Written Answers Nos. 20-28
20. Deputy Thomas Pringle asked the Minister for Communications; Energy and Natural Resources if, in view of a possible oil find in Dublin Bay, if his attention has been drawn to the pamphlet, produced by Dublin Shell to Sea Campaign, Liquid assets: Ireland's oil and gas resources and how they can be managed for the people's benefit; and if he will make a statement on the matter. [43747/12]
View answer27. Deputy Richard Boyd Barrett asked the Minister for Communications; Energy and Natural Resources if, in view of a possible oil find in Dublin Bay, if his attention has been drawn to the pamphlet, produced by Dublin Shell to Sea Campaign, Liquid assets: Ireland's oil and gas resources and how they can be managed for the people's benefit; and if he will make a statement on the matter. [43745/12]
View answer30. Deputy John Halligan asked the Minister for Communications; Energy and Natural Resources if, in view of a possible oil find in Dublin Bay, if his attention has been drawn to the pamphlet, produced by Dublin Shell to Sea Campaign, Liquid assets: Ireland's oil and gas resources and how they can be managed for the people's benefit; and if he will make a statement on the matter. [43746/12]
View answer38. Deputy Joan Collins asked the Minister for Communications; Energy and Natural Resources if, in view of a possible oil find in Dublin Bay, if his attention has been drawn to the pamphlet, produced by Dublin Shell to Sea Campaign, Liquid assets: Ireland's oil and gas resources and how they can be managed for the people's benefit; and if he will make a statement on the matter. [43748/12]
View answerI propose to take Questions Nos. 20, 27, 30 and 38 together.
Firstly I should clarify that no petroleum exploration activity has been licensed in Dublin Bay. Providence Resources and partners have a drilling commitment on their petroleum exploration licence in the Kish Bank Basin off the Dublin\Wicklow coast.
I am aware of booklet entitled “Liquid Assets - Ireland’s oil and gas resources and how they could be managed for the people's benefit” produced by the Dublin Shell to Sea Campaign. While the booklet addresses a number of discrete topics related to exploration for and production of oil and gas, its principal focus is on how Ireland should get best value from its natural resources going forward.
A key element of the analysis relates to the 21 billion barrels of oil equivalent resource potential identified in the booklet. While the authors acknowledge that this estimate, which is based inter alia on various company media releases of potential resources, might not be entirely accurate, it is still relied on in the booklet in the way “proven reserves” would be used to inform public policy decisions. The reality is that Ireland’s proven hydrocarbon resources to date amount to approximately 0.5 bboe and more than half of this has already been exploited.
The Shell to Sea estimate of 21 billion barrels of oil equivalent (bboe) includes;
Over 8 bboe for two prospects in the Atlantic, neither of which have been drilled or even have a drilling commitment;
Almost another 1 bboe in relation to two prospects (Cashel and Blackrock), both of which when drilled produced were dry holes and both licences have since been relinquished;
Volumes of gas from the Kinsale area gas fields that have already been produced over the past three decades.
While I welcome debate on how Ireland can get best value from its natural resources, I remain of the view that we are best served where that debate is grounded in fact and reality.
21. Deputy Brendan Smith asked the Minister for Communications; Energy and Natural Resources his plans for developing wind energy exports; the targets he has in this regard; and if he will make a statement on the matter. [43714/12]
View answerIn 2011, Ireland had 17.6% renewable electricity, 3.6% biofuels and 5% renewable heating, which amounted in total to 6.5% of all energy consumed being from renewable sources.
Our intention, in order to meet our 2020 binding targets, is to increase renewable energy to 40% in the electricity sector, 10% in the transport sector and 12% in the heating sector, which together amounts to 16% overall, in line with our legally binding target under the EU Renewable Energy Directive.
Separate to meeting our challenging national target, the potential for export of renewable electricity was outlined in the Strategy for Renewable Energy 2012-2020, which I published earlier in the year.
The mechanisms by which renewable energy can be traded with another country are provided for under the Renewable Energy Directive in Articles 6-12 on cooperation mechanisms.
Countries can agree statistical transfer, which involves the purchase of renewable credits by the importing country in order to meet their target or they can agree joint projects which involves identifying specific projects for the purpose of renewable trading and agreeing how the projects will be financed and how the renewable value will be counted towards each country’s renewable target under the Directive.
The use of these co-operation mechanisms under the Directive requires formal agreement between two or more Governments.
