Vol. 639 No. 3
6 Deputy Jan O’Sullivan asked the Minister for Communications, Energy and Natural Resources if he will bring forward measures to give the energy regulator, CER, co-competition powers with the Competition Authority over the oil and liquid fuels market; if he will direct CER to investigate and report on pricing policies in the oil and liquid fuels market; and if he will make a statement on the matter. [23055/07]
The Irish oil industry is fully privatised, liberalised and deregulated. There is free entry into the market. The Commission for Energy Regulation, CER, is the independent body statutorily responsible for overseeing and regulating Ireland's electricity and gas sectors. The CER has no role in regard to the oil industry. The Competition Authority is a statutory independent body with a specific role in the enforcement of competition law. The National Consumer Agency has specific responsibilities for protecting the rights of consumers. Its function is to ensure that competition works optimally for the benefit of consumers throughout the country.
There are no proposals at present to bring forward measures to give the CER a role in regard to the Irish oil industry, given the nature of the market and the roles and responsibilities of the Competition Authority and the National Consumer Agency.
I am not sure what body is charged with ensuring a competitive oil and liquid fuels market. There is clearly concern on the part of motorists purchasing petrol that there are cartels operating, but nobody appears to be in charge of investigating or dealing with that possibility. The only organisation I can find is the Automobile Association, AA, which is hardly the appropriate body. There is also the issue of the difficulty in accessing supplies, given that so many petrol stations are closing due to the lucrative property market. This is a problem particularly in rural communities, where petrol stations are closing and people are concerned that this will concentrate the facilities to an even greater degree. What does the Minister intend to do about that?
If there is evidence, even a suspicion, that a cartel is operating, the Competition Authority and the National Consumer Agency, a statutory body established last May to defend consumer rights, can investigate and bring to book anybody in the industry who is engaging in cartel practices. In Dublin, where property prices are high, the availability and expense of sites are issues. However, it is not possible for the Government to intervene and regulate a free market by trying to set prices or, indeed, set particular filling station locations and micromanage it at that level.
The Department and the CER have a general role in the energy policy area to ensure general security of supply. We are preparing a report at present examining energy security and long-term security implications. I have also, through the amendments that were made possible in the changes to the National Oil Reserves Agency Act, recently raised the security of supply levy to ensure we will have 90 days storage available in the event of any disruption. The State is engaged at that level. With regard to issues involving incorrect practices that exploit the consumer, the Competition Authority and the National Consumer Agency are sufficiently strong to address them.
That was a weak and ineffectual reply from the point of view of the person who is trying to get petrol at a reasonable price. There is clearly deep suspicion about price fixing. Is the Minister aware that an advertisement in this regard has been placed in various newspapers similar to the advertisement placed by Newry solicitors regarding planning, which unearthed major scandals in the planning system? The Minister must accept some responsibility. There is widespread concern and many questions about petrol prices and the fact that they tend to rise at the same time and stay at the same level. The price may vary regionally but within regions the price is more or less the same. If it looks, smells and feels like a cartel, one must do something about it. However, it is not clear who has the authority to do it. The Minister says he can deal with oil reserves but he will not deal with the issue confronting the individual buying petrol.
I understand from people in the sector that the margins in the fuel delivery business are incredibly tight, probably because it is an open and competitive market. The Deputy sees a suspicion of price fixing where prices move up and down in tandem. Perhaps she is right, and her deep suspicions or widespread concerns are based on fact. Alternatively, however, perhaps the fluctuations in the oil market price cause prices in the petrol stations here to rise and fall accordingly. If there is evidence to support the deep suspicions and widespread concerns, there are mechanisms in place for those concerns to be presented and the Competition Authority or other bodies can examine them. If the Deputy is saying that I should respond to deep suspicions when I do not have the statutory authority to do so but other Departments do, that does not appear to be a logical approach.
