I apologise for delaying the Minister and his colleagues. There are some familiar faces and individuals of repute present. They are all welcome. I welcome the Minister and I invite him to speak. We are anxious to hear what he has to say. As he is probably aware, a number of us are new to this business. We are here to learn as well as to help. There may be occasions when language is used that is not familiar to some of us and I hope he will forgive us if we have to ask him to explain something. The whole purpose of this exercise is educational from our point of view and to hear the Minister's plans in this area.
Energy Issues: Discussion with Minister for Communications, Energy and Natural Resources.
I very much appreciate the opportunity to be here. I hoped to make a Powerpoint presentation to show slides with some of the details. I am surprised it is not available. We used to have a Powerpoint facility in these rooms. I am not too sure what has happened in that regard. I have asked to clerk to make some photocopies. The slides are simple ones which are as much a guide to me as anything else.
How much time does the Chairman envisage my presentation will take? I propose to give a short talk and to throw the floor open to questions. Perhaps ten or 15 minutes is enough for me to speak?
Whatever you think. The purpose of this exercise is educational. The Minister should tell us whatever he thinks we should hear and then we will have a question and answer session.
I very much appreciate the opportunity to give my initial thoughts as the committee begins its work. This committee will be of crucial importance to the wider policy debate that will take place on issues of energy security and climate change, especially in the next two years. It is appropriate that the committee is examining both these issues because they are complementary. We face two significant energy challenges and solving one will help us to solve the other.
I am aware many members have a detailed knowledge of the issues involved. I will frame the discussion around what I consider will be one of the key tasks of this committee, which is to answer questions in detail on how we approach these challenges. First, I will briefly comment on what is known as the peak oil challenge. That term was coined by Mr. Colin Campbell, who is a former oil exploration geologist based in Ballydehob in west Cork. He is a member of the association that studied peak oil which had a most interesting conference in Cork this year where it set out the concerns of that NGO regarding a peak in global oil production followed by an inevitable year-on-year decrease. One can debate the timing of peak oil but the analysis has increasingly been accepted.
Mr. Colin Campbell attended an Oireachtas committee three or four years ago. At that time if one had asked the International Energy Agency or other experts about it they would have been sceptical of that analysis. Now the International Energy Agency has acknowledged that we are facing a peak in oil production. If one opens The Economist or any such international magazine these days it is evident from oil company advertisements that there is an acknowledgement that oil is becoming increasingly difficult to find. It is not the case that we will run out of oil or that it will disappear. However, it is clear that within the next decade we will be close to a peak in conventional oil production and that already oil companies are finding it difficult to meet demand. As a result, oil costs approximately $90 or $100 a barrel.
What we have to prepare for is the geological certainty that oil will begin to deplete year-on-year. The percentage reduction each year can be debated, as to whether it will be 3%, 4% or 5%. Once that happens we are on an incredibly difficult downward trend, especially in Ireland where 60% of energy comes from imported oil. Other oil sources will be available such as shale tars in Canada, and from polar exploration and gas. The graph on the photocopy is difficult to read without colour.
Oil plays a fundamental role in every aspect of the economy. In agriculture it is necessary for the production of fertilisers and pesticides. Oil is also necessary for transport, heating and electricity generation. We have to face that reality. An interesting analysis was carried out for Forfás in recent years by Mr. Bob Hirsch that should colour our thinking. He also did a study for the United States Department of Energy. His point was that, regardless of when the peak year is, and some people argue it is happening as we speak while others argue it will be in the middle of the next decade, because energy is such a long-term investment decision, and given that the cars we buy today will still be on the road in ten or 15 years time, that the roads we build today will still be functioning in 50 years time, that the power stations we build today will still be here in 40 years time, we have to change our investment decisions two decades in advance to prepare for that inevitable downward slope. It is difficult for us in the political system to get our heads around, but that is what we have to do to protect ourselves from energy insecurity.
My second slide gives a graphic illustration to this geological certainty. Again, this is a graph from Mr. Colin Campbell. Both of these slides came from the association that studied peak oil. This slide shows that the peak in exploration occurred 42 years ago. Increasingly, while we go out into the Porcupine Shelf or into the deep waters, we will find there are no more large fields out there such as in Saudi Arabia. This is a certainty that faces us in the future and we must react to it.
