Dáil Éireann díospóireacht -
Tuesday, 2 Dec 1980

Vol. 325 No. 1

Gas (Amendment) Bill, 1980: Second and Subsequent Stages.

Minister for Energy (Mr. Colley)

I move: "That the Bill be now read a Second Time."

The Bill proposes to amend section 23 of the Gas Act, 1976 by raising the limit on aggregate borrowings by Bord Gáis Éireann for capital purposes from £25 million to £30 million. In tandem with the increase of aggregate borrowings of £30 million the Bill also proposes to amend section 25 of the Act by raising from £25 million to £30 million the aggregate of such borrowings which may be guaranteed by the Minister for Finance.

The purpose of these amendments is to enable the board to borrow in order to continue with their gas distribution projects in the Cork area. To date the total borrowings of the board amount to about £24½ million. This leaves an insufficient leeway for borrowings for capital projects for the remainder of the year and leaves no scope for borrowing in 1981.

As Deputies know, following the natural gas find off Kinsale Head, Bord Gáis Éireann were established under the Gas Act, 1976 to develop and maintain a system for the supply of natural gas. The board are to be congratulated for the diligence with which they have carried out their duties in the intervening years since their formation. A transmission system from the offtake point at Inch to the ESB generating station at Marina was completed in 1977 ahead of time and within budget. A spurline to supply Nítrigin Éireann Teoranta at Marino Point was also completed in 1977. Spur pipelines were constructed to the ESB generating station at Aghada in 1979 and to the IDA industrial estates at Little Island and the Mahon Peninsula.

Construction work on the natural gas pipeline to the Cork Gas Company works in Cork city was started by the board at the end of 1979 and completed in mid-1980. On 14 November last initial supplies of Kinsale gas were delivered to the company. Initially the company will supply town gas reformed from natural gas.

Conversion of all consumer appliances to use natural gas directly is being planned and will be undertaken over the next four years. The Cork Gas Company plan that by 31 December this year all gas supply to their 27,000 customers will have natural gas as the feedstock. A further extension of the natural gas pipeline to Ringaskiddy was recently completed. This will supply Irish Steel, and the IDA industrial estate at Ringaskiddy. These are the hard core of projects for which capital borrowings of £24½ million were made by the board.

As a result of the availability of Kinsale gas in the Cork area about 600 extra jobs have already been created. About 652 jobs will become available arising out of industrial projects for which an allocation of natural gas has been already approved and there is the prospect of further jobs in connection with future natural gas based industries.

The gas from Kinsale Head field is almost pure methane. It is virtually sulphur free and has a high calorific value. It is thus a highly efficient and valuable fuel source, and should not be allocated in a haphazard way. The Town Gas Industry Review Committee concluded that, pending the implementation of a reform programme within Dublin Gas and a decision on the question of a Cork/Dublin gas grid, a restrictive policy should be adopted in regard to new allocations of Kinsale gas. I agree with that conclusion. I have decided that pending a decision on the Cork/Dublin pipeline allocations to industry by BGE should be confined to new industrial undertakings where the use of natural gas would be a premium use and where its availability would be a major consideration in the decision to set up the industry here.

I think it is appropriate to emphasise at this stage that this Bill relates specifically to the raising of the board's borrowing powers to finance projects in the Cork area. This extension of BGE's borrowing powers is independent from and is not intended to pre-empt a decision on the feasibility of building a Cork/Dublin pipeline.

The Cork/Dublin gas pipeline project is composed of three elements. First, Bord Gáis Éireann have been asked to undertake a detailed feasibility study in line with best commercial practice encompassing the design, routing and costing of such a pipeline. The second element is the implementation by Dublin Gas Company of a development plan for the company. Consumers Gas, Toronto, were commissioned by Dublin Gas to examine the company's operation and recommend a strategy for the company which would make it a suitable vehicle for the efficient distribution of natural gas. Dublin Gas progress in achieving the performance targets set by the consultants is being monitored by my Department. A works agreement is currently being negotiated between Dublin Gas management and unions as an essential step in the reform programme. The third element is the preparation of a financial package to enable the project to go ahead. No decision will be taken on the supply of natural gas to Dublin Gas Company in advance of the satisfactory conclusion of BGE's feasibility study and the demonstration by Dublin Gas Company, through the successful implementation of the reform programme, of their capability to distribute natural gas efficiently, cost-effectively and safely. If at that stage a Government decision is taken to go ahead, the necessary legislation will be introduced.

In the light of this I feel sure that the House will agree that it would be premature to debate this aspect at the present time. Bearing in mind the achievements of Bord Gáis Éireann to date in meeting the purposes for which it was established. I am confident that the House will support this Bill which is designed solely to enable the board to borrow for projects in the Cork area over the next few years. I therefore recommend the Bill to the House.

Mr. Kelly

I want to put before the House, and not for the first time, a few axioms about this natural gas resource. I feel I am speaking to a sympathetic audience, in the Minister at least. He seems to have been making the right noises right across the energy board over the last year, but he does not seem to have gone very far beyond noise to date. I am optimistic that if he is still in charge of this Department in a few years' time — naturally I hope he will not be for political reasons — we will see better results than might have been expected under his predecessor.

While I think I am speaking to somebody who is sympathetic in a general way to the sort of consideration which seems important to me, the Minister's speech today shows him insufficiently sensitive to the reality of what a natural gas resource is. The first thing to notice about an important resource of this kind is that you cannot put a value on it. It is priceless — I do not mean that in a glib or unconsidered sense but in an exact sense — in as much as any value put on it is likely to be rendered out of date tomorrow or next year, depending on what happens to oil prices, something we do not control, but which clearly represents a standard for measuring the value of energy as universal as the habit the world had of measuring money value in dollars.

We are dealing with a resource on which we cannot put a final price. It is no use saying — I know the Minister has not fallen into such a primitive mistake — that this resource is worth so much. It is on an assumption which is almost certain to be disproved, namely, that the price of oil will remain constant in the foreseeable future. On the experience of the seventies the contrary seems more likely. Where we have a resource of an indeterminate value — which is physically finite because we know there is a limit to how much there is under the seabed — the obvious course in the national interest is to economise and devote it to uses which will waste it least and will effect the most saving in the oil fuel which has to be imported at such a ghastly cost to our trade balance.

That seems to suggest that, independent of what the Minister or his predecessor may think of the Dublin Gas Company, independent of what the Toronto Gas Company may make of them, independent of whether they are being fairly criticised, and independent of whether they succeed in improving their practices, the Government should take a decision in practice to build this pipeline and supply gas to the Dublin consumers, who already outnumber many times the gas consumers in Cork city. I am speaking now of domestic consumers, and not the potential industrial consumers, who will grow even more in number as this resource becomes available and if it is competitive with electricity generated very largely from oil.

Dublin is not the end of it. The gas pipeline, having gone 160 miles, could well travel another 60 miles to reach Drogheda and Dundalk heavily industrialised towns by Irish standards, and then reach the Border. Let me claim, I hope not in a raucous spirit of party self-congratulation, that we were many months in advance even of the Minister, in advocating in print in our policy document earlier this year that we should be aiming ultimately at a pipeline connection which would enable us to sell gas to the North of Ireland. We should be thinking not only in terms of possibly selling gas to Belfast but in terms of the pipeline being an infrastructural bonus which will not be exhausted when the Kinsale field has been exhausted, because the same pipeline can be used to transport gas in the other direction.