When similar questions were raised about the mobile phone market, the regulator, ComReg, responded with a website which outlined to consumers in clear terms the difference in prices and options on offer from various operators. Would it be forward thinking to take a lead on this issue and speak with the energy regulator about similarly comparing diesel, petrol and biofuel prices throughout the country? As someone who drives between Cork and Dublin on a regular basis, I can state the costs vary widely. While the Minister states his understanding is that the margins on petrol are tight, the reality is that the price for people at the pump varies significantly from petrol station to petrol station. It may remain the same within regions and this is the potential cartel activity mentioned by Deputy McManus. Does the Minister agree many problems would be solved if the regulator took a lead on this issue and published prices on a website so people could make comparisons?
I wish to clarify for the Minister that this is not only my suspicion — if it were I would not be here asking important questions on it — it is of widespread concern. Within regions there seems to be uniformity and this raises questions. When this happens, the Minister with responsibility for energy must deal with it. Otherwise the consumer is left unprotected. The Competition Authority investigates dentists, solicitors and everybody else, but somehow this issue is allowed float free. This is a matter of concern and it lands on the Minister's desk.
If evidence is presented to show regional or other competition issues which must be addressed and investigated I will happily pursue them. To answer Deputy Coveney, the difference between the mobile phone market and the petrol station market is that one is regulated and has a licensing system and the other is a free and open market which one can enter and exit easily. Deputy Coveney's point that price differences between various petrol stations are perfectly apparent is valid. This allows the consumer, including the Deputy as he drives to and from Cork, to decide where to stop and purchase petrol.
The problem is that not everyone drives from Cork to Dublin.
If a station is cheaper and the sign outside the door states clearly the rate per litre, one is free to purchase the petrol. It is slightly different with mobile phone operators, who could improve transparency on real prices because one is contractually obliged to use the phone unless one changes operator. It is different from stopping one's car and choosing one petrol station over another.
7 Deputy Jan O’Sullivan asked the Minister for Communications, Energy and Natural Resources the position of the Corrib gas pipeline project; his preferred route of Shell’s three alternative routes and the reason for same; the way he envisages this dispute will be resolved in a safe and agreed manner; and if he will make a statement on the matter. [23054/07]
11 Deputy Martin Ferris asked the Minister for Communications, Energy and Natural Resources if he intends to have a formal meeting with representatives of the local community in Kilcommon, Erris, County Mayo, to discuss Shell’s scheme to install a gas refinery and high pressure pipeline in their midst; and if he will provide a timeframe when such a meeting might take place. [23105/07]
47 Deputy Tom Sheahan asked the Minister for Communications, Energy and Natural Resources the status of the Corrib gas field project; and if he will make a statement on the matter. [23127/07]
66 Deputy Martin Ferris asked the Minister for Communications, Energy and Natural Resources if the Shell pipeline and refinery scheme projected for the area of Kilcommon, Erris, County Mayo, has his full backing. [23104/07]
I propose to take Questions Nos. 7, 11, 47 and 66 together.
The Corrib gas project is an infrastructural development of major national importance. The developers of the field have completed the majority of the sub-sea construction work to prepare the Corrib field for production of gas. Construction work has begun on the terminal.
Last month, consultants engaged by the developers of the Corrib gas field announced a short list of three indicative route corridor options. This followed a recommendation made by the mediator, Mr. Peter Cassells, to modify the route of the pipeline in the vicinity of Rossport to address community concerns regarding proximity to housing which was accepted by the developers. These three corridor options will now be subject to further environmental and technical studies in parallel with community and landowner consultation as well as consultation with relevant statutory agencies.
Once a preferred route is selected it will be necessary for the developers to make an application to me under the Gas Act for consent to construct the pipeline. In addition, consent from An Bord Pleanála will be required under the Planning and Development (Strategic Infrastructure) Act. It would not be appropriate for me, having regard to my regulatory role, to express a preference for any particular pipeline route for the Corrib gas project.
Since my appointment as Minister I have met a wide range of stakeholders involved in the project, including the developers, individuals who are interested in the project and people from the local community. As the project advances I am open to continuing my engagement with representatives of the local community and others on matters relating to my regulatory role.
