Dáil Éireann díospóireacht -
Thursday, 18 May 2000

Vol. 519 No. 4

Gas (Amendment) Bill, 2000: Second Stage.

Minister of State at the Department of Public Enterprise (Mr. Jacob)

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

The Gas (Amendment) Bill, 2000, deals with four different issues. It provides for a scheme which will be implemented on an independent basis by the commission for electricity regulation to allocate scarce capacity in the natural gas network to prospective power producers to ensure that the electricity requirements of the State in the coming years can be met; it provides for the enlargement of the functions of Bord Gáis Éireann to allow it to engage in non-gas related activities; it provides for an amendment to the existing Gas Acts to increase the borrowing powers of BGE from £350 million to £550 million; and it provides for amendments to the Gas Acts, as amended, to introduce the same consent requirements for all people wishing to build natural gas pipelines. In this respect it will give private pipeline developers the same powers to access and compulsorily purchase rights over land as those currently enjoyed by BGE for the purpose of building pipelines.

Before outlining the detailed provisions of the Bill, I will give the House a brief account of recent developments of the natural gas industry in Ireland.

Until now the natural gas industry has been synonymous with BGE. The industry is relatively young. Prior to the discovery of natural gas in the Kinsale Head field off the south coast in the early 1970s, a number of gas companies existed in a small number of towns and cities around the State. Natural gas, however, was not very important in overall terms in meeting Ireland's energy requirements. Since its establishment in 1976, BGE has achieved significant progress in developing the natural gas industry in Ireland. It now supplies natural gas to more than 300,000 homes and has more than 10,000 industrial and commercial customers. At the end of 1998, natural gas was meeting 23% of our total primary energy requirements. BGE now operates in a highly competitive energy market and must fight for market share against other fuels such as oil and electricity.

Natural gas has played an increasingly important role in electricity generation in recent years. Last year more than 30% of electricity generating capacity in the State was fuelled by natural gas. This reflects trends at European level and even globally. Natural gas is now the fuel of choice for power generation. The development of combined-cycle gas technology has contributed significantly to increases in efficiency in power generation. In addition, natural gas has considerable environmental advantages compared to other fossil fuels. Gas combustion emits less CO2 than oil or solid fuels and, therefore, has an important contribution to make in helping Ireland and other countries to meet international obligations in relation to climate change mitigation.

The natural gas industry is undergoing a significant period of change at present, not only at national level but at European level. The EU gas directive was adopted by the European Parliament and Council in 1998. This followed the adoption in 1996 of the EU electricity directive. The gas directive provides for the introduction of competition into the industry in the form of third party access to natural gas networks throughout the EU. The directive requires gas market opening to be introduced on a phased basis over ten years. However, already we are seeing evidence of a greater urgency about the pace of market opening. The European Council, at its summit in Lisbon, asked the EU Commission to bring forward proposals for full opening of the energy markets by 2004. The Council will review progress at its summit next spring.

Ireland is already in compliance with, and greatly exceeds, the market opening requirements of the EU directive. The Energy (Miscellaneous) Provisions Act, 1995, provided a legal framework for third party access by large gas consumers to the BGE network. Under this Act, customers consuming in excess of nine million therms of natural gas per annum at a single site may now buy their gas from suppliers other than BGE and have it transported through BGE's network on their behalf to their premises. This means that more than 75% of Ireland's market is opened. A number of large companies are currently sourcing some of their gas from outside the State and importing it through the interconnector.

The 1995 Act also provides for the giving of ministerial directives to BGE relating to the transmission and pricing aspects of third party access. I issued two directives dealing with transmission and pricing in draft form in 1998 for pub lic comment. On the basis of the responses received to that public consultation and of significant developments in the market, including the possible commercial development of gas off the west coast and interest by private developers in building gas pipelines, I decided last year that a fundamental review of pricing for third party access to the BGE network should be undertaken.

This review is well under way and in the past year a significant level of consultation has been carried out with all interested parties. In order to obtain an independent view of suitable tariff options, I engaged economic consultants, the Brattle Group, to examine all the inputs from the public consultation and to propose a suitable tariff structure for the Irish gas network. My aim is to have a tariff that will promote the development of competition in the supply of natural gas, including the development of new indigenous sources of supply, and provide appropriate economic signals in relation to the establishment of new pipeline infrastructure. The Brattle Group in turn consulted all interested parties and presented its interim findings at a public forum last month. The consultants are due to present their final report to my Department shortly. I expect to be in a position to make a final decision on this issue very soon.

As I outlined earlier, there are four issues being dealt with in the Bill. The main issue, providing for a scheme to allocate scarce capacity in the natural gas network, is a very pressing matter and I would like to outline to the House the background to this issue.

At present, existing indigenous reserves of natural gas in Kinsale are declining. The interconnector with Scotland is nearing full capacity ten years sooner than had been anticipated due to faster than expected growth in demand. This growth in demand, which is a function of our economic success, is being boosted by the opening of the electricity market. It is too soon at this stage to know which of the possible options for new gas supply infrastructure will come to fruition. I will return to these options.

This is a highly dynamic and intricate set of circumstances, which I would like to explain in more detail to the House. Our existing indigenous reserves of natural gas in the Kinsale Head and Ballycotton fields are declining and are expected to be depleted in four to six years depending on the rate of depletion. In 1999 up to 70% of our natural gas requirements were imported through the Scotland-Ireland interconnector. Against this background, my Department and BGE commenced a major study in 1997 on future natural gas infrastructural requirements. This study, the Gas 2025 study, was completed last year and, with a number of other reports on the gas sector, is available on my Department's website. It made a number of recommendations regarding future gas supply options and considered that the optimal solution would be to construct a second natural gas interconnector with the UK parallel to the existing interconnector with Scotland.

My Department then commissioned DKM Economic Consultants to undertake an economic assessment of the future gas supply options recommended by the Gas 2025 study. The DKM report recommended that we wait and see the outcome of the exploration of the Corrib gas field off the west coast before deciding on future gas supply infrastructure. On the basis of studies carried by my Department and BGE on forecasts of final demand for natural gas, it is expected that the capacity in the natural gas network will be sufficient to meet final demand until 2004, although larger than expected increases in demand would reduce this period. I understand that the position regarding the development of the Corrib field will be more clear later this year and that the Corrib partners, Enterprise Oil, Statoil and Marathon, will then make a decision on whether to proceed with the commercial development of the field.

There are also other parties interested in building gas supply pipes, one from Belfast and one from the west coast of Britain. I will revert to the issue of pipeline construction later when I deal with amendments in the Bill to ensure compliance with the non-discrimination requirements of the EU directive in relation to the construction of pipelines.

For a variety of reasons, there is for the time being some uncertainty about who will build the additional infrastructure needed to meet the supply requirements of the Irish market. In any event, if one or other of the private developers is not committed to building the necessary infrastructure by the end of the year at the very latest, I will approve the building of a second interconnector by BGE. This will allow sufficient time for new supply infrastructure to be in place to meet anticipated demand.

I want to deal with developments in the newly opened electricity market which are impacting on the gas market. In anticipation of the opening of the electricity market to competition in February this year, a number of companies wishing to enter the market approached BGE last year to book capacity in the network to carry gas to fuel their proposed power plants. The applications for capacity received by BGE exceed, to a significant extent, the capacity that will be available in the network in the medium term.

In addition, studies on electricity generation capacity requirements to 2006, carried out by the ESB in March this year at the request of the Commission for Electricity Regulation, indicate that, on the basis of forecasts for future electricity demand, an increase in power production capacity of 600 megawatts will be necessary by winter 2004. In order to ensure that the electricity needs of the State can be met over the next few years, I decided that available capacity in the natural gas network would be reserved specifically for the purpose of fuelling up to 800 megawatts of new gas fired power stations. While this will meet the electricity needs of the country, it is insufficient to satisfy the demands of all the prospective power producers who applied to BGE for network capacity. Consequently, I decided that a scheme for the advance selection of power producers to whom network capacity would be allocated was necessary and that the allocation scheme should have particular regard to the need to ensure that new power plants were commissioned as soon as possible. Having regard to the provisions of the EU gas and electricity directives, the Attorney General advised that any allocation scheme devised should be put on a statutory footing.

I want to clarify why it is necessary for gas capacity to be allocated now rather than when new capacity becomes available for purchasing. Certainty about gas capacity is necessary in order for large-scale power projects to commit investment. There is a 24 month lead-in time from the commitment of investment to the production of electricity. This means that a delay in the allocation of gas capacity until there is certainty about new supply infrastructure could lead to electricity problems in about two years' time. My Department has consulted widely with interested parties on the process to be employed in allocating capacity to prospective power producers. A discussion paper was issued by my Department in October 1999 and the options considered in that paper for allocating capacity included: an auction, a lottery, an allocation process based on an ex-ante evaluation of "first-to-market", and process based on an ex-ante evaluation of electricity price competitiveness.

An overall consensus did not emerge from the public consultation but the most popular option was a process based on a "first-to-market" principle. I decided that the best interests of electricity consumers would be served by allocating capacity on this basis and my Department published a policy statement to this effect in December 1999. Both the discussion paper and the policy paper are available on my Department's website.

A further issue which I also considered was the question of who would be responsible for conducting the allocation scheme. BGE normally allocates capacity as part of its transportation business. However, as BGE has declared its intention of entering the electricity market, it obviously would not be desirable to have a situation where it would be responsible for allocating capacity to potential competitors. To prevent any possible suggestion of discrimination, I decided that responsibility for allocating capacity to prospective power producers should be taken out of BGE's hands. I am not suggesting BGE would have behaved improperly in allocating the capacity but the potential for conflict of interest arising and the need for transparency in the process were sufficient grounds for the allocation process to be conducted on an independent basis.

I decided that the allocation scheme should be conducted by the Commission for Electricity Regulation for a number of reasons. It is an independent body charged with promoting the development of competition in the electricity sector and protecting the interests of electricity consumers. The experience it has gained since its establishment will be valuable in the process of allocating capacity in the gas network because of the synergies that exist between the two industries.

I will detail the provisions of the Bill. Section 1 is a standard provision where the relevant terms used in the Bill are defined. Sections 2 to 16 are the relevant sections relating to the capacity allocation scheme and the conduct of that scheme by the Commission for Electricity Regulation. Section 2 empowers the Minister, after consultation with the Commission for Electricity Regulation, to make regulations authorising the commission to allocate a specific amount of natural gas capacity in any one year, to the power producers who will be selected by the commission under the scheme provided for in the Bill and any regulations made under the Bill when enacted.

Sections 3 to 5 set out the details of the procedure to be provided for in regulations which will be employed by the commission to select power producers to whom capacity will be made available. Essentially this procedure entails the power producers making an application for capacity in the network. The commission will then rank these applications, in order of precedence, on the basis of the estimated commissioning dates for the proposed power plants. The commission may make alterations in the ranking of applications to preclude the selection of an applicant where, in the opinion of the commission, the selection of that applicant would adversely affect the promotion of competition in the electricity market. If a power producer is selected and then forfeits its rights, the commission may then assign these rights to the power producer or producers ranked next in order of precedence. Alternatively, the commission may decide to begin the selection procedure again.

Section 6 provides that the commission shall determine and publish the criteria to which it proposes to have regard in deciding the date on which it estimates a proposed power station will be commissioned. These criteria must be published by the commission at least one month before the selection is made.

Section 7 gives the commission the power to require BGE or the ESB to provide certain information to it for the purpose of selecting power producers to whom capacity will be made available or for the performance of any of its functions. This section also obliges BGE and the ESB to comply with any request for information made by the commission within a time frame specified by it.

Section 8 enables the commission to give directions to BGE regarding the use and management of the natural gas network, where it considers that it is necessary to do so to ensure that the capacity rights of the power producers who are selected under this scheme are protected.

Section 9 prohibits BGE from entering into contracts with any power producer, other than those who are selected under this scheme, before 30 September 2004 unless they are renewing an existing contract. The section also empowers the Minister to make an order repealing this prohibition on BGE entering into contracts with other power producers if the Minister is of the opinion that there has been, or is expected to be, an increase in the total capacity of the natural gas network.

Section 10 imposes an obligation on BGE to make capacity in the natural gas network available to the power producers selected by the commission under the scheme provided for in the Bill when enacted or under regulations. The section sets out in detail the procedures to be followed in the contractual negotiations between BGE and the selected power producers and the time limits to apply to each part of the process. It also contains a dispute settlement mechanism and allows the commission to alter the time limits if it deems it proper and specifies the new time limit in writing. The section also sets out certain terms and conditions, both statutory and non-statutory, that may be included in the contracts between BGE and the selected power producers. The section does not preclude BGE from rescinding contracts in specific circumstances and, where the power producers forfeit their rights to the capacity it obliges BGE to terminate the contract.

Section 11 provides that regulations to be made under the Bill, when enacted, may include provisions for bonds and levies. A requirement may be imposed on the power producers selected by the commission to effect a bond providing for the payment to the Minister of a specific amount which is calculated on the basis of the generating capacity of their proposed power plant if the plant is not capable of sending out electricity to the transmission or distribution system on its estimated commissioning date.

Regulations may also provide for the imposition of a levy on selected power producers to defray the costs incurred by the commission in carrying out the selection procedure and to recoup funds expended by the Minister to facilitate the commission in preparing to carry out its functions under this Bill or the regulations. Regulations may include incidental, supplementary and consequential provisions as appear to the Minister to be necessary or expedient.

Sections 12 and 13 contain amendments to sections 11 and 12 of the Electricity Regulation Act, 1999. This will provide for the appointment by the commission of authorised officers to assist it in carrying out the selection process provided for in this Bill and for the obtaining of search warrants where it considers it necessary.

Section 14 amends section 13 of the Electricity Regulation Act, 1999, and provides for a prohibition on unauthorised disclosure of information obtained by the Commission in the performance of its functions under this Bill.

Section 15 contains an amendment of section 32 of the Electricity Regulation Act, 1999. The effect of section 15 is that any decision made by the commission under this Bill when enacted or regulations made under this Bill can only be challenged by way of judicial review proceedings. It precludes any person from questioning the validity of such decisions save by way of judicial review initiated within two months of the date on which the decision to be reviewed is given. Provision is made for the courts, in specified circumstances, to vary this time limit.

Section 16 provides for the indemnification of the commission by the Minister out of moneys to be provided by the Oireachtas in relation to the performance of its functions under this Bill or regulations made under the Bill.

Sections 17 and 18 relate specifically to BGE. Section 17 allows BGE, with the approval of the Minister given with the consent of the Minister for Finance, to engage in any business activity that it considers advantageous, whether or not it is related to the production, transmission or distribution of energy. This amplifies the existing functions of BGE which are limited to the energy sector.