An expansion of gas consumption in the North would likely induce the extension to the North of the gas network which already exists in Scotland, and the making available to the North of Ireland of North Sea gas. When that moment comes, if we have that pipeline, we in the Republic will be in a position to benefit equally and to buy, if the self-elected gentlemen who believe in saying things with bombs will permit us, gas from fields which are enormously larger than ours.

Under all these heads it appears that the case for a pipeline is unanswerable. The resource is finite and is of incalculable and obviously increasing value. Therefore the argument for economising and using it in a way that the conversion and transition losses are least becomes stronger every day. The argument becomes stronger every day for using it for home heating and cooking in large towns. This will lead to economies in the use of electricity which has to be generated from imported oil. I am informed by expert friends that the same pipeline can be used for transporting hydrogen as well as natural gas when the technology arrives which will make it economical to use this energy source instead of natural gas.

The provision of a pipeline from Cork to Dublin and beyond will provide a great deal of employment. I realise that is not the only component in the cost — I have not left the ground and forgotten the cost of this product which is very likely to over-run any projections we might now make — but the employment content would be enormous and would be widely spread through seven or eight counties. I am not saying that the difference to the State of paying social welfare benefits to people who do not have jobs and paying them for productive work is nothing, but when one takes into account that the State will have a certain tax take from the wages of the large numbers employed on such work, it seems to be a highly attractive proposition in the likely unemployment climate of the Republic in the eighties.

In addition to constructing the pipeline, there will be a great deal of employment in Dublin city laying the extra pipes necessary to provide an extended supply to a larger number of consumers. This, in turn, suggests that one of the gas company's problems may be solved through such a project, because that company, who have substantially cut down on the numbers by which they were overstaffed, still have a large number of employees one could call "gas engineers". If these are let go, or, if on retirement, are not replaced, where are we going to get them again, where are we going to find and train them again? The gas company have a skilled resource in their employees here — I do not pretend to know enough about it to dictate to them how many they should keep, how many they should replace, and how many they should not replace but it seems that the project of extending the Dublin City Gas network will provide guaranteed secure employment for a large number of gas engineers and remove from the gas company the stigma of being featherbedded or overstaffed.

We have no objection to the Bill, it is a Bill of a very ordinary kind. Virtually every semi-State body which has an industrial dimension, and even many who have not, have their borrowing powers and the State's guaranteed powers increased by the Bill. We have no fault to find with it and the Minister's explanation for the reason is perfectly adequate. The relevance of what we are talking about here to the oil prospects further off the cost is actually quite strong. Already voices have been raised—I do not mean just my voice or the voices of people on this side of the House or people in politics—I mean voices outside, warning us that the most insane course that the State and the people could take would be to regard an oil find as something which relieved them of the necessity to run an efficient economy any longer, that the royalties on the State's share of the take would be sufficient to provide everything we need to pay the public service costs which run away with such an enormous proportion of the budget and to give us all a highly increased standard of living, lower taxes and so on. That is a crazy way of looking at it and I hope that even Deputy Haughey's Government will not lend itself to any such encouragement of the people to illusions, illusions of the kind which the British Government harboured, and look at the condition they are in today. The Government, any Government, should take a firm decision in regard to windfalls which may take place from oil finds in Irish waters around the Irish shelf, namely that every last halfpenny deriving from royalties or from the State's share of the take in whatever form it accrues, should go into a special infrastructural fund. Not one halfpenny of that fund should be devoted to the relief of current taxation, merely in order to make it easy to pay current wages——

An Leas-Cheann Comhairle

The Chair has given the Deputy latitude to raise that matter but it does not really come under the Bill.

Mr. Kelly

I agree, I appreciate that. Naturally one cannot dictate the time scale of the pipeline—God knows when oil will be found in commercial quantities, brought ashore and processed or when the State will get its hands on any money, but the gas pipeline project seems to be pre-eminently a project of an infrastructural kind, along with many others I could mention, to which the income from an oil find could be appropriately devoted and for which it should be earmarked. I can think of very many others which have got a certain relevance to energy conservation. One of my own favourites—the Tánaiste will not be surprised to hear—is the building of an underground or partly underground railway system in Dublin. We must be the last city in Europe——

An Leas-Cheann Comhairle

Unless the Deputy proposes to run it on gas, I do not see what relevance it has.

Mr. Kelly

With the greatest respect, neither of us is so technically qualified as to enable us to giggle at such an idea——

An Leas-Cheann Comhairle

This is not the time to raise it.

Mr. Kelly

All I am saying is, there is no shortage of large scale, colossally expensive infrastructural projects which this country desperately needs and to which oil revenue should be devoted. The pipeline, which will be a very expensive undertaking from Cork to Dublin, and beyond I hope, is certainly one of these. There are others which are of relevance to energy conservation. Anything which will relieve the ghastly traffic shambles in and around Dublin, in particular on the routes between Dublin port and the trunk roads which themselves are very bad, must necessarily contribute to energy conservation as well as to many other things which make life easier and more efficient.

I urge the Tánaiste—I am sure he is sympathetic in a general way to this—to press and throw his weight behind the argument that there must be no question of absorbing any such thing as an energy windfall by way of meeting current expenditure. The pipeline is pre-eminently a project which might be financed—I do not think it can be financed immediately, but retrospectively perhaps. At every available opportunity that message should be hammered home in relation to the Cork-Dublin pipeline which will cost, take a flying guess at the figure, some figures are as low as £70 million, some figures are as high as £200 million, take a medium figure, £120 million, which is a lot of money. It is not a lot of money when trying to win an election; one can throw away that much revenue with the stroke of a pen. That is no problem to Senator Eoin Ryan but it is a problem to most of us, to lay our hands on that kind of money. I urge the Tánaiste that it should become an article of faith with his Government, as I hope it will with ours, that revenues of this kind should be earmarked only for major, badly needed infrastructural development and for nothing else. The Cork-Dublin pipeline is certainly my number one candidate.

Mr. B. Desmond

I commend the Tánaiste on the exceptional diligence with which he has handled the energy question. I hope, in relation to the operation of An Bord Gáis, that he will be forthcoming on the general strategy which he proposes to operate in this area. There are a number of entirely unsatisfactory problems facing members of the Houses of the Oireachtas in dealing with this question. I do not know, and I am not able to comment on the precise agreement between An Bord Gáis, the State and Marathon. Unless one has, in relation to the Kinsale Gas field, the precise basis of the agreement, it is quite impossible for any Deputy to talk about raising the moneys and supporting the raising of the moneys contained in the proposal for the amendment of the Gas Act, 1976. We do know that there is a substantial field. It has been stated that the Cork gas field produces 125 million cubic feet per day. We do not know how much will be taken each day. Can the Minister say what exactly is being taken out of this field each day? What exactly is being paid per 1,000 cubic feet? At what rate of extraction is this production agreed? Whether it be the United Kingdom, France or any of the other countries with an interest in this area I would submit that members of their national Legislatures have all this information fully available in public. It is absolutely in the public interest that all the information be placed before this House.

I want to ask some critical and necessary questions in regard to the situation. So far we have a transmission system from the off-take point at Inch to the ESB generating station at Marina. I should like to know what exactly the ESB are paying as of now for their product. Perhaps the information is public knowledge—perhaps the ESB are willing to make it public knowledge—but we are entitled to know. Otherwise it is quite impossible for Members of this House to make an economic assessment of the effective utillisation of this gas.

