Report on Offshore Oil and Gas Exploration: Statements

I am pleased to open this debate on the report of the former Joint Committee on Communications, Natural Resources and Agriculture on the subject of offshore oil and gas exploration. I am grateful to the Government Chief Whip for acceding to my request to make time available for the debate.

Although issues relevant to the subject matter of the report have been discussed in this House from time to time under a range of business, today's debate provides an opportunity for a more detailed discussion. I look forward to the contributions of Deputies on the report and its recommendations and, more generally, in respect of Ireland's approach to this policy area. My colleague, the Minister of State, Deputy Fergus O'Dowd, will close the debate on behalf of the Government.

This is both an interesting and a topical area of public policy. The report discussed a range of diverse subjects and issues and the joint committee invested considerable time in its preparation. Detailed evidence was taken from a range of parties and considerable time was spent in considering that information. Accordingly, the report represents a valuable contribution to the debate on how we should manage our indigenous oil and gas resources to ensure the best result for the people of Ireland. The 11 recommendations reflect the broad nature of the report and address a number of themes. The report recognises the importance of our legislative and strategic policy approach being fit for purpose and brings a focus to specific aspects of the non-fiscal regulatory regime. It considers interactions involving the public in general, as well as those relating to communities living in areas where development activity is planned.

The theme, however, that has generated the greatest level of comment relates to the tax terms that should apply in the case of future commercial discoveries. There have been occasions when debate on this subject has been premised on myth rather than fact and it is a positive aspect of the report that it captures so much detail in a single document. Understanding Ireland's petroleum exploration experience over four decades is important to any balanced consideration of the nature of fiscal terms that should apply to this industry.

Understanding our experience relative to that of neighbouring jurisdictions is also critical, as well as understanding that the hopes and aspirations that many of us held out for the industry in the 1970s have not been realised and tilting at romantic windmills amidst the dreamy spires of Princeton will not change that. It is helpful, therefore, that the report contains considerable detail of Ireland's exploration history, together with some detail on neighbouring jurisdictions, particularly Norway. An examination of Norway's experience as a major oil and gas producer demonstrates a stark contrast between that country's fortunes and ours over the past half-century. Today there is a significant difference in our respective fiscal regimes, which reflects very different levels of exploration success. In the 1970s our fiscal terms were similar but in the subsequent decades the optimism that existed in the 1970s about the potential of the Irish offshore diminished as significant and repeated commercial discoveries in the North Sea were not, unfortunately, replicated here.

There are times, however, when some contributors to the debate on fiscal terms advocate policies that clearly ignore the stark contrast between our exploration experience and that of Norway and the UK. Although they contribute nothing constructive to an important public policy consideration, such interventions can give rise to confusion, deflect focus from the real questions to be addressed and do little to engender confidence among those considering the relative merits of investing in the Irish offshore, as opposed to elsewhere in Europe or even further afield.

In general terms, some of the report's recommendations appear both sensible and desirable. Others are already provided for in the existing licensing and regulatory regime. There are a number of recommendations that could usefully be explored further, including several which have wider public policy implications. Finally, there are a number of recommendations in respect of which I have strong reservations and remain to be convinced that their adoption represents the best way for us to proceed. As examples of recommendations I would endorse, the report proposes that there be a clear and transparent fiscal and licensing regime which provides certainty for the State and industry alike. It stresses the need for a clear strategy governing Ireland's approach to petroleum exploration and goes on to recommend that the 1960 Petroleum and Other Minerals Development Act be reviewed. The 1960 Act is important in setting out the high-level exploration licensing regime and the rights conferred by the various authorisations. Since it was enacted, a broad body of legislation at national and European Union level that is directly relevant to petroleum exploration and production activities, including planning, safety and environmental legislation, has been passed. Against that background, my Department is currently engaged in a review of the 1960 Act.

Our overarching strategy in this area is to seek to maximise the benefits to the people from Ireland's indigenous natural resources. The most significant way in which Ireland stands to benefit from successful exploration is through tax revenue.

However, the potential impact should not be overestimated and needs to be put in context. It would be a positive development, both as a new commercial discovery and as Ireland's first ever commercial discovery of oil. However, it would also be Ireland's first commercial discovery since the Corrib gas field was discovered in 1996, nearly two decades ago. While it would be positive news, it would not by itself make Irish waters the new North Sea.

I do not wish to be negative or to undersell Ireland as a location for exploration investment - quite the contrary - but we must deal in realities. The reality is that the Irish offshore is under-explored and its petroleum potential is largely unproven, particularly when compared with other petroleum regions such as Norway and the United Kingdom. The statistics speak for themselves. A total of 156 exploration and appraisal wells have been drilled to date in Ireland's offshore compared with more than 1,200 wells in Norway and 4,000 wells in the United Kingdom. The UK has more than 300 producing fields, while Ireland has only three, with a fourth in development. Norway is the second largest gas exporter and the seventh largest oil exporter in the world. Ireland, on the other hand, imports more than 95% of its gas and 100% of its oil.

Ireland's focus should be on how to encourage an increase in the level of exploration investment and drilling. This is what we need if we are to establish the true petroleum potential of the Irish offshore. The principal factor driving exploration investment decisions is the likelihood of making a new discovery. The challenge is how to improve the industry's perception of Ireland's prospectivity relative to that of other countries. Exploration drilling and new seismic acquisition are both key. In 2011 and 2012 we had just one exploration well and this year it seems that Dunquin will be the only well drilled offshore. That is the backdrop against which we are having this debate. We must recognise that Ireland is competing with countries such as Norway and the United Kingdom to attract mobile international investment and we cannot set our tax terms in isolation.

We find ourselves in a complex and challenging position. There is a clearly recognised potential and there have been positive recent signs in the number and quality of exploration companies becoming involved in the Irish offshore. The exploration cycle is a very long cycle, however, and many current authorisations are at the stage at which exploration drilling has yet to be undertaken or even committed to.

The joint committee signalled clearly in its recommendations that it considered a review of the fiscal terms would be appropriate. It was also clear that an adjustment to the fiscal terms should not be retrospective. I am completely in agreement with this latter point.

While I have clearly indicated my reservations about Norwegian-style tax terms, I am conscious that long-term investment decisions on exploration expenditure would benefit from the maximum degree of certainty on the stability of the fiscal regime. With this in mind and having regard to the fact that the most recent review of the fiscal terms took place in 2007, I intend, following the conclusion of this debate, to seek further independent expert advice on the fitness for purpose of Ireland's fiscal terms. Such expert advice would focus on what level of fiscal gain is achievable for the State and its citizens and, equally important, the mechanisms best suited to produce such a gain.

Certainty as to fiscal terms is a prerequisite for attracting oil and gas exploration investment. In that regard, particularly in the context of planning for the next licensing round, it is my intention to bring my consideration of this matter to a conclusion before the end of the year. This would ensure that the next licensing round could be launched against a backdrop of regulatory certainty and encourage much-needed new investment in exploration in our offshore. I thank the former joint committee for its detailed report and look forward to hearing the views of Members in this debate.