Section 18 provides for the amendment of section 23 of the Gas Act, 1976, to increase the borrowing powers of the board from £350 million to £550 million. Sections 19 and 20 amend sections of the Gas Act, 1976, concerning access to and acquisition of land by BGE for the purpose of constructing and operating natural gas pipelines. BGE owns and operates the natural gas network. If it wishes to construct a pipeline, it must apply to me for consent to do so under the provisions of the Gas Act, 1976. There is no legislative prohibition on private developers building or operating a pipeline. The 1976 Act, as amended, requires that private developers give previous and reasonable notice to me of their intention to construct a pipeline, accompanied by an environmental impact statement, and I am permitted to require the pipeline to be constructed in accordance with certain environmental, safety and efficiency criteria.

This means that, in effect, there are different legislative requirements for BGE and private developers wishing to build pipelines. This is contrary to the provisions of the EU gas directive. To date, no one other than BGE has constructed a pipeline. However, in the past year a number of private developers have informed me of proposals to build pipelines both within and to the State. The effect of section 19 is that everybody who wishes to construct a pipeline will have to obtain my consent. This consent may be subject to conditions I may impose in relation to the pipeline.

The current legislative provisions governing the construction of pipelines place BGE in a more favourable position than private developers in that it has rights to access and acquire land for this purpose. The EU gas directive, which entered into force in August 1998, prevents any form of discrimination between natural gas undertakings and requires that there be a level playing pitch for BGE and private developers.

Section 20 extends the rights enjoyed by BGE regarding access to and acquisition of land to persons who have notified or have obtained the Minister's consent under section 40 of the Act. The enjoyment of these rights is extended subject to the same obligations to pay compensation that apply to BGE. The combined effect of sections 19 and 20 is to place private operators and BGE in the same position.

The remaining sections contain provisions that are standard in legislation. Section 21 provides for the laying of regulations or orders under this Bill, when enacted, before each House of the Oireachtas. Section 22 provides that the expenses incurred by the Minister in the administration of the Bill shall be paid out of moneys provided by the Oireachtas to such an extent as may be sanctioned by the Minister for Finance. Section 23 also contains standard provisions relating to the Short Title of the Bill and provision for collective citation etc. of the Acts amended by it.

I and my Department have received a number of comments on the Bill from interested parties. I will take these into consideration and I envisage bringing forward some amendments on Committee Stage aimed at clarifying certain elements and enhancing the practical aspects of the Bill. I look forward to the contributions of Members and I commend the Bill to the House.

Mr. Yates

I welcome this opportunity for a comprehensive debate on gas issues and proposals regarding the liberalisation of the electricity market on foot of the legislation that was enacted some months ago. I have some concerns about the Bill. I understand the need for it, but we are dealing with the optimum energy policy which will provide the highest level of efficiency and competitiveness nationally.

The context of the Bill is that there is not enough gas. These issues have confronted us since 1997 and the Department has engaged in the process of analysis through the Gas 2025 study and various consultants. However, the issues remain the same. Although we are awaiting the results of the Corrib field explorations, there would be no need for the legislation if the Government had made a decision in relation to a second pipeline from Dublin to Belfast or a second interconnector between Ireland and Scotland because there would be enough gas. As IBEC pointed out to me, it takes as long to build a second pipeline as it does to build a power station.

There would be no need for the Bill, the primary aim of which is to allocate restricted gas capacity of the pipeline to power generators, if a decision had been made. The Minister said he intends to make a decision on the matter before the end of the year, but that decision should have been made in the past year. I urge the Minister to bring forward the decision to increase capacity. The figures are clear – 31% of our natural gas is now used for electricity generation. All the new power generating stations want to use natural gas because it is the cheapest and most efficient generator of electricity and, in relation to our Kyoto commitments, it is also the most environmentally friendly. The position is that more gas is needed.

Bord Gáis Éireann says that the current capacity of ten million cubic metres per day will increase by October this year to 14.5 million cubic metres per day and to 17 million cubic metres by 2001. This falls short of what is required and hence the need to reserve 3.3 million cubic metres for 100 megawatts of electricity on the assumption that the pipeline will be available in 2004. However, my prediction and fear is that any beauty contest involving the selection of somebody to do this will be fraught with the potential for litigation. I have been advised that there is potential for litigation because the CER, Mr. Reeves, has proceeded with the process prior to the enactment of the legislation and he is acting ultra vires. This is one basis for legal challenge.

I am also advised that this allocation of pipeline capacity is, under sections 4 and 5, in breach of the EU gas directive. People, including a large State company involved in the electricity business, are getting legal advice because, if they are denied right of access under the competition criteria, to which I will refer in more detail later, they will say that the legislation is defective because it is in breach of the EU gas directive.

The Supreme Court will make a judgment today on the decision of the ODTR to give the third mobile telephone licence to Meteor, an Irish-US consortium. There was supposed to be a third mobile telephone operator in position two years ago at the latest. However, that matter has been bogged down by a High Court challenge and a Supreme Court appeal, one by Orange and the other by the regulator. If this legislation follows a similar legal route, the Minister will not be giving pipeline capacity to anybody because the matter will be bogged down in the courts.

The Minister set out the four options available to him in allocating the pipeline capacity – a lottery, an auction, an evaluation of efficiency based on price or an evaluation on first to market – and he has chosen the latter. However, the two beauty contest systems, efficiency and first to market, are predicated on promises which are only punishable by penalty and not by removal of the licence. This is ripe for litigation, and it will defeat the purpose of providing gas between now and 2004 if litigation takes two years.

I have come to the conclusion that all such allocations by the State, for example, for the wireless local loop, the mobile telephone licence or gas capacity, should be by way of auction. It does not surprise me that only four of the respondents on the Minister's list favoured an auction because it diminishes their profits. If we consider past events and what is happening in the rest of Europe, it is clear that licences and allocations by regulators are valuable pieces of paper. My point is that Denis O'Brien and ESAT made too much profit. The last Government decided on that licence, but more should have been paid for it.

Mr. Gordon Brown recently got a windfall of £22 billion from the latest generation of telephone communications licences. The advantage of an auction is that the unsuccessful bidder walks away rather than to the Four Courts. It brings clarity, conclusion and certainty to the process and avoids litigation. It could be a condition of an auction that the process is finite, as happened with Cablelink. The profits Esat made were too excessive. Whether it is the third mobile phone operator or a person who wishes to supply gas, they will charge as much as the market will absorb. An example of the outcome for the consumer is that we have the highest prices for mobile phone use in Europe because there is not a third mobile phone operator. It is in the best interests of the consumer to bring clarity and certainty into this area and to make expeditious decisions, and an auction is the best way to do that. It does not surprise me that companies are not lining up to minimise their profits given that the market will reflect a certain price for gas and electricity. Based on that dynamic, the issue should be confronted. The approach taken in sections 2 to 16 is wrong. Given the breach of the gas directive, I can see the ESB taking a case. A number of people have told me the CER is operating ultra vires and there are other detailed points concerning the way it will develop.

Will the Minister make decisions on the infrastructure of new pipeline capacity? Should it happen that the process becomes stuck in a legal quagmire, if the Minister of State has taken decisions on pipeline capacity, he will have resolved the problem, because a pipeline can be built as quickly as a power station. The Minister of State should bite the bullet. It does not matter whether it is Premier Transco or BGE. He should do it. The wait and see approach has resulted in the necessity for this legislation and it impedes the ability of the market for electricity and gas to develop in a normal commercial fashion.

A specific point I would like the Minister of State to address relates to an outstanding issue from the Electricity Regulation Act. That legislation provided for a PSO levy to apply to people who buy electricity from new power providers. A number of people within that market have a co-generation proposal. In other words, they wish to generate heat for their own proposal and have a combined heat and power plant to produce electricity. The largest of these is Aughinish Alumina. I am told a decision will be made in the next few weeks on a statutory instrument regarding how the PSO levy will apply. Aughinish Alumina intends to build a plant generating 310 MW using gas. A fair compromise would be that people who generate up to 20 to 25 MW for their own purposes would be exempt from the PSO levy. A capacity of 20 to 25 MW is a bona fide CHP plant. I will return to this because a CHP plant is not properly defined in the Bill. I appeal to the Minister of State to consider my suggestion, not as a special favour to Aughinish Alumina, but as a crucial development of the mid-west and employment in the region. Aughinish Alumina is unique in that the heat requirement for its manufacturing process requires a level of generation capacity sufficient to create enough heat seven days a week, 365 days a year. Building its own plant would give it huge savings and would guarantee employment in the mid-west. A threshold should be introduced for both for CHP and co-generation below which the PSO levy would not apply where the generator and user is the same person. That would protect the ESB's position and deal with the issue.

What are the penalties for people who receive an authorisation or licence under the legislation on the basis of promising to be first to the market and who do not deliver? The manner in which this has rolled out appears to have resulted in 11 potential IPPs being reduced to three, and that is of great concern for the dynamics of the electricity market. If the legislation were to provide for three successful applicants to receive gas capacity and I were number four or five, I would have an incentive to go to court because those who won on the basis of being first to market would be delayed by my litigation, thus allowing me to get my environmental impact statement in place and obtain my planning permission to construct whatever was necessary. This is a built-in incentive. In that regard, what penalty will apply to those who fail to commission on time?

As a member state we are obliged to implement the EU gas directive in August this year. It has been asked why the Department is not incorporating the directive in this legislation. Of greater concern is that we are told the gas directive legislation will not be ready until the middle of next year. People are concerned, and pipeline operators, explorers, people who may bring gas ashore and others would like the gas directive implemented in full. Perhaps the Minister of State would, in the context of Committee Stage, examine the possibility of including sections to deal with that. We have spoken of ten eligible customers in the liberalised gas market. Given that it is restrictive, we need to have answers to facilitate those ten eligible customers to move as quickly as possible. The Department has been slow in coming to an end position on that.

Regarding amendments I will table on Committee Stage, I wish to be transparent by saying that I have had discussions with a number of interested parties. I am sure my colleagues have done likewise and it was referred to by the Minister of State. While the public tends to be bored by debates of this nature, they are important for the competitiveness of the economy. I have spoken with representatives of the ESB, BGE, Viridian, one of the first possible applicants to market, Premier Transco, which wishes to lay a pipe, and Enterprise Oil and Corrib Oil, which are offshore exploration companies. In the interests of transparency, I will state which amendments they have requested me to table so the Minister of State understands people's motivation. My position, as with the complex and lengthy electricity legislation, is to understand what people seek and to consider it in the context of the best interests of the consumer.

We went through a detailed process regarding green issues when discussing the Electricity Regulation Act. All those who made submissions on the legislation, especially those involved in wind energy, have pointed out that, while we had a detailed debate on the legislation and were in favour of wind energy, the CER has issued a discussion paper which minimises the impact of what we tried to do to optimise the use of wind energy by giving it a preferential market, positive discrimination, and so on. I am not happy with the accountability of the Office of the Director of Telecommunications Regulation, the CER or the new aviation regulator, and this point has also been made by Deputy Stagg. These regulators have been given powers of regulation by this House for good reasons of independence and EU requirements. The accountability of Mr. Reeves and the CER is defective and that is borne out by the fact that the Minister, Deputy O'Rourke, has promised legislation for the ODTR and a commission to oversee the regulators. That grey area is not dealt with in the legislation. In other words, while we can enact this legislation, there are no corresponding measures to ensure the House or the Committee on Public Enterprise and Transport has proper authority over the CER if it fails to implement what we agree. I would appreciate the Minister's views on that.

Regarding the ESB's concerns, it believes sections 4 and 5 will, by their definition, exclude the proposal by Dublin Bay Power to obtain gas. The Ringsend proposal involves a 70% stake from the ESB and 30% from Statoil to construct a station to generate 390 megawatts of electricity generation based on a gas facility. That has been the plan for some time and there has been much debate on it. They believe the competition criteria set out in section 4(b) – pages 11 to 12 – particularly line 3, which states that the commission shall make such alteration in the ranking of the person in that order of precedence as it considers will prevent such a result. This is in the context of competition criteria. The ESB would rather not have that “shall”, but it should at least be “may”. I would like the Attorney General's advice on this point, as the ESB has the resources to go 12 rounds in court with the CER on this matter. We will be left with a pipeline and nobody to whom to give the 3.3 million cubic metres.

The ESB makes some specific points based on its senior counsel's advice – that the legislation, particularly sections 4 and 5, is in breach of Article 18 of Gas Directive 98/30/EC, that it contradicts the terms of reference of the CER as it was established under the Electricity Generation Act and that it is contrary to the section of that legislation which states that the CER should not discriminate against any power generator, which is what is happening here. The important point is that this legislation gives out a section of the pipeline but not a gas contract. The ESB points out that its contract with Alliance Gas Limited, which is a subsidiary of Statoil, would be open to legal challenge and Articles 3, 7 and 17 of the gas directive are breached.

If I were in the Minister of State's position, I would consider this heavyweight stuff as legal teams will make a lot of money out of thrashing this out. It might be in the ESB's interests to say, "By God, if Dublin Bay Power is not going to get the gas to compete we will make sure nobody else gets it." That would suit it just fine except for one thing, we have had eight amber alerts in electricity generation in peak day demand and winter shortages. My fear for the consumer is that we will face the prospect of power cuts next winter or the winter after because of the failure to resolve this issue and to commission new plants. We have been stuck in or around the 4,000 megawatt capacity for some time and we need to get on our bikes, as the forecasts for growth in megawatt requirement and generating capacity have been exceeded because of the Celtic tiger. This issue cannot, therefore, be bogged down in the courts. I am not saying we should just roll over and follow the ESB, I have consistently stated that I am for competition. However, if the ESB is right in its legal arguments it cannot be dismissed and the electricity market proposals may unravel.

Enterprise Oil sought legal advice from London on the Bill, pointing out that the section that defines commissioning is technically wrong because typically one sets up a contract and has a trial run of 30 days before commissioning a plant. Enterprise Oil states that commissioning is itself a process, typically over a six month period, in the course of which both plant and all related facilities are progressively tested, leading to a reliability run which is typically 30 days, only after which the handover of the plant from the EPC contractor to the owner takes place. Enterprise Oil believes that the Department has misunderstood the term "commissioning", which is a very technical term, so I will be tabling an amendment in relation to this.