I have had a number of bilateral discussions with my UK counterpart in this regard and we are actively exploring the possibility of trade in renewable energy between the two jurisdictions, with a view to reaching a Memorandum of Understanding by end year.
It will be necessary to ensure that Irish consumers do not have to foot the bill for renewable electricity that is exported to the UK and that some benefits from renewable trade for harnessing the development are achieved for the Irish state and Irish consumers. In the event that renewable power was being exported to the UK, for example, it would be necessary to ensure that the costs associated with new transmission infrastructure to export the power and the cost of a support scheme for renewable developers is paid for by UK consumers, rather than Irish consumers who would not be benefitting from either the power or the renewable value of the electricity.
If the Irish Government decides to enter an Inter-Governmental agreement under the Directive with the UK or another Government, it will have to ensure sufficient return and benefits to the state from such projects. This might include a share of the renewable value or the imposition of a royalty of some type.
22. Deputy Dessie Ellis asked the Minister for Communications; Energy and Natural Resources if he will confirm the ratio of rising fuel costs to the increase in electricity prices this year; and if he will make a statement on the matter. [43725/12]
View answerMy Department has not conducted an exercise of the type mentioned by the Deputy. Such an exercise would require the identification of reliable comparable data sets suitable for the precise purpose of understanding and explaining the relationship between the relevant fuel costs and electricity prices. Suitable data sets are not readily available, particularly in the case of fuel costs. Timeliness of available data is also an issue. In the case of electricity prices, EU level data are only made available six months to a year after the period to which they relate.
Since 2008, and every six months approximately, Eurostat publishes comparable data on electricity and gas prices for all EU states. The Sustainable Energy Authority of Ireland (SEAI) publishes analyses of those Eurostat data twice a year. The analysis is conducted by the Energy Policy Statistical Support Unit (EPSSU), the specialist statistical unit of SEAI and each price analysis publication covers a six month period (either January to June or July to December).
SEAI analysis demonstrates that a number of factors influence energy prices in Ireland, and show how prices here compare with other EU countries. These factors include, but are not limited to, imported fuel prices, energy infrastructure investment costs, Ireland’s electricity generating fuel mix and non-energy costs that affect energy prices (for example, taxes levied, employment costs, raw material and transport and shipping costs).
The fuel mix for electricity generation has a key bearing on the variation in the price of electricity in different countries. This is particularly significant in the case of an electricity fuel mix which relies to a significant extent on internationally traded fossil fuels, such as gas, oil and coal. During periods of volatile price movements in these fuels there is a strong consequential knock-on impact on electricity prices in the short term. Other factors that affect electricity prices include the level of competition in electricity generation and supply, labour costs, geographic isolation and the extent of population dispersal, taxation policy and the level of investment required in infrastructure to improve the transmission and distribution networks.
According to the SEAI analysis Ireland has close to the highest overall dependency on fossil fuels for electricity generation across the EU at 78%, behind the Netherlands at 83%, Cyprus 98% and Malta at 100%. Within the fossil fuel category, the analysis shows that Ireland additionally has a high dependency on gas in electricity generation, at 62%. This is the third highest share of gas generation in electricity, behind Luxembourg at 64% and the Netherlands at 63%.
Our heavy reliance on gas imported from the UK and traded in Sterling means that Irish electricity prices are susceptible to fluctuations in the wholesale cost of gas and in exchange rate movements. According to the September 2012 Bord Gáis Energy Index, in the 12 months to September 2012 the wholesale cost of natural gas has increased by 20% and the Euro has weakened by 7% compared to Sterling. This will affect the cost of generating electricity in Ireland.
The latest analysis of data published by Eurostat for electricity prices is published by the SEAI and covers the period July to December 2011. This publication is available on the SEAI website: http://www.seai.ie/Publications/Statistics_Publications/EPSSU_Publications.
23. Deputy Mary Lou McDonald asked the Minister for Communications; Energy and Natural Resources the level of public inquiry that was made before the granting of an exploration licence to Providence Resources at Dalkey, County Dublin; and if he will make a statement on the matter. [43732/12]
View answerStandard Exploration Licence 2/11 was granted last year to a consortium comprising Providence Resources Plc and Star Energy Oil and Gas Ltd. The licence, which is a follow-on authorisation to Licensing Option 08/2, covers an area of approximately 380 square kilometres in the Kish Bank Basin off the Dublin/Wicklow coast. The award of this exploration licence confers on the holder the exclusive right to search for petroleum in the licensed area, but does not confer a right to produce/extract petroleum and therefore did not require a public consultation phase.
