Dáil Éireann Debate, Thursday - 7 April 2022
91. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications if he will report on the energy security review; the action that is being taken to ensure security of supply in view of the war in Ukraine; the measures that are being put in place to assist households with escalating energy costs; and if he will make a statement on the matter. [19069/22]
View answerI ask the Minister to report on the energy security review and the action that has been taken to ensure security of supply in light of the war in Ukraine. I note the comments of the Minister for Foreign Affairs, Deputy Coveney, that he would support sanctions on Russian fossil fuels. Those are likely to have implications. What measures are being put in place to assist households with escalating fuel costs?
The Russian invasion of Ukraine in February is unprecedented in Europe in modern times. The war has, and will continue to have, significant impacts for the world, for the European Union and for Ireland. It has caused a humanitarian catastrophe, with millions of Ukrainian citizens internally and externally displaced. Efforts have been consolidated across the Government to address these emerging and urgent humanitarian issues in solidarity with the Ukrainian people.
The invasion has also impacted Europe's energy system. In particular, the Russian invasion of Ukraine has triggered a decision by the European Union to phase out its dependency on Russian gas, oil and coal imports as soon as possible. The immediate impacts of that include an effect on the price that we pay for energy. However, it will also impact where and how we source that energy and will alter how we design energy policy going forward to ensure the long-term resilience of the system.
The Government is acutely aware of rising electricity and gas prices and the consequent effect on households. This is driven by high international gas prices. Our immediate response has been to utilise the tax and social welfare system in the budget last year to counter rising costs of living for households. Additionally, in recognition of the ongoing inflationary pressures on households we have introduced a credit payment to each domestic electricity account amounting to €200. Approximately 2.1 million account holders will benefit from the payment in the coming weeks. This is one of a range of new measures as part of a €505 million package of measures announced by the Government on 10 February to mitigate the wider cost-of-living increases.
Extensive arrangements are already in place to manage any interruptions to gas, electricity and oil supplies and these are being re-examined by my Department and the relevant agencies in the context of the impacts of the war in Ukraine on international energy supplies. I hope we may be able to publish some of this energy security framework in the coming weeks to show exactly what are the measures we may have to employ to cope should there be any further disruption in supplies.
There are several levels to be considered. The first is the immediate context. We know that coming into the year, there were many amber alerts last year, the CRU security of electricity supply and the programme of actions. We know the Great Island power plant is down for several months. There are real concerns in respect of generation capacity and, obviously, in terms of security of supply, particularly now as it relates to the war in Ukraine. Do the Minister and the Government support the imposition of increased sanctions on Russia in the context of a ban on the use on fossil fuels? What are the implications of that for Ireland? Are there discussions at European level? How will we ensure we are best positioned to weather the impact of that?
I thank the Deputy. We support tougher and stiffer sanctions. I have had meetings in recent weeks in Berlin and Paris with other European ministers. There have been meetings of the International Energy Agency, IEA. It held an emergency meeting last week at which we made the case for tougher sanctions. That would affect other countries in Europe far more than it would affect Ireland.
Europe has introduced sanctions on coal. That was announced yesterday by the Commission, as I understand it. That should not have a major disruptive effect on this country because Moneypoint, the largest coal user, is already switching away from Russian contracts towards Colombian coal. Similarly in terms of gas, while it would probably have a significant effect on the market price if Russian gas were to be shut off, minimal amounts of our supply come through from Russia. Our gas comes from the Corrib gas field, the UK and Norway. Very little of it comes from Russia. It would have a price implication but less so a supply one. In terms of oil, there is real concern. The International Energy Agency has prepared several detailed reports looking at the oil supply situation. Russia is one of the largest global oil exporters. There has already been a reduction in the supply of oil. An estimated 3 million barrels a day of exports are now not being put out into the market. That is why we have been doing these oil stock releases. There are implications but we can manage them.
I thank the Minister. I ask him to expand on the potential implications in the context of oil and related liquid fuels. There have been reports on the prospect of liquified natural gas, LNG, usage in the context of the energy security review. We have heard different things from different parties in government and different State agencies, whether the Commission for Regulation of Utilities, EirGrid or other agencies that have appeared at the climate committee. What is the position in respect of LNG? Is there a different position in respect of commercial LNG as compared with State-owned LNG? Is that something the Government is considering? If we end up in that position, it will be an indictment of the management of this transition.
I will be dealing with questions on that issue later on. We have to be careful here. There will be certain short-term measures, such as the €200 credit that will be going onto people's bills this week. There will be medium-term responses to the crisis which include the likes of the acceleration of the retrofitting programme and the roll-out of renewables such as photovoltaic energy and other renewables projects. There are longer-term issues relating to strategic storage of gas.
Although some people are giving consideration to LNG in the context of an immediate decision, it is probably not of as much consequence or significance in the immediate crisis as some of the other measures, particularly with regard to oil fuels, for example, in respect of which we are more exposed, as the Deputy noted. All our oil is imported. We are fortunate in comparison with European countries that are further east and closer to Russia as a shut-off of Russian oil would have a more immediate strategic impact on them. The Whitegate refinery provides much of our diesel and gasoline and most of its crude oil products come from the west, such as from America. That means we do not have a huge volume of Russian oil in our system. However, as it is a fungible market and oil tankers can head in any direction, any supply shock on the oil markets affects every country. Probably the most immediate focus is on managing such supply shocks and we are doing that through the International Energy Agency.