I appreciate the Minister inherited this issue and I pay tribute to Mr. Peter Cassells for the work he has done on this difficult matter. The timeframe is short and the Minister will be expected to make his decision in November according to the documentation I received. Is this still the case? A great deal of work would be involved between now and November. How far has work progressed on the environmental impact of the three alternative routes? When the Minister was in opposition, he recommended that Bord Gais be involved in overseeing the operation of the terminal. Is this still his view and, if so, has he made any progress in this regard?
The November deadline relates to the EPA which was due to make a presentation on the final clearance it must give on the terminal building. This decision was deferred until November when the EPA will deal with a variety of environmental licensing issues with regard to the terminal building. Later this year the developer will announce its preferred pipeline route option.
Is that this year?
Yes, this year. This is subject to its work programme and technical issues which may arise. The timeline is not ours and the initiative is with the development company rather than the Department or any other body. A complicated evaluation process will follow this, including public consultation involving An Bord Pleanála under the new Planning and Development (Critical Infrastructure) Act, the foreshore licensing section of the relevant Department and my Department in terms of consent. My Department liaises with the other Departments and agencies involved in this complicated process to ensure a co-ordinated approach. I intend that the process will be open and transparent and will engage people in a positive and constructive manner so their concerns are addressed.
What timeframe is involved?
The timeframe will begin when a preferred route option is proposed and the process will continue into next year. It will not be a short timeframe. It will take several months rather than weeks as it must engage An Bord Pleanála as well as the Department. The timeframe is difficult to quantify in advance and the Planning and Development (Critical Infrastructure) Bill means we are in new territory. I am confident it can be done in an orderly manner which is respectful of all parties.
I also asked the Minister about Bord Gais.
Bord Gais made clear that its involvement does not extend beyond the internal gas transmission pipeline. It constructed the pipeline connection to the terminal building but is not engaged in the offshore pipeline section.
8 Deputy Leo Varadkar asked the Minister for Communications, Energy and Natural Resources how much of the White Paper on Energy Policy has been implemented; and if he will make a statement on the matter. [23118/07]
The energy White Paper was published on 12 March 2007. It sets out a comprehensive range of policy actions designed to deliver on our strategic goals for security of supply, sustainability and competitiveness over the period to 2020. There is no doubt that we need to make fundamental changes to the way we provide and use energy. Ireland's sustainable energy future depends on it. The programme for Government endorses the White Paper and underlines the imperative to secure long-term energy security and a low carbon future for Ireland. The urgent and massive challenge of climate change underscores this imperative.
The many policy actions in the energy White Paper have different timelines. The short-term actions are under way. Others have longer time horizons with work starting now. As the Minister responsible for energy, my clear objective is accelerated, intensified delivery on all fronts, reflecting the challenges we face. To achieve a secure, sustainable energy future for Ireland we need collective delivery across all the priority areas.
I will outline some of the key priority areas and associated progress. The single electricity market is on schedule to go live on 1 November. The energy efficiency action plan has been launched for consultation and will be finalised before the end of this year.
The east-west and north-south electricity interconnectors are proceeding according to schedule, with a view to delivery by 2012 or sooner if possible. We are giving priority to accelerated delivery of our renewable energy targets for electricity and heating by addressing barriers and ensuring positive signals to the market. We are putting in place measures to support the potential of Ocean Energy as a key opportunity for Ireland.
The all-island grid study is nearing completion and will provide critical underpinning for future development of the grid in support of renewable energy. We are expediting the programme of roll-out over time, of the installation of smart meters in every home through the Commission for Energy Regulation, ESB Networks and Sustainable Energy Ireland.
The policy actions under way and planned in the White Paper, together with the additional commitments in the programme for Government, will result in a transformed landscape for the Irish energy sector. I am committed to working in partnership with my Government colleagues and with all stakeholders to deliver that change. The challenges of security of supply and climate change have created a new energy paradigm for Ireland for Europe and globally. My objective is to meet the challenge of being ahead rather than behind in energy policy terms in addressing that new framework.
