I welcome the Minister of State and his officials.
Gas (Amendment) Bill 2008: Committee Stage.
Sections 1 and 2 agreed to.
Questions proposed: "That the Title be the Title to the Bill."
I thank the Chairman for inviting me to come before the select committee. I thank members for their constructive support of the Bill on Second Stage and again today. It is hoped that Report and Final Stages of the Bill will be taken at the earliest possible opportunity. I do not know whether the debate in that regard will take place before or after Christmas. I again thank members for their support.
I wish to comment on a contribution made on Second Stage in the Dáil by an Opposition Deputy. It is a pity the individual in question did not consult with Deputy Coveney, who knows about what he is talking and who is aware of the facts relating to Bord Gáis. The Deputy to whom I refer has an embarrassing lack of understanding with regard to the operation of Bord Gáis under the relevant guidelines. The regulator determines the prices of gas and in so doing examines the revenue streams of Bord Gáis so that any expenditure to be incurred must be seen to be cost-effective. This has been the system since the regulator was appointed. In 2006 a new system was agreed between the regulator and Bord Gáis. This allowed the position relating to towns to which supplying gas was previously unviable to be re-examined.
The Deputy to whom I refer made political charges against Bord Gáis and stated that political cronyism was engaged in and that political interference took place. I hope an apology will be issued to Bord Gáis in order that this slur might be removed from its name. I am sure the Deputy in question will also acknowledge that Bord Gáis will not be instigating a price increase in January. His plea to the Minister to ensure that matters relating to the Longford spur be expedited again shows his basic lack of understanding. The Minister is not involved in the day-to-day running of Bord Gáis. If, however, he had listened to the CEO of Bord Gáis, Mr. Mullins, the Deputy to whom I refer would, like me, be confident that this matter is being vigorously pursued.
That tees me up nicely. I am not sure of the identity of the Deputy to whom Deputy Kelly refers, but I have my suspicions.
Given that he was making an outrageous attack on a fellow Member of the Oireachtas, one would think Deputy Kelly would have had the courage to name him.
It was not an outrageous attack. I merely want the Deputy in question to ensure that his facts are correct rather than making comments that are not completely accurate.
Deputy Kelly should be man enough to name the Member in question rather than casting aspersions on everybody.
I referred to one Deputy.
Deputy Kelly does not have the courage to mention his name.
Is Deputy Coonan the Member in question?
I am not from Longford.
Did Deputy Coonan make the contribution in the Dáil to which I refer?
If I was engaging in an attack on a person, I would have the courage to name him. Deputy Kelly does not possess such courage.
Everyone knows the identity of the Deputy to whom I refer.
I do not know his identity.
Deputy Coonan should make a guess in that regard.
Is it Deputy O'Rourke?
No. I will give the Deputy two further guesses.
I do not need any further guesses. Deputy Kelly should be man enough to identify the person he is attacking.
In defence of what a colleague of mine may have said, I must point out that it is the role of those in opposition and of politicians in general to try to put pressure on the providers of gas, electricity or whatever in order to keep charges down and ensure that such providers extend facilities to their constituencies. It is my understanding that this was the sole intent behind comments made by my colleagues in respect of their constituencies.
There is a great deal of frustration that gas pipelines have not been extended to towns in certain areas. The Bill is designed to increase dramatically the borrowing capacity of Bord Gáis in order that it can make the kind of capital investment it proposes to make over the next four to five years. Some of the expenditure in this regard should include extending gas pipelines into areas where home and business owners might benefit as a result of gaining access to competitively priced gas.
I did not hear the precise comments to which Deputy Kelly refers. I accept that makes me sound like an English Premier League manager. However, I would defend the right of members of my party to make a case on behalf of their constituencies. I understand that is what happened in this instance.
Politicians have an obligation to continue to exert pressure on Bord Gáis and companies like it in respect of pricing. Let us not forget that the regulator made a decision to keep gas prices as they stand. However, that was not the basis of the application made by Bord Gáis. Even though the company would probably accept that it does not need a price increase in January, the original application requested a significant increase. Let us get our facts right. Bord Gáis was not responsible for keeping prices as they stand but I am sure it would accept that in light of the international cost of gas, an increase in January is not required. If it is conceding that there is no need for such an increase, I would argue that there should in fact be a reduction in the price of gas.
I and my colleagues will not apologise for keeping companies under pressure in order to ensure that prices are reduced. The cost of energy in Ireland is, on average, well above that which obtains in other European countries. By increasing the borrowing capacity of Bord Gáis, I hope we will see improvements and efficiencies in the cost of transporting gas and of providing it to customers. We must ensure that gas pricing will be more competitive in the years ahead.
A single issue arises in the context of the Bill. We are facilitating a dramatic potential increase in borrowing on the part of Bord Gáis. If one considers its performance in the past five or six years in the context of what it has borrowed and what it then delivered, then it is clear that the company has done quite a good job. The only question I would raise relates to the second gas interconnector with the UK. It is arguable that this is not necessary at present. In the future, however, we may be able to put it to much greater use.