The Minister said that a spurline to supply Nítrigin Éireann Teoranta at Marino Point was also completed in 1977. I put the question directly to the Minister: What ate NET paying per 1,000 cubic feet as of now to An Bord Gáis Éireann for the gas feedstock which they are using at present? Unless the answer to that simple question is public knowledge I would submit it is not possible at all for Members of the Houses of the Oireachtas to assess the overall viability and role of Bord Gáis Éireann vis-à-vis NET or Marathon. Unless that information is publicly available it is out of the question for anybody to comment coherently on this problem.

In an article in the Irish Independent of Thursday, 26 June, 1980 it was stated by Colm Rapple:

NET is getting its supplies of natural gas this year at little more than 64p per 1,000 cubic feet. That is the price being paid by Bord Gáis to Marathon and it is about eight times below the energy related price of natural gas.

He went on to say:

In other words, to buy oil of an equivalent amount would cost eight times as much.

I put it to the Minister: is Colm Rapple right or wrong? The public and these Houses are entitled to know.

The Minister further said in the course of his remarks:

Spur pipelines were constructed to the ESB generating station at Aghada in 1979 and to the IDA industrial estates at Little Island and the Mahon Peninsula.

What is being paid by the ESB in relation to their production facility at Aghada? What is being paid for the gas from this spur pipeline? From public statements made by the board we know what they pay for oil; they do not particularly hide the cost per ton of oil into their conventional oil-fired generating stations. There is no way in which I would give an unqualified endorsement of the Bill before the House without having that information. The Minister said also that a further extension of the natural gas pipeline to Ringaskiddy was recently completed. He said that this will supply Irish Steel and the IDA industrial estate at Ringaskiddy. What is the precise agreement between Irish Steel Limited and An Bord Gáis? It is impossible — and will be impossible in the years ahead — for Members of the Houses of the Oireachtas to talk about NET, about the ESB, about Irish Steel Limited, to deal with them even in the context of the public capital programme, unless we have the basic information on their present energy inputs. Indeed, the feedstock inputs in relation to NET are of such magnitude and of such critical importance that, without that information, this House simply is not in a position to comment effectively. Naturally the extensions of the natural gas pipeline are going into the IDA industrial estate at Ringaskiddy and into their industrial estates at Little Island and the Mahon Peninsula. The House is entitled to know what An Bord Gáis, the Department of Energy, the Department of Industry, Commerce and Tourism and the IDA are offering prospective industrialists at any of those industrial estates. What price is it being suggested those industrialists will be obliged to pay for the use of natural gas? These questions are of fundamental importance.

We are dealing with such a finite resource that I might draw one scenario at present in relation to one of its major users, NET. It is conceivable that natural gas is extracted under agreement with An Bord Gáis who, in turn, have an agreement with Marathon. It is conceivable that at present Irish people are using natural gas, from a finite natural resource, to make fertiliser at a massive loss, portion of which apparently is being exported to some European and Asian markets at a loss. Therefore, it is conceivable that the people in those countries are benefiting from that finite resource because, by all accounts, NET are getting a very cheap feedstock. Therefore, although NET are making a substantial loss those countries are benefiting. Therefore, it could even be argued that from natural gas off the Irish coast at Kinsale some farmers in Europe are spreading natural gas fertiliser on their fields with the help of a massive subsidy from the Irish people.

I fear that there will be serious argument when there becomes available the full information about what is happening in respect of this complex matter. I know that the Minister has a great interest in this area and that he has no preconceptions in regard to it. I know also that he is a politician who is totally willing to clear the air on issues of such seriousness. Because of this I wish to put before him the following evidence which was taken before the Joint Committee on State-Sponsored Bodies on 2 July last. I quote from page 32 of the Minutes of Evidence:

Senator Cooney.— Yours is a 20year contract. What are the provisions in it for renewal?

Mr. Crumlish.—It is related to the life of the field and at the time of signing or drawing up the contract the life of the field was determined as 20 years from the start of production. Our contract runs for 20 years from commencement of production, from 1979.

As reported at page 31, there was the following exchange:

Senator Hillery.—What is the duration of the contract for the natural gas?

Mr. McSweeney.—Twenty years.

Senator Hillery.—But it is escalating?

Professor O'Donnell.—There is an escalation clause, I think I said 12 years earlier. The escalation clause is based on the average of the bulk price for 12 months and not 12 years.

Various other questions arose during that session because it had been suggested by a number of Deputies, including the Chairman of the Committee, that there was an element of subsidy. This is the kind of issue that must be cleared rapidly in the House.

The Minister tells us that as a result of the availability of Kinsale gas in the Cork area about 600 extra jobs have been created to date, but I should like to know what these jobs are. I presume that about 430 of them are NET jobs and that the remainder are at the Aghada power station and within the field itself. However, the question arises of whether we are producing jobs which have any rationality behind them or whether we are producing jobs based on a finite resource, the exploitation and determination of which could well result in a situation in which the jobs are produced at a high cost to the nation while the question of the strategy on the use of natural gas nationally has not been clarified. I am extremely concerned about the development and the progress in this matter in recent years.

I would make a point also in regard to the natural gas being used for routine or conventional town gas consumption. I do not regard this as being the predominant issue, though the Minister might be inclined to make major play of it. I presume that the total national town gas capacity is in the region of 12 million to 13 million cubic feet per day. It was suggested in 1976 that the figure was 11 million cubic feet. I should like to have a figure of confirmation from the Minister on that. The total national town gas capacity must be judged in the context of the Cork field which, at normal production, has a capacity of apparently ten times the figure I have mentioned. That would be about 125 million cubic feet per day. I should be pleased if the Minister would correct me in the event of any of my assumptions being wrong but, having regard to the lack of information concerning this matter, it is almost impossible to comment coherently on the situation. Perhaps Deputies have not been diligent enough in tabling questions in this regard. However, am I correct in assuming that, if all the national town gas requirements were to be catered for fully tomorrow morning, assuming that all the necessary pipelines had been installed, we would still be using only about 10 per cent of the Cork field? I ask this question because it is vital that we put the Kinsale field and its exploitation in a proper economic perspective. That is what I have been trying to do since I was appointed as spokesman for my party on energy matters. Deputy Pattison has now taken over that role.

One must ask also the question of what would be the economic price that might be charged to town gas consumers for the availability of this gas. I do not think that the Minister has a clear mind on this matter. Would it be the price which An Bord Gáis would negotiate with Marathon, for instance?

By way of final comment, I might add that my membership of the Joint Committee on State-Sponsored Bodies during the past two or three years has been a fascinating exercise in that we have had the opportunity of meeting representatives from the various bodies and discussing with them the various issues raised. One of the points that we have made consistently, whether we were talking about Bord na Móna supplying turf to the ESB or about anything else, was that an economic price should be paid by the consumers of finite natural resources and that we should be very careful in exploiting those resources, whether they be natural turf deposits or gas deposits off Kinsale Head or any other deposits. It is in that general context that I put these questions to the Minister. I regret that I shall not have the opportunity of remaining to hear his reply. I must attend a meeting of the committee to which I have been referring but I look forward to reading later in the Official Report what the Minister has to say. I wish the Minister well in what one might call vital economic strategy decisions in this area in the months ahead. These are decisions that should be taken rapidly. They should be put to the people without delay. Our prospects in terms of the economic situation, of the energy situation and of our future industrial development are such that firm decisions, irrespective of their electoral popularity or otherwise, should be taken and made known widely. I am confident that the Minister is capable of accomplishing the necessary strategy in that regard.