A number of potential gas pipeline layers refer to the section of the Bill which deals with the bond. Those in the business, including Viridian, say they are knee-deep in bonds of every description and that the bond for the average power station under this legislation would be between £15 and £20 million. Whatever about a levy, they feel this situation is punitive and would be a disincentive. If 11 potential IPPs have been whittled down to three, I would take that argument seriously. A bond is only a bond in relation to non-delivery – perhaps the issue could be dealt with by penalties.

Enterprise Oil also refers to the code of operations in terms of the STA, which it believes should be reviewed with a view to modification. There is already a BGE code of operators and this is absent from the Bill. Perhaps it should be reflected in the Bill as Enterprise Oil feels it would streamline operation. I do not necessarily agree with Enterprise Oil on gas contracting, but in the case of the Corrib find going ahead and the gas coming onstream, under this legislation the gas contracts would be tied in between the IPP and Bord Gáis for four years. This would preclude the opportunity of anyone else entering that market in that period. Enterprise Oil feels a more flexible model should be looked at. One could argue that both ways, but the Minister of State should look at the IPP gas contracting system as it evolves.

Premier Transco is an interesting company because it is the only non-BGE pipelayer at the moment. It requires technical clarification of section 19, which provides for a new consent procedure for someone laying a pipeline and particularly subsection (1) which refers to 27 April 2000, as it would have had correspondence with the Minister before that date. The new and old consent procedures are different and by virtue of Premier Transco's correspondence with the Minister before 27 April it wants to clarify that it is to be treated under the new procedure rather than the old procedure. Premier Transco has given me the wording of an amendment to the principal Gas Act, 1976, in that regard so that the new regime would apply. The company is not actually an applicant for a licence, but a letter could be construed as such.

Premier Transco also points out that if BGE wishes to run a pipe to somewhere in the mid-west or north-west, it can simultaneously have the right to go on lands while carrying out the environmental impact assessment study, whereas under section 19(2) of the Bill, a new pipeline operator could only go onto land after the environmental impact assessment study is completed. Premier Transco is looking for a level pitch, that it can survey land and do a trial borehole, just as BGE can, so that one would not have a further year's delay – they could be done simultaneously. This should be looked at favourably.

BGE and other bodies have made a very important point about the definition of "power station" under this legislation. There have been endless debates about CHP and its efficiency as well as other environmental benefits. It believes – I am referring to Bord Gáis Éireann – that it treats combined heat and power as power generation and says, therefore, that an interpretation of this legislation could prohibit all new CHP building until September 2004. This is probably unintentional and I do not believe it is desirable in view of the Government's greenhouse abatement strategy. Therefore, the definition of power station should be modified so as to exclude CHP, which could be achieved by defining power stations as plants over 20 or 25 megawatts in size. This refers to my earlier point about creating that threshold for Aughinish Alumina, other co-generators and the PSO levy.

Bord Gáis Éireann also makes the point that section 9 places a severe restriction on new gas contracts which may be entered into by it. It suggests that section 9 be redrafted so that it can enter contracts provided the rights of new capacity holders are protected – on Committee Stage I will go into more detail on this. It also suggests that the provision of CPO powers to other parties should be dealt with in a new section and provided on a separate basis as it believes that a legal challenge to one CPO could tie up their CPOs.

Bord Gáis Éireann also believes that certain sections, such as section 8, should be redrafted. Section 8 provides very strong powers to the CER relating to the protection of the rights of holders of capacity under the allocation scheme. BGE says these are without balance in terms of other users of the gas system, even other generators. Therefore, it is suggested that the section be redrafted to acknowledge other user rights so that the situation pertaining to CER is balanced.

I want to discuss the proposals from Viridian, which is interesting in that it is not a potential IPP but, like Huntstown, is well down the road and likely to be well up in the pecking order. It makes a number of points and is anxious to see the legislation progress quickly as it has everything sorted out except the gas. Viridian is concerned about section 3 which does not seem to delineate between single cycle gas turbines and combined gas cycle turbines. It quotes the example of the ESB plant at Poolbeg which went in phases from gas burning, to a turbine, to gas and steam turbine generated electricity. It believes, therefore, that the commissioning definition in section 3 does not fully take account of this point. It points out that where the ranking is equal in section 4, the bigger power station will get the generating licence or capacity which it thinks is unfair. It believes that where the first power station has a capacity of 400 megawatts and the others have a capacity of 200 megawatts, it is better to go with the latter, and I think it is correct. Therefore, I ask the Minister to examine the possibility of deleting subsection (a) which gives preference to bigger power stations.

Regarding section 9, Viridian makes the point about CHP being undefined. It is opposed to the bond in section 11. Regarding section 17 and other related provisions which give the Minister power in various aspects, perhaps an insertion should be included stating that CER has power to make recommendations to the Minister in advising him or her in relation to the consent procedures set out in the section. This also applies to section 19. It would be prudent to give some role to the regulator in this context.

I have tried to be constructive and to acknowledge that there is a need to allocate gas capacity given the current situation. We should examine the issue of infrastructure and accelerate a decision in this regard. Finally, auctions and tendering for all licences as a matter of policy will give better clarity and are a better way of progressing all these competitive issues in the economy.

Mr. Stagg

I thank the Minister's officials – Peter O'Neill and other members of staff – for briefing us prior to this debate. It was a very useful exercise and I thank the Minister for arranging it.

A Bill to allocate the known scarce gas resources of the country should have been published and enacted two years ago. The Minister, Deputy O'Rourke, was warned by the ESB of the danger of power cuts as early as 1997, while her departmental officials were aware of the impending crisis even earlier. The Minister was aware of the limited capacity to import natural gas and that the Marathon gas field was nearly depleted. Yet she refused permission to the ESB to build a power station in Ringsend and the new deity of competition was given as the reason. She also refused permission to Bord Gáis Éireann and is still refusing – this morning the Minister of State said he is only considering the matter – to build a second interconnector to import natural gas from the North Sea despite being repeatedly warned that the existing infrastructure and pipeline could not cope with demand.

We are now facing an emergency where natural gas will have to be rationed and where power stations will not be supplied, with the certainty of power cuts in 2001 and 2002, with things becoming worse in 2003. The Minister must and will carry the can for this disaster. She knowingly failed to deal with the impending crisis and stands condemned for neglecting to carry out her critical ministerial duties.

Directly arising from the Minister's failure or inability to heed the many warnings she received, including in the House, Ireland is now facing for the first time the real prospect of serious and prolonged power failures. These power cuts will seriously damage the industrial and commercial life of the country and adversely affect the quality of life of large numbers of citizens. When they occur – I believe they are inevitable – the Minister, Deputy O'Rourke, should not try to lay the blame anywhere other than at her own door. She was warned by the ESB and Bord Gáis Éireann and decided to ignore them both.

If the Minister, even at this 12th hour, made two simple decisions, the crisis could be averted, but because of the right wing political straitjacket in which she operates, I doubt she is capable of doing so. Because of her deeply held right wing political ideology, even when facing the emergency I have described and given the clear public interest in ensuring a continuation of electricity supply to industry and the commercial sector, I doubt if she is prepared to do anything that might offend her new god, namely, privatisation and so-called competition, which is worshipped daily.

Neither is it acceptable for the Minister to hide behind the advice of the Attorney General. She, I and the House know that the advice from that quarter comes from a man who espouses a deeply held belief which is opposed to public enterprise in any form and who preaches a philosophy which favours the wealthy and the private individual and which is opposed to the rights of common people and the community. The Attorney General is an avowed Thatcherite and despite the fact that philosophy has been discredited throughout the world, it still has an ardent advocate in the Attorney General.

The Minister has been in the House a long time. Do I need to bring to her attention that the advice she is receiving from the Attorney General is not a true and balanced legal opinion but a political opinion masquerading as legal advice? As such, the Minister has every right to reject it, but I know she does not have the courage to do so. The coalition is gingerly held together and it would be impossible for the Minister to do anything which would threaten that shaky alliance. As a result, Michael McDowell can dictate policy to the Government and the Dáil.

I wish to refer to the two simple things the Minister could do to avoid this looming crisis. She could give the necessary authority to the ESB to proceed with the building of its new gas turbine power station in Ringsend. The request for this authorisation has been on the Minister's desk almost as long as the warning notices about power cuts. The electricity directive and competition regulations clearly allow such action to be taken by member states where they face emergencies, such as Ireland faces in terms of electricity supply. Why then has the Minister not done so? I was directly involved in the negotiation of the electricity directive, which provides for such scenarios. The Government can make provision to meet demand where it cannot otherwise be met.

The second direct action the Minister could take is to authorise the construction by BG of a second interconnector to Scotland to allow Ireland to tap into a sufficiency of natural gas from the North Sea. This could be in place and supplying gas by 2002 if a decision were made even now. However, it should have been made three years ago. The application is on the Minister's desk awaiting her attention and I appeal to the Minister of State to impress on his senior colleague that this action, which does not contravene any directive, should be taken so that ample gas will be available.

There would be no need for this emergency legislation if the Minister were to take such action. Gas would be available for all competitors to build as many power stations as they wish and they would be able to live or die in the marketplace. I urge the Minister to act because if she delays beyond the end of this year it will be too late. The result will be power cuts. I have little confidence that the Minister has the courage or political will to give authority to the ESB to proceed with the power station in Ringsend or to give BG the authorisation for the second interconnector, nor has she the bottle to reject the Thatcherite political advice of the AG.

What do we get? We wait three years as the crisis mounts and the Minister ignores it, hoping it will go away. A Bill is then introduced to address the crisis caused by her prevarication and inability to make decisions. This legislation contains extraordinary right wing ideology. It reflects the thinking in the AG's office and the office of the regulator, Tom Reeves, but not that in the Department of Public Enterprise. It also indicates how weak willed the Minister is when dealing with these two gentlemen. The Minister does not have the courage to come into the House to present this right wing straitjacket for the public commercial sector. Instead, she sends in the Minister of State, Deputy Jacob, who is landed with steering the Bill through the House. I attach no blame to him but I fear he will not have the authority to accept changes to this legislation as it is processed.

I turn now to some of the offending sections. The Bill has been introduced in a context where the legal adviser to the Government is ideologically opposed to all forms of public enterprise, the regulator mistakenly believes his remit is to curb the development of public enterprise and facilitate a soft landing for private sector vultures and the Minister's title should be changed to the Minister for undermining public enterprise.

Section 4 restates, and unnecessarily re-emphasises, the role of the electricity regulator in the promotion of competition. That matter is adequately dealt with in the Electricity Regulation Act, 1998, and does not need to be restated. The regulator has re-interpreted the Act such that all its sections are considered subservient to the promotion of competition. For example, in his recent discussion paper he proposed a cap on the production and sale of green electricity despite explicit provisions in the Act which allow for free market entry of such electricity companies with no limit on production. He has taken on the role of policy maker, legislator and regulator and seemingly the Minister is afraid to tackle him.

Section 4 is right down the regulator's street. If it is agreed, as drafted, he will be able to thumb his nose at the Minister and pay homage to his competition god with the backing of legislation. The section uses the definitive "shall" in this regard rather than "may" or "will consider". This will ensure the Minister will not be able to divert direct policy in the matter and that the possibility of a court challenge to the regulator's decision will be excluded. I presume that is why "shall" is included and the Attorney General and the regulator were directly involved in the drafting of the section. If it agreed, without amendment, the regulator will be a powerful and untouchable man. I am sure he is rubbing his hands in glee at the prospect. I know him very well.

If this were not enough the same competition god is again fortified in section 5. Who drafted this legislation? The section is not necessary because it is already covered in legislation. Is the regulator not satisfied that he has enough power already and that he will be able to stop the green electricity drive agreed by this House with the powers he has already? Why has it been included again?

Section 4 also contains a major shift in policy from that in operation and agreed with the main players. It puts competition on such a high pedestal that it breaches a principal clause in the CCR agreement with the ESB management and unions and the Minister and her Department. It was agreed policy that competition would be introduced in the generation of electricity and that the ESB would be entitled to take part in that competition. The agreements, one of which is quite recent, between the Minister, the ESB and the unions state that the ESB would be entitled to take part in the competitions. A new policy that excludes the ESB from taking part is contained in this section. That is not acceptable and it will be fought in the House and outside it. This is a case of cutting off one's nose to spite one's face.

In the time available before power cuts are a reality the only players who will be ready and capable of producing electricity will be the ESB, at its new power station at Ringsend, and Ireland Power in west County Dublin. My information regarding Viridian in Huntstown and its 600 megawatt power station is that it is not proceeding with it because the technology it proposed to use would not be efficient or competitive. It is going back to the drawing board to build a 400 megawatt power station which will use different technology. It is back at square one. Essentially, only two players can produce enough electricity in time to prevent power cuts.

Mr. Yates

Who is the second player? The ESB is one, who is the other?

Mr. Stagg

Ireland Power. If this new anti-State enterprise policy is forced through it will lead to court challenges by the ESB's partner, Statoil, and its suppliers of gas, who are entitled to be included in the competition.

The Minister should also be aware that the unions in the ESB will not tolerate this abuse of their company and this breach of the CCR and the tripartite agreement. They will not tolerate their agreements with the Department being breached because a law is introduced which sets aside those agreements. It has been accepted both by management and unions that 40% of the ESB's generating capacity will be lost to the private sector due to the introduction of competition. This will occur because the majority of power stations are old and do not employ the most efficient tech nology. For the future well-being of the ESB, therefore, it is imperative that the company should be allowed to compete by building modern power stations.

During my time as a Minister of State in the Department we pursued a policy of not putting all our energy eggs in one basket. Now, however, we are heading for a system whereby the overwhelming majority of our power generation will be from one energy source – gas. That is a highly undesirable situation both from a strategic point of view and as regards energy security. The Minister, who I know is interested in energy systems other than gas, should examine that part of Government policy to see if some diversification can be assured in real terms. I do not mean tinkering around the edges with wave power. If diversification of supply was achieved we would not be left without energy in an emergency arising from the fact that we would produce practically all our electricity from imported gas supplies. That serious strategic consideration should be addressed by the Minister.

The Department should consider alternatives to gas, even if the Bill is enacted and there has to be an auction to ration the amount of gas we have left. As a safety measure the Minister should consider authorising Bord Gáis to build an interconnector so that the North-South interconnector can go ahead. The Minister should not hang around waiting for John McGoldrick and Enterprise Oil to play cat and mouse with the Government. The Minister should not wait until Mr. McGoldrick is able to dictate to the Government exactly what will happen. If we do not proceed with the interconnector he will effectively have a monopoly of supply for all the new demand. Since nobody else will be supplying it, he will be able to decide policy. By delaying the interconnector we are playing into Mr. McGoldrick's hands.

I intended to raise particular points relating to sections but since Deputy Yates has already done so, I will not repeat them. We will deal with them in some detail on Committee Stage.