Gas will be an important interim fossil fuel. It is playing an increasingly significant role in power generation. However, we must be cautious in terms of our increasing dependence, especially on imported gas, for several reasons. Security of gas supply is far from certain and price volatility is phenomenal. It is a very risky fuel on which to depend. The evidence for that can be seen in the past two years where the price of gas increased from approximately 20 pence a therm in the UK market to £2 a therm in late 2005 and early 2006, and went back down to 20 pence a therm last year. It has now gone back up to 50 pence a therm. How does the regulator set the price of electricity in such circumstances? When we had that very high spike in gas and electricity prices our industry really hurt. Intel and other companies told us how they were suffering as they were exposed by that price volatility.
My next graph is a simple illustration showing demand for gas in Ireland increasing steadily in recent years and it is projected to rise further. We are still building gas power stations as our main option in terms of electricity generation. The bottom lines show actual Irish production. As the Kinsale field is depleted, it has reduced down to less than 10% of our gas supplies. We are projecting that we will have gas from the Corrib field but it is clear from the graph that even with that, it will only provide for a fraction of our needs and it will very quickly peak and deplete. We cannot be certain of an indigenous energy supply to meet growing demand.
I am sure people recognise the graphs from Sustainable Energy Ireland. These excellent energy statistics are produced by a company in Cork. The next graph is an interesting one because it is from the UK energy statistical unit on the UK projections. The UK line is the black line in the centre. The lack of colour coding makes it difficult to ascertain the actual trend. The bottom bar is North Sea gas production. Currently we get 85% of our gas from the North Sea which shows we are inextricably linked to the UK gas market. Oil and gas production in the North Sea has peaked and is decreasing by the order of 7% to 8% per annum. Our main energy supply peaked in 2000 and is depleting rapidly. That puts us in an incredibly exposed position.
A number of different bars show additional gas supply that is being examined. The first one is Norwegian gas. The opening of a new pipeline to Norway is one of the reasons price went down from £2 a therm back to 20 pence. It, too, is a resource that will deplete relatively quickly. This will leave us dependent on Russian gas and LNG facilities, both of which are not secure supplies. LNG competes on a world market so a half pence difference in price may well result in a LNG container going to the American market or the Chinese market rather than the European market. The same is true of Russian supplies. We are at the very end of a long gas pipeline from Russia and we cannot be certain of the security of that supply. Peak oil and exposure in terms of gas are two crucial policy challenges we must address. The graphs presented indicate this.
It is interesting that, in order to manage our society and economy to cope with peak oil, we must reduce our oil consumption at a rate equal to or greater than the rate of depletion. Thus, we will be ahead of the curve and not over-dependent on oil or gas. The reduction target required to cope with peak production is approximately 3% to 4% per annum. There is a coincidence in this regard in that the rate of reduction required to meet our climate change target is similar.
The Chairman and other members of the committee have returned from Bali and will therefore have a much better understanding of the latest scientific evidence, but it is becoming increasingly clear that, regardless of the international negotiations, we have committed to a 20% reduction in overall European emissions from 1990 levels by 2020. Following the meeting in Bali last week, we can be fairly confident that we will need to commit to the higher rate of reduction to which the European Union has committed, that is, a 30% overall reduction by 2020. I was greatly reassured last week because the Bali meeting initiated a process that I believe will lead towards a global agreement in two years which will require Europe to meet its target by 2020.
If one plots the graph for Ireland, one will note that an annual reduction of approximately 3% is required until 2020. We have a clear interest, owing to climate change and peak oil, in reducing our use of fossil fuel consumption by this amount each year. This committee, among other bodies, must ask how this can be achieved. It has a key role to play.
Another SEI slide forecasts our likely position in 2020 according to current modelling data. It includes the changes proposed in our policy framework, including the renewables targets. The table shows the total primary energy requirement from 1990 to 2005. The projections are reasonably accurate because, as I stated, energy consumption is plotted over a long timeframe. Rather than securing an annual reduction of 3%, we are facing a 30% increase in energy use by 2020. We therefore have a significant challenge to meet if we are to alter the course of the graph such that the business-as-usual scenario will not continue.
The climate change figures on the next page of my presentation, again provided by Sustainable Energy Ireland, show the trend has stabilised following a period of very strong growth. The growth in our carbon dioxide emissions has been nothing like our economic growth and we have therefore decoupled our economic activity and our carbon emissions. However, the graph uses a figure for our carbon emissions of €70 per tonne. Energy accounts for roughly 60% of our emissions, and this includes transport, power generation and heating. Agriculture accounts for 28% of our emissions and a number of other smaller areas pertaining to waste and industrial processing, for example, make up the remainder.