Mr. P. Barry

I wish to say a few words with regard to the Dublin Gas Company and their customers. It is time there was a little realism about the fate of that company. I am afraid I must accuse the Minister for Energy of sending the fool further in so far as the consumers of the Dublin Gas Company are concerned. He is being unfair to them. The Dublin Gas Company have serious financial problems that will not be solved by promising them natural gas in two or three years' time. The problems of the Dublin Gas Company need to be tackled within the next few months, not within the next four or five years, and to allow the consumers and the company to think that natural gas from the Kinsale Head field would solve their problems is not correct.

The first point that must be settled is the price they will pay for the gas. My understanding is that the Cork Gas Company — at the moment they are in the process of getting natural gas from An Bord Gáis — are paying an energy-related price. Unless the Dublin Gas Company are to be given an advantage over the Cork company — I presume this is not the intention — they will not get energy cheaper than they are getting it now from imported naphtha, although I accept that they may have a greater stability of price over a longer period, and this was one of the assurances given to the Cork company. When I was in charge of the Department they were concerned with having to pay an oil equivalent price. At the time the instructions were that where possible An Bord Gáis were to get an economic price so that investment could be made if it were necessary to build a pipeline and to undertake the other projects the board might have.

If the Dublin Gas Company are not to get gas at a subsidised price, what will be their financial position when and if a pipeline is built? It will not be any different. Before the Dublin Gas Company withers and dies and before all the appliances people are investing in become completely useless, the Minister should focus his attention on the company and provide them with the financial structure necessary. No matter how politically unpopular it may be, it is the duty of the Minister to tackle the problem now, not to hold out the carrot of natural gas when and if a pipeline is built. If the Dublin Gas Company are to get natural gas at a subsidised price — perhaps at the price An Bord Gáis are paying to Marathon — the Minister and the Government will have to defend that decision in this House.

In the event of such a decision, in fairness, the Government will have to see to it that the Cork Gas Company get the gas at the same price. However, that will not relieve them of the necessity to allow Dublin Gas Company to borrow capital. I understand that the cost to the Cork Gas Company of supplying 27,000 households with natural gas and of changing the appliances was £4 million. If there are seven times as many appliances in Dublin, presumably the cost of changing them would be in the region of £30 million. The Dublin Gas Company should be told whether that capital will be made available to them now.

I do not think sufficient account has been taken of the size of the field of natural gas at Kinsale — it is 125 million cubic feet per day and 40 per cent goes to Nítrigin Éireann at Marino Point. Presumably it will not be the Government's intention to take that 40 per cent from NET? A quantity goes to the Cork Gas Company. About 60 per cent was earmarked for the ESB station at Aghada and now a supply from that 60 per cent goes to Irish Steel. Spur pipelines are being laid with the intention of supplying natural gas to three industrial estates — one at Little Island, one at Ringaskiddy and one at Mahon in Cork city. Of course there is always the possibility that the field will be bigger than was thought originally. At the moment it is assessed at 125 million cubic feet per day for 20 years. I am told that in other parts of the world fields have been proved to have a longer life than the exploiters thought originally. It may be that in another 17 years we will discover there is another ten years in the Kinsale field but, even if that is so, it does not alter the amount that can be allocated at the moment. It merely lengthens the time in which we can take a supply of 125 million cubic feet per day.

Obviously a guarantee has been given to An Bord Gáis to go ahead and build the spurs to the three industrial estates while at the same time supplying Irish Steel and the Cork gas consumer. Otherwise they would not have undertaken the capital expenditure of laying the spurs. In the context of the total length of pipeline between Inch Strand and Cork city this may be quite small but I do not think they would have undertaken the expenditure unless they had been given an assurance that they could pump gas to their customers in those areas. Therefore, we may be talking of piping to Dublin as little as 40 per cent of the field, that is something in the region of 50 million cubic feet per day.

In the annual report of An Bord Gáis data is given on the cost of the pipeline and the time it took to build it from Inch to Cork. It cost £18 million for 30 miles in 1977 money terms. I should imagine that in the three years since that time costs have increased by at least 50 per cent. Thus, in current prices the cost of building that pipeline would be between £25 million and £30 million. The distance from Cork to Dublin is five times the distance from Inch to Cork. Using a multiple of five one gets an expenditure of well over £100 million to build the pipeline between Cork and Dublin and over much more difficult terrain than that experienced between Inch and Cork. For eight or ten miles that pipeline went through open country and it was merely a question of laying the pipe along the ground. There was only one small town, Carrigtwohill, through which the pipe had to be laid. At Mahon Peninsula there was a disused railway line available to take the gas from the Mahon estuary, through Mahon Peninsula, through the disused railway line that had been closed for 40 years and right into the heart of Cork city to the Marina power station. On three or five miles of the route nothing had to be done and the question of way leaves was fixed.

We are talking there, about negotiation and way leave purchase on a major scale of a different kind for somewhere in the region of 15 or 18 miles. The Government are now talking about doing the same thing for a distance of over 160 miles and, at the end of the day, evidently there will be only one user of gas — the Dublin Gas Company. There may be industries which would come here if gas were available in Dublin. The IDA have been more than enthusiastic in seeking out, for the Cork region, industries which will use natural gas. At Ringaskiddy there is an industrial estate with everything which heavy industry would require. The estate has 1,000 acres of land purchased and owned by the IDA. It has deep water which can take ships up to 50,000 tons, a flow of water sufficient for even the largest industry to come there and natural gas. They have not yet succeeded in enticing suitable heavy industries to that most desirable location.

Let me say, in case anyone thinks I disagree with this pipeline project, that I agree with Deputy Kelly that we badly need investment in infrastructure at present. This project will be of great value from the point of view of employment when it is being built. I am sure that the Minister and the Department have read the energy report produced by the Fine Gael Party early this year. I cannot remember the exact date.

Mr. Kelly

April.

Mr. P. Barry

In April of this year. It may not be written into the Act, but it was certainly part of the instructions given to the first Bord Gáis that their first task was to undertake a feasibility study on the cost and likely problems to be encountered in building this gas pipeline. If this pipeline from Cork to Dublin is built at a cost of £100 million, the servicing of that capital, at the very cheapest interest rate at present, would be £14 million or £15 million. If at the end of the day the only customers will be the Dublin Gas consumers, will that represent a further subsidy to that company of perhaps £14 million a year, because that is what it would amount to?

The length of time taken to build the gas pipeline from Inch strand to Cork city was from its commencement on April 1 to 19 December 1977, the day of the formal pipeline completion ceremony. It took about nine months to build 30 miles, a lot of which distance was over uncluttered, open, virgin territory. It will take somewhere in the region of three years, minimum, to construct the pipeline between Cork and Dublin. This will go through many more towns and have many more river and canal crossings. The Irish Farmers' Association, even though they got extremely good terms in the negotiations between them and An Bord Gáis in east Cork for way leave to cross their land, are now deciding that they were dissatisfied with those terms. I am not sure if they are speaking of re-negotiations in regard to the existing pipeline but they have certainly given notice that they would not accept the same terms if a gas pipeline were to be constructed between Cork and Dublin.

I do not know whether the Minister, in negotiations with the gas company has given an undertaking to subsidise the price of gas at the same price that Bord Gáis are paying Marathon, or what price has been struck at all in this regard. If in three years' time they are going to pay an energy related price for gas in Dublin and still be faced with the prospect of spending £30 million in converting appliances in and around Dublin city to the use of natural gas, that is not financially feasible as far as the Dublin gas consumers are concerned. That company will certainly be bankrupt between now and then. I understand that in the last year before an election the Minister may not like taking unpopular decisions but one must remember that the ordinary gas consumers in the city of Dublin are, in a large proportion, the less well-off section of the community. They cannot be allowed to fall between the two stools of financial insolvency or the financial difficulties of the gas company and the political expediency of the Minister in the next two years. The problems of the Dublin Gas Company must be tackled. They should have been tackled 12 months ago and to send for people from Canada to tell us what we already know about that company is not of any service, either to the company itself or to the people depending on it for their heating and cooking facilities.