Bord Gáis is a very ambitious company, particularly under its current management team and in the context of the direction it is taking. As well as supplying gas, it will make a significant contribution towards energy generation in the future. The company refers to it as dual power, gas and electricity, and that is the direction it should go in. The Bill facilitates a significant competitor to the ESB in electricity generation into the future, which is positive. We are also facilitating Bord Gáis to invest heavily in renewable sources of energy. The CEO is interested in this sector and he has a detailed knowledge of it, which is also positive. Not only will competition be provided in conventional generation because the company will manage a new gas powered station in Cork, it will become involved in supporting and leading renewable wind and wave energy projects. This is a positive development for which the company needs the ability to borrow. We should encourage it in that direction and that is why Fine Gael strongly supports the legislation. However, pressure should be maintained on the regulator in respect of pricing to ensure when he makes determinations on gas and electricity prices, he takes accounts of the needs of consumers and businesses more than ever as well as the requirement to keep companies such as the ESB and Bord Gáis operating.
I welcome the fact that Bord Gáis has not secured a price increase. The pressure and the public outcry that developed because of the application for a further increase helped to ensure it did not materialise. The company secured a steep increase relatively recently and that had an onerous impact on those on low incomes. We have reached winter and more and more older people are living in poverty and fuel poverty in particular and therefore, I welcome the fact the increase did not materialise.
Recently, on behalf of the Joint Committee on Climate Change and Energy Security, some of us attended an interparliamentary meeting at the European Parliament in Strasbourg, which highlighted the overriding fear about our reliance on Russia to provide gas. Many countries are concerned about that. Every effort needs to be made in Ireland to develop at least partial self-sufficiency and I hope progress will be made on the Shell issue through the forum set up by the Minister.
The advertisements for gas always promote it as a form of energy that is quick and efficient and I commend the Chairman on being the same.
I welcome the Minister. I gave a warm welcome to the legislation when it was introduced and I outlined its importance. Deputy Kelly's comments are symptomatic of the Government's arrogance and if everything was going well, we could imagine what we would have to put up with from the Government parties. He referred to a colleague of mine not properly informing himself while, at the same time, he referred to the CEO of Bord Gáis as Mr. McMullins. He did not have the courage to name my colleague. He stands corrected in referring to research by another colleague when he did not get the name of the CEO, Mr. John Mullins, correct.
When I welcomed the legislation on Second Stage in the House, the Minister's colleague, Dr. Mansergh, issued a statement in north Tipperary criticising my comments on it, stating I had not conducted proper research and I did not seem to know what I was talking about because I referred to four major towns in north Tipperary — Nenagh, Thurles, Roscrea and Templemore — where not one inch of pipeline has been laid. He corrected me by referring to the spur from the gas network between Limerick and the edge of north Tipperary at Birdhill and Newport. I have the utmost respect for him and I stand corrected but I am amazed he has time on his hands during such an unprecedented economic crisis in the State to nitpick about my comments.
I appeal to the Minister again on behalf of the people of north Tipperary and the major towns I mentioned to provide them with the option of natural gas. The area has been left behind and it would be a great economic boost if this added infrastructure was provided to attract industry and to maintain development. Perhaps he will examine this issue directly. I understand a draft report is due to be published which will at least recommend gas for Thurles with a strong possibility of Nenagh being included. I ask the Minister to leave no stone unturned when an announcement is made, hopefully, sooner rather than later, that those towns will be included in the expansion programme by Bord Gáis with the aid of the Government.
Like Deputy McManus, I welcome the non-approval of the price increase in January. When the cost of crude oil and other products increased, there was an urgency about approving a 20% price increase last July, which is typical of what happens when crude oil prices increase but when they decline, the same urgency is not apparent in reducing the price for consumers to help them in difficult times. I welcome the legislation and the opportunity it provides for Bord Gáis to develop as a dual provider and to increase competition, a prime example of which is the IFA, Eircom and Bord Gáis doing a deal that is of huge benefit to the rural community by providing dual pricing and a competitive package.
The rigorous examination of the Bord Gáis CEO by the committee a few weeks ago probably did not do any harm in ensuring the company's actions were being analysed and scrutinised.
I welcome the Minister and I look forward to the passage of the legislation. While the gas is available in a number of towns in south Tipperary, it is badly needed in Tipperary town and Carrick-on-Suir. I hope the Minister will encourage Bord Gáis, given its new borrowing facility, to be more proactive and to bring gas to many towns and regions that do not have it but that have a great need for it and will encourage the company to make inroads regarding alternative energy projects. We have given them support in this regard and movement is needed.
While I congratulate the Minister on his work and his efforts, the legislation further highlights my insignificance as a Dáil Deputy from Donegal. I do not say this because Donegal is, traditionally and historically, the forgotten county, but because the neglect of the county makes my role here completely insignificant. Bord Gáis is doing a survey on the feasibility of bringing gas from Northern Ireland into Donegal. That study will prove it is unprofitable, of little value and not in the interest of the State to bring gas to a big town like Letterkenny. My message to the Minister is that even before that survey, the Government has a public service obligation to the taxpayers of Donegal to bring gas to our county. As far as I and the citizens of Donegal are concerned, we are tired arguing the toss for services for a county that has been historically and traditionally neglected.
I accept the points made by Deputies with regard to the expansion of the gas network, particularly to their counties. We have seen the gas network grow significantly. We had 365,000 connections in 2000 and now we have over 600,000. There has been a major increase. In 2006 we made an agreement with the regulator which allows Bord Gáis Éireann to consider bringing gas to clusters of towns, which can result in areas being included that would have been excluded on economic grounds heretofore. I accept the point the Deputy made on behalf of County Donegal and will talk to Bord Gáis about it.
Question put and agreed to.
Bill reported without amendment.