The committee must address the problem raised in the next graph. It is not an official production and is just a back-of-the envelope PowerPoint slide showing the challenge we face. The work is derived from the national climate change strategy and the Government's energy policy framework published in recent years. It demonstrates that if no remedial measures were taken, there would be an increase from approximately 70 million tonnes per annum, in terms of carbon dioxide equivalent, to approximately 79 million tonnes per annum by 2020. The first climate change strategy indicated that we could reduce the figure to 74 million tonnes. A key development of the energy policy framework arising from the White Paper on Energy showed how we could make further reductions. It set targets pertaining to bio-fuels and bio-heat and listed a figure of 33% for renewable power generation. This implies that our carbon dioxide emissions level could be reduced to 64 million tonnes per annum.
The committee must go beyond its business-as-usual approach and beyond all existing considerations. The European Union has already committed to an overall European reduction of 20% by 2020. The negotiations on Ireland's burden-sharing responsibility will take place over the next few months, but we can imagine what our target might be. The national climate change strategy change projected that the commitment of 20% will require Ireland to lower its emissions level to approximately 55 million tonnes per annum. If the negotiations in Bali prove to be what we hope, that is, the roadmap to a general global agreement, Ireland can expect, in light of the European reduction target of 30%, to be required to lower its output to approximately 48 million tonnes per annum.
I am listing many figures and people's eyes glaze over when considering them but it is crucial for us to understand that everything we said we could do will result in a reduction to only 64 million tonnes but we must exceed this and reduce our emission level to 48 million tonnes. Achieving the latter target requires a reduction of 3% per annum. This may not be a reduction of 3% every year in that there may be a curve inside and outside the linear line. It is better to have flexibility but we know we must achieve this figure. If we did not strive for the reduction of 3% per annum and reached a level of only 64 million tonnes per annum, the cost of buying our way out of the problem would be several hundred million euro per annum, if carbon prices will be as we expect.
Even if we say in the short term that we can bear a cost of €500 million or €800 million per annum, it will not be a clever strategy. This is because the Bali process suggests that beyond 2020, in 2050, an 80% reduction will be required in developed countries. Consequently, postponement and accepting the financial burden are not options.
The committee, Government and industry must decide how we can decrease our carbon output from 64 million tonnes to 48 million tonnes. There are a number of different approaches the committee can take in helping to answer this question. The timeframe is useful in that there is a two-year lead-in period to the meeting in Copenhagen, at which we must hope a deal will be done. In the two-year period, politicians can prepare so that Ireland will know what it must achieve and how it must do so when the deal is done. The role of the committee may well be to address some of the key questions that arise in respect of the transformation we must make. We must determine whether there is agreement on the broad outline of our approach
There are a number of different ways in which the questions may be asked. There is great potential in Ireland to develop renewable electricity. This will take time and require solving difficult problems. Grid development will not be easy and require considerable capital investment. It may not be easy to have a grid connection in every part of the countryside but if we are agreed on and determined regarding the overall policy, it will be easier to achieve our goals for development of renewables.
Our key responses will pertain to renewables and efficiency. The task of achieving the targets we have set, even that of having a 33% renewables component by 2020, as set out in the energy policy framework, will be unlike any other in the energy area. It is a large task on which we must concentrate. That, married to energy efficiency drives, will be the two key indicators.
In a meeting last week the European Investment Bank and the EU Commission reiterated this. People in the past might have thought of this as a side issue, not as a large finance one. Both parties said this is a major development. The European Investment Bank is doubling its investment in energy lending, half of that going to renewable energy. The EU Commission will set a renewable energy target for the Irish economy. The EU Commissioner for Energy, Andris Piebalgs, has said that while the targets are humble we should meet them and then go way beyond them.
One question that clouds the energy and climate change debate is the issue of nuclear power. It is no harm to have a debate on the option of nuclear power. This committee is a perfect forum for that issue to be addressed. I am often asked how can I favour renewable energy and yet want a debate on nuclear power. However, the committee should examine it with an open mind and it would be interesting if the committee produced an in-depth report on it. By going into the real detail of energy production and its associated economic opportunities, costs and expertise, it will show a clear response that nuclear power does not make sense for Ireland. It is important for us to have a clear indication on that.