Mr. Kelly

It is three years since Deputy O'Malley first started talking about this.

Mr. P. Barry

Yes. If you have only 40 per cent of the field, 50 million cubic feet a day to transport from Cork to Dublin, will a gas pipeline be built for that? This is the smallest proportion of a relatively small field in a place which is not close to a major centre of population. Does it make sound sense to do that? Suppose you are half way up the country and there is a gas find off the Kish Basin, what will be done then? If there is a grand plan — and I cannot see any sign of it, but perhaps it is not suitable for the Minister to announce anything in this regard at the moment — we must remember that we already have here an energy grid. The Electricity Supply Board are not everybody's favourite people and they would certainly not win any popularity chart test, but they have provided an energy grid throughout this country. Indeed, they are providing energy to about 99.5 per cent of our houses — the highest proportion of anywhere in Europe.

To establish a series of industries based on natural gas would be a very good thing, but not if done in a haphazard way for political reasons. To establish the grid to extend up to Belfast and across to Derry would be a very good job. If we can have gas interflow between Scotland or the UK and Ireland so that we can feed, as far as possible, our own grid and buy in gas from the UK or from other available sources, that would be of benefit to this country and certainly it would have many political as well as economic advantages. We should not pretend we will do it when it appears — and maybe there is much more to it than I can see in the papers, but I do not think there is — that it is just political window dressing to satisfy Dublin gas consumers that we are doing something to solve their problem. Even if the Minister promises to subsidise their gas and promises to give them the money to change over their appliances, this would be of no benefit to them for three years. What will happen to the Dublin Gas Company in the meantime?

If there is nothing more to meetings with people from Northern Ireland in relation to natural gas — maybe there is; if there is I hope the Minister will say so — than political window dressing, the Minister should do more with his time than engage in them. I hope I am wrong about that and I am open to correction.

If a decision is made to build a pipeline — and I can see sense in that, but not with the quantity of gas available — that decision should be made urgently. We should not have the IDA in Cork, the Gas Board headquarters in Cork and the ESB in Aghada wondering whether they can undertake capital investment because the gas may be taken from them in two years' time. From where I sit there is no economic reason for building a pipeline. There may be political reasons for doing so. If the Minister intends to build it for political reasons he should announce this urgently so that people can make alternative arrangements. If it is not justified on economic grounds, and I believe it is not, the Minister should say so, so that people can go on planning to entice industry to the Cork area where the gas is already, industries which can be of benefit to the whole economy if they are enticed in quickly and without any doubts about future energy supplies.

Mr. Hegarty

I live in an area where natural gas was first brought ashore practically a few farms away from me. It was quite a revolution, and we all looked in awe and wonder at the achievement of putting a pipe into the seabed, across a most beautiful beach and onto good farmland without creating any hassle. The Gas Board are to be complimented on doing a very efficient job. Obviously they had the expertise. I do not share some of the pessimism expressed. I hope we will have more and more gas finds off Kinsale Head. I do not know why it is called Kinsale Head because it is not Kinsale. It is Ballycotton.

From what I have heard from various experts — and they talk quite freely when you meet them in the pub — this is a massive gas field. We are right to make the optimum use of it. I would defend against all comers the decision to use natural gas for nitrogenous fertilisers. For far too long we had the same dependency for our fertiliser imports as we had for oil. Prices are high and exports are large. All this was explained when the company appeared before the Special Committee. I will not go into that now.

I feel very happy that we have this factory, apart altogether from its job content, which is substantial. There were massive problems in the course of construction, but now it is running well. There were quite a number of environmental problems which cost a great deal of money. It was right to have the necessary environmental safeguards provided to ensure that everyone would be happy and that the neighbours would feel safe about emissions of ammonia. All that cost a great deal of money. The plant is now in existence. It is working well and delivering on target. Taking one year with another, I am convinced that we will have no difficulty in exporting our surplus of nitrogenous fertilisers. The figures prove that Holland, Belgium, the United Kingdom, Germany and France are almost doubling their output of nitrogenous fertilisers.

An Leas-Cheann Comhairle

The Deputy is getting away from gas.

Mr. Hegarty

The same applies to the ESB power station at Whitegate. Here we have a source of power, natural gas, on stream, to create electricity. The job has been done. It is practically built and it will be efficient. We should expand and develop this gas to the limit, expecially during this period of recession. This gas should be used to create more jobs, and I do not mean piping it all over the country. I mean that jobs should be created along the lines indicated by the Minister. We should do more and more in Little Island, in Irish Steel and possibly in Verolme dockyard if they require it.

We are overlooking something in that area. There are three substantial industrial towns there which require natural gas for their industries and their people. At very little cost to the State the town of Midleton and its industries could be supplied. The gas line almost passes through that town. Instead of taking it all the way to Dublin, which may or may not have some merit in it, first we should supply the home base, and the home base is not entirely Cork city although it is part of it.

There are also growing towns, which are almost cities, like Cobh, Midleton and Youghal. Recently we spoke in the House about industrial problems in these areas and of new industries and old industries running into difficulties. One logical way to keep them going is to give them a supply of natural gas at the right price. I hope the Minister will listen to the reasoned arguments of the chambers of commerce, particularly of the Midleton and East Cork Chamber, who have sent him a reasoned and lengthy document setting out why they feel there should be a spur for natural gas to Midleton forthwith. This would serve as an indicator of the efficiency of the project without having to spend too much. All the industrialists in the town, such as East Cork Foods, Irish Distillers and so on, are crying out for natural gas, and with it they would be able to assess its value vis-à-vis heavy oil. The big factor is that in the likely event of an oil shortage we would have enough natural gas to keep these industries going, especially the important food processing industries.

We should look at other areas where natural gas could be used so that things could go ahead in the event of an oil shortage. For instance, farm tractors could be converted to run on gas. When I was chairman of the Sugar Beet Growers' Association I visited Northern Texas where practically every tractor was being run efficiently on natural gas. We should set up a special section in the Minister's Department to look at the possibility of conversion kits for cars, lorries and so on. I am convinced that this is a very big field and that we should use it to the full. We should not waste gas but there is no need for conservation so long as we have good use for it, and we have. We should use it as I have suggested in providing energy to heat homes in the towns in the area where the gas is brought in. It is not logical to pipe this gas up and down the country when it can be used so well where it has been found especially when there may be other gas finds, possibly in Dublin Bay, and there is certainly a likelihood of gas finds in the west. Seeing that we were lucky enough to find gas in Inch Bay and seeing that it is a highly industrialised area, it is logical to use it as much as possible in that area. A lot has been done with the ESB, Nítrigin Éireann and the Cork city supply, but we could go further. We could work our way up along the country via Youghal, for instance, into Waterford and take it in stages so that we could monitor how we were getting on instead of shooting up through the midlands with a pipeline without thinking of the people along the way.

This is a most important ministry and we are just dealing with one aspect here. Will the Minister assure us in the House that there will always be adequate supplies of natural gas for the fertiliser plant at Marino Point and that there will not be a change of thinking with regard to that plant because of a sudden change in world markets? A few years ago, in regard to urea and this type of nitrogenous fertiliser, we had periods of dumping and also very expensive periods. There is a danger that if we have a couple of years of dumping of urea on the world market the Government might have second thoughts. This is all the more reason why you should have a commitment now that Nítrigin Éireann, with their large number of employees, their infrastructure and all their efforts in the market, will not be interfered with and will get a guarantee of a full supply. The same would apply to our power station in Whitegate.