It is not acceptable to introduce legislation that is promoting competition in such a way that some of the players in the market are excluded. It is extraordinary that we are excluding public companies, such as the ESB and Bord Gáis, when we do not need to. The ESB will be seriously damaged if this decision goes ahead. The company has expended a huge amount of money on foot of ministerial approval for the power station project, for which the generator has already been ordered. The ESB is simply awaiting clearance from the Minister for civil works. We could, therefore, have the farcical situation of the ESB having a new power station, but we would experience power cuts because we could not supply any gas to the plant at Ringsend. There is a real possibility that could occur.

The other real danger is that we will have the worst of all worlds by making a decision to exclude the ESB from competition and as a result there will be court action. In that case nobody will produce the electricity in time so we will have power cuts. We are facing into a dangerous scenario.

I am a strong advocate of keeping power in this House because the people send us here to exercise power on their behalf. I feel strongly that such power should not be granted to quangos, whether individuals or groups, that have no democratic accountability.

Mr. Ring

Hear, hear.

Mr. Stagg

The office of the electricity regulator has a great deal of power. The Bill effectively takes the power the Minister exercises as the regulator of gas, and gives it to the powers the ESB regulator already has. That is undesirable from the point of view of democratic accountability and the exercise of power on behalf of the people. The Minister should examine that matter and find ways of making the regulator accountable.

The system of rationing gas that the Department has come up with is the best one. While the Department would say that is the central issue in the Bill and the reason for the legislation, I disagree. Changes in competitive policy are more important than the rationing system for our remaining gas reserves. The "first up, best dressed" system is probably the best one. I am worried, however, about an auction system because the deepest pockets can pay the highest price in the knowledge that they can recover that cost from the end consumer.

I sympathise with the Minister for having the job of bringing this ideological baggage into the House, which I am sure is not of his making. As it stands, the Bill is unacceptable to the Labour Party. On Committee Stage we will deal with the issues that have been raised and, I hope, we will be able to resolve them.

Mr. M. Kitt

I welcome the fact that through this Bill we are providing a scheme which will implement a commission for electricity regulation on an independent basis. Unlike the previous speaker, I do not sympathise with the Minister at all. I congratulate him, however, because during his period in office he has demonstrated a keen interest in energy matters. He has published a Green Paper on Sustainable Energy and has also examined alternatives to traditional electricity production methods. In addition, the Minister has examined renewable sources of electricity generation while maintaining the competitiveness which the Minister for Public Enterprise, Deputy O'Rourke has also mentioned.

The Minister of State, Deputy Jacob, has responsibility for energy matters and his continuing interest in this sector is a matter of record. The first concern I wish to raise with him relates to a seminar concerning the electricity grid in the west, which was held last Friday at Sligo Institute of Technology. We do not have a generating station in the western region, nor do we have the same transmission network as elsewhere in the country. It is important for us to examine this matter. The ESB is currently exploring ways of improving the electricity service in County Galway, including the provision of new lines from Portumna to Athenry. As we know, many areas of the west, from Donegal to Kerry, are not on the national grid, and we have been reminded many times by people involved in wind energy that we have to improve our system. Resources are being put into roads, railways and the provision of ISDN lines for the western region but one of the areas that has been forgotten about is the whole question of energy. We have not seen much interest in setting up another electricity generating station in the region.

I read in the ESB electric mail magazine that the go-ahead has been given for a power plant at Huntstown, north County Dublin. Approval has been given also for an e-power venture between Esat's Denis O'Brien and other Irish investors for a site outside Navan, County Meath, and two new peat-fired power stations are planned for the midlands. There is also a proposal for a biodiesel project which will be built in Ireland by a Dutch company called Petroplus International. That interesting concept involves producing a biodiesel using the seeds of plants like grape or olives which are treated in a chemical process, and the oil resulting from this is burned. That is regarded as a green electricity and is obviously very sound on environmental and health grounds. There is no indication, however, that there will be a similar type of station in the western region. At a time when there is much talk about the finds in the Corrib gas field, it is important that we put in place the necessary infrastructure before the gas field becomes operational.

I was in contact with Bord Gáis Éireann who sent me a map of its future supply options. While they showed existing lines going from Cork to Dublin and the interconnector to Scotland, it states clearly that there is a possibility of a new pipeline, as it was described, from Dublin to Galway and down to Limerick. It does not indicate if the spur lines to individual towns will be shown, and they are not shown in any of the maps or correspondence I received, but Bord Gáis Éireann makes it clear that all these proposals are subject to ministerial approval. I join with the other speakers who called for the speeding up of the provision of supply options to the western region. The question of a second interconnector is also very necessary. We already have the interconnector to Scotland and there is another proposal to have a second connector approved and installed.

Obviously what we are talking about here is a move towards environmental and health matters in relation to gas fired stations. I would like to give an example to the Minister of State concerning a vacant site at Derryfadda, Ballyforan, which is on the Galway-Roscommon border, where a power station was to be built in the 1970s. It was felt at the time that that should not happen and we were then told that a peat briquette factory would be provided on the site. A road has been made into the site and all the services are in place, but the experts have told us that there was an over-supply of briquettes in the late 1970s and early 1980s and it was decided that the project was not a suitable one with which to proceed. This is a suitable site for a gas fired power station and it should be considered. Obviously a site in a bogland is not suitable for every type of industry but it would be very suited to an energy based industry. That is the reason I recommend this site, but obviously if the roads are in poor condition and there are acres of bog available, both in north Galway and south Roscommon, one cannot expect other types of industry to come into the area.

Someone referred to the bogs making us poor. Let us hope that the bogs will be the raw material that will improve the incomes of the people in the area, particularly the farmers who sold or literally gave away their bog in order to have an industry based on peatland in the area. Now that we know some of the projects that are coming on board, including peat burning, gas fired and coal burning stations, we should examine the available sites that have all the services in place.

I received correspondence from the Western Development Commission, previously called the Western Development Partnership Board, in which it referred to the inequity between the west and the east coasts. The commission made 17 points in a submission to the Department of Finance, one of which was very simple. It stated that the gas line covers the south-east and the north, that there is no natural gas in Connacht-Ulster and that this facility attracts large energy-using industries. It is true that we will have difficulty getting industry into an area when energy supplies are not available, particularly when we have had many power cuts in the west and when the grid from Donegal to Kerry is not being fed into by the various alternative ways of producing electricity, to which the Minister referred. The Minister's announcement that he will allow other people into the market, and the whole question of competition that he raised, is welcome.

When we are talking about industry and jobs, a strong case can be made for a fair allocation of resources to the Connacht-Ulster region. We know from the IDA reports that only 20% of jobs have gone to the western region. Most of them go to the larger cities like Galway, Castlebar, Letterkenny and Sligo and it is important that the other counties are not forgotten, such as Mayo, Roscommon, Leitrim, Cavan and the rural areas of Donegal, Galway and Sligo. Those counties need the infrastructure about which the Minister spoke. We have to try to focus on these regions and, from what I hear from the IDA, the Minister and former Ministers, there will now be a focus on those regions. If additional incentives are given under, say, the Objective One category, we will be able to get our share of the Celtic tiger. Announcements about record years for the IDA do not make sense to people if they see that jobs are not being made available for the people who live in rural areas.

We had a lot of discussion in recent days about the health effects of incinerators. In my county of Galway, the plan appears to be to locate an incinerator near the city of Galway and the landfills in rural areas. That will be the experience in every region. I was interested to hear those who favour incinerators say they could be used to provide energy. One of the reasons they want them located near cities is to use the energy in local industries. I understand there are four sites around Galway city that could be used for an incinerator. Most of the publicity surrounding incinerators has been concerned with their effect on people's health. There are arguments for and against the dioxins produced by them. Leaving that aside, it makes sense to use such energy to provide jobs. I met Mr. Declan McCormack who is involved in a company that is talking about providing an incinerator on the M50. He is also involved in LEC 2000. As I understand it, he is talking about a mobile incinerator which can be brought to any part of the country. He maintains it will replace landfill sites.

We are examining ways of recycling and getting rid of waste and the concept of a mobile incinerator is interesting. I would like to hear more from this company on whether it intends to proceed with bringing the unit to different areas. Usually when we speak of incinerators and landfill sites we want them to be located in isolated areas far away from people. However, if an incinerator can be used for energy purposes, that is something we should look at. I wish those involved in that well and hope a suitable site will be found. Obviously we have not heard the end of the debate on the health risks and environmental damage that could be involved.

There is a need for renewable energy and we should support Bord Gáis Éireann in securing further gas fired stations. As we know from the 1970s and 1980s when oil was very expensive, peat is a valuable resource. Our natural gas reserves off the south coast will run out in the next few years. I mentioned the Corrib gas discovery off the west coast earlier. I understand further explorations are being conducted there and the commercial viability of the area is being examined. While we are awaiting those decisions we should remember that peat is our native source of fuel. Two new stations are being built in the midlands. It is ironic that much of the raw material for those stations will come from the western regions, the bogs in Galway and Roscommon in particular where there has always been a close attachment to the bog. Whenever an area of conservation is looked at, people are very hurt when they are told they cannot cut turf or can only cut certain types of bog.

What the Minister has said about alternative energy is very important. Let us look at all the areas and feed them into the grid. In that regard I hope the Minister will keep in contact with the farming organisations. The ICMSA has shown great interest in looking at alternative energy generation systems. There is a new organisation, Meitheal na Gaoithe, comprising farmers and other interested parties, to promote wind energy. That would be a viable alternative in the western region. I know there have been many objections in some areas, particularly in County Clare, Ballybunion, Waterford and Wexford. However, in areas where such systems have been provided they are very successful. The involvement of the farming organisations, local development associations and co-ops has meant everyone has a say in how this viable business can be run. I hope the Minister will not forget that when we are talking about alternatives ways of providing energy. That area, known as green energy, is important because we have difficulty relying on fossil fuels.

The same is true regarding hydro-electricity. The Minister spoke about this in the past. We are able to provide electricity in an environmentally friendly fashion. Dams are used to provide electricity and these mitigate flooding and are tourist attractions. People can be involved in water sports, canoeing and so on if damming is done properly. The Minister for the Marine, Deputy Fahy, has been very concerned with, and has launched a document on, the potential of exploring offshore power sources. That document underlines the necessity to tap into wind and wave energy, lessen our dependency on fossil fuels and reduce the harmful effects of greenhouse gases on health and the environment. As regards sea based wind generators, the Minister is looking at an area off Dublin.

An Leas-Cheann Comhairle

The Deputy's time is up.

Mr. M. Kitt

The Minister is from Galway and I would ask him to look at other areas where these offshore power sources could be effected. We have wind and wave energy off the west coast which has the potential to be used for other sources of energy. I welcome the fact that we are discussing this issue and hope the Minister will take on board some of the points I have made.

Mr. Ring

I am glad of the opportunity to speak on this Bill. I listened to previous speakers' contributions. I oppose the proposal to appoint a regulator. People wonder why they should vote any more. As a public representative, I come into the House and am told that the powers under this Bill will be given to a regulator. If you table questions the Minister will say he has no power and that the matter must be dealt with by the regulator. We will write to the regulator and will be left waiting for months for a reply. The Local Government Bill will be brought before the House in the next few weeks and, hopefully, we will have an opportunity to address some of the problems we have as public representatives in relation to health boards, county councils and regulators. If we write to these people we should receive a response within a reasonable time.

I come from County Mayo. Everyone knows there has been a major gas find off the west coast. I compliment The Western People and its editor, Terry Reilly, who over the past few months have campaigned on this issue. In an editorial on March 8 last, it laid down a challenge to the Minister, Deputy O'Rourke, relating to the gas find.

As a representative from the west, it would be wrong if I did not express the views of the people of the west who have been disadvantaged for long enough. We now have another natural resource, of which we have had many in the past. We saw what happened when this Government and previous Governments sought EU Structural Funds. They used the statistics of the disadvantaged area of the west and everywhere but the west gained, including the east coast and Dublin. The west has not seen any of those Structural Funds yet Dublin has received three, four and five rounds of funding.

The people of the west will not allow this natural resource to be taken without gaining some benefit. As the Minister of State knows, it is proposed to close Ballycorrick power station in 2004 which employs 260 staff and 65 people who work for the ESB. This will have an awful effect on the west. Bord Gáis will run the new gas line from Dublin to Galway. I hope it continues from Galway to Mayo so the west will benefit. This is the challenge that faces us as public representatives. If we go back to the people of Mayo and the west and tell them another natural resource is being taken from the west to benefit the rest of the country and perhaps those outside it, we will have let down those we represent.

A number of grids is proposed and one of those should be located at Ballycorrick. I know people will say the find has not been confirmed but the Minister of State, the Department, the shareholders and those who will benefit know there is a massive find. I am glad this will benefit the country. In north Mayo, if there is a breeze, a storm or a bit of snow falls, there are power cuts for a month and people have to wait for the ESB to come out. As a man recently said to me, if a crowd of butterflies shot across Mayo and hit the power grid, north Mayo's power would be out. The power was cut during the storms at Christmas and upset a large number of people. A recent report stated that if companies wished to invest in the west, the proper power supply is not available because the infrastructure is not in place.

We have an opportunity to do something about this. We hope Objective One funding will be announced soon, along with the Government's announcement of matching funding. We hope that at last we will get our fair share of the national cake. On the gas find, I am not an expert in this field but I have been contacted by many people who want to get on the grid. The IDA and local government are asking the Government to fund the laying of fibre optic cables at the same time as the laying of the gas line. I hope this happens because it would be an outrage to lose this opportunity to bring the west into line with the rest of the country. It is the responsibility of the Government to ensure the regions benefit economically from the gas find.

I have a message for the Minister and Enterprise Oil. The people of the west have been short-changed in relation to infrastructure and Knock Airport, which has not received support from the Government and has not yielded the predicted economic benefit. Knock Airport does not receive the same support from the Government as Shannon, Cork and other airports, simply because it is in the west. The editorials in local newspapers and the campaign in The Western People have spelt it out to us, as the people's representatives in this House, that we must ensure we get the benefits from this which will bring us into line with the rest of the country. We are in the National Parliament and we hope the country as a whole will gain but we represent a disadvantaged area. This is the greatest challenge we face as elected public representatives. The challenge facing the Government is to ensure it will put the resources in place so that whatever happens in relation to the gas find, the people of the west will gain from it.