When the nuclear power question is answered, it will allow us to concentrate with much greater certainty on key developments in renewable energy and energy efficiency. I hope the committee will prove a proper forum for both sides of the nuclear power debate, allowing it to assess it. This would be of wider public interest in producing an energy policy framework. It is not an insignificant task in the overall aim of carbon emission reduction.
Other contentious issues that are worthy of examination by the committee include agriculture. Agriculture accounts for 28% of our carbon emissions. Are we saying we cannot change agricultural production and it will stay as it is for the next 20 years? Is there potential for the development of new biomass crops, bioplastics and new materials that could give farming a new future in the process of reducing emissions? If land is used for power production rather than feeding the cattle herd, it will be a significant development in meeting our targets. It is a contentious issue and deserves examination by the committee.
There are real questions about the deployment of bio-fuels and their social and environmental consequences. It would benefit the committee to examine this in detail as we move towards bio-fuel obligations under EU commitments. The committee can examine the energy reality of bio-fuels, their emissions reductions and which are the best. These are questions on which the public is confused. It would suit in an Oireachtas setting to have an open public hearing to allow everyone to give their view. This would help to reduce the uncertainty on the correct direction to be taken on bio-fuels.
As we try to implement the White Paper on Energy, we must ask what the best location for biomass is, as there are competing interests. Biomass can be used in heat and power generation. However, as we have limited resources in land and farming expertise, we must ask how much can go to each sector. The committee can bring in the experts from Teagasc and other organisations to find out the best deployment of biomass. A position from the committee on this subject would be useful.
The committee's establishment in not having one line Minister was appropriate. The committee should have the same access to the Minister for Transport and the Minister for Agriculture, Fisheries and Food, as well as to my Department and the Minister for the Environment, Heritage and Local Government. Climate change crosses all sectors and Departments. It is also appropriate the committee is made up of members from other committees so there is cross-fertilisation of work. This committee has a crucial role in making those connections between different policy areas.
Transport is the one area in which we have a serious problem. It will not change quickly because the roads being built today will be there for 50 years. Transport accounts for 14 million tonnes of carbon emissions per annum. By 2020, on current projections, it will be at 20 million tonnes. This is a 6 million tonnes increase which is the figure by which we should reduce emissions. How do we get the political commitment to the type of changes needed to reverse this? It will need changes in planning and infrastructural investment but more so in common agreement on the nature and the extent of the problem. Unless we secure the latter, it will be difficult to make some of the necessary changes.
Carbon tax raises the fiscal issue of climate change. There are several other matters in this area such as whether the emissions trading system should extend into aviation.
Examining these issues will take time if we want to do them justice. The committee has a wide range of issues. It will have to decide which ones to concentrate on in its work programme. It is only dawning on us now the extent of the challenges. Last year and the Bali conference have been a turning point on the awareness of these issues. It has been debated for the past 20 years but remained at the back of our minds. The Stern report, the IPCC report and the Bali conference were a wake-up call that now is the time to address the issue of climate change. As it is on a global scale, it is a scale of challenge we have never faced before.
The only approach to this is to see it as an opportunity where we as a country and people can be exemplars. We cannot buy ourselves out or run away from this commitment because Ireland is special in some way. The business world is ahead of the political world in this regard. It sees the market has gone in the direction of tackling climate change.
For example, a large Irish supplier to UK food stores informed me that the business world has changed. Asda, Tesco and Marks and Spencer now ask it about its carbon footprints because as Marks and Spencer say, there is no plan B. They want to ensure their products are within the new carbon-free world. If we do not go in this direction, our economy will be left behind and we will miss out on opportunities.
We should not be afraid of tackling carbon reduction but address it with conviction and determination. It can be achieved from renewable energy sources. Changing our transport system will lead to more attractive towns and cities. For the past several years there has been a sense in the agricultural sector as to what is its purpose. In the carbon-free future, the farmers will be the heroes on the front-line of our response. I hope our response is in a positive vein, but we should not underestimate the extent of the challenge and the extent of the change that is ahead of us. We in the Oireachtas have a responsibility to lead. We have to retreat from the use of fossil fuels for the market to achieve it, which is hard. The market can help, but ultimately it will need political leadership. As this will go on for four or five decades, that political leadership does not belong to any single political party. It does not belong to any one ideology, because we are dealing with an emergency rather than an ideology.
