I move: "That the Bill be now read a Second Time."
This is a Bill to provide for the regulation and control of the supply and distribution of fuels. There is no immediate need for the measures proposed; these measures are purely precautionary and I would hope that the Bill, if enacted, would go into cold storage and that it would never be necessary to avail of its powers.
In the light of what I have just said, Deputies will no doubt wonder why the Bill has been introduced. I should explain firstly that the decision to have the Bill prepared and ready for enactment at short notice was taken several years ago as part of an OECD programme of a general preparedness to deal with peacetime emergency shortages. This preparatory work, including the drafting of orders, permits, et cetera was carried through by my Department so that controls could be introduced at short notice if the need arose. I repeat that there is no immediate need but, because of the growing importance of energy sources in the economy and because of recent changes in the world energy situation, the Government have considered it prudent to have this Bill enacted so that the necessary powers will be immediately available if they are ever required.
I have mentioned changes in the energy situation as a reason for this Bill. These changes affect primarily fuel oil and coal. Both these commodities, at fairly short notice, have become in short supply.
The demand for fuel oil has been increasing rapidly in the western world. There are various reasons for this. There has been a steady growth in economic activity and industrial expansion. Fuel oil used either directly or as converted energy in the form of electricity is now the accepted source of motive power and heating for industry. Similarly, fuel oil is rapidly replacing solid fuels for domestic heating and with the growing standard of living the standards of domestic heating have been going up with consequent increases in energy consumption. This situation of increased level of demand for fuel oil has coincided with short-falls in other energy sources. The rationalisation of the coal mining industry in Europe has resulted in the closure of many uneconomic mines and an overall reduction in production. The programme of nuclear energy stations for the production of electricity has fallen short of targets. Reduced rainfall in a number of European countries in the year 1970 reduced the production of hydro-electricity. While there have been some gains through increases in the production of natural gas in Europe, this has, so far, had only a small impact on the overall energy supply position in Europe. In the USA, which depends heavily on the production of natural gas, production has been lagging with consequent heavier demands on other energy sources.
The combination of these circumstances gave rise to a greatly increased and unexpected demand for fuel oil and this situation was aggravated by some fall-off in oil deliveries from the Mediterranean area. The situation has been such that if the weather this winter had proved very severe supplies would have had to be restricted to some degree. Fortunately, the weather has so far, been relatively mild.
The scarcity of fuel oil has created an extra demand for coal particularly for power production. This extra demand, combined with the reduction in the output of coal in Europe, has given rise to some concern about our coal supplies. This country still consumes about one million tons of coal a year mainly for domestic purposes. We are now dependent to the extent of about 80 per cent of our requirements on European coal sources and other countries are competing sharply with us for the available supplies. Unforeseeable circumstances such as a dislocation of transport facilities due to severe weather could in this tight situation lead to a shortage.
It will be noted that the Bill also provides for the control of supplies of electricity. We are now dependent on fuel oil for the production of more than 50 per cent of our electricity requirements and a scarcity of fuel oil could lead to a situation in which it would be necessary to ration electricity.
Deputies will, of course, realise that powers to regulate and control the supply of fuels would be of little use to us unless supplies are available to control and regulate. Precautionary measures were, therefore, taken some ten years ago to maintain within practical limits, a stock pile to safeguard against a short-term interruption of supplies. On Government direction, the ESB and CIE carry substantial reserves of oil. The oil companies also carry reserve stocks and, in addition, we participate with other OECD countries in a scheme for control and sharing of oil products generally which would be activated in the event of a scarcity of supplies. The coal trade in this country safeguards the supply position as far as possible by entering into long-term contracts and by diversification of supply sources and I am glad to say that their efforts successfully averted a shortage during a period of temporary supply difficulty last year. Arrangements have now been made to continue coal deliveries during the coming summer at the rate supplied during the heavy usage winter months. This should ensure a substantial reserve stock entering next winter.
I should say that the big difficulty with stock piling is the question of cost. It is estimated that it costs £6 million to store one month's supply of oil alone. There is, therefore, an early limit to what it is possible and practicable to store in present circumstances. At present we have in stock between two and three months supply and are considering methods by which we can increase this level. These estimates are, of course, at normal rates of consumption. With the aid of the powers I am seeking under this Bill it would be possible for me to ensure that, in an emergency, fuels would be used only for essential services and stocks could therefore represent a much longer period of essential supply. Any settling of priorities for use of fuel in an emergency would, of course, be done in full consultation with all the interests concerned.
In the circumstances I have outlined, Deputies will I am sure agree that it is no more than prudent to be in a state of preparedness to deal with a shortage of fuel supplies if the need should arise instead of waiting until an emergency is upon us. Enactment of this Bill would enable the Government, under section 2 (1), to declare by order at any time they consider that the supply situation warrants it, that the Minister for Transport and Power may control the supply and distribution of any fuel or fuels. The Minister would then be empowered to make orders under section 3 (1) to control, to the extent necessary, the supply and distribution of the various fuels covered by the Government order. Drafts of orders which would be made by the Minister have been prepared and they could be made at short notice. In addition, plans have been prepared to facilitate the speedy introduction of a rationing scheme, should this prove necessary.
Any order made by the Government would expire after a period of six months unless continued in force by order of the Government, and any order made by the Minister for Transport and Power would expire with the enabling Government order unless previously revoked by him. Deputies will be aware that this measure has already been debated and passed by the Seanad. During its passage through that House certain objections were raised by Senators and to meet these objections I had a number of amendments introduced during the Committee and Report Stages. These amendments are designed to ensure that (i) oral directions given by the Minister under the Bill would be confirmed in writing within four days (ii) persons would not become innocently or unwittingly liable for prosecution under the Bill (iii) an offence by neglect would only arise in the case of wilful neglect and (iv) the forfeiture of chattels provided for in the Bill would apply only to movable goods and would not include leasehold or freehold property.
While, as I have said, there is no immediate likelihood of a shortage of fuels, the Government consider it wise to make all possible preparations to meet such a situation should it arise. It is for this reason that I recommend the Bill to the House but I repeat that the Bill is precautionary.
