Priority Questions

Gas Exploration

Éamon Ó Cuív

Ceist:

1Deputy Éamon Ó Cuív asked the Minister for Communications; Energy and Natural Resources if he intends to develop a national policy on the extraction of onshore natural gas by hydraulic fracturing; if the issuing of further licences for the exploration and exploitation of this resources will be deferred pending the development of such a policy; and if he will make a statement on the matter. [2620/12]

There is potential for Ireland to enjoy both economic and energy security benefits from its indigenous oil and gas resources. These benefits will only be realised through effective exploration. Ireland has a policy of actively encouraging investment by relevant companies in exploration for oil and gas, both offshore and onshore.

Where exploration or production takes place, it is subject to a robust regulatory framework, with a clear objective of ensuring that all exploration and production activities are carried out in a safe manner and do not harm the environment.

I am very conscious of the views that people have strongly expressed that use of the technology known as hydraulic fracturing in exploration and production activities could have a negative impact on the environment. The principal concerns that have been expressed relate to the production phase of a project and environmental considerations arising from the large number of production wells that would be hydraulically fractured.

In February last year, my Department granted onshore licensing options to three companies over parts of the Lough Allen and Clare Basin. The licensing options are preliminary authorisations and are different to exploration licences. The options are for a two-year period from 1 March 2011. During this period, the companies will evaluate the natural gas potential of the acreage, largely based on studies of existing data. Exploration drilling is not permitted under these authorisations.

While it is too early to say if any of the three existing onshore licensing options will progress to the exploration phase, let alone to a production phase, I would like to set out in summary terms the regulatory framework that would apply in Ireland in the case of a shale gas production project. Under the framework a developer would require consents from An Bord Pleanála, the Environmental Protection Agency, the Commission for Energy Regulation and the Minister for Communications, Energy and Natural Resources. All of these authorities have a statutory obligation to consider the potential environmental impact of any proposed petroleum production project. All these processes are subject to EU environmental directives, including the Environmental Impact Assessment Directive.

The policy approach is therefore one of encouraging investment in exploration, while ensuring all exploration and production activities are carried out in a safe manner and without harming the environment.

I thank the Minister of State for his response but I do not think he really replied to the question. Do we have a wider policy framework in relation to fracking? The Minister of State says that only preliminary licences were given out but the presumption is that if that was successful, one would progress to the next licensing stage. Before we go any further with this, we should have a national policy on fracking. As well as the purely narrow environmental concerns, there are also human, social and community concerns. Members of the House might remember that previous governments decided not to allow mining for gold on Croagh Patrick, even if there were endless supplies there. That was because of the social and wider human concerns about it.

Is it intended that this country should develop a policy on fracking to take all these concerns - not just the purely narrow environmental ones - into account? Will the Minister of State clarify the status of Clare County Council's decision not to allow fracking there? Has the Minister of State examined the reasons why France has banned fracking? That seems to be a very serious decision for a government to take.

There are two minutes remaining on this question.

I will answer the last question first. In Britain, a House of Commons committee has recommended that hydraulic fracturing can take place and will not damage the environment.

Any decision made by Clare County Council is a matter for them. If they wish to change their development plan, that is their prerogative. However, if they are going to change it, the plan must go on public display and there will be due process in which my Department will engage. Clearly, there is a democratic process in that regard.

We are talking about three phases: licensing, exploration and production. The full-scale production phase covers the significant issues raised by the Deputy, including how the volume of activity on the ground affects society and impacts on the community. The key matter of importance is protecting the environment.

The EU guidance on regulations is very clear. The following directives apply to fracking: Environmental Impact Assessment Directive; Mining Waste Directive; Water Framework Directive; Reach Directive, which covers the safe use of chemicals; Biocidal Products Directive; Seveso Directive; Habitats Directive; and the Environmental Liability Directive. Therefore, significant environmental safeguards are already built in to any such applications. I am confident that due and proper process through An Bord Pleanála, will be clear and will be taken on board. It is a democratic process and anybody can express their views. Ultimately, however, if it can exploit gas or oil onshore, it will create a lot more jobs than it would offshore, provided that the environment is protected. Clearly, in the context of all the directives I cited, the EPA will have to apply a full and rigorous examination of all the issues.