An Oireachtas joint committee with representatives from all parties is crucial. The investment decisions we must make over the next ten or 20 years must be outside the electoral cycle. We must get common agreement on the broad policy direction, although we can differ on the detail. If we can say to Irish people and Irish business with confidence that this is the direction in which the country is going, it makes it much easier for us to invest and to make the decisions in the right way. That is why this committee has a crucial role. It will be backed up by the work done on the Cabinet sub-committee on climate change and energy. It will be backed up by the work of the high-level officials group, which takes officials from different Departments. It will be backed up by the expert group the Government is setting up and which will bring people from SEI, the EPA and the ESRI to address this challenge. However, this committee has one of the most crucial roles because it has the advantage of being cross party, of being on the public record and of having the ability to bring people in and question them. That is a crucial and exciting role. Our Department and the Government should support and provide whatever resources are necessary to help the committee in that work.
I thank the Minister for a very comprehensive briefing. Senator O'Malley, Deputy Coveney and I were in Bali and we were talking about targets on our way back from the conference. Hearing about the steps other countries had taken, our targets are Mickey Mouse in comparison as they are depending on coal and so on. We can frighten ourselves by thinking this is a huge task. However, it is not a big task. Having read so much and listened to so much since we took up these positions, we intend to bring in the Minister for Agriculture, Fisheries and Food, while the Minister for Transport will come in next January. The Cabinet sub-committee must work alongside this committee to achieve what we are trying to achieve.
If I was the Taoiseach, I would ask the Minister for Agriculture, Fisheries and Food, who is responsible for 28% of our emissions, to come back in six months with a plan to reduce emissions from 28% to 20% in the next few years. I would ask the Minister for Transport, who is responsible for 20% of our emissions, to come back with a plan to reduce emissions to 15%. I would ask the Minister for Communications, Energy and Natural Resources to try to reduce emissions in his area from 23% to 16%. Otherwise, we will only talk about this issue for the next ten years. From all the reports I have read, there does not seem to be a sense of urgency to find alternatives. Anything I read would suggest that there is no problem with gas for the future, yet all the evidence shows that it will become a very scarce commodity. Similarly, we use oil like it will be there indefinitely.
Unless targets are set in the largest areas causing the problems, we will not get anywhere. In that way, we can open up the debate in agriculture. We asked a scientist what to do with agriculture and he said the biggest problem is the use of nitrates. We must face up to that issue. We are not going to slaughter all our cattle.
We stayed for an evening in Hong Kong on the way out. We noticed that all the taxis there are run on LPG. The only thing our taxi regulator does is ensure that taxis are not more than ten years old. Why can we not do that for taxis? Similarly, I do not hear of anyone talking about a massive scale changeover of the type of fuel used to drive buses. Nothing will happen unless there is a real sense of urgency, and that must come from the Cabinet sub-committee. We can then look at the targets set in agriculture, transport and energy. We can spend hours talking about waste, but the reality is that waste is responsible for 2.5% of our emissions. If we solved all our waste problems, we would not solve our emissions problem.
As a member of the Cabinet sub-committee, the Minister should bring all this to the attention of his colleagues so that targets can be set in all of these areas, and people are forced to think. Otherwise, everybody will think that it can be solved by changing our transport network and by not building roads. However, that will only deal with a certain percentage while at the same time, we will continue to do the same things in agriculture and energy use.
I welcome the Minister and his advisory team. I know that he asked to come and brief the committee, which shows a willingness to engage.
The Minister's comments this morning have set the scene for what is required. I think he will get co-operation from Opposition parties for what is required to get where we need to be in ten years' time. We may differ in how we get there, in the sense of urgency and in where we focus our attention. As well as setting the scene, I was hoping the Minister would outline some definitive solutions for the Government — where he has a convincing job to do — and for his Department.
I do not expect to go into the detail of policies, but would like to talk about general policies. We need to change the way people think. People need to think about their carbon footprint, what they are emitting and the results their emissions are having on the atmosphere and the climate. The Government needs to lead by example. It is one thing to make impressive speeches, but another to make hard changes at Government level. We need to increase the percentage of renewable energy powering our Departments at the moment. We have the figures from Dáil questions and they are an embarrassment. The Department of the Environment, Heritage and Local Government is the only Department leading by example. Seventy per cent of the Department's lighting and heating bills come from renewable energy, but that figure is only 4.5% for the Department of Communications, Energy and Natural Resources. That is not a personal failure of the Minister, because he is just in office. Let us see those changes next year, if it is possible to do this from a contract point of view.