We have continually reviewed, adapted and developed our regulatory and fiscal terms to ensure they remain fit for purpose, and that process will continue.
Apart from tax revenue, additional benefits would accrue from the economic activity generated by development and production. For example, more than 1,000 people were employed at the height of the construction phase of the Corrib gas terminal. A more active exploration and production industry would also encourage the development of a range of support services, particularly around key port facilities. Further commercial discoveries would also strengthen Ireland's security of energy supply.
It is a core element of the State's strategy for this sector that private industry, rather than the Exchequer, should carry the financial risk associated with exploration. Given that a single exploration well in the Atlantic can cost more than €100 million, this is a policy I strongly endorse. It is important that the State provide suitable opportunities for international investors and the right environment to encourage private industry to take the risk associated with investing in exploration. We do this in a number of ways, including offering attractive and innovative licensing opportunities, such as the 2011 Atlantic margin licensing round; providing a fit-for-purpose, transparent and robust regulatory regime; deepening knowledge of our offshore petroleum potential, particularly through data acquisition and supporting key research projects; and actively promoting the opportunity to invest in exploration in the Irish offshore, particularly to companies not currently active here.
A fundamental matter recognised in the report is the need for our licensing regime to communicate both stability and certainty to industry. This is especially true when we are competing with other countries to attract investment and in view of the fact that the nature of the business requires taking a long-term view. For this reason, I welcome the recommendation that no retrospective changes should be made to licensing terms.
In regard to recommendations that I believe may already be provided for under our licensing regime, I want to comment briefly on the recommendations relating to the maximisation of production from commercial fields, the principle of unitisation and the issue of flaring gas. If I am clear in my understanding of what the committee had in mind on these recommendations, these issues are already addressed to a considerable degree by the existing licensing terms, together with the Department's own industry-specific rules and procedures. I am, of course, open to suggestions as to how existing provisions could be improved.
I have said that some of the recommendations could usefully be explored further. In that regard, it is important to address the recommendations relating to public consultation and community gain. I do not know whether the recommendation on consultation is a statement recognising the value of public consultation and advocating continuance of the status quo or a suggestion that adequate public consultation is not provided for. The reality is that all major infrastructure consent processes involve a public consultation phase, which generally includes an oral hearing. These requirements are not industry-specific and they flow from both national and European legislation. This means that any future oil or gas development project would be subject to a number of consent processes, each of which would have a detailed public consultation phase. It may be that the circumstances which gave rise to the committee's focus on public consultation predate the passing of the Planning and Development (Strategic Infrastructure) Act 2006, which provides for a more holistic, transparent and strengthened approach to the assessment of applications for major transport and energy projects.
In its earlier stages of development, the companies involved in the Corrib field took their eye off the ball, and there were genuine local community interests which should have been properly addressed. Since that time, however, the State has bent over backwards in every way it can. In so far as it is known to man to make safe the bringing ashore of gas, this has been done. Uniquely, we are engaged in constructing a tunnel under Sruwaddacon Bay, at a cost of €400 million. That €400 million will be written down against the costs of developing the field, which means the Exchequer must forgo €100 million in taxation.
The community gain concept discussed in the report is clearly not industry-specific. It is also complex, as communities are not homogenous, and what some may consider to be a gain, others may consider a loss. The 2006 Act enables An Bord Pleanála to attach specific community gain conditions to a planning consent. The Government fully supports a community gain approach in the delivery of energy projects. This is explicitly referenced in the Government's policy statement on the strategic importance of transmission and other energy infrastructure which we published last July and which now guides the planning authorities in their decision-making. That policy statement stresses the need for developers to examine appropriate means of building community gain considerations into project budgeting and planning.
I now turn to the recommendation that has generated the greatest interest, namely, the near-doubling of the existing tax rate applying to petroleum production. A comprehensive review of Ireland's licensing terms was carried out in 2007, following which both the fiscal and non-fiscal licensing terms were revised. The revised terms sought to strike a balance between attracting investment in high-risk exploration and ensuring the State receives a fair share of any profits. The terms provide for a profit resource rent tax of up to 15%, on top of a 25% corporate tax rate, ensuring that the return to the State will increase to a maximum of 40% in the case of the most profitable fields. The revised terms apply to all exploration licences issued since the beginning of 2007. The changes in that tax regime that are now proposed are not minor or modest in nature. What is proposed is a fundamental repositioning which would raise our tax to a similar level to that of the UK and, in the case of very profitable fields, would result in a higher tax here than applies in Norway. It may be the case that the committee was signalling where Ireland should seek to reposition the tax regime over time. However, I struggle to understand how anyone could expect Ireland to have Norwegian-style tax rates without first having Norwegian levels of commercial discoveries.
It also appears to me that the recommendation does not logically flow from the committee's own report. The report sets out four main reasons for proposing these tax changes: high oil prices; the impact of advances in technology on exploration success rates; the fact that not all regions with petroleum potential are politically stable locations for investment; and recent positive indications from exploration off Ireland's south coast. The first two of these factors, high oil prices and new technologies, do not give Ireland any comparative advantage. They do not make investing in Irish offshore exploration more attractive than investing in the North Sea or elsewhere. Advances in technology in the exploration sector, like most other sectors, tend to be of an incremental nature. It is still a fact that without exploration drilling, no new discovery will be made. This is a critical factor for Ireland because drilling levels in the Irish offshore remain very low. Incremental technology advances may help, but more drilling is essential.
Political stability as a location for investment is an advantage that Ireland has over certain other regions. However, this is by no means a new or exclusive advantage and it is an advantage that is also enjoyed by Norway and the United Kingdom. The final factor that seems to underpin the report's tax recommendation is the positive news from the Barryroe well. While the drilling results there are encouraging, further work is required to establish whether this discovery can be declared to be commercial. If it is declared commercial, then it should attract more exploration investment to the region.

Tá fíor-áthas orm deis a bheith agam cúpla focal a rá i dtaobh na tuarascála seo anocht. Caithfidh mé a rá go bhfuil díomá orm gur thóg sé bliain an plé seo a eagrú sa Dáil. Tá díomá orm freisin faoin dearcadh diúltach, sa chuid is mó, atá á ghlacadh ag an Aire. Rinne an coiste go leor oibre ar an ábhar seo. Más buan cuimhne an Aire, rinne an Dáil plé trí huaire an chloig ar rún a chur Sinn Féin ar aghaidh in am Comhaltaí Príobháideacha dhá bhliain ó shin. Dúirt mé an oíche sin nárbh fhiú mórán an plé sin mar bhí an gnáthrud á rá ag gach éinne. Dúirt Sinn Féin go raibh na billiúin amuigh ansin, agus nach raibh le déanamh ach slat iascaigh a chaitheamh amach san fharraige chun iad a fháil. Bhí an gnáthrud ag teacht ón Roinn freisin. Tháinig athrú an-sciobtha ar an Aire ón mhéid a bhí á rá aige agus ag a pháirtí sa Fhreasúra, i gcomparáid leis an méid atá á rá aige anois mar Aire Cumarsáide, Fuinnimh agus Acmhainní Nádúrtha.

Ní fíor sin.