In the event that the exploration activity under this licence resulted in a commercial discovery being made then the licensees would require a number of statutory approvals for a production project, including a petroleum lease and a plan of development consent from the Minister for Communications, Energy and Natural Resources. Other relevant statutory consents could include an IPPC Licence from the EPA, a Foreshore Licence from the Minister for the Environment, Community and Local Government and a planning and development consent from An Bord Pleanála. All of these consent processes would be subject to an environmental impact assessment, which would include a full public consultation phase.
24. Deputy Michael Colreavy asked the Minister for Communications; Energy and Natural Resources if he will ensure that any solution selected for postcodes will support standard location tracking systems, for example satellite navigation; and if he will make a statement on the matter. [43731/12]
View answerThe procurement process to select a postcode management licence holder to implement a National Postcode System is still ongoing and being managed by my Department on a ring fenced basis. That process began last year with the publication of a Pre Qualification Questionnaire on www.etenders.gov.
The final decision to proceed with implementation of a national postcode will be one for Government and will be based on appropriate financial, technical and operational considerations. I anticipate that a decision will be made later this year in this regard.
25. Deputy Brendan Griffin asked the Minister for Communications; Energy and Natural Resources if he will consider grant aiding the installation of double or triple glazed windows as part of existing home energy saving schemes; and if he will make a statement on the matter. [43506/12]
View answerWindow replacement works are not eligible for support under either Better Energy: Homes or Better Energy: Warmer Homes, both of which are operated by the Sustainable Energy Authority of Ireland (SEAI).
The Better Energy: Homes scheme provides support to homeowners towards the installation of attic and wall insulation, and heating system upgrades including solar thermal with the works being undertaken by privately appointed contractors.
These measures were selected for inclusion in the Scheme as they were deemed most likely to deliver significant energy savings to homeowners, at least relative cost, and would thereby optimise the use of Exchequer funds while at the same time maximising the opportunities for homeowner participation.
Under the Better Energy: Workplaces grant scheme, also operated by the SEAI, commercial and public sector organisations may include the upgrade of windows as part of an application for funding. However, it should be noted that this scheme is a highly competitive one and that not all eligible projects will necessarily qualify for support.
As part of the Better Energy programme a number of energy suppliers are meeting their energy savings targets agreed as part of their Voluntary Agreements with the SEAI. A range of energy efficiency measures currently qualify for energy credits towards those targets including insulation and heating upgrades as well as high performance windows. I am further informed by the SEAI that high performance glazing replacement in existing window frames qualify for energy saving credits. The availability of credits for specific measures stimulates energy suppliers to promote the uptake of these measures more widely, as a means of achieving their targets.
I am advised that grants for window replacement are available to those over 60 under the Housing Aid for Older People Scheme, operated by local authorities on behalf of my colleague the Minister for the Environment, Community and Local Government. This means-tested scheme provides grants to assist older people living in poor housing conditions to have necessary repairs or improvements carried out to their homes. Eligible works include structural repairs or improvements, re-wiring, repairs to or replacement of windows and doors, provision of water supply and sanitary facilities, provision of heating, cleaning and painting.
26. Deputy Denis Naughten asked the Minister for Communications; Energy and Natural Resources his views on the Western Development Commission paper, Why Invest in Gas, which outlines the clear benefit of extending the natural gas distribution network to the north west; and if he will make a statement on the matter. [43509/12]
View answerAs the Deputy will be aware from my Reply to a Parliamentary Question raised by him on this issue on the 2nd May, I met with the Western Development Commission on the 21st March last. The meeting provided the opportunity for very useful and informative discussion in regard to the Commission’s Report into the benefits of national gas infrastructure for the North West. We also discussed the role of the Commission for Energy Regulation (CER) and the economic criteria governing the CER’s gas networks Connection to Towns policy.
The CER is the statutory, independent body, charged with the assessment and licensing of prospective operators seeking to develop and operate a gas distribution system within the State. I have no direct statutory function in relation to the connection of towns to the gas network.
The CER, in 2006, approved a network connections policy which enabled reassessment of the feasibility of connecting certain towns to the gas network. In order for any town to be connected to the gas network, certain economic criteria need to be satisfied as a prerequisite. The policy allows for the appraisal of a town either on its own or as part of a regional group of towns.