In terms of transportation, the national climate change strategy, which was announced in April, stated that CIE would be required to move all of its vehicles onto a 5% biofuel blend by the end of this year. That simply has not happened. The latest statement from the Department of Transport, on 7 December, states that the Department is working with CIE to establish how these targets can be achieved in the shortest timeframe possible. The strategy also referred to a sustainable transport action plan that would be drawn up before the end of 2007 but we have not seen it.
While we agree on what needs to be achieved in terms of overall policy, our job in Opposition is to ensure we push those in Government to ensure they follow through on the commitments they make in this area. We must ensure these issues are as big a priority as the other challenges in health care, education, agriculture or whatever other challenges Government faces down the line. Climate change must not be conveniently put on the back burner because it is not as populist an issue as others. My concern is that while calling for all-party agreement and a combined approach towards making a change in this area, we should not lose the kind of Government versus Opposition vigour that produces results. This is certainly the role I see myself playing, although this committee will perhaps be less party-political than some others.
With regard to energy security, I wish to refer to the interconnection issue. This morning I had a breakfast meeting with a private sector company which plans to build, with no state assistance, two interconnectors between Britain and Ireland, one from north Wales to Wexford and the other from south Wales to a landing point between Wexford and Waterford. The company is using new technology and plans to be up and running by January 2010 with the first 350 MW interconnector. At the same time, the State is floundering with an east-west interconnector which will cost probably double what this interconnector will cost, and will open in 2012 at the earliest.
From a renewables promotion, grid development and energy security perspective, interconnection is key. It is not just about providing cheaper electricity for the consumer, although that is a very attractive by-product, but also about providing the necessary back-up in terms of energy security. It is also a potential export channel for the kind of renewable energy projects the Minister and I want to see happening in Ireland, which can help reduce emissions as well as ensuring diversity of supply and ensuring we do not have to rely on as high a percentage of imported fossil fuels.
The sense of urgency with regard to that interconnector has been extraordinarily lacking in the past ten years. The Minister and I, in Opposition, were calling for interconnection at least five years ago. Now, when we finally have a plan for EirGrid to put out to contract the building of this east-west interconnector, I have genuine concerns with regard to the timescale and value for money, when one considers what private sector companies are potentially offering with regard to similar products.
At present, what the Minister says is required and what the Government is delivering do not match up, although I accept some positive developments took place in the budget, particularly with regard to wave and tidal energy, which is welcome and will be of benefit in the medium term. We could discuss this issue for hours and would do so if we had the time. I want to set the scene generally with regard to issues such as interconnection, the promotion of biofuels, energy conservation in terms of the management for the past year of the greener homes scheme, grid development and the public sector leading by example, whether in the transport or energy area. There is still a large gap between the actions that would reflect a sense of urgency and the speeches we are getting from Government. It is the job of the Opposition to try to close that gap and assist the Minister in achieving that sense of priority from Government as a whole rather than just from his Department.
I agree with the Deputy that the job of the Opposition is to hold the Government to account as forensically and determinedly as possible, which is appropriate. However, this should not get in the way of our consideration of the longer-term picture. I am not suggesting we need cross-party agreement or must sign a contract or the like, but simply that further analysis is needed. Deputy Coveney may have ideas that will be useful and perhaps the committee could hear the views of others who would have useful ideas, or set a target for agriculture, for example, and ask the relevant Minister to respond.
This process will not be easy.
I know. That is why we must set the target.
Of all areas, agriculture has shown a reduction because of the changes to CAP. We need to examine the issue in detail, which takes time. I do not see why that level of forensic analysis should not occur in the committee, as well as in the Cabinet sub-committee and within Departments. To a certain extent, we must take cognisance of the reality that, as Deputy Coveney stated, broad understanding in the political sphere and among the public of the nature and extent of that change is only beginning. We do not yet have a real understanding and, until we do, no matter who is in Government, it will be more difficult to get acceptance of the type of extensive change we need. There is a role for this committee outside of the ordinary scrutiny of day-to-day and year-to-year policy delivery by Departments.
As Deputy Coveney noted, we could return on another occasion to the range of different measures taken by my Department which have a role to play. My sense is that I am much luckier than other Ministers in that the roadmap is set out far more clearly and far better with regard to energy efficiency and renewables than it is in some other areas. The delivery of the Green Paper, White Paper and other energy policies mean that, for my Department, it is a matter of getting ahead and delivering rather than the position for agriculture and transport, where much thought is needed as to what to do to completely change thinking. We know where we need to get to in regard to the issues of electricity, energy efficiency and heat. It is now a matter of determination, although success will not be easy to achieve because one is pushing a range of different actors to move in a certain direction, such as State companies, the private sector and domestic dwellers — we must bring many different parties with us.