Tháinig athrú an-aisteach ar an Aire. Bhí mise i gcónaí den tuairim go raibh an fhírinne idir an dá rud. Dúirt mé é sin ar an oíche sin. Mhol mé go mbreathnódh an coiste Oireachtais, nach raibh bunaithe ag an am, ar an gceist seo ó thus go deireadh. Chaith an coiste go leor ama ag plé na tuarascála seo. Is dóigh liom go raibh sé suntasach go raibh aontas i ndeireadh thiar idir Fine Gael, Fianna Fáil, Páirtí an Lucht Oibre, Sinn Féin agus na comhaltaí Neamhspleácha ar an gcoiste faoin tuarascáil seo. Bhí súil agam go mbeadh an toradh sin ar ár gcuid oibre. Chreid muid go ndearna muid dóthain staidéar ar an fhadhb ionas go dtiocfadh muid ar chomhthuiscint. Tá súil agam go bhfuil muid imithe ón gcaint éasca a bhíodh ann roimhe seo. Tá go leor airgid curtha amú. Tá saibhreas aisteach curtha amú tríd na téarmaí a bhí ann go dtí seo. Bhí daoine eile ag comhairle go dtiocfaimid siar ar shocruithe conartha a bhí déanta. Ar an dtaobh eile den scéal, chreid muid go bhféadfaimid barr feabhais a chur ar an bpolasaí a bhí agus atá ag an Rialtas i dtaobh na ceiste seo.

Ba mhaith liom labhairt faoi cheann de na rudaí is suntasaí a tháinig amach faoi dheireadh idir an dá linn. Caithfidh mé a rá gur lorg mé an t-eolas seo fiú nuair a bhí mé sa Rialtas. Tuigim go bhfuil ceadúnais tugtha amach i dtaobh 4% den fharraige ar fad sa dlínse atá againn. Dúradh nach bhfuil ceadúnais tugtha amach ach i taobh 9% den áit ina bhfuil an cloch fábharach ó thaobh ola nó gáis a bheith ann. Dá bhfaightí Ekofisk de shaghas éigin maidin amárach, bheadh 91% fágtha againn. Mar sin, tá sé ciallmhar go seasfaimid leis na téarmaí a bhaineann leis na comhlachtaí a bhfuil ceadúnais acu cheana féin.

Tá mé sásta go bhfuil an tAire ag rá go ndéanfaidh sé athbhreithniú ar Acht 1960, nó go bhfuil sé sin á dhéanamh. Tá súil agam go bhfeicfidh muid toradh na hoibre sin go luath. Tá mé díomách faoin dearcadh atá ag an Aire maidir leis na téarmaí airgid atá á moladh againn. Bhí gach éinne ar an gcoiste den tuairim nár cheart dul siar ar aon socrú atá déanta. Feictear dom go bhfuil sé réasúnta a rá go gheobhadh an Stát 40% i gcás tobar beag agus 60% i gcás tobar measartha mór, agus má fhaigheann comhlacht jackpot ar nós Ekofisk, ba cheart go n-íocfadh sé 80%. Ba mhaith liom an difríocht idir an rud atá ann agus an rud a bhí á moladh againn a mhíniú. De réir na Roinne, dá bhfaightí Ekofisk an chéad uair eile, cuirfear 80% air. Ar ndóigh, sílim go bhfaigheann muintir na hIorua 78%.

Bhí muid ag moladh gur cheart a rá leis na comhlachtaí go n-íocfaidh siad rátaí arda má fhaigheann siad tobar ola iomlán, ach nach mbeidh orthu aon airgead a íoc go dtí go mbeidh an gás nó an ola acu. Dúirt an tAire anseo tráthnóna nach n-aontaíonn sé leis an argóint sin. Tá mé cinnte nach n-aontaíonn oifigigh na Roinne leis. Ceapann siad go raibh na téarmaí a réitigh muid sa bhliain 2007 ró-dhian. Dúirt siad istigh i gcoiste nach raibh an Rialtas deiridh, ina raibh mé féin páirteach, ceart nuair a mhéadaigh muid na téarmaí go dtí 40%. Cheap mé go raibh an ceart againn. Glacaim leis go bhfuil an tAire ar aon tuairim leis an gcinneadh a rinne muid. Aontaíonn sé go raibh an ceart againn. Mar sin, bhí díomá orm inniu nach raibh an tAire sásta glacadh leis an moladh a rinne an coiste. Dar liom, glacfadh pobal na hÉireann leis an moladh sin. Tabharfadh sé an-mhisneach dóibh nach bhfuil aon rud á dhíol saor againn mar thír. Fáiltím roimh an athbhreithniú go bhfuil an tAire le déanamh ar na téarmaí airgid. Is dul chun cinn beag é sin. Beidh muid ag súil leis an tuarascáil sin. Beidh muid ag súil go mbeidh moltaí maithe ann le leas na tíre seo.

Níor thagair an tAire don mholadh go mbeadh fóram de gheallshealbhóirí ar fad ann. Dá mbeadh a leithéid ann, is dóigh liom go gcuirfí go leor den mhíthuiscint atá ann faoin tionscal seo agus go leor den rúndacht a bhíonn i gceist leis an Roinn ar neamhní agus go gcothódh sé muinín sa rud atá ar bun. Cé a bheadh páirteach san fhóram seo? Ar ndóigh, bheadh ról ag an Roinn sa chomhthéacs seo. D'fhéadfadh cuid de na húdaráis a bhaineann le cúrsaí sábháilteachta agus chomhshaoil - an EPA, mar shampla - páirt a ghlacadh ann. D'fhéadfadh ceardchumainn a bhíonn ag plé leis an tionscal bheith páirteach. D'fhéadfadh an dream a bhíonn ag plé le tóraíocht ola agus na comhlachtaí a bhíonn ag iarraidh ola agus gáis a aimsiú amach ón gcósta bheith rannpháirteach. D'fhéadfadh Foras na Mara, Suirbhéireacht Gheolaíochta na hÉireann agus go leor dreamanna eile bheith ann. Dar liomsa, ba cheart go mbeadh na pobail atá bainteach leis an tionscal ann freisin. Tá sé éasca teacht ar shocruithe a roghnódh muintir an phobail. Níl sé chomh deacair sin pobail a láimhseáil. Dá ndéanfaí é sin, is dóigh liom go gcruthófaí agus go gcothófaí go leor muiníne sa mhéid atá ar bun.