I concede the question was so general that I did not expect precise answers. May I probe the Minister on one or two specifics; first, how does he intend to handle the separation of the ESB and Eirgrid? In essence what he is proposing is to take the transition system which is made up of 6,600 km valued at €840 million away from the ESB balance sheet and any ESB maintenance work and so on and put it under the direct responsibility of Eirgrid to manage it as a State asset. The principle of that is one with which I agree but there are some significant hurdles to be got over to achieve it. My understanding is that the ESB has very substantial borrowings based on the balance sheet that includes the transmission system and that the value of the transmission system is security for the ESB on some of its substantial spending programmes which involve significant borrowing. How does the Government plan to deal with that issue early next year?
Deputy Coveney and I were opposition colleagues at a time when the borrowing limit was increased for the ESB from, if I recall correctly, €2 billion to €6 billion.
Yes.
Looking at the recent annual accounts it is interesting to note that the borrowing level has not increased to anywhere near what was anticipated. It is probably closer to what it was at the time when emergency legislation had to be drafted. I am less concerned about the balance sheet, the borrowing aspect of the ESB, than I would be if it had been closer to the levels we provided for in legislation. Deputy Coveney is correct in saying that in opposition I also welcomed the separation of the ownership of the transmission assets under the understanding that these assets would be maintained in public ownership, that this was an asset that rightly belonged to the people, that it is a natural monopoly and, therefore, there was no question of these assets being privatised. Given that we had a separated out transmission grid company that was meant to have complete autonomy and was acting with complete autonomy, the reality was that in a sense the assets had to be transferred to make a reality of that separation out. It was nonsense to separate out this company completely and not give it ownership of the assets it managed. On the basis of giving that company confidence in how it manages those assets there would be no effective transmission grid company if on the one hand it was told to act in a certain manner and at the same time it did not have confidence in what it was doing because it did not own the assets it managed, so it made sense.
An tAire——-
Sorry, perhaps I can finish.
——by way of explanation, under the terms of the order of the House the Minister has one minute to reply. The Minister has already used two in this reply.
Perhaps I can finish briefly.
I call Deputy Coveney for a final supplementary and then the Minister can incorporate his reply into it.
Taking a slightly different tactic, because this is a huge area, the renewable energy promotion area, does the Minister plan specific targets on an annual basis in terms of the overall power generation in Ireland coming from renewable energy and, if not, why, because that is something he promoted strongly in opposition?
We have the obvious target of 15% in electricity generation by 2010. At present we are close to 10%. With targets we have to be careful not to set limits to our ambitions. I would like to go way beyond some of the targets already set. I have no objection if that can be done on an annual basis or otherwise.
Can the Minister set a floor?
Yes. Those targets that have been set are the floor.
They are not annual targets. Therefore, there is no way of measuring performance on a yearly basis.
I am quite happy to be measured on reaching those targets not as a limit of our ambitions but as the floor on an annual basis and to be picked up on that if we do not achieve it. I will come back to the ESB at a later stage.
9 Deputy Róisín Shortall asked the Minister for Communications, Energy and Natural Resources if he will report on the Government’s target of 700,000 broadband subscribers by the end of 2007; his views on the targets the Government should set for broadband roll-out to 2010; the measures he will take to introduce this objective; if he has had contact with broadband service providers on achieving the new 700,000 target; and if he will make a statement on the matter. [23088/07]
There were 698,000 broadband subscribers in Ireland at end of quarter two of 2007 according to official figures from ComReg. Since then, the 700,000 target has been achieved and I am confident the final figure for the end of 2007 will greatly exceed 700,000. This 698,000 figure is equivalent to 16.48% of the population. At the start of 2005 only 3% of the population were broadband subscribers and 6.76% of the population at the start of 2006. This is significant progress by any measure.
A draft policy paper on next generation broadband is being prepared by my Department, which will review current communications infrastructure policy, and analyse policy options in light of industry developments. This will give guidance on the optimum role for Government in the planning and roll-out of broadband. It will be in this context that any new targets may be set.
