is really a taboo subject in a lot of ways. In spite of the fact that thousands of jobs could be created and we could drastically reduce our energy costs for both households and businesses, as well as reducing our reliance on energy imports, we have a culture of NIMBY, not in my back yard. Professor Quentin Fisher is an expert in this area who says that drilling a well is noisy and disruptive but after a few weeks only a building the size of a garden shed remains. He says that people may change their minds once they see how safe it is. I ask for the Minister of State's comments on hydraulic fracturing and safety. I am convinced that it is a topic we need to discuss and I am not sure that we are even taking the first steps towards a real discussion of it. In Britain they have decided and it was announced yesterday that they will initiate the process in Lancashire. Some people are not happy about it and there are some protests, but, on the other hand, it is the sort of decision we have to be discussing and I ask for the Minister of State's views.

I thank Senators for their contributions. I agree it would be good to have a broad debate where people offer a critique. While this legislation is very specific, it provides an opportunity to discuss a number of items.

Senator Mark Daly made a wider argument around the transposition of EU directives. I share his frustration. I refer to the 1992 habitats directive and the tensions which have arisen in his county and my county as a result of the directive being implemented and enforced. However, there is a deadline on the directive which we are discussing now. As Senator John Whelan pointed out, we have a deadline and our European partners share that deadline. The Senator referred to culpability for what happened in the Gulf of Mexico and issues associated with BP. He asked whether an assessment of the regulatory impact was undertaken. The 2010 Act provides that the Commission for Energy Regulation has responsibility to ensure we follow through with the commitments we gave under that legislation. The decommissioning of oil and gas platforms is an issue. While it is not within the remit of this legislation, it is important to have that discussion. It is an issue in the waters off the south coast of Cork. There have been four successful gas finds in this country. The momentum is good and positive with regard to the current Atlantic margin round which closes in mid-September and it is our success to date.

The focus of the legislation is specific and narrow. I refer to the framework regarding culpability, liability and responsibility. Much of the work on the culpability conversation will happen after the Bill. An EU report on culpability and liability is due in the autumn. I would not like to see bigger companies coming together to establish an exclusive insurance bond for themselves only. We must ensure there is a level playing field for small companies. An in-depth conversation is needed in this regard.

There is no outer limit on environmental costs. I will ask for further clarification on the figure of €3 million. Responsibility for a contingency plan lies with the Department of Transport, Tourism and Sport. The Irish Coast Guard has responsibility for the implementation of the contingency plan. Those of us of the same age were not part of the Internet generation and we were not brought up with broadband. That is certainly the case with regard to County Kerry and County Donegal. This is European legislation and an oil spill off the west coast of Ireland will need a collaborative approach from Europe. We can share resources as members of the European Union. That is outside the remit of this Bill but it is a conversation we could have.

Senator Tony Mulcahy mentioned fines and the €3 million which I have dealt with. I appreciate his points about more time but unfortunately we have a strict deadline as this is important legislation. I note his points about the incident in the Gulf of Mexico and how to have a mitigating plan in place to avoid such situations. He referred to the Petroleum (Exploration and Extraction) Safety Act 2010 and the recognition of the need for vigilance and a safety regime. He spoke about clean-up costs which are dealt with under section 22(2). The liability for environmental damage is not limited to €3 million as I mentioned in reply to Senator Mark Daly. The State will have to agree the liability for different operations.

Senator Trevor Ó Clochartaigh raised a number of issues. He speaks as fast in English as he does in Irish-----

-----which is no mean feat. He covered many issues, including the general interaction with politics and power. Even in the health sector there is a jargon phrase, "clinical networking", meaning consultants, the pharma industry or health departments working together on solutions. From my short time in this Department I have noted the very strong collaborative spirit between industry and officials in efforts to work together to share resources and advice and ensuring environmental sustainability. The officials in my Department are working on behalf of the political representatives on behalf of the people. There is a high level of collaborative work on information about the sea bed. Ireland is the fourth largest country in Europe when one considers the geographical size of our land mass under the sea after France, Portugal and Spain. It is hoped that industry and officialdom can work together in assessing what is available and mitigate environmental damage. Wearing my other hat, this is very important within the Department of Arts, Heritage and the Gaeltacht and the National Parks and Wildlife Service working hand in glove with the Department of Communications, Energy and Natural Resources on the protection of wildlife or other habitats that could be affected as a result of industry-led development.