Ba mhaith liom focal a rá mar gheall ar an mbuntáiste don phobal áitiúil, nó community gain. Is féidir leis an mBord Pleanála a rá gur cheart go mbeadh buntáiste i gceist don phobal. Tá dhá locht agamsa ar an socrú atá ann i láthair na huaire. Níl rud ar bith sa saol nach féidir a fheabhsú. Is é an rud daonna gur cheart a dhéanamh ná rudaí a fheabhsú de shíor agus go síoraí. Tá sé i gceist agam an reachtaíocht a athrú ionas go mbeadh sé éigeantach 1% den infheistíocht, mar shampla, a chur ar fáil do na pobail áitiúla. Sa chás sin, ní bheadh aon rogha ag an mBord Pleanála ach órdú go gcuirfí an t-airgead sin ar fáil. Ní dóigh liom gur cheart go mbeadh sé faoi na comhlachtaí an t-airgead sin a thabhairt amach. Nuair a bhí Shell ag tabhairt amach airgead i dtuaisceart Mhaigh Eo, bhí daoine sásta é a thógáil. Cheap daoine eile gur breab a bhí ann agus go dtabharfadh Shell an t-airgead don dream a bhí fábharach dóibh. Molaim go mbeadh coinníoll statúideach ann go gcaithfí airgead a chur ar fáil don phobal áitiúil. D'fhéadfaí an rud céanna a dhéanamh faoi línte ardchumhachta, mar shampla. Ba cheart an t-airgead a chur ar fáil don phobal áitiúil agus é a roinnt ar bhealach a bheadh leagtha síos ag an Roinn nó ag an mBord Pleanála. Ba cheart é a roinnt trí údaráis a bheadh neamhspleách ón bhforbróir a thabharfadh an t-airgead. D'fhéadfaí na húdaráis áitiúla a úsáid, ach ní hé sin an rogha ba ansa liom. B'fhearr liom go dtabharfaí an t-airgead do leithéidí na gcomhlachtaí Leader a chuir muid ar bun le ionadaíocht maith pobail iontu. Tá an Rialtas ag iarraidh fáil réidh leo, ar ndóigh. Dá mbeadh deis acu an t-airgead a roinnt, bheadh an próiseas céim amháin ó na comhlachtaí forbartha.

Ba mhaith liom labhairt faoi dul i gcomhairle. Tá an ceart ag an Aire sa mhéid a dúirt sé faoi ról an chomhairliúcháin sa chóras. Tá a fhios againn gur theip ar na córais dul i gcomhairle leis an bpobal. Deireann an pobal go minic nach mbíonn a fhios acu cén uair a bhíonn an dul i gcomhairle ann. Os rud é go bhfuil sé déanta céim ar chéim tríd an bpróiseas, bíonn sé ródheireanach nuair a thuigeann siad na himpleachtaí uilig. Bhí fadhbanna ann nuair a rinneadh dul i gcomhairle faoin bpíobán gáis i gcás na Coiribe, mar shampla. Bhí an ola amuigh san fharraige in áit amháin agus bhí an críochfort in áit eile. Ní raibh ach bealach amháin leis an ngáis a thabhairt isteach. Mar sin, nuair a bhí an dul i gcomhairle ann faoin bpíobán, bhí daoine ag rá nárbh fhéidir mórán athruithe a dhéanamh ar an gcosán. Is dóigh liom gurb é an uair is mó a theastaíonn an dul i gcomhairle ná nuair atá an bunphlean forbartha - an schematic plan - á chur le chéile ag tús an phróisis. Tá mé cinnte dearfach nach raibh pobal tuiscirt Mhaigh Eo ar an eolas nuair a bhí an plean sin á réiteach. B'fhéidir gur fógraíodh go mbeadh a leithéid de dul i gcomhairle ann, ach níor thuig muintir na háite na himpleachtaí. Caithfidh muid breathnú ar an gceist sin agus déanamh cinnte de, an chéad uair eile, go mbeidh a fhios ag daoine go mbeidh an dul i gcomhairle sin ann.

How much time do I have left?

There are about 13 minutes remaining.

What? Thirty minutes?

I could go through the full report if I had 30 minutes.

The Minister might recall that shortly after the current Administration came to office, we engaged in a Private Members' debate in which the usual speeches were made by those on the Government side and during which he defended the citadel with an energy I found extraordinary, particularly from someone whose party had, shortly before the debate in question, declared that there was a huge free bonanza available from the sea and that all one needed to do to avail of it was to cast one's fishing line into the water.

There is no basis for that statement, which the Deputy has now made in both languages.

Does the Minister wish me to obtain all the quotes made by the various members of his party?

Absolutely. Ar aghaidh leat.

I will do that. Sinn Féin, which tabled the relevant Private Members' motion, was of the same view. Whereas I was critical of the Department's policy-----

Tadhg an dá thaobh.

No. The officials who are with the Minister would have been fairly well aware of my views of his Department when I served as Minister in another Department. I had many a heated meeting with them during my time as Minister for Community, Rural and Gaeltacht Affairs in respect of the community process we put in place in north Mayo. I suggested at the time that if we were really serious about the gas project, it should be discussed at the relevant committee - with all the parties involved - in order that we might develop a comprehensive and agreed approach. It is fair to say that the parties invested a great deal of effort in dealing with this matter.

I compliment the Chairman, Deputy Doyle, the rapporteur and the parties on their significant efforts in preparing this good and comprehensive report. More fundamentally in political terms, all of the parties involved - Fianna Fáil, Fine Gael, Labour, Sinn Féin and the representative of the Independents - signed off on it. This was the first instance of coherence in the political spectrum on the issue.

The report is balanced. A great deal of research was conducted. We invited the Norwegian authorities to Ireland. They gave us good advice, much of which we took. The 11 recommendations are simple and should be fully implemented.

Over many years, the Department has created suspicion about what it has been doing. Instead of engaging in long-term, detailed debate like the committee did, the Department has dismissed anyone with a different opinion. I found it difficult just to find out how much of the sedimentary basins that possibly held oil had been licensed. That information is key to any rational debate on oil. I thank the Minister, who provided the answer in Parliamentary Question No. 28 on 18 January 2012. He stated that the total amount of licensed area represented 4.4% of the seabed, or 9.3% of the sedimentary basin, that is, the geologically significant areas for hydrocarbons. This debunks the myth that all of the basin has been sold. Were we to find an Ekofisk tomorrow, 91% would remain for licensing on whatever terms. It is important that I put this point on the record. It was difficult to drag this justification for the loss leader approach out of the Department - one sells at a certain level until one finds oil, then one bumps up the price for the other 90%. It is like a supermarket selling at below cost to get people inside its doors and then making money off of them.

In terms of public confidence, the committee's approach was more rational. We took the Norwegians' advice, in that what is done is done and no retrospective changes should be made to existing terms. As the Minister pointed out, it would be legally possible to change tax terms, but doing so would not be a good idea, as it would undermine confidence. All committee members accepted that stance and it now forms part of the report.

The committee recommended three levels of tax. If a company found a large well or field in its licensed area and hit the jackpot, we would hit the jackpot, too. We would get 80% and the company would get 20%. This is what is done in Norway.

We must get them here first.

If a company finds a field, it gets 20%, but if it does not find one, it does not get 20%. The same would apply for us. If a company hit a medium field, we would get 60%, but the company would not pay the 60% until the field produced oil. It is clearly written in the Constitution that we own all of these fields. It states: "All natural resources, including the air and all forms of potential energy, within the jurisdiction of the Parliament and Government established by this Constitution and all royalties and franchises within that jurisdiction belong to the State subject to all estates and interests therein for the time being lawfully vested in any person or body." If a company finds a small field, we will get 40% because we own it and the company gets 60%, plus the tax write-off on its development costs, given the fact that it took the risk to find and develop the field. The Irish people would accept this reasonable and fair balance, which has the endorsement of the political parties, including the Minister's and Fine Gael, the other coalition party.