The airport and the infrastructure are there but the real support is not. Tax designation was put in place but because of the need to get approval from Europe and for other reasons, we never really got the benefit from it that we needed and hoped we would get. It is said that the rising tide lifts all boats but this does not apply to the west. A recent European report stated the poorest regions, mainly Counties Mayo and Donegal, have not gained from the economic boom. This is our first real opportunity to do so. That is why it would be wrong for me not to insist that we must get some benefit from the gas find. All political parties must work together to ensure the Minister and the Minister of State ensure the west will gain from the proposed grids. The people of the west have put up with a lot. I have been at public meetings and I have listened to the people there who will judge us and the Government if we do not see some benefits.

As the Minister of State knows, Ballycorrick power station is closing in 2004. I hope the Government will consider this as a national grid location and that the Minister of State will refer to this in his closing remarks. Many people, especially the ESB workers, are concerned about the closure of the power station. There is also concern about its impact on the bogs, to which Deputy Michael Kitt referred. As a result of EU regulations farmers who traditionally cut their own turf are being told they cannot cut turf for their own use any longer. There are thousands of acres of turf bogs in north Mayo.

There was an energy company up and running in the area. This week, the Minister for Arts, Heritage, Gaeltacht and the Islands had an opportunity to sign an order which would allow the State to buy that resource, although I hoped we would wait for a year to see if further investors could be found for peat briquette manufacture. Obviously the Minister has no faith in the project, despite the money that has gone into it. It was bought by a Cavan man for £300,000 and he is now looking for £2 million for it. It employed 70 people in an area of high unemployment. The Government, however, did not even see fit to buy the asset. The chairman of Bord na Móna told me it would be interested in some of the assets but it would not interfere until there was a decision on whether the project would go ahead.

The Government got £1.7 million from a Norwegian company and that money was spent on roads when it would have been better to spend it on job creation. The State could have bought the company for a song but did not. People in Mayo are upset about what has happened with infrastructure and employment in recent years.

The presence of gas means the Minister and the Government have important decisions to make. The Minister is aware of the importance of bringing resources to his own constituency. As a Deputy from the west of Ireland, I will fight hard to ensure that any infrastructure needed by Bord Gáis is forthcoming and that County Mayo will gain from this find.

We do not want to listen to Enterprise Ireland. Its concerns are pounds, shilling and pence, the stock exchange. All it cares about is profit. It would not have an interest in the local economy. It is our job to make sure that the west benefits from this. The Minister for Public Enterprise and the Minister of State will decide what will happen. They must make the correct decisions to enable the exploitation of a natural resource which could bring the west of Ireland into line with the rest of the State. Perhaps then the west will see its fair share of the infrastructural funding coming from Europe. We have Objective One status but it must be tied to the development of the gas field.

This has the potential to create many jobs in the west. If there is a gas grid in Ballycorrick, potential investors will not be able to complain that it is not viable to go the west of Ireland. We will have a resource which will encourage them to invest, they will see the benefits of gas and, at last, we will be at an advantage compared to the rest of the State. We may even have energy at a cheaper price. That would encourage those from the west of Ireland who live all over the world to come home.

The Minister must ensure that the officials in the Department are aware of the groundswell of opinion in the west – people want to see the benefits of this. I warn Enterprise Ireland; it will get every assistance and encouragement to invest in the west of Ireland but if the people from Mayo do not see any benefit, it will be like the Civil War. Enterprise Ireland will have a difficult time getting that gas then. This is a natural resource that will not be stolen from us. We have lost everything else. The Land League started in Mayo and the gas league might start there as well.

Mr. Browne

(Wexford): I compliment the Minister of State at the Department of Public Enterprise for introducing the Gas (Amendment) Bill, 2000. It gives all of us an opportunity to put down markers on the gas industry and its effects.

I also compliment the Minister on his efforts in recent years to promote alternative energy sources, particularly wind energy. The Minister has been actively involved in this area for some time. I was surprised, therefore, by the attack on both the Minister of State and the Minister by Deputy Stagg. I was even more surprised by his attack on the Attorney General, during which he was accused of not giving legal advice on an independent and fair basis, which is simply not the case.

There is still a long way to go with wind energy. While all of us are seeking alternative methods of energy generation, there is much opposition from local people. The ESB once applied for planning permission for land it owns in south Wexford to build a nuclear facility. Quite rightly the planning application was kicked out then. Recently, however, it applied for planning permission for large scale wind energy facilities. That was also refused because there is such mistrust of the ESB in Wexford. It is time for the ESB to spell out its plans for the land it owns in the county. There is a feeling that the ESB may have an ulterior motive which is not in keeping with the environment of the area and the health of its people.

The only way to develop wind energy is on a community basis. A locally based community group has submitted a planning application to Wexford County Council for a wind based energy project. I hope the application will be granted because the only way forward is to involve local people in developing wind energy. People from County Wexford have gone to the Innishowen peninsula and to Britain to examine wind energy projects but they are concerned about how it might affect their environment and health. There is still much work to be done. Consultation with local communities is the way forward.

The Minister of State spoke about giving Bord Gáis Éireann additional powers in terms of borrowing. Is the Department satisfied with the way it has extended the natural gas grid? Many countries, including Wexford, are disappointed they do not have access to natural gas. There are proposals to extend the gas grid to Arklow, Kilkenny and Carlow, but there are no proposals to extend it to Wexford in the southern corner of the south east. I ask the Minister of State to consider extending it there.

Those working in industry and householders in Wexford have as much right to benefit from natural gas as people in other counties. I remind the Minister of State, the ESB, Bord Gáis and other powerful bodies that Dublin is not Ireland and people in counties across the region have as much right to benefit from natural resources as people in Dublin and other big cities.

The south east has not got its fair share of industry during the lifetime of the Celtic tiger. There has been very little inward multinational investment in the region. I listened with interest to Deputy Ring talk about Knock Airport. At least that region has a viable airport that serves thousands of passengers annually. The south east is served by Waterford Airport, which has been a white elephant for years. Government action is required to provide funds to develop the runways of Waterford Airport so that 747s or larger jets can land there. The south east is suffering badly due to the lack of an adequate airport in the region.

At a recent regional authority meeting, I proposed that the local authorities in the region should get together and invest £1.5 million in the region, which could be matched by Government funding, to develop Waterford Airport. Given that the Minister of State lives near enough to the south east and has a voice at the Cabinet table, I ask him to take an interest in the region by urging the Government to allocate funds to develop that airport.

I welcome the gas find in the west. I am sure it will be of major benefit irrespective of whether Enterprise Oil or some other group develops it. I am sure Bord Gáis will be able to tap into that development and it will benefit the economy in the long-term.

The Minister of State referred to the ESB and its plans for the future. There is talk of it expanding its operations in parts of Dublin and I am sure Deputy Daly will have something to say about Moneypoint and other plants. The Great Island ESB generating station in Campile has been winding down for a number of years. At a time when the country is booming, industry is progressive and there is much house-building, I am baffled that Wexford has again been pushed into the background in terms of the Great Island ESB station. I accept it is an oil powered station, and that is one of the reasons it is important the natural gas grid is extended to Wexford. Business people, consumers and others in the south east have complained about the electricity supply being cut off and others have complained about the long delay in getting an ESB connection for industry and houses. It takes four to five months for people who build new houses to get an ESB connection. The Great Island power station has been allowed to run down. The ESB needs to show some ingenuity by ensuring that station does not continue to be flagged as one that will close or where there will be job losses in the future. It should invest in upgrading it and the Government should ensure it does that.

A few months ago the ESB proposed the possibility of building an incinerator close to the Great Island power station in Campile. It was proposed that such an incinerator would take all the landfill from the counties in the south east and would generate electricity that would feed into the Great Island grid. I listened to what Deputy Michael Kitt said about the possibility of building incinerators and I can tell Members there was uproar in the south east, including in Wexford and Great Island, about such a proposal. I doubt if a incinerator will be built in Wexford in the foreseeable future. Too many factors are unknown about the impact of incineration. In a small country like Ireland where fresh produce is an important industry and food is produced to a very high standard, it is felt an incinerator would have major implications in terms of food production, agriculture, health and the environment. There are many unanswered questions about the consequences of having an incinerator and the proposal to build one in Wexford was rejected.

The ESB, whether willingly or unwillingly, tried to tie a proposal to build an incinerator to the possible future of Great Island power station. That was wrong.

Acting Chairman (Mr O'Malley)

I remind the Deputy we are dealing with a gas Bill.

Mr. Browne

(Wexford): I am talking about the need to extend the gas grid to Wexford and to ensure the future viability of the Great Island power station.

I compliment the Minister on introducing the Bill. I ask him to take on board some of the points I made about extending the natural gas grid to the south east and to Wexford in particular. I am sure he will show a keen interest in doing that.

Mr. Daly

I thank Deputy Browne for allowing me the opportunity to make a few comments on this legislation. I welcome the Bill and I compliment the Minister of State, Deputy Jacob, on his initiative in this area and commitment to developing this important industry.

It must be recognised that Bord Gáis has been a major success story. It has dealt with 300,000 domestic connections and 10,000 industrial connections and has made a major contribution to the development of our economy.

Ensuring a fair and reasonable balance in the supply of gas is a challenge that faces the Government and Bord Gáis. Another challenge facing the Government is to increase gas capacity and ensure its potential is carefully developed, especially in the west. I compliment the Minister of State and the Department on their drive to encourage research and exploration on the west coast. Marathon, Enterprise Oil and Statoil have been to the forefront in this exploration commitment. According to all indications, it is a successful undertaking and the prospects are that it should be soon possible to substantially increase our gas capacity and to avail of the opportunities that will provide, especially in terms of employment, for people in that field. I suggest that the previous Fine Gael speaker use some caution. It is obvious in this highly technical area that many of those who will be employed in the gas installation business will come from abroad and follow the gas business. They will be professionals in the area with expertise and will enable the work to be undertaken and completed in a speedy and efficient manner.

There is one omission in the Bill which, perhaps, the Minister will address in his closing remarks, the question of training for people in the gas industry. Unfortunately, it does not appear we have the capacity to train personnel. They have to go to Aberdeen to do basic training even for an ordinary job in the gas industry. The prospect of large scale employment along the west coast arising from this scheme, will be limited unless the training and expertise area is tackled. Nevertheless there is an opportunity to develop huge business which can make a major impact on our economic performance and can substantially meet some of the shortcomings in our energy supplies. The Minister indicated that 600 megawatts will be needed by the winter of 2004. This is a vast amount of energy. Even if this was to be provided by way of wind-power or wave-power stations the prospect of it being provided is limited without either the importation of energy supplies from other jurisdictions or the development of new technology which would ensure that our opportunities can be exploited.

There is little reference in the Bill to the research necessary to deal with the problem of emissions from stations such as Moneypoint. If the Moneypoint station was to close tomorrow, on foot of complaints of dioxide emissions or whatever from the chimneys, it would effectively close down the energy supplies for this island and we would not have the capacity to meet energy demands. There is a need for major research into clean coal technology which would substantially reduce emissions from Moneypoint which would enable investment in clean coal technology, and investment in new technology at the station. It would be possible to build a fourth phase at Moneypoint given that the foundations and infrastructure have already been put in place. This was done while you, Acting Chairman, were Minister for Energy at the time Moneypoint station was being built. The fourth phase has not been brought into operation and it is unlikely to be brought into operation while there are concerns about emissions. Let us do research into that. Research indicates that dioxide and small particle emissions can be reduced from stations such as Moneypoint. If this can be done by way of clean coal technology, putting further investment into the scrubbing equipment in the chimneys, it would be possible to bring the fourth phase into operation. This would eliminate the need for millions of pounds of investment in peat stations and gas stations all around the island. However, that is for another day.

It is necessary to look carefully at the necessity to reduce fine particle emissions. The World Health Organisation has established that up to 100,000 Europeans die annually due to fine particle emissions from phosphate generating stations. This figure will probably increase to 200,000 deaths unless serious action is taken to remedy the situation. There is a necessity for a commitment to research in this area, whether it is done by Bord Gáis, the ESB or the Department, or by a combination of all, and the universities. If it is in line with developing trends all over Europe it should be possible to find a way in which the greenhouse gas emissions can be substantially reduced, and to find alternative ways of producing electricity.

At one stage there was a proposal to build a pump storage facility near Killaloe on the Shannon. This would be a hydro facility which would not create pollution and has the possibility of producing substantial amounts of electricity to meet our demands but it is not being followed up. There is the prospect, as identified in the research done by universities, the University of Limerick included and other international universities, of developing substantial amounts of energy from wave power generation. In my constituency, Tullig in west Clare has been identified as one of the most suitable sites in the world for the generation of electricity from wave power but this is not being followed up.

We have a responsibility to ensure a safe and sustainable supply of energy for the future. We have to reduce emissions. We have to find ways in which to protect the environment and public health. We have also to find ways in which to train people in the industry to exploit the opportunities. We can, in an effective way, meet the energy demands of this economy for the foreseeable future if we do our business right. This Bill will help in that regard.

Mr. Finucane

I welcome the opportunity to contribute. Even though the Minister has left the House I wish him well in the discussions in Europe regarding the closure of Sellafield. As this is a time bomb which is ticking way he has the total support of everybody in the country in striving to achieve this objective.

I listened with great interest to the contributions of previous speakers, particularly that of my colleague, Deputy Yates. I compliment him on the amount of research he has done on this legislation.

In my area, Aughinish Alumina is a prominent employer. Aughinish Alumina, Bord Gáis and ATCO Limited are forming a venture to generate their own electricity. It is vital for Aughinish Alumina and its 450 employees that this plant is provided. Aughinish Alumina will provide about 40 megawatts of electricity for the plant, a combined heat and power plant, and into the national grid which will be marketed by Bord Gáis, they will provide more than 200 megawatts of electricity. I welcome this as a step in the right direction, particularly their commitment that this plant will be in operation in 2002. It is important for environmental standards, given the Kyoto protocol, to reduce emissions by 1%.

I hope Moneypoint will follow the example of Aughinish Alumina. There has been much concern in regard to the high quantities of sulphur dioxide spewed into the estuary and the surrounding area. Some 50% of the national sulphur dioxide finishes up in that area. Moneypoint and the ESB have a strong obligation to do something about their emission levels. It is worth bearing in mind that this gas, the pipeline and its extension will not only be provided for Aughinish Alumina but could be provided for Moneypoint. This is a matter about which much concern has been expressed over the years. If we are serious about the Kyoto protocol, it behoves the operators of the Moneypoint plant to do something about the emissions in the estuary.