The Senator referred to the death in Corrib. I will get the Senator information on that matter. Those in the best position to talk about what happened in Corrib are the people who live there. I had an opportunity to go to Bellanaboy and various parts of Bellmullet recently to hear a debate. As with any debate, there is passion on both sides. It was apparent to me that there were many economic benefits to the development. Certainly, there were lessons in terms of regulation and enforcement also. Many lessons have been learned. This has been a dragged-out project. When the operation is commissioned initially it will provide up to 40% of all our gas needs in the short term.

There will be constraints on the fiscal potential or possibilities as a result of one thing and another in terms of a delay. It is important to move forward. Much work has gone on behind the scenes, including the Wood Mackenzie report. The work includes looking at readdressing the matter within the finance Bill this year, looking at the fiscal regime moving from 40% to 55% and looking at other ways of trying to get revenue once production starts. That relates to future finds and does not affect existing finds.

We need to consider the context as well. A drill can cost upwards of €200 million. Is the State prepared to put that type of investment into a risk that may find an empty field? We need to keep in mind all these considerations. We can learn from it, and we must put community to the heart of any new development. I will digress a little. Let us consider wind farms. There are wind farms in my county. The Donegal local authority gets over €1.2 million in development charges or a rate base per annum. At a local or micro level there are probably better, smarter and more clever ways of trying to ensure that communities get the dividend as well. We can learn from this.

I do not agree with the comments on a laissez-faire attitude to companies. Within the narrow confines of this legislation, companies must have a contingency plan and consider risk assessment. They will have to show that they are prepared for a possible failure, if that happens.

Senator John Whelan commented on how we need to learn from our history. In our short history we have learned from the building boom. We know that a serious lack of oversight and a laissez-faire attitude led to what happened today. I met a developer in Letterkenny recently. He has welcomed the new regulations on building control. This will cost him more, delay his project and his profits will be reduced, but he has welcomed the new regulations. The point is that we can learn from what has happened within the Department of the Environment, Community and Local Government in respect of regulation. That is what we are trying to do in this Bill also.

Senator John Whelan referred to decommissioning. The matter is outside this legislation. I appreciate his comments on trying to get this legislation through. I note the Senator's observations on the Environmental Protection Agency and his confidence in the Commission for Energy Regulation. I do not agree with the former observation, but I acknowledge the fact that there are areas where we can do better. The CER has been doing this work since 2010. The commission has been acting as an oversight body and it is important to note this.

A good point was made about resources and skillsets. Do we have the necessary resources? How do we police the legislation? How do we ensure an appropriate monitoring system? How do we ensure compliance? The CER is a competent authority and has the resources. Our Department has been recruiting experts in the relevant fields. The Department aspires towards looking at different skill-sets in different parts of Europe. Let us consider the example of civil servants in Norway and the United Kingdom. Perhaps we might be clever or smarter in looking at exchange programmes to bring that skill-set into this country. For example, pre-2008 officials from Denver, Colorado engaged with counterparts in Germany and Denmark to try to build up a skill-set around renewable energy. There may be clever ways of doing that. Officials within the Department are looking at those areas and I acknowledge this.

I thank Senator Feargal Quinn for welcoming me back to the House. I am pleased to be here again. The critique offered in this House is as good as ever and I acknowledge the Senator's contribution. He referred to the offshore fund and whether the fund was a parent company. Much of that will have to be worked out post this legislation. This is an opportunity to offer suggestions on the matter.

Senator Feargal Quinn also referred to unconventional hydraulic extraction. I did not use the word "fracking", but the Senator is right in that is exactly what it is. As he is aware, a report has been commissioned. A particular company or agency is involved but it is a multifaceted approach and involves universities and third level expertise, North and South. I look forward to the outcome of the report. I agree with the Senator that in the meantime the debate should continue. Politicians are not precluded from debating the matter and perhaps there is an opportunity to do this. Whatever the report shows up, it will be the outcome of two main pillars in terms of concern, that is to say, human impact and environmental concerns. The report will also consider the geology and whether it is conducive or otherwise to carrying out this particular procedure. We need to look at all of these factors and feed in to the process at a political level. I agree that the debate should continue.

I made a reference to financial liability. A report is due in the autumn in this regard. I will ensure my officials will present the House with the findings from the European Union in the autumn.

I thank the Acting Chairman and acknowledge the patience of Members in recent days.

Question put and agreed to.

When is it proposed to take Committee Stage?

Committee Stage ordered for Tuesday, 30 June 2015.

Next Tuesday, 30 June 2015.
Sitting suspended at 4.10 p.m. and resumed at 5 p.m.