I welcome the Minister's statement that he will re-examine the fiscal terms, but I am worried that, even before the ball has been thrown in, the situation has been prejudiced by his rubbishing of the joint approach taken by the parties in the Oireachtas.

I am not rubbishing it. I stated that the recommendation did not logically flow from the report's content.

Minister, please allow the Deputy to finish.

The Minister is entitled to his opinion, although we do not accept it. Perhaps we do not realise what we have written, but I believe we do. The recommendation flows logically from the report.

I wish to address the question of having a consultative forum for the industry. When all of the players are at the same table, misunderstandings often evaporate and buy-in increases among communities and society in general. The Minister should establish a forum that would involve his Department and the statutory agencies, including the National Oil Reserves Agency, NORA, which is responsible for ensuring that we have enough oil, the Geological Survey, the Environmental Protection Agency, EPA, Bord Gáis, etc. Exploration interests should also be involved. Their representative bodies appeared before the committee. As a former trade union official, the Minister will support my next suggestion - representatives of the trade union movement in the oil industry should be involved. They have made strong comments. For example, the Minister used to be an official in SIPTU, which is active in this field and has produced reports. Representatives of the communities hosting developments in the oil and gas industries should also be involved. All of the groups that the committee met should be brought to the same table in a consultative process with the joint aim of developing this industry in the interests of Ireland's ordinary people.

The Minister has stated that An Bord Pleanála can order community gain, but we must move a step further. The Minister stated that Fianna Fáil should have done this. Perhaps we should have, but that does not mean that the world should not keep developing. I am always thinking up new ideas and developments. There should be statutory community gain. It should be mandatory that, in every major infrastructural development, 1% or some other percentage be made available for community gain. The disbursement of that money should be done at a remove from the developer. While the developer would pay the money, integrated development companies with long-established credibility in their communities for disbursing moneys, such as Leader companies, would disburse it so that it would not be treated like a goody bag by a private interest.

There is much talk of consultation but the time that needs to take place is when the schematic plan is published. In north Mayo people say they were not fully aware of the consequences until the terminal application was made. At that stage it is too late because once one has decided on the terminal and one knows where the gas is, all the rest flows and there is nothing much one can do about it. I see it time and again with windmills and so many issues that relate to the Department. We put little advertisements in newspapers for planning purposes but in many cases communities are not made fully aware of the consequences of development.

We must also ensure that the dul i gcomhairle, the consultation process, is one that is not controlled by private interests but by the State in a proper forum. It should not be a case of going into oral hearings against people with vast resources. The consultation process must be a much more inclusive and less formal process in the beginning leading to a more formal process as the project develops.

I welcome the Minister's speech this evening. However, I take issue with parts of it. I also welcome the response to what was a good report by the Oireachtas Joint Committee on Communications, Natural Resources and Agriculture.

This afternoon I launched the Petroleum and Other Minerals Development Bill 2013. The Bill seeks to set out some of the recommendations of the joint committee’s report on offshore oil and gas. The Bill was born out of frustration. It is a pity that it has been a whole year from when the report was released to it being discussed in the House. It is wrong that it takes an Opposition Deputy such as me to introduce legislation to try to enact the changes that were recommended in the report. At the time, the recommendations were supported by all parties represented on the committee and the Independents.

It was I who asked that the report be debated in the House. No member of the committee sought to have the report debated since its publication. I asked that it would be debated. I asked the Chief Whip to make time available and I appreciate that he did so.

I appreciate that, but the point I make is that there seems be a disengagement from the point of view of an Oireachtas committee setting out a report with recommendations. There is no clear path and no clear timescale for the committee’s considerations to be put before the House and the Minister. It is a case of waiting for someone to do something rather than having a clearly defined path for the generation of debate. Perhaps if there were a clearly defined path we could all have engaged in the process rather than me doing my thing and the Minister doing his thing. That could be what is missing from the way we do business.

The debate on this country’s oil and gas has continued for many years. The Minister will recall that in the 1970s he was campaigning, as was I, for a review of Ireland’s tax take from its natural resources. The then Labour Minister, Justin Keating, responded by introducing legislation based on best international practice which claimed a 50% stake in oil and gas extracted from Irish waters. However, the years that followed saw the propagation of a myth – the Minister and I disagree profoundly on the issue - that argued that this country needs low oil and gas taxation in order to promote exploration and develop our oil and gas industry. That view was well supported by the oil and gas companies and by certain media outlets that had vested interests in an oil and gas company. They argued that unless we kept our tax take from our natural resources artificially low, we would not reap the benefits from their rewards.

The same lobby also pushed the myth that under the current system the Irish people would have access to cheap oil and gas, allowing them to heat their homes and run their cars far more cheaply than their European neighbours. That was, and is, untrue. Not only do Irish people have to pay the market value for their oil and gas, but the petroleum itself does not even have to be brought ashore in Ireland. These are the people’s resources, yet under the current system Irish people potentially have little or nothing to gain from them.

The reversal of the legislation introduced by Justin Keating during the 1980s and the 1990s has resulted in an underdeveloped oil and gas industry. The Minister referred to Norway. I agree that we do not have the same finds of oil and gas as in Norway. However, one should recall that Norway was told the very same thing by the oil and gas industry and the media in the 1970s. In 1972, Norway voted to establish a state oil and gas company. At the time, oil and gas companies said they would not explore in Norway. The Norwegian Government said that was okay and that it would leave the resources in the ground. The companies did not leave it. They came and eventually agreed with the government’s point of view. Statoil was founded, which served to further the interests of Norway’s citizens in petroleum affairs. Some 40 years later petroleum is the backbone of Norway’s economy. It is currently the world’s second largest gas exporter and the seventh largest oil exporter. Its oil and gas exports have served to cement the country’s sovereignty and independence in the world field. While Norway boomed, Ireland lagged behind.

According to a 2006 report carried out by the Department of Communications, Energy and Natural Resources, there is approximately 10 billion barrels of oil equivalent off our western coast, composed of 6.5 billion barrels of oil and 20 trillion cu. ft. of gas. At current oil prices, that equates to a value of approximately €540 billion.

The projections are entirely unproven.

The report makes plain that the estimated resources are unproven.

While it is true that the amount of oil and gas brought ashore has been small there is strong evidence that the reserves exist. At present very little gas and no oil is being extracted from Irish waters, however, the potential reserves exist, and perhaps more than that.

There are weaknesses in our regime and not just in the rate of taxation. Companies that discover oil or gas in Irish territory are not obliged to supply those resources to the Irish market. Not only that, our licensing terms are so weighted in the industry's favour that they do not require the companies to bring a single drop of oil or gas ashore in Ireland. Ireland's resources and our licensing terms do not award the country with fuel security. When the Government awards an oil or gas company a licence, ownership and control of Irish oil and gas is transferred to that company and under the current licensing terms, the Government cannot guarantee that the oil and gas will be sold to the Irish market, landed in Ireland or that the companies would even use Irish workers. Irish consumers would still continue to pay the full international price for the oil and gas found off Ireland's coasts. It is difficult to see where our present licensing system gives advantage to Ireland or to its people.