May I ask a second supplementary question?

I am sorry, Deputy, but the standing order allows two minutes for the Minister's reply and four minutes for supplementaries.

It seemed to be more than two minutes.

No, it was two minutes. I will give the Deputy ten seconds, if he wishes.

There are many things I could say, but I will put it simply. To go back to the Croagh Patrick analogy, it might have passed all those technical tests and still not be considered because at the time the State took that policy on gold mining there.

Will the Minister of State consider publishing a Green Paper or a White Paper on the issue of onshore exploration in this country before any further licences are issued? That would treat all the issues in the round in the context of policy, rather than of permits.

The EPA has commissioned preliminary background research into all aspects of shale gas production in the form of a desktop study being carried out by the University of Aberdeen. In addition, the EPA will be commissioning more extensive research on hydraulic fracturing in 2012. A working group involving representatives from my Department and the EPA is currently developing specifications for this study.

Before moving to the next question, I wish to set out for the benefit of Deputies that two minutes are available to the Minister for the initial reply and four minutes overall for supplementary questions and replies.

Bord Gáis Grid

Martin Ferris

Ceist:

2Deputy Martin Ferris asked the Minister for Communications; Energy and Natural Resources if he is satisfied with measures being undertaken for the maintenance and safety of the Bord Gáis grid. [2888/12]

Bord Gáis Éireann is the owner of the national gas transmission and distribution systems, and is mandated with the development and maintenance of the natural gas network under the Gas Act 1976.

The Commission for Energy Regulation is the statutorily independent body charged with all aspects of the licensing of transmission and distribution operators. A key legal responsibility of the regulator is to promote the safety of natural gas for customers and the public generally.

The regulator's remit now also includes specific responsibility for natural gas safety. The Energy (Miscellaneous Provisions) Act 2006 empowered the regulator to regulate from a safety perspective undertakings involved in gas transmission, distribution, storage, supply and shipping. The regulator has established a natural gas safety regulatory framework, including a system for the inspection and testing of natural gas transmission and distribution pipelines. The regulator places obligations on undertakings to ensure that any safety risks associated with their operations are reduced to as low as reasonably practicable. Bord Gáis Éireann's transmission and distribution operations are subjected to ongoing audit and inspection by the regulator. Additionally, Bord Gáis Éireann reports quarterly to the regulator on a comprehensive range of safety performance indicators to verify that all operations are in compliance with the overall natural gas regulatory framework.

Safety is Bord Gáis Éireann's first priority and the company is committed to ongoing development and maintenance of the gas networks and systems to ensure safety and to deliver continuous safety improvement and performance. Bord Gáis Éireann also has a continuous programme of safety promotion including the gas efficiency service, the dial before you dig service, promotion of registered gas installers and public awareness of the dangers of carbon monoxide. Since its establishment Bord Gáis Éireann has developed and modernised a national gas distribution pipeline network of nearly 11,000 km and a gas transmission pipeline network of over 2,000 km as well as the two interconnectors with Scotland. There are over 640,000 gas users in Ireland. Bord Gáis Éireann operates the networks in compliance with recognised Irish and international quality and safety standards.

I have every confidence in Bord Gáis Éireann's priority commitment to safety and its safety and emergency response service. There is never room for complacency however and Bord Gáis Éireann is engaged in a constant process of safety review and enhancement working with regulator.

Is the Minister aware that a British company, Balfour Beatty, has been awarded a €400 million contract for the maintenance of Bord Gáis? Is he aware that this company was fined £1.2 million in 1997 following the collapse of the tunnel at Heathrow Airport, which it built? Is the Minister aware that, in 1989, the company was fined £500,000 after a train derailed on a section of the line laid by that company? In 2006 it was fined £7.5 million after a train crash cost four lives and 100 injuries on a section of rail line the company maintained. In 2007, it was fined £180,000 after a fatal electrocution of one of its line maintenance workers. In 2008 it was fined £2.25 million after the Serious Fraud Office found the company guilty of false accounting. In 2009 it was fined £5.2 million by the Office of Fair Trading for corrupt practices in securing construction contracts. Given the record of Balfour Beatty, does the Minister think it is a suitable company to have responsibility for the safety of the gas network?