My Department has undertaken initiatives to address the gaps in broadband coverage. These include providing grant-aid under the recently concluded group broadband scheme and investment in Metropolitan Area Networks, MANs.
Despite these Government initiatives there are still some parts of the country where the private sector will be unable to justify the commercial provision of broadband services. Accordingly, the procurement process for a national broadband scheme is under way. The national broadband scheme will provide broadband services to areas that are currently not served and will ensure that all reasonable requests for broadband in those areas are met.
My Department is anticipating that the award of the national broadband scheme contract will be in quarter two of 2008, with roll-out of the services due to begin as soon as possible thereafter. This timeline is subject to negotiations with candidates during the competitive dialogue phase of the procurement process.
One of the major complaints I have received through constituents and across the country has been problems with broadband. Is the Minister aware there are still significant complaints in regard to inability to access it, the cost in some cases, and sometimes technical difficulties? Has he considered looking at the figures to see how effective is the provision across the country because it appears there is a slight disconnect between the reality and the figures and statistics he has given? In relation to MANs, when in opposition the Minister called MANs a spectacular waste of money. Perhaps the Minister would elaborate on his views now, because it appears that what he is talking about in terms of transferring €10 million out of the MANs and into the greenhomes scheme will have a fairly sizeable impact, whether on a multi-annual basis or not. What exactly will be the impact? Given that all politics is local, on the whole issue of enabled exchanges, Eircom has enabled 500 exchanges and have promised 400 more in the next two years — although it keeps changing its timetable — yet, there is a huge disparity across the country. In Wicklow there are 13 while in Donegal there are 30. That does not auger well for my constituents and I am sure other parts of the country have difficulties as well. Perhaps the Minister would comment.
Where we are not getting sufficient service I have no problem in deploring that and in encouraging the companies involved. I will have no problem in regulating as much as possible to ensure that the companies involved begin to provide services. In the case of Wicklow if that is the level of exchange that has been enabled, then it is an issue of real concern. The response to that is how we deliver it. There are various way of delivering service, one of which is through competition. Where a company does not provide a viable product in that area, if we could ensure there is a competitor who would get a competitive advantage it would give a real impetus to the existing companies to ensure they provide it.
In other words if a cable operator in Bray or Wicklow could start meeting some of the slack demand or a mobile operator could take on the business that undoubtedly exists there, it would put pressure on companies where there are gaps in availability to ensure it is provided. It is not just basic availability. We need to consider higher speeds and cheaper prices. We need to move on from the level of coverage and the statistics in terms of the number of houses that have it to the quality of the service.
In general we have a difficulty relating to two very different geographical circumstances. In urban areas it would be easier to achieve such competition because of the existence of cable and fixed lines — there is copper in the ground. The national broadband scheme exists to ensure we do not leave sections of the country behind and that we have universal accessibility. We then need to ensure the speeds are higher and the prices are lower. This is not just banging or hammering companies. Their long-term viability relies on such a universal high-quality and lower-price service being available. This represents the future for communications.
Regarding the end of the group broadband scheme, is the Minister telling us today that people in rural areas without the capacity to connect to broadband will have no Government sponsored or supported scheme to help them connect to broadband until the national broadband scheme is in place, which the Minister has advised will be some time after 2008? For the next 18 months people can have no aspiration to gain broadband in their homes or businesses if they cannot currently get it. The Government has nothing to offer to people for the next 18 months to two years until the new national broadband scheme is in place.
I wish to reinforce what the Deputy has said. I am aware of significant rural parts of my constituency where considerable frustration has been expressed. There would be concern that they will now need to wait until 2008. The Minister talking about competition is a very poor response when we are talking about areas of the country in which competition will not apply to any great extent. It is one thing to have a model in Dublin. I am not talking about people living on the tops of mountains; I am talking about relatively sizeable villages with only recent introduction of broadband as is the case in Rathnew, for example, or places still struggling to get a decent broadband service. If a decent broadband service exists they are often expected to pay through the nose for it.