Under the 1992 and 2007 licensing terms, a 25% tax on net profits from oil and gas is applicable. However, oil and gas companies can write off 100% of costs against tax, including costs incurred up to 25 years before field production begins and the costs of unsuccessful wells drilled anywhere in Irish waters in that 25 year period. Under the 2007 licensing terms, a profit resource rent tax, PRRT, was introduced. PRRT is payable on a profit ratio calculated by the cumulative after-tax profits on the specific field divided by the cumulative level of capital investment on the specific field. Oil and gas companies may be subject to pay PRRT on after-tax profits of between 5% and 15%, which means that an oil and gas company could pay up to 40% tax on their profits. However, in reality, only the largest of oil and gas explorations and finds would pay the higher tax and small and medium size fields would pay little or no PRRT.

Compared with international standards, Ireland's licensing terms are extremely generous to oil and gas companies. In 2007 the United States Government Accountability Office, USGAO, studied the licensing terms of 142 fiscal systems. The USGAO report, on foot of that study, found that Ireland has the second lowest government take of all the countries studied. In the United States there is a minimum government take of 42% and in Norway the government take amounts to 75%. While acknowledging the point-----

They have oil. They found oil. We did not.

I will get back to that-----

I ask the Minister to allow the Deputy to speak.

I acknowledge that point and will return to it later. As new technologies emerge and develop, along with the rising price of oil and gas, reserves that had previously been dismissed are now becoming commercially viable. However, at present, companies are relying entirely on their own data in assessing commercial viability and it may not be in a company's interests to let a country know the exact viability of deposits of gas or oil. That must change.

I know that we are speaking now about offshore gas and oil, but it would be wrong of me speak about oil and gas without addressing an issue that affects my own constituency deeply, that is, the issue of fracking. The legislation I published today seeks to ban the practice of unconventional gas exploration and extraction. There are many reasons for seeking to do this now, not least the international evidence which shows that damage has been done by fracking. More importantly, however, is the new phenomenon where what the Minister calls investors and what I call gas and oil companies are taking legal action against nations in which they feel the regulatory system prevents them from making profits. Once one gives these guys a start, they will seek to bully and hurt any country that tries to stop them. The best way to deal with them is to ban fracking in this country. If, at some stage in the future, there is demonstrable evidence that hydraulic fracturing can be done safely and does not endanger the environment and human health and will not damage agriculture, tourism and so on, it would then be a simple matter of changing the legislation. If fracking is not banned, however, I can guarantee that there will be companies taking legal action against Ireland Inc. because we interfered with their ability to make profits. I have no doubt about that.

We must consider the process whereby land is acquired for the drilling process. How will that happen? There are at least seven issues of concern regarding the process of hydraulic fracturing which will not be covered by the EPA report. These issues will have to be assessed and addressed. The fracking process involves pumping large volumes of water, chemicals and sand into the ground in the hope of creating fractures in the earth to release the petroleum. Biocides and dyes are often used in the fracking process. The water that is pumped into wells is of significant concern in itself and the disposal of it is of even more concern. There are serious questions about how much of what is by then poisoned water is lost into the soil. The water mixed with chemicals is probably already toxic when it is being pumped into the soil and it is most definitely toxic by the time it is brought back up.

I am not sure if the Environmental Protection Agency will even address the question of what will happen to the land after 14 or 15 years worth of gas is extracted from it. I am also not sure if it will address how horizontal drilling will affect land that is not within a fracking zone or what legal rights such landowners would have. I do not know if the Minister knows the area where I live but it is beautiful. It is a rural area of hills, valleys, lakes and rivers; a beautiful place. It is not a building site or an industrial site. Shame on any Government that would turn it into one and shame on me if I let it happen.

People do not trust the Government, the regulators or the Minister for the Environment of the Northern Ireland Assembly at Stormont to make the right decisions here. There appears to be a good deal of official understanding extended to the so-called scientific documents published on behalf of the oil and gas lobby, with little communication with or understanding of the predicament of host communities where fracking has been introduced.

When the Taoiseach was in Philadelphia he lauded the miracle of fracking there, but I do not see that attitude among the thousands of people who regard fracking as a blight on their countryside and their lives. As well as considering the scientific documentation, cognisance should be taken of the impact on people's lives caused by fracking.

I question the motivation of some of the people who produce reports on fracking. My sole motivation is to preserve the environment, our land, our tourism, our agricultural industries and to preserve future generations. The fracking companies have an entirely different motivation. A holistic picture should be taken to the issue. I urge the Minister to look again at the terms of reference of the EPA because aspects of this issue arise far beyond what the EPA is currently examining and they need to be addressed.

Have I much time left?

Did Deputy Colreavy put a tax rate in his Bill?

I did. It was along the lines of the Oireachtas committee report. My legislation addresses the need for a social clause to be included in contracts with oil and gas companies. I am sorry, I wish to correct a point. I am not allowed to include tax rates in legislation under Standing Orders, but I included a clause to encourage the Minister to do so. Social clauses have been used to good effect in the Six Counties. One example of this is the construction of the Peace Bridge in Derry. Due to the high levels of unemployment that currently exist in the country and the fact that so many of our unemployed are young, skilled tradespeople it is imperative that all future contracts contain a social clause which will lead to the hire of people from the locality in any exploration and extraction of oil and gas. This would provide for a holistic approach.

I wish to highlight several aspects of the Minister's statement, which I welcome. I am pleased that the process has moved on from a committee report to receiving active consideration. I understand the point the Minister is making. A certain hope held out in the 1970s. Naturally, we hope that Ireland's oil and gas will be as good as Norway's, but Norway decided initially to leave it there and not touch it. The Department is currently engaged in a review of the 1960 Act. Will the Minister ensure that careful attention is paid to the approach of these investors? The oil and gas companies seem to have adopted a strategy of legal action against countries in which they believe the regulatory frameworks are too tight and that must be addressed. I understand discussions and negotiations are ongoing in respect of an economic and trade agreement between the European Union and Canada that would make this even easier. I find it extraordinary that any politician would make it easier for companies to take legal action against his country and its finances.

The Minister referred to the Corrib field and acknowledged that the eye was taken off the ball. The fact is the eye was in the wrong field and the damage was done by the time the eye went back on the ball and that is what was wrong. People hear about consultation and that there will be full consultation and so on. However they find that the key decisions have been made before anyone meets a group of local people to tell them how it is going to happen. That is not consultation. Better decisions could have been made if those who mooted the project involved local people from the outset, because local people know better than anyone about the problems that will arise in their areas. However, that did not happen. Decisions were made and subsequently communicated and we know the result. Certainly, the good people of Mayo are not the cause of this country losing €100 million in taxation, it is the result of a flawed approach by those who implemented the project in the first place. If we have learned nothing else, we should have learned that.

The committee report does not argue for outlandish or Norwegian rates of tax. It argues for rates of tax to be linked to the size of the field. There are two issues. We need to entice companies in for exploration. The second element is the extraction and sell-off on the world market. The committee report suggests that the bigger the deposit and the bigger the income from it, the higher the rate of taxation. I believe that is a good suggestion. It is fair and it has been used in other jurisdictions.