The Deputy has read a list of allegations. The tendering process was in accordance with the requirements and the tender for services was issued through theEU Journal. I am aware of some of the background to what the Deputy said but he has made a list of allegations that I cannot say are true or otherwise. The tendering process was designed to bring in a company that had expertise and a track record. The advice I have is that the company is capable of discharging its responsibilities. I will examine what Deputy Ferris has put on the record of the House, some of which is entirely new to me.

I understand that this matter predates the Minister. Is the Minister aware that 13 February is the deadline and that the company, Balfour Beatty, must have 50% of current contractors under subcontract to it? One of those subcontractors is Emerald, which the Minister knows about from Kildare in the recent past. Is the Minister aware that a member of the board of directors of Bord Gáis was chairman of the subcommittee that awarded the contract? Ironically, his office is the Dublin address of Balfour Beatty but he claims not to have taken part in the process. I do find it very strange that his offices accommodate a company that is now-----

Deputy Ferris should be very careful.

Is the Minister aware of that?

All I am aware of is that due care was taken in selecting this company. My understanding is that some of the allegations raised by Deputy Ferris were raised at the time. I am advised that they were satisfactorily disposed of at a time. Having regard to what the Deputy put on the record, I will investigate the matters raised because they are serious allegations.

Energy Resources

Catherine Murphy

Ceist:

3Deputy Catherine Murphy asked the Minister for Communications; Energy and Natural Resources if he intends forwarding an application to the European Union for State aid clearance in respect of a refit support mechanism for the electricity generated by offshore wind, wave or tidal power; if so, when he expects to make such an application; and if he will make a statement on the matter. [2898/12]

Ireland's deployment of renewable energy sources in electricity has been increasing steadily in recent years as we work, North and South, to deliver a 40% level of renewable electricity consumption by 2020. There has been good progress from 5% renewable electricity in 2005 to around 15% renewable electricity at present. The challenge is to steadily increase renewable electricity generation in the all-island market from onshore wind and bio-mass year on year to 2020.

I am confident that Ireland has the capability to achieve its targets for domestic renewable electricity from the onshore wind projects already in the existing gate processes despite the difficulties being encountered and the undoubted planning and financial challenges that remain for a number of projects. In this context I am pleased to confirm that the REFIT 2 onshore wind programme has this week received State aid clearance from the Commission. This welcome certainty on the feed in tariff support for onshore wind will now enable investors to finalise their plans to build out projects over the next number of years.

While offshore wind is already being deployed in some member states as part of delivering on their national renewable energy targets, it is still a very expensive technology to deploy. Offshore wind currently costs in the region of €3 million per MW to deploy compared to the cost of onshore wind which is about half of that.

Wave energy technology is still very much at the research and development stage and the commercial and technical feasibility is not yet proven. While there are very promising wave technology devices in development, they are at pre-commercial stages.

Additional information not given on the floor of the House.

Ireland has a very small electricity market, with around 2 million electricity consumers. The public service obligation levy which is paid by all electricity customers in this small market currently encompasses support for peat, some conventional generation and onshore wind generation. Given the very significantly higher price of developing offshore wind compared to the lower cost onshore, it makes economic sense that we focus on developing our lower cost onshore wind resources to deliver Ireland's binding EU targets for renewable electricity. In parallel we will actively pursue the potential opportunities for renewable energy export which offshore wind represents. I will be working with my UK colleagues through the British-Irish Council and with my EU colleagues through the North Seas offshore grid initiative to deliver on this potential. In the present economic circumstances and given the challenges for Ireland's competitiveness, of which energy costs is a key component, the Government has agreed with my decision not to proceed with the application to the European Commission for State aid clearance for a feed in tariff to support offshore wind in the Irish electricity market. Given the inordinately high costs which would be incurred by business and domestic electricity consumers to support such a tariff, we need to focus instead on the opportunity to develop a renewable electricity export market for the offshore wind sector. The best future for Ireland's offshore wind resource lies in becoming an export industry.