I do not know where Deputy Coveney got the 18 months figure. I believe I said earlier that the scheme would be operational by the second quarter of 2008, which would be less than six months away. The group broadband scheme was fully implemented in terms of processing all the applications and providing grants in 2004 and 2005. Based on the experience of that scheme it was decided that the way to ensure it really covered all areas was to move to this national scheme, which I regard as a positive development.
When on holidays in Inishbofin this summer I experienced a very good broadband scheme in a very isolated rural island, which indicates that companies exist and group broadband schemes are operating providing it to rural areas. We need to ensure universal availability and then move up to make it higher speed and lower cost, which is the key development I will be pursuing in the consumers' interest.
10 Deputy Deirdre Clune asked the Minister for Communications, Energy and Natural Resources his views on the continued ownership by Eircom of the national landline network; and if he will make a statement on the matter. [23122/07]
Eircom's fixed line network is one of many regulated communications networks in Ireland. The communications landscape has been transformed over the last decade. Where once we had just one publicly owned telecommunications company, we now have close to 400 operators in the communications area. Ireland now has a mix of mobile, wireless, cable and fixed networks all of which are capable of delivering high-quality, innovative telecommunications services including broadband. The regulation of these networks, including Eircom, is a matter for the independent Commission for Communications Regulation.
My role as Minister for Communications, Energy and Natural Resources is to ensure the best possible legislative and regulatory framework for telecommunications services to promote the public interest in this area. In my view the public interest is best served in the telecommunications sector by having a state of the art, affordable and accessible telecommunications service that can be used sustainably for social and economic development. My priority therefore, is to provide the policy framework for the sector as a whole to facilitate the provision of competitive high-quality communications services across a range of infrastructure platforms.
Does the Minister consider it would be desirable for Eircom to considering splitting into a wholesale network provider and a retail provider of telecommunications services? If that were to happen would the Government be interested in using the split as a way to roll out broadband across the country and to ensure that the network was managed and regulated independently without a retail arm and concentrated solely on providing a wholesale pricing for the use of its network to all competing service providers?
Yes, it would be a positive development. We look to the UK example where a similar incumbent provider separated its business and provided its mainline retail network on a wholesale access basis. Going back to the argument the Deputy made earlier, it seems to me that there is an economic or commercial benefit for companies moving in that direction. By raising the overall level of business, be it in wholesale or retail, it could make more efficient use and development of a network system. I would be supportive of such a development. The exact mechanisms and how it would be done would primarily be a commercial matter for the company. It would be its decision as to how it managed its assets and arranged its business. The Government will work in one manner with ComReg and the Department to assist in whatever way possible such a development.
If that split were to happen would the Government be tempted to buy a share in that network company? The Minister and many others have been very critical that in the sale of Telecom Éireann we sold a very valuable network which many people would like to see in State hands or at least controlled by the State. Is there a potential opportunity for the State to buy back an asset that perhaps should never have left State hands in the first place?
Earlier I spoke about the developing competitive market in terms of not just fixed line telecommunications providers of which there are several. The number of companies in the telecommunications area is very significant in wireless, cable and a range of different technological services. We need to be very careful that we do not just jump into a very quickly evolving and competitive market in a way that would restrict our development technologically. My general instinct is that we would need to look in some detail at any proposal, to consider the costs and benefits and the developing market conditions, and to be very careful before making similar bold moves that in the past might have seemed in the first instance to be very astute but actually have longer-term consequences that are difficult to manage. My main intent in this regard is to work with ComReg, which has been in existence for ten years and has considerable experience, and my Department to consider all the consequences of any such separation, but not to commit the State to anything as yet.
Question No. 11 answered with QuestionNo. 7.
12 Deputy Joan Burton asked the Minister for Communications, Energy and Natural Resources his views on the potentially huge consequences for the world’s poorest people as land for food and land for fuel compete with each other; and if he will make a statement on the matter. [23086/07]
I am aware of the need to strike a land balance between energy and food crops. The European Commission has indicated its awareness of general sustainability issues regarding biofuels and has signalled its intention to introduce incentives and support systems to avoid such issues. Specifically, it intends to encourage the development of "second generation" biofuels which can be produced from non-food crops or from areas that do not conflict with food production.