Bord Gáis has been a success story. We have come a long way since Marathon got the licence for £500 in 1970. Marathon have successfully explored, off Kinsale and Ballycotton in recent times. Gas resources are finite and possibly will run out in 2006. However, it is also worth remembering that, over those years, the State benefited to the extent of over £90 million from royalties from that operation. Up to now the terms governing our offshore gas fields have been dictated by legislation introduced originally in 1975 and modified in 1992 by a Fianna Fáil led Administration. It justified the changes to the licensing terms on the basis that it would provide a stimulus for more offshore gas exploration.

Dramatic changes to the 1975 licensing terms were made. Those terms embodied royalties but they were abolished under the changes and it was decided that, in future, companies would be subject to a rate of 25% corporation tax on their profits. This might be compatible with the position in other European countries. In addition, all offshore gas exploration could be off-set by the company against future corporation taxes. The abandonment cost of wells could also be off-set.

There could be a potential resource off the west coast which would not pay royalties. In addition, the costs involved in the use of wells could be off-set against taxation. The end result is that little would be paid to the economy. Many people question whether an overly generous package has been provided, but it is difficult to roll it back because the terms were introduced in 1992 and companies cannot be penalised retrospectively. Those companies would say they are taking an inherent gamble in drilling off the coastline. However, it is worth remembering that when the licensing terms were introduced in 1992, the Minister for Energy at the time was the Minister of State, Deputy Molloy. The complete package for offshore gas was part of that year's Finance Bill and that legislation was piloted through the House by the then Minister for Finance, Deputy Bertie Ahern, who is now the Taoiseach.

The Minister for the Marine and Natural Resources, Deputy Fahey, has indicated in replies to parliamentary questions that he is carrying out an assessment of the current status. However, it is worth noting that, aside from the Kinsale gasfield, the most significant player is Enterprise Oil. When it drilled in 1996, it employed a complement of approximately 40 seasonal rig workers. They had a tradition going back to the 1970s and they worked on the wells off our coastline. They were usually SIPTU employees and they operated for a 14 week period, which is often described as the weather window with regard to offshore oil and gas exploration. This became a tradition, but recently Enterprise Oil changed the ball game completely.

It decided to bring in a fully crewed rig and there is almost a battle going on between SIPTU and Enterprise Oil. This is regrettable. Ministers can hide behind EU regulations and state, as the former Minister, Deputy Woods, did and the Minister, Deputy Fahey, is doing now, that companies cannot be compelled to employ Irish workers. However, the stipulations regarding EU workers go back to 1968.

If there was esprit de corps, which should exist, Enterprise Oil should give cognisance to employing Irish workers. I regret what has happened. In the context of long-term goodwill, Enterprise Oil is not doing itself any favours. I met representatives of the company and the offshore operators association and I made my views known. I know people who worked on the rigs in the past, many of whom came from the community in Foynes where I lived for many years. I know how they feel about what is involved.

People get over-excited about developments that are taking place offshore, but we should consider logically what is happening. As I have heard and read in the newspapers, people are right to feel that if a find is 30 miles off the Mayo coast, it and all the western counties should benefit. The employment content is probably being exaggerated compared to what would materialise, but the Wood Mackenzie report quantified that there are approximately five trillion cubic feet of gas in the Slyne Trough. Regarding the appraisal wells sunk by Enterprise Oil in the Corrib field, which is in that area, the amount of gas has been quantified at one trillion cubic feet. I understand the final appraisal well has been sunk. Although the company has urged caution, there is optimism that gas is present there.

Deputy Ring's point about Objective One status is correct; I am not in an Objective One area because I come from Limerick. However, if trenches are being dug for potential gas pipelines, it is an excellent opportunity to also lay fibre optic cable to stimulate industrial development in the west. This is most important.

Regarding the three partners, comprising Statoil, Marathon and Enterprise Oil, Statoil and Marathon have a majority 55% shareholding in the investment. During a recent trip to Norway on marine related activities, I had an opportunity to speak to people there about the significant contribution oil and gas have made to the Norwegian economy. I do not suggest its success can be duplicated here, but it is interesting to note that one of the reasons Norway stayed outside the EU was a loss of sovereignty. It felt it was a cash rich economy because of its offshore gas fields. Another reason it remained outside the EU was its concern about the Common Fisheries Policy in terms of the vital importance of fisheries to its economy. Norway appears to be extremely successful even though it is outside the EU. Statoil is a state owned Norwegian company and at home it has a strong commitment to employing Norwegians. I would hope that a nod in the right direction to Enterprise Oil would encourage it to employ local labour.

There are exciting times ahead for Bord Gáis in terms of the pipeline from Dublin to Galway and on to Limerick. It will bring domestic and industrial gas to many users in the 12 towns and cities along the route. Regarding reservations about a second gas interconnector from Scotland to Ireland, on which Bord Gáis hopes to expend £300 million – I understand the design and engineering plans are being completed – it is vital that there will be a second gas interconnector in the future. Bord Gáis is only producing approximately 50% of the amount of gas required. The other 50% is supplied through the interconnector. Bord Gáis Éireannn will probably operate on short-term contracts, from six months to two years, depending on where it purchases gas. If we look to the future and examine carefully the Kyoto protocols and gas emissions, the positive direction in which to head is towards gas. We should be thankful that we have that resource and that we will have the opportunity of using gas to fuel electricity generation plants. The Bill is a step in that direction. We are fortunate, and one need only look at other countries with nuclear resources and the frightening aspects of that to realise that. Arguably the most progressive decision made was not to become involved with nuclear energy, but that is another debate.

As regards Bord Gáis Éireann and Marathon, I hope a new dawn is breaking for the economy, especially given what is happening in the Corrib field. I hope that, when the results of the exploration in that field are brought ashore, further drilling will take place to tap into what is regarded as a potentially great resource. While I may have been critical in my speech of Enterprise Oil, I congratulate it on drilling when an inherent gamble may be involved. Its use last year of Killybegs port as a service facility was a token involvement because the main servicing of the offshore oil base was done from Ayr in Scotland. I was also critical in a radio interview with Des Geraghty, the general secretary of SIPTU, of its decision to place a picket on Foynes because this drove out Enterprise Oil which was using Foynes as a service location at the time. The dispute concerned a national issue of workers on offshore oil rigs belonging to Enterprise Oil. I welcome the step taken by the company recently to increase the amount of service activity in Killybegs in Donegal. It is important that, if gas is available off our coast, the economy benefits as much as possible so that as many workers as possible from the economy are involved.

This resource will be significant for Ireland's future and we look forward to the gas coming ashore. With the Marathon resources beginning to peter out, it is important to have an alternative supply in place. I understand that the Corrib gas field could extend the amount of gas to be brought ashore by another 15 to 20 years. What is happening is exciting. That said, we should not forget that multinationals can be ruthless. They are not here for the good of their health but to increase their profits, and that is understandable. In doing so, I hope they are cognisant of the potential for this country, not only in terms of employment but also in terms of energy resources for the future, which would be important.

There is a great appreciation of what Bord Gáis has done over the years. Aughinish Alumina and other multinationals are often criticised. However, Aughinish Alumina, which is located in Limerick West, a constituency I represent, contributes about £56 million to the local economy, which is significant funding. I welcome what it is doing as regards improving and enhancing its industrial plant.

I welcome the Bill. As my colleague, Deputy Yates, said, there probably are certain deficiencies within it which probably need rectification on Committee and Report Stages. I would like the Minister of State to examine a statutory instrument which the Minister will introduce soon. It concerns a public service levy which is likely to be imposed on companies such as Aughinish Alumina which intends to generate 40 megawatts of electricity Is that giving a true incentive to employers with a sense of vision who build their own power plants? On the one hand they are building them at their own expense and are tackling gas emission levels while, on the other, they are being penalised by having a levy imposed. Is that the right direction in which to go? Is it possible for Aughinish Alumina to be exempt from the levy? I know my colleague has spoken about this and has written to the Minister about it. I raise it as a matter which should be considered by the Government.

Mr. Higgins

(Dublin West): The Bill essentially provides for the privatisation of significant sections of our natural gas resources and of electricity generation in the State under the cover of competition. The Socialist Party is opposed to this and is opposed to the Bill. The Bill is consistent with the policy of the Government, which it has pursued relentlessly for three years, of ongoing privatisation of publicly owned companies and public assets. Almost on a weekly basis we have announcements of an intention to privatise new sectors of the economy which are in public hands through State or semi-State companies. Yesterday we had a clear signalling of the Government's intention that public transport in Dublin, followed by public transport throughout the country, will be given to private operators and eventually privatised entirely. It is a similar case for Aer Lingus and Aer Rianta. If the Government is allowed to continue, almost no assets will be left in public hands, and that will have disastrous consequences when the rate of economic growth begins to decline. At a certain stage under the laws of capitalism it may even go into reverse. We will then see what compunction and compassion the new private operators will have for the tens of thousands of workers who will have been handed over to them in the meantime.

The Bill is an attack on public ownership of a crucial natural asset. It hands a significant section of our natural gas resource to private capitalists whose remit is not primarily the welfare of the people or workers but private profit, which they will go about shamelessly. We have a precedent and an example of what certain individuals and companies have done with assets they were given by the Government. In essence, what is being planned is the plundering of public assets, and there is no doubt that, in the generation of electricity from natural gas, private individuals and companies, if they can, will go the same road as those in the telecommunications industry. In 1996, a licence was given to a private operator for the mobile phone industry for a mere £14 million. A brief four years later, this mobile phone company was sold to a multinational with a personal profit of £250 million for one individual who obtained the licence, and millions for others as well. Everyone in the telecommunications world knew in 1996 that to be given a licence for a mobile phone agency was like being given a licence to print money, but the Labour-Fine Gael Government did that and in four short years allowed an asset that belonged to the Irish people and a crucial service that should have remained within the remit of the people to be plundered in this way for private gain. The Government now intends to do the same with another natural asset – our gas supplies. We can have no confidence in this Government protecting public assets and getting the maximum benefit for all those living on this island. What happened with the Corrib field gives an indication of how the Government will treat our natural resources.

Handing over the vast wealth of the gas reserves in the Corrib field, lock, stock and barrel to multinational companies is a national scandal. It is incredible that this resource would be handed over by a Fianna Fáil Government with no royalties accruing to the State and under a tax regime that will ensure that hundreds of millions of pounds can be written off by this company that would otherwise be due to the State. We see here the folly of a State giving such power to multinational companies over significant natural resources.

Enterprise Oil is a law unto itself. The Government is totally dependent on whatever information is supplied to it and appears to swallow that information uncritically when there is evi dence to suggest that this company is deliberately downplaying the significance of the Corrib field in order to continue enjoying beneficial conditions for as long as it can. The Government has never explained why such favourable terms were given to a gas-producing company off our shores by contrast with the regime in other parts of the world; in many cases there is an average tax regime of 40%.

We should know the relationships between the multinational companies and the major political parties which appear to give their blessing to this deal. We should have disclosure of political donations made by Enterprise Oil and others involved in the Corrib field to political parties so we know exactly what level of friendship exists between them.

An opportunity has been lost to utilise and develop the natural resource of natural gas for the benefit of the people. A State company could have been created under the auspices of the Irish National Petroleum Corporation, for instance, which could have gathered the technical expertise and investment necessary to develop our natural resources ourselves. The skills learned by Irish workers in the North Sea and other areas could have been used in such a company and we would not then have the incredible situation where we will have to buy back the total reserve from a multinational company.

What confidence can we have in a Government introducing a Bill to give more concessions to private companies to make a killing out of our natural resources? Sections 4 and 5 are quite clear on publicly owned companies which want to generate electricity being kept out of the market in favour of private companies. That is the effect of section 4. It does not just apply to the ESB but to other organisations that might come in. It is clearly designed to give the benefit to private operators.

There is already evidence from other countries that the scramble to deregulate electricity generation is damaging to people's interest, to economies and to the environment. A major study carried out by the World Wildlife Fund and the Environmental Working Group from 1992 to 1997 found that the deregulation of electricity generation contributed significantly to a deterioration of environmental controls and standards in the deregulated companies. For example, 42 of the largest electricity companies in the United States completely eliminated their investments in energy, efficiency and programmes to cut down emissions. Those cuts meant that in those years 11 million tons of global warming gases and 79,000 tons of soot and pollutants were pumped into the air as a result of those cutbacks by private firms in the electricity provision in the United States. We have a smaller economy on a smaller scale, but we will have the same pressures and laws operating. It is already clear that the Government is not taking seriously either environmental control or the most efficient use of natural gas in conversion to electricity.

For example, the Huntstown project, for which permission has been granted in Fingal, is merely a station generating power from gas. Why is there no provision that any company coming in should combine power and heating programmes in one project when that is the most efficient way to use the available energy? If the Government goes down this road, the policy should not be one of massive generating stations in green field areas, but one of smaller scale generating stations which would combine electricity generation with district heating programmes as well. That would ensure the maximum capacity and benefit for people as well as ensuring the least amount of waste of resources.

Serious environmental questions are now being asked. The application to build at Platin on the banks of the Boyne is causing alarm in the local community as well as among ordinary people and environmental groups. The drastic effect a station of that capacity would have on the water of the Boyne and the amount of water that would be taken and not replaced is staggering. It is a matter of developing this in a calculated way for smaller stations and of combining heating with electricity generation. The emphasis in general should be on the creation of energy from sources with the least emissions. In this regard wind power must be further investigated. There are problems with communities who must be treated sensitively – one cannot ride roughshod over anybody. Renewable energy which does not result in emissions is the way forward.

Instead of giving important sections of our national assets to privateers, we should have a renewal and revamping of public ownership, although not in the bureaucratic way of the past where publicly owned and semi-State companies on occasion operated even more clumsily than capitalist firms with bad industrial relations. A revamped energy generating company in public ownership with the involvement of the workforce, consumers and representatives of environmental groups, etc., should be charged with generating the necessary energy in the most environmentally friendly way possible. That is the way forward, rather than the Government policy of handing everything over to privateers for private benefit and a private killing. Cé mhéid ama atá fágtha agam?

An Leas-Cheann Comhairle

Tá ceithre nóiméad agat.

Mr. Higgins

(Dublin West): Is náireach amach is amach an polasaí atá an Rialtas ag iarraidh a chur i gcríoch sa Bhille seo. Is é atá i gceist ná acmhainn lúchmhar – gás nádúrtha – a thabhairt do chomhlachtaí príobháideacha chun aibhléis a ghinneadh agus chun brábús príobháideach a dhéanamh seachas an rud ba cheart a dhéanamh, sé sin polasaí a chur i gcríoch a bheadh ar mhaithe le muintir na hÉireanna i gcoitinne.