The Minister stated, "With this in mind and having regard to the fact that the most recent review of the fiscal terms took place in 2007, I intend, following the conclusion of this debate, to seek further independent expert advice on the fitness for purpose of Ireland's fiscal terms". I welcome that statement. However, I would also welcome if the Minister would get a report on the whole issue of exploratory licences and operational licences to ensure that it is open, transparent and incapable of being manipulated by those who might have ulterior motives or motives of greed, such as those involved in what happened before. It is not simply a question of the fitness of our fiscal terms, the whole process must be looked at and I would have welcomed this report far more had that been included.

I call Deputies Richard Boyd Barrett and Thomas Pringle who, I understand, propose to share 25 minutes.

The committee deserves considerable credit for producing this report and its recommendations. It deserves credit because this is a critical issue. However one looks at it and whatever view one takes on how or if we should develop our oil and gas resources, it is important that it is debated fully and that all the angles and aspects of it are understood, debated rigorously and that the wider public gets to understand fully the issues and different perspectives.

The report is welcome because it proposes a radical shift in how we manage the taxing and licensing of oil and gas development in this country. That is absolutely right because the current licensing and tax regime is an absolute scandal. There is no justification whatsoever for allowing the status quo to continue, whatever arguments the Minister might put forward to say we have no viable alternative and there would not be any exploration if we did not continue with the current arrangement. The truth is that as it stands, there is nothing in the regime for the people of this country or the economy except environmental risk and a trampling of local community and environmental interests by oil companies. Frankly, if the status quo is the only option available, as the Minister suggests, we should leave it in the ground. That is how bad this regime is. The only beneficiaries of the current regime will be private oil companies, primarily multinationals.

While the committee deserves considerable credit for raising this issue, the biggest tribute in forcing the issue on to the national political agenda should be paid to the people of north Mayo and Rossport for fighting a heroic battle against one of the most powerful and nastiest companies in the world, Shell, for the way it has tried to trample a small rural community that has been treated disgustingly by this company. The community has been vilified by political and media interests in an outrageous manner. It is to their great credit that those people have fought to highlight just how nasty these multinational oil companies are and how little the people of this country stand to gain if these companies are allowed to have their way, as this Government and the last seem to wish.

I also pay tribute to Frank Connolly when he was chairman for the Centre for Public Inquiry and the fantastic report he did on Corrib and the great gas and oil giveaway that is involved in the taxation and licensing regime in this country. More recently, SIPTU produced an excellent report showing how we are effectively giving away our gas and oil resources. One of the latest publications that every journalist and TD should read, and I strongly recommend the Minister reads it, is the brilliant pamphlet Liquid Assets, which was produced by the Shell to Sea campaign and written by journalists and researchers. It is filled with evidence and references and explains the prospects for the discovery of oil and gas in the country, the oil companies' estimates and how much of a giveaway is the current taxation and licensing regime.

We should also pay tribute to the campaign in the Dublin Bay area, in Dún Laoghaire and elsewhere, against Providence Resources' plans to put an oil rig very close to the coast of Dublin. It was successfully beaten off by a campaign of people power. That campaign was motivated by the experience of Rossport and the trampling of the local community as it sought to highlight the giveaway of natural resources under the current regime.

We are discussing this subject because of people power. I underline that because those who get out and campaign, be they in Rossport or elsewhere, are never given the credit they deserve for forcing issues like this on to the agenda. The Minister for Communications, Energy and Natural Resources of all people should know and acknowledge that as a man who cut his political teeth in the resources protection campaigns in the 1970s where he made precisely the same arguments now being made by Shell to Sea, SIPTU and others about the potential give away of our natural resources. He argued at the time that we needed a regime that ensured real benefit to the citizens and economy and argued for a State company to manage the development of those resources. I do not understand how he has flipped to the degree he has from the position he once held.

Let us be clear and dispel some of the myths about the current regime. The State will not receive 25% tax from the development of gas and oil resources and it will certainly not receive 40%. It is more likely to be around 7%. Where does that come from? The CEO of Enterprise Energy, the original company doing the Corrib gas field development, which was then bought by Shell, Brian O'Cathain, spoke in the IFI after the take-over and he estimated the tax revenue to the State over the lifetime of Corrib would be €340 million, despite the fact the estimated value of the Corrib field is somewhere between €5 billion and €7 billion. The likely tax benefit to the State will be between 3.5% and 7% at most, depending on gas and oil prices. That is the reality. The reason for that is the tax write-offs, where every cent the multinationals have invested in the last 25 years, or any losses in any exploration done anywhere around the country, can be written off against tax liability, meaning that for small and medium-sized fields, it is possible they will pay no tax or it will be years before they pay a single cent because they could write off all losses and capital costs going back 25 years. That is the current situation.

In response to questions from me and others, the Minister constantly talks about security of energy supply to this country in trying to justify the current regime. There is nothing in the current regime that guarantees any security of supply. Shell, Providence, Tullow or whatever company is involved, is under no obligation whatsoever to provide a single drop of gas or oil to the country. Incredibly, if gas or oil is developed on any significant scale, we will not see any reduction in energy costs, it will be privatised and sold at market prices. If we are not willing to pay the market price, it will be sold on the global market.

There is no obligation for Statoil in Norway either.

Statoil is a state company.

And it can sell oil into the market.

Can the Minister not see the difference? The profits there go to the state.

They have a vault of hundreds of billions of krone in revenues that would keep that economy secure for decades to come because they take 78% of the profits in royalties, direct taxation, etc., and it is a state company.

There would be no jobs under the current regime as Providence told us, in the case of Dublin Bay, that it was going to fly staff in from Scotland to Dublin Airport and put them on a helicopter from Dublin Airport to bring them out to the oil rig. They would not touch down on Irish soil. There would be no jobs, no community gain and no spin-off whatsoever.

Deputy Boyd Barrett's imagination is running away with him.

That is stated in the Providence report. If there is any journalist watching, I challenge him or her to go and read Providence's submission on its application to drill for gas and oil off Dublin Bay. That is the reality, as much as the Minister wants to deny it. It is under no obligation whatsoever. There is no regime currently over community gain or any arrest of it.

Deputy Pringle stated I could go on for a couple more minutes.

The alternative is the Norwegian model. They had a situation-----

The alternative is the unique geology of Norway.

Let us talk geology then.

The unique geology of Norway is what makes the difference.

Let us talk geology. I hold a map of the basins off the side of Ireland's coasts which reach up to Norway and the North Sea. The basins which we are exploring are the same basins as the ones from which they are getting the gas and oil in Norway-----

I wonder why they are not in on ours finding oil then.

-----and in the North Sea.

Why are they leaving the oil there then?

It is because they want to get it on their terms.

Deputy Boyd Barrett stated that they had been getting it on their terms.

We are rolling over for them.

Deputy Boyd Barrett said they have been getting it on their terms. Why are they not here?

Why do we not have a forest of explorers?