The policy framework provides that, over a certain period, the costs of connecting a town, or group of towns, to the network are recouped through the actual economic consumption of gas and the associated tariffs. Uneconomic projects would increase costs for all energy consumers.
Under the CER’s policy framework, Bord Gáis Networks, and latterly Gaslink carried out a comprehensive review of towns not connected to the national gas network. Gaslink published its New Towns Analysis Phase 3 report in 2010.
The study included a review of the feasibility of connecting 11 towns in the West and North West region which are the focus of the Western Development Commission paper, ‘Why Invest in Gas’. However, the Gaslink review found that none of the towns qualified for connection on economic grounds.
Gaslink will continue to regularly review the towns which did not qualify for connection under the 2010 Study as well as other towns. The key factor which would qualify a town or group of towns in any future review would be a significant increase in demand for natural gas, usually as a result of the addition of a new large industrial or commercial facility.
28. Deputy Bernard J. Durkan asked the Minister for Communications; Energy and Natural Resources the extent to which commercial or promising oil, gas or other mineral finds have been located on or off shore in each of the past five years to date; the licensing regime and terms under which any such discoveries will fall with particular reference to benefit accruing to the Irish economy in the event of a major commercial discovery; the extent to which preparations are in hand to bring product to the consumer for home or export use; and if he will make a statement on the matter. [43722/12]
View answer121. Deputy Bernard J. Durkan asked the Minister for Communications; Energy and Natural Resources arising from any discoveries of oil, gas or other minerals in the past five years, if provision has been put in place to ensure a greater return to the Irish taxpayer than previously; the extent to which such discoveries are likely to positively impact on the economy in the short and medium term; and if he will make a statement on the matter. [44019/12]
View answer122. Deputy Bernard J. Durkan asked the Minister for Communications; Energy and Natural Resources the full extent of commercially viable oil, gas or other mineral discoveries over the past twenty years which have been fully developed and commercialised; the extent of any such discoveries remaining undeveloped for whatever reason; and if he will make a statement on the matter. [44020/12]
View answerI propose to take Questions Nos. 28, 121 and 122 together.
There have been no new commercial discoveries of oil or gas either onshore or offshore Ireland in the past five years. There have, however, been four discoveries in the Irish offshore during this time, namely the Hook Head and Barryroe oil discoveries in the Celtic sea, the Bandon oil discovery in the Slyne basin and the Schull gas discovery in the Celtic sea. None of these discoveries has been declared commercial to date and tests are ongoing in order to determine if any of them can be declared commercial.
All of these discoveries, other than the Barryroe discovery, were made pursuant to licences granted under the 1992 Licensing Terms, the Barryroe discovery was made pursuant to a licence granted under the 2007 licensing Terms. The Licensing Terms provide inter alia for a Corporation tax on profits which is set down in the Finance Acts. A basic tax rate of 25% applies to profits from oil and gas production. Following a review of the fiscal terms in 2007 the terms were revised to provide for a higher tax rate of up to 40% in the case of more profitable fields. The revised terms apply to all discoveries pursuant to exploration licences granted since 1 January 2007.
A commercial discovery would also strengthen Ireland’s energy security of supply and associated development projects would be expected to stimulate a range of economic activity and give rise to job creation.
There have been two commercial discoveries of natural gas over the last 20 years, namely the Seven Heads gas field in the Celtic sea and the Corrib gas field off the coast of Mayo. While the Seven Heads field has been developed and commercialised the Corrib field is still at the development stage with production expected to commence in late 2014.
With regard to non-petroleum minerals, as of 30 September 2012, there are 606 active mineral prospecting licences currently held by 46 companies.
In the past twenty years, the Galmoy and Lisheen zinc/lead mines have been successfully brought into production, and discoveries of additional reserves adjacent to Boliden Tara Mines Ltd’s operations at Navan have extended the life of that mine. While no new commercially viable deposits of minerals have been discovered in recent years, there have been some encouraging results, particularly in Counties Limerick and Clare. However, it is too early to determine whether these results will lead to identification of commercially viable deposits or to estimate the economic benefits that might accrue.
Financial and other terms for State Mining Facilities (Lease or Licence, depending on ownership of minerals) are negotiated on a case by case basis, in accordance with the Minerals Development Acts 1940 to 1999. Receipts from State Mining Facilities are normally paid in the form of periodic royalties based on volume of production or revenue. Output from base metal mines is exported to smelters abroad while industrial minerals, such as gypsum, are produced for the home market.