It is welcome that REFIT 2 is taking place. The Minister has differentiated between onshore and offshore energy. The Minister linked Northern Ireland and the South in terms of wind energy and renewable energy but there is a different approach being taken in the North. An article inThe Sunday Business Post two weeks ago considered how this development is happening in one place but not another. The article was interesting and pointed out that an 800 MW round for offshore wind was announced last month in Down and Antrim. The complaint in the article was that this presented a stark contrast between North and South. How is it viable in the North but not viable in the South? Given the conditions and the fact that Ireland is an island nation, we have a unique advantage that we are not exploiting. While we have enormous ambition about delivery, it is limited if we do not exploit offshore energy. Has the Minister sought clearance from the European Union in respect of offshore energy? If not, why not? The investment that can be made strikes me as something that is well worth exploring. There may be jobs in a range of industries and expertise in the offshore area. Has the Minister sought clearance? If not, why not? Does he intend to seek clearance and when will he do so?

I thank the Deputy for her question. I am pleased that we have, at last, got feed-in tariff approval from Brussels in respect of onshore wind.

The answer to the Deputy's question is that I have not made such an application in respect of offshore wind and it is not my intention to do so at this time. It is not simply that I have made a distinction between onshore and offshore wind generation. There is a manifest distinction. Offshore is at least twice as expensive. I am satisfied, on the best advice available to me, that we can make our targets from the development of onshore capacity, biomass and related technologies.

I do not say the Deputy's information about Northern Ireland is not correct, but it is certainly news to me. We are doing relatively wellvis-à-vis any member state of the European Union, let alone Northern Ireland. If one were to develop an 800 MW farm, as the Deputy suggests, it would impose more than €220 million on the cost of the PSO. The Deputy’s question concerns the fact that, because we are an island, we are blessed with bountiful resources in the wind area.

The issue is whether we can develop an export capacity in respect of that and whether the development of such an export industry requires a subsidy. I have looked at that issue and, in my view, we have that prospect. There is no example of this in Europe. There is no cross-border intergovernmental agreement for the export of offshore wind. However, I have spoken with my British counterpart on this matter on a number of occasions and I believe it is possible to develop an intergovernmental arrangement for the export of excess energy from here. However, I do not think it would be a good use of scarce resources to provide a subsidy to do that. We can do it without a subsidy.

Sustainable Energy Projects

4.Deputy Éamon Ó Cuív asked the Minister for Communications, Energy and Natural Resources if he carried out a fuel poverty and job impact analysis on cuts to the better energy homes scheme; and if he will make a statement on the matter. [2730/12]

The Sustainable Energy Authority of Ireland, SEAI, administers the Better Energy programme on behalf of my Department. As I announced in the context of the budget, the Government has committed significant funding of €76 million to the programme this year. It will, therefore, continue to underpin economic activity in 2012, supporting at least 4,500 jobs and realising significant energy savings for households. In the current extremely difficult budgetary and economic environment, the programme is being maintained and will continue to deliver positive economic impacts and consumer benefit.

Grant levels for half the measures have been adjusted for 2012 in light of market developments and to ensure when necessary a better link between grant support and dwelling type. Support for external wall insulation, for example, was originally set at a level designed to stimulate consumer demand and the market development of this sector. It is increasingly clear from the pattern of grant applications for the Better Energy Homes scheme that this measure is in high demand. The adjustment to the external wall insulation grant reflects increased price competitiveness in the market and the relative cost of undertaking this work on the various house types.

There have only been minor adjustments to many of the popular measures, so for the majority of contractors and applicants there will be little or no overall impact. Applications under the programme received prior to 8 December 2011 will be eligible for the grant level at the previous grant rates.