Is le muintir na hÉireann an achmhainn seo agus ba cheart go mbeadh an buntáiste as ag dul do mhuintir na tíre seachas do chomhlachtaí príobháideacha. Tá fealsúnacht atá thar a bheith coimeádach ag díriú an Rialtais seo le trí bliana anuas. Teastaíonn uathu más féidir gach comhlacht poiblí a phríobháidiú. Tá sé dochreidte mar a dheileáileann an Rialtas leis an ngás atá faoin bhfarraige amach ó chósta Mhaigheo. agus ó chósta na Gaillimhe fé mar a thugadar an achmhainn lúchmhar seo do chomhlacht idirnáisiúnta, Enterprise Oil. I ndáiríre, caithfidh muintir na hÉireann an gás sin a cheannach ar ais ón chomhlacht mór seo. Tugann Alt 4 agus 5 den Bhille seo le fios go mbeidh cosc curtha ar chomhlachtaí stáit go dteastaíonn uathu cur isteach ar chonradh aibhléise a ghinneadh agus an buntáiste ar fad a thabhairt do chomhlachtaí príobháideacha. Tá tionchar mór ag ginniúint aibhléise ar chúrsaí timpeallachta. Tá impleachtaí díriailiú don timpeallacht sna Stáit Aontaithe, fuarthas amach tré staidéar a deineadh, gur gearradh siar ar infheistíocht a laghdódh an damáiste a déantar don timpeallacht nuair a deineadh díriailiú ar ghinniúint aibhléise. Dá bhrí sin cuireadh na mílte tonna d'ábhar truaillithe isteach san atmasféar. Nuair is brabús amháin atá i gceist ag comhlachtaí príobháideacha den tsaghas seo tá dáinséar tromchúiseach don timpeallacht i gceist chomh maith.

Is é polasaí an Rialtais anois ná daoine príobháideacha agus comhlachtaí príobháideacha a dhéanamh saibhir trí achmhainní muintir na tíre seo a thabhairt dóibh. Beidh an Páirtí Sóisialach in aghaidh sin. Táimid ag cur in aghaidh an Bhille agus táimid chun vótáil in a choinne. Teastaíonn uainn maoin agus achmhainní na tíre seo a fhorbairt ar mhaithe le muintir na tíre agus ní ar mhaithe le mionlocht beag, comhlachtaí agus daoine a dteastaíonn uathu, i ndáiríre, na hachmhainní seo a ghoid dóibh féin agus dá mbrabús féin seachas ar mhaitheas na ndaoine.

An Leas-Cheann Comhairle

I call Deputy Crawford.

Mr. Sargent

On a point of order, I recall seeing my name as the contributor following Deputy Higgins when I last looked at the Chair's screen.

An Leas-Cheann Comhairle

Since taking the Chair the screen reads Deputy Joe Higgins, Deputy Seymour Crawford and Deputy Trevor Sargent.

Mr. Sargent

There has been a change mar sin.

An Leas-Cheann Comhairle

Apart from the change it is appropriate that Deputy Crawford should be called as an Independent Member has already been called and, having regard to the size of the Fine Gael Party, it is appropriate—

Mr. Sargent

I should know not to believe my eyes in this place.

An Leas-Cheann Comhairle

I would not like to think the Deputy is casting a reflection on the Chair or the staff of the House.

Mr. Sargent

I went by what I read on the screen.

Mr. Crawford

I am disappointed that this issue should arise at this time. As a Member of Fine Gael I believe it is our turn to contribute and I am fully entitled to speak.

I have no intention of going into the legal or technical details of the Bill as my colleague, Deputy Yates, and others have done that and will do so on Committee and Report Stages. I welcome the find of gas off Kinsale. We also welcome the find off the west coast and hope it will become commercially viable. Obviously, we need to get the most benefit possible from it, but we must ensure the industry gets some recognition for the costs it will encounter in trying to find gas in such a difficult situation.

The interconnector has been in place for many years and has been very useful. According to the Minister's statement it is now nearing capacity and we need new provisions to carry gas from the European gas fields. I welcome the commitment in the Bill and given to Bord Gáis Éireann in that regard.

Once again it seems that at least in part of my constituency of Cavan-Monaghan there are no plans for a gas pipeline. Much of the Bill concerns the use of gas by electricity power stations and if we are to have a proper spread of power stations we must have pipelines in areas such as north Monaghan. There is a gas pipeline going to Carrickmacross, including Lough Egish industrial estate, which I welcome. I have no doubt that the Lough Egish industrial estate can and must be one of the major flagships of the food industry and every opportunity to lower costs and make it as competitive as industries in other areas must be welcomed. However, there seems to be no proposal to run a gas pipeline to areas such as Castleblaney, Ballybay, Monaghan town or Clones. The list proposed by Bord Gáis Éireann includes many other towns in the Objective One area to which industries are being directed by the Tánaiste if we are to believe what has been stated in press releases, etc. The statement issued by Bord Gáis Éireann of 9 November 1999 includes the following towns: Trim, Mullingar, Athlone, Ballinasloe, Athenry, Longford, Loughrea, Galway, Gort, Kinsale, Killaloe and Shannon. Unfortunately, important towns are left out, particularly when one considers the peace process and everyone's hope that life will return to normal in the North after this weekend. With the exception of Donegal, the most northern region of the Twenty-six Counties should not be excluded.

Natural gas is cleaner, cheaper and more convenient for householders. People building new estates in areas that I mentioned should have the same right to that gas as anybody else and our businesses should enjoy a similar advantage, especially those which are extensive energy users. For example, in County Monaghan the food industry is extremely important and energy use is high. The Tánaiste in the past few days admitted that there is a serious problem enticing industry to set up in the Border region, especially in Cavan-Monaghan. It is essential that is fully recognised. All types of infrastructure must be available if there is to be an even spread of industry and jobs in the regions.

There is also a difficulty in the Border region regarding the N2 and N3 motorways. There has been no indication yet as to when the bypasses of Monaghan, Castleblayney and Carrickmacross will be undertaken. There are also difficulties with telephone services for industry in the area. Recently awarded private contracts went to the west and other regions, but not to the Border region. Gas is another element of infrastructure. If Bord Gáis Éireann needs financial assistance to justify running a pipeline to Monaghan, it must be given that help through whatever means.

There is a possibility that a power station fuelled by waste from the agricultural sector will be built in the region. Ways and means of utilising it to generate power and heat are under examination. I was interested in Deputy Higgins's reference to power and heat earlier. I, with other Members, travelled to Finland as part of an interparliamentary delegation last December. We saw that most of Finland's power stations provide not only power but also heat and, obviously, it is much colder there than in Ireland. A local authority delegation visited Denmark to examine ways to manage all forms of waste. Some Danish villages are built near power stations which use waste and which are supported by gas. If gas were available in north Monaghan, it would be easier to guarantee power in all circumstances and, thus, provide for the establishment of a much needed waste management service.

A Leas-Cheann Comhairle, you were present, as I was, when the Taoiseach visited Cavan town last week. He emphasised the need to ensure that people and, consequently, jobs and infrastructure were spread evenly. I accept that the Taoiseach meant that. I hope, through whatever means, it is ensured that a gas pipeline, as part of the infrastructure for the region, will run along the Border and service the region and that there will not be more impediments than are necessary. The 30 odd years of trouble in that area has been an impediment. Ireland has interconnectors to the North Sea through the UK. It is important that the Border region, which has suffered most as a result of the troubles, should not be forgotten in the plans for the provision of gas as part of the new infrastructure for the region.

Mr. Sargent

Tá áthas orm seans a fháil labhairt ar an mBille. Le linn don díospóireacht seo a bheith ar siúl sa Dáil tá taispeántas ar siúl san RDS ar a dtugtar An Seó Fuinnimh 2000. Tá sé urraithe nó ar a laghad curtha i láthair ag an Ionad Fuinnimh, the Irish Energy Centre. Is cúis díomá domsa nach bhfuil an Bille – the Irish Energy Centre Bill – os comhair na Dála faoi láthair nó nach raibh sé os ár gcomhair i bhfad roimhe seo agus na billí Fuinnimh seo ag teacht chun cinn. Is trua san mar léiríonn sé nach bhfuil an rialtas ag smaoineamh go hiomlán ar an bhfreagracht idirnáisiúnta atá orainn maidir le ceisteanna caomhnaithe seachas maidir le príobháidiú fuinnimh.

Go pearsanta ba mhaith liom a rá go mbainim féin úsáid as gás sa bhaile nuair is gá agus tá sé áisiúil gan aon dabht. Ach maidir leis an mBille seo, níl sé chomh mór agus b'fhéidir nach bhfuil sé chomh tábhachtach leis an mBille Leictreachais a chuaigh roimhré. Ach é sin ráite is Bille tábhachtach é do chúrsaí fuinnimh ar fad. Dar leis an Chomhaontas Glas is céim ar chúl é ar bhealach chomh maith mar is píosa den achmhainn nádúrtha é an gás atá sa tír. Tá sé ann ní hamháin ar son an ghlúin atá ann anois ach ar mhaithe leis na glúnta atá le teacht in ár ndiaidh. Níl mise den tuairim go mbeidh na comhlachtaí príobháideacha a bheidh ag baint tairbhe as an ghás seo ag smaoineamh go ró-mhinic ar na glúnta atá le teacht. Beidh siad ag smaoineamh ar dheireadh na bliana, ar na daoine atá páirteach sa chomhlacht agus ar dhlí na tíre agus sin an méid.

An rud is tábhachtaí ar fad sa díospóireacht seo ná go gcreideann an Rialtas – taréis an méid atá ráite ag an Aire Stáit – gur leor an méid atá ar siúl acu chun an t-atmasféar a shabháil ó ghásanna ar nós carbon dioxide agus mar sin de atá á scaoileadh amach san atmasféar. Ach ní leor é. Tá go leor daoine idirnáisiúnta ag rá go bhfuil Éire as smacht ar fad ó thaobh eisiúint carbon dioxide de. Glacaim leis nach bhfuil gás chomh dona le gual nó le h-ola. Ag éisteacht leis na daoine ó Fhine Gael anseo in aice liom cheapfá gurb ionann gás agus cumhacht na gaoithe, cumhacht tonnta agus cumhachtaí gur féidir a athnuachaint mar sin. Is bréag é sin agus ní féidir linn glacadh leis. Is fíor nach bhfuil gás ag bun an dréimire, áit atá gual agus ola ach go háirithe, ach níl sé ag barr an dréimire ach oiread. Tá sé áit éigin i lár baill agus ba cheart dúinn é sin a aithint agus a rá arís agus arís eile ar eagla go mbeadh daoine ag ceapadh gur ionann gás agus an ghaoth, rud atá bréagach ar fad.

Sa chomhthéacs sin bhí díomá orm chomh maith nuair a chuala mé gur cheap an Coimisiún um Rialú Leictreachais – the Commission for Electricity Regulation – nach raibh dualgas mór orthu tús áite a thabhairt do chumhacht na gaoithe, go raibh siad ag féachaint ar an Acht nua ach nach raibh an dualgas go pearsanta orthu. B'fhéidir go ndéarfaidís go raibh an dualgas ar an Roinn Chomhshaoil agus gur leor sin. Ach má labhraíonn duine leis an Aire Comhshaoil Nollaig Ó Díomsaigh, déarfaidh seisean go bhfuil freagracht ar gach Roinn cumhacht agus an timpeallacht a chaomhnú agus mar sin de. Déarfaidh sé go bhfuil gach Roinn fite fuaite maidir leis an timpeallacht de agus eco-audity mar a tugtar air. Ar an láimh eile de má labhraíonn duine leis an Aire Fiontair Poiblí déarfaidh sise agus an tAire Stáit go bhfuil an freagracht ar an Roinn Comhshaoil. Tá dhá scéal ann mar sin ach ba cheart scéal amháin a bheith againn agus an rud a chur ina cheart mar tá an fhadhb seo ró-dháiríre ar fad le haghaidh na meáin chumarsáide agus an cineál PR spin a chuirtear ar na ceisteanna seo ar fad. Beidh mise ag labhairt leis an Choimisiún um Rialú Leictreachais chun é sin a rá go díreach leo agus an rud a phlé chomh maith.

Is fiú dúinn féachaint taobh amuigh den Stát ar an cheist seo. Is fiú dúinn éisteacht, cuir i gcás, le hoifigigh na haimsire sa Bhreatain agus i Stáit Aontaithe Mheiriceá. An Nollaig seo caite, 1999, d'eisigh siad litir go dtí na meáin chumarsáide a dúirt go lom agus déarfaidh mé mar a scríobh siad as Bearla é: "The likely consequences of our past and ongoing activities: (ó thaobh ghinniúint leictreachais agus úsáid fuinnimh agus mar sin de) more extreme weather, rising sea levels, changing participation patterns, ecological and agricultural dislocations, and an increased spread of human disease". They concluded that "ignoring climate change will surely be the most costly of all possible choices for us and our children".

Sin oifigigh na haimsire. Nílimid ag caint mar gheall ar aon ghrúpa comhshaoil nó ar dhaoine a bhíonn ag caint mar sin de ghnáth. Tá sé ráite sa mhíniú a théann leis an mBille nach mbeidh aon chostas ar an Stát leis an mBille, gur rialú atá i gceist agus ní costas a bheidh i gceist. Dar liomsa tá costas an-mhór i gceist má éisteann tú le hoifigigh na haimsire. Tá níos mó fuinnimh á úsáid anois ná mar a bhí riamh cheana. Cé íocfaidh as an costas ag deireadh thiar thall, an costas a éireoidh as an píonós a ghearrfar ar an tír seo i ngeall ar Chonradh Kyoto? An íocfaidh gach leanbh agus gach duine fásta as nó an íocfaidh na comhlachtaí móra a bheidh ag baint tairbhe as an reachtaíocht seo agus as an gás, an achmhainn nádúrtha a bheidh á thabhairt againn dóibh? Sin ceist a chuir mé go minic sa Teach seo agus taobh amuigh de ach ní bhfuair mé aon fhreagra go fóill. Ní dóigh liom go bhfuil fhios ag an Rialtas cé íocfaidh agus má tá níl siad sásta a rá agus cuirim an cheist arís anseo inniu.