The Minister, for obvious reasons, should look at the possibility of using natural gas for farm tractors. This would not entail expensive pipelines. On the assumption that farm tractors can be converted to natural gas, all it would mean would be special tankers on the farm and special road tankers. It would not involve a pipeline or any massive expense. This would not even be something new: in 1967 I saw it in America where the whole of Northern Texas was being well cultivated with tractors run on natural gas. The price of diesel oil will go through the roof and people involved in agriculture will find this a major cost at a time when their produce is making very bad prices. It looks as if the prices are levelling off and the Government and the Minister have a responsibility to the farming sector to ensure that every help possible is given to them.

I do not share the pessimism of Deputy Desmond who had doubts about Nítrigin Éireann. I have no doubts. It is probably the most efficient plant run on natural gas in the world. It is certainly the most modern. It has built into it all the safeguards necessary for such a plant. We now have nitrogenious fertilisers in large quantities for the first time, and while in some years we may have problems with exports there will be many more years during which we will have something very valuable for sale on the world market. In future Estimates I would like to see provision for the carrying out of further exploratory work. I know we are leaving this perhaps in the hands of multinationals, but I often wonder if we are getting the full facts from these people. It is an area where the Minister should have a lot of control and, if we can afford it, we should have people involved who are closely tied up with multinationals. It has been known in the past that these people could close the tap on a find of gas or oil until the time is right. It is vital that if there is a lot of gas or oil we should be told. Hardly anywhere in the world has there been such a find of natural gas without a find of oil.

Perhaps in the context of the UK the small find of natural gas would not be worth buttons but in our economy it means a lot and particularly in Cork where we have serious unemployment. The gas line has given, and still is giving, massive employment when unemployment is at an all time high. An Bord Gáis are doing an excellent job and their decisions are usually taken very wisely. They have had some difficult negotiations on way leaves with the farming community. However, I do not know of any case where there was not a satisfactory outcome and that gives me great heart. I hope the gas will not be going straight to Dublin but via every industrial town along the way.

I do not know how practical this suggestion would be but there is a lot of land in public ownership along the railway line and if we could run the gas line side by side with the railway line we would be doing two things: we would save the town of Youghal industrially and the railway line which is in the doldrums.

I would give the Minister full support for using natural gas in a practical way. I am satisfied that in a few years time we will have a lot of oil and gas as a result of more explorations and new techniques. The problems we have at present with regard to getting oil from under deep waters will be overcome with new technology. When that time comes we could think about having long distance pipelines but, for the present, we have a field situated in an industrial area and we should serve that area before Dublin or Belfast.

Mr. Deasy

I welcome the Bill and fully support the sentiment embodied in it — to provide industry with a source of fuel from native resources. We must be honest about the Kinsale gas field. I should like some straight answers to questions which have been "bugging" me and which I raised at the Joint Committee on State-Sponsored Bodies when we were examining the activities of NET. I should like the Minister to spell out clearly the answers to questions which remained unanswered as a result of that investigation.

As the Minister stated, the gas from the Kinsale field is a valuable source of fuel. It is a highly efficient one and should not be allocated in a haphazard way. It is very important to get the maximum benefit from the gas. It has not been answered to my satisfaction that that is the case at present. The country is entitled to answers to the questions: is it being used to the best advantage and, if not, why not? In what way could it be used? I have no doubt that the reason for the Bill is to use it to the best advantage whether it is to the Cork gas company, the steel industry at Haulbowline or the new industrial estate at Ringaskiddy. I am glad that the Minister asked Bord Gáis Éireann to do a feasibility study to see whether it would be better to pipe it to Dublin and use it directly as source of oil rather than in some other manner. I appreciate that the cost of a pipeline will be very high. A figure of £120 million has been mentioned and that may be a conservative one. If it is the most efficient way to use it and the cost is not unduly high that is the thing to do.

Figures of 50p and 55p per them have been quoted as the cost of producing heat and energy from the present Dublin gas system. It is reported that gas from the Kinsale gas field is being sold to industrialised concerns for as little as 7p or 10p — these are figures I have seen quoted in the national papers — and there must be a case for spreading it around the country. We have a duty and should not be making decisions on a political basis only. We should not be parochial but should get the maximum benefit for the country as a whole. I strongly advocate that the Minister be courageous in that regard and I know he will be.

We asked what the gas was being sold for at present. I understand that An Bord Gáis are the intermediary and the Marathon gas company are selling the gas to the board who, in turn, are selling it to industrialised concerns. I would like the Minister in his reply to clarify that position. It is a bit clouded at the moment.

I would like to know what gas is being sold and what Marathon are receiving per therm for the gas. What are An Bord Gáis selling it for to the various industrial concerns such as NET, the ESB and other companies listed here? I would like a figure. The public should not be denied this information. We have a right to know what it is being sold for. The Joint Oireachtas Committee were told in answer to that inquiry that they could not be given a figure because it was confidential and might give an unfair advantage to trade competitors, to people competing with the present users of gas. That is not a sufficient answer. The circumstances should be spelled out. I would like to know what the value of the gas is and what the people are paying for it.

I have a suspicion that there is a second gas field in this country which is not being utilised at the moment because the going rate is not being paid for the gas coming out of the Kinsale field. I would like the Minister in his reply to let us know if there is a second gas field off the County Waterford coast.

Mr. Colley

I would like to ask the Deputy that. I thought that there was.

Mr. Deasy

I ask the Minister if there is a second commercial gas field off the Waterford coast near Ardmore Head. It has been reported to me that there may be a gas field there but it is not being developed because the gas company feel that the price which they are being paid at present is not sufficient to justify that development. That information may be false but it has been put to me on a number of occasions and I would like clarification on the matter.

The price at which the gas is being sold is obviously a very important factor and it is in the national interest that we— when I say "we" I mean our agency, An Bord Gáis—should get it at the lowest possible price, but if it is being sold for as little as 7p per therm it should be used to the maximum benefit. It should be spread around the country and used directly as a fuel because that surely is the way we get the maximum benefit. One question that I cannot get an answer to from technical people, and I would like to ask it of the Minister, is what is the efficiency of the manner in which the gas is being used at the moment? For instance, what is the wastage in having it converted to urea and ammonia as in the NET plant at Marino Point in Cork? What is the wastage in having it used for the generation of electricity such as is happening at the Marina Plant in Cork and at the Aghada plant? I believe that particularly in the generation of electricity the gas is not used to its maximum potential and it may be that it could be used for some other purpose. It is not that I advocate that, in particular, NET should not be allocated this gas, because they have importance where our balance of payments is concerned. We need fertilisers with a high nitrogen content and it is obvious that we should have this plant within this country. If we were dependent on imports we could be squeezed badly in times of shortage or price hiking by foreign industrialists.

It is important that we have a native source of supply. But notwithstanding that, I would like to know the levels of efficiency in the production of various commodities which are made from this gas. Above all, we must ask ourselves if mistakes have been made in the allocation of this gas in the past. If so, let us not be afraid to admit it. I would like the Minister to tell us if he is quite satisfied that the gas is being put to the best possible use at present. I am satisfied that the uses outlined in the Bill are the proper ways in which to use it and, if it can be hiked around the country and used to fuel the Dublin Gas Company's requirements and other industrial requirements on the way, then that should be done. I would like a clear explanation of the best way in which it can be used in the national interest.