The SEAI models levels of commitment and expenditure patterns on an ongoing basis which has enabled them to successfully manage their budget envelope each year. In addition, the Government's capital investment framework published on 10 November, sets the broad direction, level and sectoral split of capital investment of the years 2012 to 2016. Such capital investment is subject to relevant value for money arrangements, including detailed appraisal prior to the commitment of Exchequer resources.

The programme for Government provides a commitment to roll out a pay-as-you-save, PAYS, retrofit scheme after 2013, which is planned to replace the existing Exchequer funding for Better Energy Homes. The transition to market-based mechanisms by 2014 is complex and detailed work is under way by my Department in conjunction with all relevant Departments, agencies and the energy and financial sectors.

In relation to actions to mitigate energy poverty, I would point out that the Warmer Homes scheme remains open and free-of-charge to eligible applicants. We are introducing changes in the structure of the programme to reflect the Government's affordable energy strategy. Priority will be given to households considered to be in extreme energy poverty, that is, those who spend over 20% of their disposable income on energy. This initiative will ensure that those most in need will be the first to receive the benefit of energy efficiency measures.

I am disappointed to hear of the narrowing of the Warmer Homes scheme. Anyone with an inefficient house and a low income should be assisted.

In 2010, the budget allocation for the three energy schemes was €94 million and €93 million was actually spent. In 2011, after the jobs initiative budget, the allocation was €99 million. The Minister has cut that to €64.6 million. In 2011, he said he would create or sustain 5,800 jobs, that is, 2,000 jobs in addition to the 3,800. He now says that will be reduced to 4,000 jobs. This amounts to a loss of 1,800 jobs.

Why is the Government reducing the commitment to investing in something that would give a significant long-term return to the economy, as well as making houses comfortable for humans to live in, by reducing a requirement to import very expensive hydrocarbon fuels? The Government seems not to have carried forward the money taken from pensioners last year in the pension levy which was meant to go into these schemes. Why did the Government decide to reduce the commitment to these schemes, particularly having robbed the pensioners of Ireland to invest extra money into these schemes?

I do not know how robbing the pensioners of Ireland relates to this.

Income from the pension levy was supposed to go into these schemes. It is not going into them.

Deputy Ó Cuív tried to rob them of their medical cards. That is the only robbing I remember.

That was a socialist approach. People on high incomes should not have medical cards.

They fought back with great gusto.

As the Deputy said, €94 million was allocated in 2010 for this very commendable scheme. Unfortunately, the budget was cut to €65 million. That is my figure rather than the €60 million he has.

€69.4 million. The Minister should check the Estimate.

Deputy Ó Cuív's Government cut it by almost one third.

Then the Government took €30 million off pensioners.

When this Government came to office I got €30 million extra under the jobs initiative scheme, and that brought the expenditure to €95 million last year. The previous Government had cut it to €60 million.

€69.4 million.

This year, we are putting in €76 million. I am doing this for a number of reasons. The first is because the previous Government left no money after it when it went out of office. That is the big reason. There is no money. Second, prices are now more competitive than three years ago. One can get this work done in the market place at a discount and we have discounted some elements of this package. Third, I want to meet the demand that exists as far as I can.

When grants were first introduced, the intention was to stimulate the market and to stimulate interest in energy efficiency and retrofitting.

It did that very effectively. Now that it is done, the Government intends to move towards a pay-as-you-save system, as I have explained before. It is possible for us to put in place a financial model that will enable householders to cause this work to be done in their homes out of the savings that will accrue from better thermal efficiency. That is a much better approach than relying on a grant-based Exchequer-funded system.

What is the projected outturn for last year?

The outcome last year was €91 million.