I hate to interrupt, but only to let Deputy Boyd Barrett know that he is eroding Deputy Pringle's time as well, unless Deputy Pringle states that he wants Deputy Boyd Barrett to go on.

Ten minutes will be good for me.

If the Minister was not interrupting.

I am sorry, I will not do it again.

Deputy Boyd Barrett has only another minute.

I will conclude by saying that we should leave it in the ground until we have a regime that guarantees us a proper take and that we do get security.

It is in the ground.

Chair, can you ask the Minister not to intervene?

Seriously, can you shut him up?

Hold on, the agreement was you were sharing your time. You are already a minute and a half over time and we cannot go on forever. You can either have an argument and provoke an argument on that basis, or bring your remarks to a conclusion.

That is an incredible way to chair these proceedings, that the Minister interrupts me and you do not say one word of criticism of him, and then you challenge me over speaking. That is utterly biased.

You are in your colleague's time.

Deputy Pringle just told you that I-----

That was not the original agreement and you are on borrowed time now.

I will conclude. We should not take it out of the ground unless we have a State company that is doing it and controlling it, where we are guaranteed security of supply, community gain and proper consultation with local communities, and where it is taken out at a safe distance from human habitation so that there is no danger to communities or to the environment. Norway proves it is possible. It is not worth doing it if we do not act in that way because there is nothing in it for this country.

I welcome this debate on the report by the Oireachtas Joint Committee on Communications, Natural Resources and Agriculture on oil and gas exploration in the State.

When this debate was scheduled, I had to think back to when the report was published because, much to my own discredit, I had forgotten when that happened. It is a full year since the publication of this report and that does not augur well for the debates that are needed on committee reports in this House. It reminds me of the commitment given two weeks ago in the House during a debate on Private Members' legislation that the upcoming report from the Joint Committee on Justice, Defence and Equality on prostitution will be scheduled for debate after publication. The Government did not say that it would be a year after publication.

Aside from the fact that this report was published a year ago, it is important that it is debated. I hope that the debate is intended to inform policy-making within the Department of Communications, Energy and Natural Resources and is simply not a filler of time in the House.

The former joint committee of which I was a member deliberated for a long time and took evidence from a number groups in drafting the report. One of the most useful discussions was with Norwegian representatives and experts on the policy decisions made in Norway on its oil and gas reserves. The point that came out of it was that they stated that they would not start from our position. In Norway, they decided the policy at the early stages of its oil industry, a policy that put the good of the Norwegian people at the centre of their decision making. Unfortunately, in this country the good of the oil and gas industry has been paramount in the development of the sector here.

There are three aspects of the report on which I will focus: the exploration, the taxation debate, the relationship between the oil and gas industry and the host communities which have the facilities imposed on them. There was much debate in the committee on the taxation aspect and how to get a return for Irish society from any resources that may be developed in the future. The guiding principle of this debate should be that the Irish people must be seen to get a fair return for allowing energy companies to exploit our resources.

As I have seen from the committee's deliberations, the exploration industry was keen to highlight how difficult the Irish exploration landscape is and how hard it is to get a return from exploration. I have discovered that this appears to be the theme that all industry vested interests take in giving evidence to committees, whether it is the oil and gas industry or the retail sector on which we in the Joint Committee on Agriculture, Food and the Marine are deliberating in regard to the code of practice for the retail trade. The oil and gas industry was keen to highlight the lack of success from their exploration wells offshore in Ireland, constantly going back 40 years and mentioning the number of wells drilled and the low instance of commercial finds, and always citing a one in 35 success rate. Interestingly, if the figures were analysed, in more recent times, from, for example, the late 1980s, the success rate rises to approximately one in 12, which would seem to be more attractive.

A key theme in the report is that the technology has improved and this can be seen from the improved success rate. The industry claims that it is not reduced to looking at old seismic data to try to locate finds, but it forgets to mention that looking at old data with modern technology has uncovered commercial finds, as in the case of Norway where the biggest field ever found has recently been discovered by looking at old data and re-drilling.

As improvements in technology continue and the need to rely on more politically stable areas for exploration grows, the potential for more commercial finds offshore increases. It is, therefore, timely that the committee's recommendations on taxation should be taken on board and amended by the Government. The committee recommended a minimum 40% tax take made up of corporation tax of 25% and phased profit resource rent tax. The profit resource rent tax should be at rates of 15%, 35% and 55%, depending the profitability of the find, so that the more profitable the find, the higher the tax take for the Exchequer.

Everything we do should be to maximise the return for the Irish people. We also should have a guarantee of supply at less than the market rate for the needs of the Irish people. Why should we have to pay the going rate to get the benefit of a resource that belongs to our people? I do not believe we should pay the same as consumers in England or Europe who will benefit from our resources. There must be a dividend for the Irish people.

The Minister stated that he agreed that there should not be any retrospective changes to the taxation rate, a recommendation with which the committee came forward. As we look to the future, now is the time to undertake such a review and change those rates, and implement the rates recommended by the committee. It will be too late, if there is not retrospection, when the commercial finds are found. Then the Minister will argue that he cannot go back and change the rates, and that the companies need certainty. Therefore, the Minister should introduce those new rates at this stage before any further licences are issued and any further finds are made so that the companies can enjoy such certainty but so that the Irish people can also enjoy certainty.

It should be a condition of any licence and commercial find that it should be refined, in the case of oil, in Ireland to ensure that we have control of the resource if conditions demand it. In the case of an oil find offshore, it should never be allowed that crude oil is shipped to refineries outside the State.

The way the host community in the case of the Corrib gas find has been treated by the Government and by the promoters of the terminal in Rossport has been highlighted.

The committee heard very good contributions from Pobal Chill Chomáin and Pobal le Chéile about the impact the development has had on their communities. The experience of these communities should not be allowed to be repeated anywhere on this island. The Government can clearly take action to ensure that does not happen.

Both groups recommended that future developments should not be allowed to be broken up into piecemeal consents. A fragmented consent process should not be allowed to happen at any stage. This is vital because the development should not and cannot be allowed to become more important than the proper consultation and community involvement. The splitting of the Corrib consent process has meant that once the site for the terminal was agreed, the pipeline had to reach it. This has meant that regardless of the valid arguments or concerns the community had, they had to be overruled because the gas had to get to the terminal. In future, the State needs to ensure that all aspects of the development process happen together and all consents are granted simultaneously.

It makes a mockery of the planning process to allow the piecemeal development of any infrastructure. Best practice in Norway has shown that, with proper consultation, the best results for communities can be achieved. There also need to be clear lines of demarcation between the promoter, regulator and health and safety authorities to ensure each element can do its work independently of others and not be concerned about other aspects of the project.

I believe there will be more commercial finds in Irish waters. The Minister, on behalf of the State, has responsibility to ensure they are used not just for the benefit of oil companies but also for the benefit of the people. Having a tax regime that ensures a return to the State is vital. Ensuring a supply is available to Irish society at a reduced rate, recognising that the people own this resource, should be an integral part of any policy. Ensuring the planning process reflects the concerns of communities and that consents for development are issued in an integrated way that respects the needs and concerns of those communities and respects best practice must be at the heart of any development policy.