Tá costas áitiúil ag baint leis an mBille seo chomh maith ach níl sé sin luaite sa Bhille féin. Tá costas do phobal ar bith atá in aice le rud a tugtar "stepdance station" air. Is Teachta Dála mé do Bhaile Átha Cliath Thuaidh. Tá fhios ag an Aire go bhfuil stepdance station i Ros Eo agus cé go dtugtar Lough Shinney ar an áit, tá sé in aice le heastát mór tithíochta St. Catherine's. Tá, nó bhí ar aon nós, boladh láidir i sráid bhaile Lough Shinney agus i Ros Eo féin a chuir tinneas ar dhaoine agus bhí imní ar go leor daoine as an méid gáis a bhí ag teacht isteach ansin agus as cad a tharlódh dá mbeadh fadhb ann. De réir dealraimh tháinig 70 faoin gcéad de ghás na tíre isteach ansin anuraidh. Sin costas ar phobal agus cé gur chaith Bord Gáis Éireann £10,000 ar an bpobal sin chun an fhadhb a réiteach tá costas an- mhór ann ó thaobh imní de agus ó thaobh rudaí eile a lua mé. Níl sé sin luaite sa Bhille.

Chuir mé ceist ar an Aire cheana féin maidir le cé íocann as ghinniúint fuinnimh sa tír seo. Labhair mé ar an mBille Leictreachais mar gheall ar chonas is féidir linn níos mó cumhacht gaoithe agus mar sin de a úsáid mar tá sé ar fáil. Tá sé saor in aisce, ní dhéanann sé aon dochar don timpeallacht agus mar sin de. Dúirt an tAire liom i litir nach n-íocann an Roinn as cumhacht gáis nó cumhacht guail nó ola agus mar sin de agus mar sin go raibh cothrom na féinne ann. Chomh fada agus is eol domsa, leis an phíoblíne a tháinig isteach idir Alba agus an tír seo bhí 35 faoin gcéad den chostas sin tógtha ag an Aontas Eorpach. Is mór an bronntanas é sin do na comhlachtaí móra a bheidh ag baint tairbhe as an gás chomh maith. Ó thaobh cothrom na féinne de ceapaim féin gur cheart ar a laghad an méid céanna a thabhairt do chumhacht na gaoithe chun é a chur chun cinn nó chun taighde a dhéanamh ar an chineál teicneolaíochta atá ag teastáil chun cumhacht tonnta, cumhacht na gréine agus cumhacht na gaoithe agus mar sin de a úsáid. Mura ndéanfar é sin ceapaim go mbeidh an Rialtas ag obair in aghaidh na timpeallachta arís agus arís eile.

Luaigh an Teachta Finucane ó Fhine Gael Statoil agus ní raibh ormsa dul go dtí an Ioruaidh chun an méid a dúirt sé a fháil amach. Tháinig muintir na hIoruaidh anseo mar chuid den chuairt a bhí ar siúl ar an Choiste Fiontar Poiblí. Fuair mise amach ó mhuintir Statoil nach raibh plean acu stáisiún giniúna a thógáil san Ioruaidh. Cé fáth? Mar bheadh an iomarca gáis, an iomarca carbon dioxide, de thoradh an stáisiúin sin, agus ní bheadh cead acu é sin a dhéanamh. Tá orthu teacht go hÉirinn chun stáisiún a thógaint anseo agus tá orthu dul go Vietnam chun stáisiún a thógaint mar nach bhfuil cead acu é a thógaint in a dtír féin. Léiríonn sé sin caighdeán comhshaoil níos aoirde san Ioruaidh ná mar atá sa tír seo. Ní dóibh liom gur féidir leis an Rialtas a bheith bródúil as an caighdeán íseal atá acu ó thaobh cúrsaí comhshaoil de go mór mór nuair atáimid ag briseadh limistéar Kyoto cheana féin mar is eol don Aire.

Taréis don Bhille seo a bheith in a Acht, agus is dócha go mbeidh, an féidir leis an Aire geallúint a thabhairt nach mbeidh feachtas fógraíochta ar siúl ag aon chomhlacht mar a bhí ar siúl ag Bord Gáis Éireann nuair a bhí siad ag iarraidh daoine a chur ag úsáid gáis. Cuma an raibh gás ag teastáil uathu nó nach raibh bhí siad ag spreagadh daoine gás a úsáid má bhí sé ceangailte sa teach acu. De thoradh sin tá aithne agam ar go leor daoine a deir gur ghá dóibh méid áirithe gáis a úsáid nach bhfuil ag teastáil uathu chun praghas an gháis a ísliú sa bhille. Mar sin, d'fhágadar fuinneog ar oscailt agus iad ag iarraidh gás a úsáid mar a bheadh sé ar fáil go buan. Rud scannalach a bhí sa bhfógra sin ó chomhlacht stáit. Is léir go raibh an rialtas féin an mhí-fhreagrach gan smacht a chur ar an chomhlacht agus feachtas fógraíochta mar sin ar siúl acu.

Cá bhfuil an caighdeán fuinnimh chun fuinneamh a chaomhnú? Bhí mé ag comhdháil an tseachtain seo caite i gColáiste na hOllscoile i mBaile Átha Cliath, áit a raibh The Irish Home Energy Rating Standard á chur i láthair do thithe nua. Bheadh eolas ag an Aire Stáit ar rudaí mar sin mar tá mé taréis a léamh sa nuachtán mar gheall ar an fháilte a chuireann sé roimh rudaí mar seo. Ach níl an Rialtas ag gníomhú de réir an chaighdeáin seo chomh mór agus atá siad ag gníomhú ar ghiniúint leictreachais agus ar phríobháidiú gáis agus mar sin de. Is mór an trua é sin. Cuir i gcás, tá go leor daoine ar ioncam íseal agus ní féidir leo fuinneamh a chaomhnú mar is féidir le daoine a bhfuil airgead acu agus ba cheart deontas a thabhairt do na daoine sin i dtreo is gur féidir leo a bheith compórdach, rud atá bunúsach, agus gur féidir leo gan a bheith ag úsáid fuinnimh atá teoranta agus a dhéanann dochar don timpeallacht ag deireadh thiar thall.

Cá bhfuil an riachtanas chun district heating a bheith mar chuid den ghiniúint leictreachais? Táimid ag tabhairt cead do dhaoine stáisiúin a thógaint agus nílimid ag cur aon riachtanas orthu distict heating a chur ar fáil, rud atá scannalach arís ó thaobh Kyoto agus ó thaobh an airgid a bheidh le n-íoc againn nuair nach mbeimid in ann teora Kyoto a chomhlíonadh.

Ag tagairt don méid a dúirt an Teachta Crawford, ba mhaith liomsa a rá go bhfuil an-chuid ábhar gáis i gContae Mhuineacháin agus ar fud na tíre i bhfoirm an méid slurry a bhíonn ann de thoradh na muc, na gcearc agus mar sin de. Tá an-chuid de sin ag dul amú sa tír seo. Tá sé ag dul isteach sa talamh. Tá an talamh ar nós spúinse agus loite ag an ábhar gáis seo atá ag dul amú. Ba cheart anaerobic digesters a bheith i ngach contae sa tír seo mar tá an-chuid gur féidir a bhaint as, methane mar shampla, Ba cheart é a dhó chun leictreachas a ghiniúint seachas é a scaoileadh isteach san atmasféar, áit a dhéanann sé dochar sé oiread níos mó ná mar a dhéanann carbon dioxide. Go bunúsach is rud riachtanach agus rud práinneach é sin. Iarraim ar an Aire sin a dhéanamh go tapaidh. Cé mhéid ama atá agam, a Leas Cheann Comhairle?

Leas Cheann Comhairle

Tá nóiméad amháin agat.

Mr Sargent

Unfortunately, there are many people who will not have the opportunity to listen to a translation of my contribution, as Members of this House have with the translation service. The Green Party is disappointed that the Bill will privatise a natural resource which is both important and also potentially damaging if used badly, given our commitments under the Kyoto agreement which are already being broken. The Department of Public Enterprise has a solemn duty to play its part as a major user of energy in terms of its remit, particularly with regard to the likes of Aughinish Alumina and other large energy users in the country, including the ESB. It should be at least as serious about it as the Department of the Environment and Local Government is expected to be.

In relation to global warming, the meteorological offices in Britain and the USA have warned that if we neglect the climate change issue it will be the most costly of all possible choices. There is a cost implication arising from the Bill, even though the Minister did not state that in his explanation of it. It would be unfair if that cost were to be paid by every child and adult in the country. It should be paid by the largest energy users in proportion to the amount of energy they use which creates greenhouse gases. That is a question which has yet to be answered by the Government.

I hope there will not be a repeat of the scandalous advertising campaign in which Bord Gáis engaged. It offered cheaper gas if customers used a lot of it and it resulted in people leaving their windows open so that they would use gas and not be too hot. That was a scandalous advertising campaign. This Bill is not as important as the type of legislation needed to improve energy conservation so that we might start the downward demand on energy instead of accepting that it always has to increase. Other countries have managed to decouple economic activity from energy demand and it is about time, as a civilised country, that we put our house in order and ensured that an Irish home energy rating standard and other energy conservation measures are enacted and enforced in order that we can start to comply with some of the international regulations in terms of climate change.

Mr. Perry

It is a matter of the utmost importance that the pipeline runs through County Sligo. Local industry and the general community have a right to a choice of energy options, as is available in most areas of the country. I welcome the prospect of a supply offered by the discovery of a natural gas field in the region. According to An Action Plan for the Millennium, the intention is to extend natural gas, as far as practicable, to major towns and cities. County Sligo should be connected to the national grid. That can be accelerated with the prospect of natural gas being brought ashore in the north west, particularly in light of the Enterprise Oil venture which I believe will be successful.

Sligo, as the capital of the north west, on the periphery of Europe, is the self-selecting natural centre of the focus for the Border region, as concluded by the Fitzpatrick report on the Border, midlands and western region and endorsed by the Border, midlands and western regional authorities. It is recognised that Sligo is by far the largest town in the north west region, where a great deal of infrastructural investment has already taken place, but Sligo has infrastructural deficits which need to be addressed to enhance its access and competitive position, to promote inward investment and develop its potential as the main regional growth centre in the Border, midlands and western Objective One region.

Sligo has many of the ingredients necessary for the development of a vibrant growth centre – a scenic coast location, roads, an institute of technology, a regional airport and a sea port which, I understand, the Minister for the Marine visited a few weeks ago. There is much work that could be done and investment is needed. Sligo also has arts and cultural facilities and a Government agency. However, action needs to be taken to consolidate its position, including mobile investment and economic and social development.

As regards the electricity supply to Sligo alternative energy options should be examined. Sligo has failed to attract international investment projects in the information technology and telecommunications sectors. The quality of electricity supply is a major requirement in attracting and supporting the retention of these and other major industries as well as for the effective functioning of the economy in general. For these reasons a 220KV electricity supply is a priority. Unfortunately, it is only coming as far as Carrick-on-Shannon. That is a major disadvantage. Due to cross-Border development, to which Deputy Crawford referred, and particularly the development of the gas supply, it is a matter of the utmost importance that the pipeline be extended to Sligo. It is imperative, as Sligo is the capital of the north west, that there be cross-Border discussions on the new and exciting times that lie ahead.

Investment in a high quality electricity supply will help to remove any disadvantage in terms of the quality and cost effective energy supply that might militate against the attraction or retention of small, medium or large sized enterprise and local employment. A quality of supply of international standard will also help support agri-tourism, a potentially important rural enterprise. The development of enterprise will, in turn, help to stem the tide of migration to Dublin in search of employment, assist the regeneration of local communities and meet the explicit objective of Government and EU policy.

Enterprise Oil, the British exploration company, has discovered a major natural gas field off the west coast. Initial estimates suggest that the find will be bigger than the Kinsale field. However, when the gas eventually comes ashore it will be hardly worth it to the Exchequer, from a revenue point of view. I understand Enterprise Oil prefers to base its operation in Aberdeen in Scotland. There was an impression that many jobs would be created here but advances in mining technology and the use of hi-tech equipment to extract gas from the newly discovered Corrib gas field will generate few jobs.

As Enterprise Oil has stated in a feasibility study of the area 70 kilometres from Achill Island, unmanned submarines will be deployed to perform tasks on the seabed. It states that the drilling manager puts much effort into getting as many people onshore as possible for safety and cost benefit reasons. The depth of the seabed means they will have to go down 350 metres below sea level. The logistics involved in the extraction make for a long and costly process as Enterprise Oil plans to put six wells in place by the year 2002. People are under the impression that there will be many onshore jobs. It will require a great deal of effort to secure most of the eight onshore jobs it takes to support each job on an exploration rig. However, the number of jobs that will be created must be clarified. If we take the case in Kinsale there are very few jobs on land arising from the development of offshore exploration. Many people in local authorities believe there will be a massive job loss but jobs will be created through the extension of the pipeline and the benefits that will follow from that.

If the pipeline is extended into Sligo there will be long-term benefits for the region that will accelerate the creation of a growth centre. What is needed in Sligo is a centre to generate electricity that will attract industry to the northwest. At present there is a 110KV supply. That is a huge disadvantage and if there were a greater supply the benefits from potential job creation would be enormous. As regards the digging up of roads there should be integrated planning so that, for example, where a pipeline was being laid a fibre optic cable could be laid at the same time. The IDA and Enterprise Ireland would be well aware of the advantages of such an approach. There is uncertainty about where the pipeline will go and if linked up with the pipeline from Mayo to Galway via Tuam I believe there would be a significant opportunity to develop industry along the western pipeline.

It is important that such development be incorporated and that there be an action plan. Bord Gáis has given assurances on continuity of supply but it is important that the pipeline is extended into western areas, particularly the north west where I have the honour to represent the Sligo-Leitrim constituency. We have the potential. Sligo has been designated as a major growth centre. Thanks to the generosity of the tax regime there will not be any revenue for the State. Preferential treatment for exploration companies was introduced under the Finance Act, 1992, in the form of a 25% tax rate. In the rest of the world the average rate is 40%. In Norway all companies that enter its waters are taxed at a rate of 75% and it insists that drilling companies employ Norwegian services and workers. Enterprise Oil can also offset its past exploration expenditure, including capital expenditure, against its tax bill. Considering that it is a costly business, Enterprise Oil has claimed to have spent over $50 million, one wonders when the Exchequer will see any tax revenue. It will probably be in 80 or 90 years.

The real benefit is in the location on the west coast of Ireland, cross-Border benefits and the fact that we can accelerate developments in the region. We are an Objective One area as part of the BMW region and the development of the gas pipeline presents us with a unique opportunity. I appeal to the Minister to look seriously at Sligo as a connection for the pipeline. It would open up a new avenue of development. Sligo is the natural growth centre of the north west. It is the largest centre in that region and can stake a claim to the pipeline. I know it will be a political decision but it is in the interests of Government with the clearly established new growth centres in the national plan to avail of each opportunity to create them. The offshore development of gas presents such an opportunity and I welcome it. It is a good form of energy.

Debate adjourned.