Fishing Vessel Licenses

Thomas Pringle

Ceist:

5Deputy Thomas Pringle asked the Minister for Communications; Energy and Natural Resources in relation to oyster dredging licences issued recently for Lough Swilly in County Donegal, his views that it is acceptable that Inland Fisheries Ireland do not ensure that the licencee has a commercial sea fishing licence in place for their vessel when issuing the licence even though it is a requirement of the licence that the licencee have an appropriately licensed vessel; and if he will make a statement on the matter. [2977/12]

Inland Fisheries Ireland, IFI, is the agency responsible for the issuing of oyster dredge licences under the 1959 Fisheries (Consolidation) Act. As the Deputy will appreciate, there are other consent processes required in order to engage in commercial oyster fishing. IFI does not have any powers in this regard but does ensure that licences are issued to established oyster fishermen.

Prior to granting of an oyster dredge licence, applicants must satisfy the fishery district inspector that they have a suitable boat, capable of operating a dredge, and a dredge. In addition, all vessels engaged in commercial fishing need to be licensed and registered as sea fishing boats with the Department of Agriculture, Food and the Marine.

Section 278 of the 1959 Act is very prescriptive and does not provide any discretion for IFI in the issuing of licenses. I am advised that IFI believes that if it were to refuse to issue a licence on the basis of the applicant not having completed other consent processes, it would be actingultra vires.

It has always been the responsibility of each applicant to ensure compliance with the full consent processes in order to validate operations in regard to the oyster dredge licence.

That response defies belief. If one wants a taxi licence, one must have a driving licence to drive a car. The Taxi Regulator does not issue one with a licence and ascertain afterwards whether one has a driving licence.

The licensing criteria state, "No licence will be issued until such time as the applicant who has initially been deemed appropriate for receipt of a licence presents himself with his appropriately licensed boat and dredge to a nominated Inspector of IFI". Despite this, IFI has confirmed to me that it will take no interest in whether a licensee has a commercial sea fishing licence. It states it is a matter for the Sea Fisheries Protection Authority to decide that. The latter has confirmed that, in order to operate with an oyster fishing licence, one must have a commercial sea fishing licence and meet all the associated requirements.

My information indicates there may be some licensees operating in Lough Swilly who do not have the required commercial sea fishing licences. A system that does not verify that licensees meet the basic requirements for operating on the sea is bad. It does not make any sense and is suggestive of maladministration within IFI. In effect, what is occurring on the ground is that people with adequate vessels who cannot obtain licences are being set against people with inadequate vessels who can obtain licences. This does not make any sense. To hand over responsibility for policing the system to the Sea Fisheries Protection Authority does not make any sense either. I urge the Minister of State to ensure that IFI operates a fair and transparent system and that people with adequate commercial sea fishing licences can obtain oyster fishing licences in a proper manner.

IFI does operate a fair and transparent licensing application system. The key point is that only those whose main income is from oyster fishing will get the licence. They must show a record to this effect. Account is taken of oyster fishing activity in each of the preceding five years, and this has a bearing on the grade of licence. One must have a boat and the correct dredge. IFI ensures this and does so very well. The Deputy pointed out that the anomaly in the law is that the Department licenses other types of mollusc fishing, including fishing for clams. We are trying to consolidate all the fisheries legislation. While I cannot make any promises, I will consider the point raised by the Deputy, namely, that the Department should be doing the job in question rather than IFI, which carries out its special responsibility fully and well with no maladministration whatsoever. It is clear, transparent and open.

The number of licences to be issued this year will be 24. The number last year was 22 and it was 16 the year before. The number of licences issued has been increasing but this is based on the capacity to allow people to fish in the area in question, on the grounds that they have due regard for EU habitats directives.

I accept what the Minister of State is saying but if the law is wrong, it needs to be changed very quickly. The least fishermen should expect is that they should all be operating on a level playing field.

While I fully accept the requirement to restrict the number of licences, people should be able to and expect to apply on a fair and equal basis. If the law is wrong, it needs to be changed.

The existing process allows for appeals. If one is refused a licence, one can appeal to the fishery officer, then at district level and finally a higher level. There are, therefore, three levels at which one can appeal. If one has been sick and submits a genuine written account stating one could not possibly have fished in the preceding years, this is taken into account. The system is fair. We will take on board all the views expressed by the Deputy when we are reviewing the legislation this year.