To this end, it is anticipated the Commission's renewable energy legislative proposals, to be published at the end of 2007, will contain targets for biofuels market penetration, subject to the introduction of sustainability criteria and the coming on stream of second-generation biofuels. The Commission also notes that European demand for biomass, especially biofuels, could contribute to improving trade relations with the European Union's trading partners, in particular developing countries, many of which have the potential to produce and export biomass and biofuels at competitive prices. It will be important to strike a careful balance to ensure the optimum outcome in terms of reducing greenhouse gas emissions in transport, providing opportunities for developing countries and, at the same time, minimising risk to food production. Ireland's biofuels obligation will take account of EU sustainability initiatives relating to biofuels and I intend to work very closely with my EU colleagues in addressing this complex challenge for biofuels policy.
When the proposals are published, will the Minister ensure they are debated in the House because this is a major issue? There is always the danger that as the notion of renewable energy is promoted, we could create imbalance and unfairness elsewhere. Perhaps the Minister will elaborate on what he thinks the EU could do to ensure the poorest people of the world are not put at a great disadvantage as the battle develops between the use of land for food and the use of land for fuel. Grant aid alone is not an effective way to address this issue. Presumably, more effective measures could be used.
I would very much welcome a detailed debate but this may take more than a debate in the House. For example, this could be a subject for a committee because it is highly complex and technical. Second generation biofuels have different implications for generating feed stock, as they are generated from a general organic source rather than a food source. Such issues require much analysis and it would be appropriate for the Oireachtas to go into detail on this so that we have a proper understanding of market conditions. They are complex not only in the context of food prices for people in the developing world but also in the context of environmental consequences, as we could end up subsidising or supporting biofuel production elsewhere which has a detrimental environmental effect. I commend the Deputy's suggestion that the Oireachtas examines this issue and I look forward to working with her in this regard so that we have a clear outcome.
The best and most effective approach is to reduce demand for fuels and transport in general. When energy prices doubled in 2005, demand for fuel in Ireland increased by 8% in the transport area. That inexorable growth will put us under pressure and it will lead to pressure for these fuels as the world approaches a peak in oil production. The sustainability issue can be addressed. For example, the UK has moved towards a system of labelling the sustainable sources of a biofuel crop. That is a progressive development and we should look to progress that in Ireland. Similar measures have been introduced in Germany and Holland. Although the world trade rules in this area are highly restrictive, that may help us address a number of environmental concerns.
The food price issue is the result of American biofuels policy where the development of bioethanol from wheat and maize is causing a large spike in wheat prices globally. The European Union, therefore, does not have a specific role in this. The development of biofuels will have a beneficial long-term consequence for Ireland in securing its fuel supply if there is an energy shock. Significant waste supplies can also be used for biofuels.
We could debate this subject for hours. Food crops have been the winner in the competition for land between food crops and energy crops. Has the Minister made representations to the Tánaiste and the Minister for Finance in the build up to the budget to support energy crop production in Ireland, particularly on set aside land, on which farmers are not permitted to sow food crops anyway, as this would not impact on the food industry? If not, why not given the Minister promoted that thinking for a long time when in Opposition?
I will do whatever I can to ensure Irish farming benefits from biofuel supports rather than distant sources, without infringing world trade rules, which could result in Ireland being pulled up and a stop-start approach for the industry. My colleague, the Minister for Agriculture, Fisheries and Food has a key role in this regard. We must be innovative and, at the same time, careful. The energy White Paper sets out the best approach, which is to move towards an obligation system for fuel suppliers to carry a set biofuels quotient rather than a grant support system so that the oil supply companies, as opposed to the taxpayer, carry the cost. However, within that, support measures should be implemented so that Irish farming is provided with a positive and lucrative market in the long run. I would support that, while taking into account the general policy issues relating to global food prices, of which I must be cognisant.
Written Answers follow Adjournment Debate.