Minister for Energy (Mr. Colley)

Before I spoke on the Second Stage of this Bill I had a strong feeling that what has happened would happen. It was almost inevitable. However, I would like to draw the attention of the House to something I said in my Second Stage speech. I said:

I think it is appropriate to emphasise at this stage that this Bill relates specifically to the raising of the board's borrowing powers to finance projects in the Cork area. This extension of BGE's borrowing powers is independent from and is not intended to pre-empt a decision on the feasibility of building a Cork-Dublin pipeline.

That is a factual statement. I had to make certain references to the Cork-Dublin pipeline project in the hope of excluding it from the debate. As you have heard, Sir, it was not excluded from the debate. I understand why it was not although, strictly speaking, this Bill does not deal with it and does not provide any capital for it.

Mr. Kelly

That is merely making a debating point in order to stop others from taking part.

An Leas-Cheann Comhairle

Deputy Kelly should not come in so early in the Minister's reply.

Mr. Colley

I explained the irrelevance of that matter in my introduction. However, I merely want to put it on the record. We had a very interesting discussion, so interesting that if I were to follow up all the points raised we would be here for a very long time. I am not going to follow up all of the points, but I want to deal with a number of the major basic ones. Perhaps the first one I should deal with is one which has been raised by a number of Deputies, but with most persistence and perhaps with a certain amount of feeling by two Deputies, Deputy Deasy just now and Deputy B. Desmond earlier, each of whom is a member of the Oireachtas Joint Committee on State-Sponsored Bodies. There is some significance in that. One would have thought that, being members of that Committee, they would have better knowledge of and more access to the kind of information we are talking about than any other Deputy in the House, and yet they come in seeking information which apparently they were unable to obtain at the Committee.

Whatever complaints they may have about that Committee and the non-production to the Committee of information which they sought, I do not think it can be remedied here in the House. I do think that it is reasonable — or let me put it the other way — it is not unreasonable for NET to argue that the question of the price that they pay to BGE is a commercial one. This is not my business, but I think there is provision in that Committee for the disclosure of information of that kind on a confidential basis. As for its public disclosure, it is not unreasonable to object to that being done. It could give advantage to commercial rivals and it would be unreasonable of us to insist on that. In general in regard to the prices paid to BGE by different customers these are energy-related and they also reflect BGE's capital cost in building a pipeline infrastructure. It has been the consistent position of successive Ministers dealing with this matter that they would not and did not feel at liberty to disclose a price being paid by An Bord Gáis on behalf of the State to Marathon. That is paid on foot of a contract which was negotiated some years ago and certainly a disclosure by one party to that commercial contract of terms of that kind would be regarded as a very considerable breach of confidentiality. It has not been done up to now and I do not propose to do it.

Mr. Kelly

Except by the Minister for Industry, Commerce and Tourism, Deputy O'Malley, in the case of Bula.

Mr. Colley

No, I do not think the Deputy is correct.

Minister for Labour (Mr. G. Fitzgerald)

He never is.

An Leas-Cheann Comhairle

It is hardly relevant to gas anyway.

Mr. Kelly

I am sorry. I could not resist it.

Mr. Colley

I think Deputy Kelly was talking about the sum in the region of £10 million which was paid to shareholders in Bula.

Mr. Kelly

I am talking about the publication of an agreement containing commercial details which might have been of some value to competitors.

Mr. Colley

I participated in that debate and I remember that there was a cover-up. It was not a matter of commercial details but there was a cover-up of other aspects. However, we will not pursue the point.

Mr. Mitchell

Where does that leave NET?

Mr. Colley

Deputy Mitchell is still young in this House and he does not know what he is saying.

Mr. Mitchell

What cover-up is going on in NET?

An Leas-Cheann Comhairle

Deputy Mitchell's youth does not mean he can prevail on the Chair.

Mr. G. Fitzgerald

It is not youth, but inexperience.

Mr. Colley

Some colleague of Deputy Mitchell should take him aside and warn him not to rush too far into NET.

Mr. Mitchell

Somebody might advise the Minister about rushing into leadership contests.

Mr. G. Fitzgerald

Deputy Mitchell will never have that problem.

An Leas-Cheann Comhairle

Somebody might advise Deputy Mitchell to keep silent at present. He is not in possession.

Mr. Colley

There are some people who keep leading with their chins. The Deputy must not tempt me too much.

Bord Gáis negotiate prices with various people and in general the basis of payment is as I have outlined. In case there is any doubt on the matter statutorily, I should like to draw the attention of the House to the provisions of section 11 (4) of the Gas Act, 1976, which states:

Nothing in this section shall be construed as enabling the Minister to exercise any power or control in relation to a price to be charged by the Board in a particular case.

That is the statutory position and, even if it were not so, it would be necessary for me to adopt the stance I have taken in regard to price. However, that does not mean that we are not entitled to examine and comment on the performance of Bord Gáis or the use of natural gas, nor does it mean we cannot discuss the points raised by Deputy Deasy in regard to the most effective and efficient use of natural gas and whether its use for the generation of electricity is efficient. These are the kinds of questions we are entitled to ask.

I understand that there are conflicting views among experts on these matters, but the great bulk of the advice I have received and which I accept is that the use of natural gas for the generation of electricity is not the most efficient use available to us.

There are also difficulties about the use of natural gas by NET. The situation is perhaps compounded by the fact that roughly 50 per cent of NET's production in that plant is exported. In one sense this is a good thing, but on the other hand we are exporting a product which is based on a natural resource of which we have great need. To put this into perspective, I would point out that natural gas is one of our few indigenous sources of energy at present. In broad terms, if we were to utilise natural gas in major urban areas and if LPG were used for domestic purposes in most rural areas, we would very substantially alter the demand for electricity and therefore our rate of importation of oil, on which electricity is very largely dependent. Obviously I do not wish to pursue this matter in great detail on this Bill. I am merely trying to illustrate the fact that natural gas potentially forms a major part of our overall energy strategy. Part of that strategy is, of course, switching from dependence on imported oil. Therefore it is quite right to question the use to which natural gas is being put or may be put in the future. There is not full agreement even on the technical question raised by Deputy Deasy and certainly not on the economic arguments that arise, but it is quite clear that there is a large volume of opinion which is not satisfied with the use at present being made of natural gas.

I said earlier that I am not anxious to score political points and I am not trying to do so in mentioning that historically the decision to utilise natural gas for generating electricity and for the NET plant was made by the parties opposite when in Government.

Mr. Kelly

That was before the oil price situation looked like escalating.

Mr. Colley

I feel that the Deputy will not be dissatisfied when I have finished on this point. My party were then in opposition and we opposed that decision, mainly for the reasons I have been outlining. I appreciate that those faced with responsibility for that decision were in the position that, unless they could guarantee a substantial offtake of gas, then the gas might be better left where it was at the bottom of the sea. It would not have been worthwhile constructing the platforms and pipelines to take the gas ashore. I am not suggesting that the decision was simple and that the wrong decision was taken. It was necessary to ensure a guranteed offtake of a substantial quantity of gas in order to get the operation going. We can now re-examine the whole situation to see if we can find a better use for this major natural resource.

I am a little confused about some of the arguments I heard from the Fine Gael benches. At first I thought they related to geographical location because there was a major difference between the lines taken by Deputy Kelly and Deputy P. Barry. I thought that was simply due to the fact that Deputy P. Barry was a Corkman. Then Deputy Hegarty seemed to be taking Deputy Kelly's line. I am confused.

Mr. Kelly

It may be that Deputy P. Barry was lashed to this particular wheel for four years and it left its print on him.

Mr. Colley

Maybe that was it. Deputy P. Barry, for the second time in my hearing, has taken a line on this which mystifies me. I think he is wrong, and I hope he is wrong, because if he is not we are doing all the wrong things.

Mr. Deasy

The Minister would not be the first Dublinman who could not understand Cork logic.

Mr. Colley

It appears that Deputy P. Barry was basically saying that this was a small field and we should not be thinking in terms of running it all over the country and wasting it that way. He set out to prove that if we piped it to Dublin it could only be used in Dublin at a substantial loss and heavily subsidised by the taxpayers. I believe him to be totally wrong. Deputy Kelly seemed to be saying we should go ahead and pipe it to Dublin and, indeed, to the border, and contemplated, as I am contemplating, piping it to Belfast.

We do not know the precise size of the field but the original estimate, is acknowledged to be conservative. It is necessary to have an offtake from the field for a considerable time before one can have any accurate estimate. That reassessment is going on at the moment and I hope to have the result of that reassessment within a few months. Obviously I have to await that but all the indications are that it will show that the capacity of this field is considerably bigger than was originally estimated. In a few months we hope to know for definite.

The question of availability was raised. I think some of Deputy P. Barry's calculations were being made on the basis that the allocation made originally for electricity generation on the one hand and NET on the other were rigid and inflexible and that anything over and above that was all that was available for use otherwise. If that were so Deputy P. Barry would be right in saying that the amount available would not be worth piping to Dublin, but that is not so. For instance, the ESB station concerned can run other than on natural gas. Whether it should be is another question. In other words, it is possible to reallocate gas from one source to another. I believe we have substantial quantities of gas and we should go ahead on that basis.

That brings me to the question of the future. One aspect of that was raised by Deputy Kelly and another aspect by another Deputy: supposing we should have a pipeline as far as Belfast, then a pipeline connecting Ireland with Britain and a pipeline connecting Britain with the continent. That is ultimately what we are going to have within the context of the EEC. Deputy Kelly correctly said that the gas can flow either way in such pipes. Some people would argue—and some people have argued to me—that ideally we ought to have a pipeline to Northern Ireland and Scotland——

Mr. Kelly

And south as far as Dublin and no further.

Mr. Colley

——and between Wexford and Wales, and that it ought to be possible to have it flow either way.

Our exploration efforts are being stepped up considerably. Nobody can be sure what is going to happen but I believe there is a very good chance we will, in due course, discover more natural gas. The question of the price was raised. Deputy Deasy said it had been reported to him that there was another field off Waterford but that it was not worth exploiting because we were paying too small a price. I am not aware of the field off Waterford. I am not saying that it is not there——

Mr. Kelly

Like the missing postman; another absence in Deputy Deasy's constituency.

Mr. Colley

I have said this publicly, and privately to some of the companies concerned, and I want to say it again here so that there will not be any misunderstanding about it: in the event of the discovery of further deposits of natural gas, while we could not at this stage anticipate all the factors which would enter into the contract we would sign, it would nevertheless be my intention to aim at a contract which would result in a price comparable to and related to the going rate for natural gas discovered offshore in Northern Europe at that time. I do not think I can be fairer than that. Clearly that kind of formula indicates that any company which locates natural gas in our offshore can depend on the fact that we will try to negotiate with them a price which will be related to the going rate for Northern Europe offshore——

Mr. Deasy

What is the present going rate?

Mr. Colley

It is a bit difficult to say because it is kept dark——

Mr. Kelly

Very effectively.

Mr. Colley

It is roughly 25p a therm. It varies, depending on whether it is crossing national boundaries, how difficult it is to recover, how deep, how far out and so on.

I do not want to follow all the interesting hares mentioned but there is one I have to mention. Deputy Kelly talked about the use and the possible abuse of the oil millions we might eventually find in our possession. I have no desire to enter into this game of spending the oil millions which we do not have and which, in the best circumstances, we are not going to have for many years. I do not want to be a party to that. It would be very dangerous——

Mr. Kelly

We will not be regarded as cheating if we cite that at election time.

Mr. Colley

I have said all this many times. When Deputy Garret FitzGerald——

Mr. Kelly

The FitzGerald——

Mr. Colley

Deputy FitzGerald spoke at the Fine Gael Ard-Fheis and he abused this party for spending the oil millions. Having done that, he proceeded to spend them himself at great length. I do not want to do that. There is one principle which should be applied if one is thinking about it — and it is dangerous even to think in these terms — any oil we may discover, no matter how much we find, is going to run out some time. Therefore, one principle to be observed is, any money we make out of it should be utilised to provide a substitute for oil.

Mr. Kelly

Exactly.

Mr. Colley

I do not want to enter into any discussion on how that money should be spent. We have a lot to do before we even think about that.

Mr. Kelly

I heard some fairly noisy references to oil at the final rally of the Fianna Fáil Party in Donegal.

An Ceann Comhairle

The Minister without interruptions, please.

Mr. Colley

There is a question of the possible piping of natural gas to Northern Ireland. That depends, obviously, on a number of factors. It is not entirely within our control. I will be having discussions shortly which may throw further light on this matter but, in general, I want to make it clear that I favour that proposition.

In relation to Dublin gas, I was being urged on one hand to get on with the job and on the other, Deputy Barry seemed to be suggesting it was a waste of time and money and fooling the people of Dublin to start piping natural gas to them. No time is being wasted at present because the necessary feasibility study and the preliminary work are going on and which would have to go on any way, regardless of the other conditions. No time is being lost on that score. It is very necessary, having regard to the enormous amounts of money that are involved, that this be properly planned and worked out.

I also want to make it clear that because of the enormous importance and value to our economy, nationally, of natural gas, the ultimate decision is not going to depend on whether the management and unions in the Dublin Gas Company are prepared to be sensible — at least in my view to be sensible. What depends on that is whether the Dublin Gas Company are going to participate or not, or, indeed, whether they are going to survive. There is no doubt that, without access to natural gas, the Dublin Gas Company will not survive. Preliminary work is going on and an alternative approach to supplying natural gas to the Dublin Gas Company is being examined by my Department. We must have an alternative. We cannot be totally dependent on the management and unions in Dublin Gas Company reaching an understanding. I have an alternative. If, therefore, when the other conditions, the preliminary conditions in the feasibility study and so on are all right, but we are not in a position to have had demonstrated to us the ability and willingness of the Dublin Gas Company to meet the necessary criteria, that does not mean that we are going to say "no pipeline". On the contrary, if everything else is right, there will be a pipeline and we are going to go ahead with it. It means that Dublin Gas Company are not going to get their hands on it and we will have another way of doing it. It will be difficult, but not impossible. I hope that will not happen.

There is a tremendous opportunity for the Dublin Gas Company, their management and workers, to have a good, steady, secure future in a worthwhile and expanding industry, if they can overcome the difficulties. The plan is laid out for them to do that. I am anxious to assist them, as far as I can, in achieving that. That would be the best solution for everybody concerned but I am not prepared to let them have a veto over whether the whole national economy is to benefit fully from natural gas. There is an alternative and, if we have to follow it, we will. There is no delay taking place in the decision, because all the necessary work is going ahead.

None of this is covered in the Bill. It simply deals with providing a small amount of additional capital for the purpose of work in the Cork area which Bord Gáis have undertaken.

Question put and agreed to.

Bill put through Committee, reported without amendment and passed.