Deputy Coveney is correct that we must set an example. One of the first things I did on coming into office, as I stated in reply to the Deputy's parliamentary question, was to ask the OPW to examine my building from top to bottom and tell me how the Department could cut back its energy use and deliver an alternative energy system. The OPW came back to me and told me how we would do it, and the building now has renewable heating and power systems. I hope to set an example with regard to how we operate in the Department building.
With regard to the east-west interconnector, I am aware that private developers are considering the possibilities of interconnection. I welcome such enterprise and endeavour. The State will be equally enterprising. We are on the right track in terms of delivering that east-west interconnector.
That is—
As we speak, we have a ship in the Irish sea, plotting the route. We have a foreshore licence and have dealt with the planning and grid connections in north Wales.In a number of days we will introduce a bidding system so that by the middle of next year we will have contracts signed and will deliver it on time because it is crucial infrastructure.
Will it be delivered in four years?
Definitely. We must start delivering projects like that quickly. I am very confident that EirGrid as a publicly owned company is showing real skill and enterprise in delivering it. There is great political determination to get that agreed. I hope to come back early in the new year with legislation to allow EirGrid deliver it on time and on budget. Work is progressing on many of these issues. We are not publicly blowing our trumpet or shouting about it. The scale of the challenge is so great that I do not believe in immodestly claiming we are great to have achieved X, Y and Z. We will say we are great only when we achieve very significant reductions.
We should not focus on 2020 because it will take the three decades to 2050 to achieve it. It takes time for energy infrastructure to have effect. It takes a longer time than it takes for transport infrastructure to have an effect. We start now.
I thank the Minister for attending today and I will not take issue with anything he said. It would be useful for him to have a copy of our work programme which, thanks to the Chairman, we have already completed. The Minister said many kind words about the importance of the committee. That is not strictly true. Oireachtas committees are not decision-making bodies. What are crucial are the decisions the Minister makes and more importantly what happens at Cabinet. How often has the sub-committee on climate change met and how often has the Minister attended it? I tabled a parliamentary question on the matter and was not given the information. The first thing I want from the Minister is to ensure we get the information. We are not getting it and we are entitled to have it if we are to do our job well.
The format of this session is not terribly satisfactory. I am not so interested in the Minister's views of the committee. I am interested to know what he intends to do to meet the 3% target and how it relates to his Department. Major speeches that may make us feel better can be made on this area without having any impact, which is not helpful. The Minister has been in office for six months and at best he will have another four and a half years until the next general election. The time is very restricted in terms of what he can do, the targets he sets and reaches, and how he will do it. I want to focus on that. The other Ministers will appear before the committee and I intend to take the exact same approach of asking them their targets.
What is the Minister's target for 2008? He talked about flexibility, which is a devious and slippery phenomenon because it often means projects are back loaded rather than front loaded. How does he intend to reach his 2008 targets? During that year, what are the checks and balances? Does he agree that legislation should be introduced to address the Government's commitments on climate change? We both attended the recent well-organised parade on climate change. The big demand was for legislation. Does the Minister agree with that or not? A majority of Members of the Oireachtas have signed a document to that effect and I would like to hear the Minister's views on the matter.
I ask the Minister to talk about offshore wind power. There were major criticisms from that sector of the position the Government was taking regarding offshore wind power. We all know that offshore wind is more efficient and productive than inland wind power generation. What is happening in this regard? What we hear is coming from the private sector and we do not always need to believe it. It has mentioned a €4 billion investment it wants to make, but is having difficulty with support from the State. What is being done about that?
What is being done about fuel poverty? The most inefficient houses in fuel consumption tend to be the poorest. If we are to have changes they will be difficult. However, the Minister should test us when it comes to saying we all need to get together in the one tent. He should put us to the test in terms of what he, as Minister, decides to do and whether we will support him. That is the way it works, as he knows. Changes will occur that will increase costs and have an inordinate effect on poor families. A recent public health report raised concerns about people dying because of hypothermia. That problem will increase without measures to mitigate the effects of climate change.
Last year's grant aid scheme for greener homes was nothing short of a shambles. What will the Minister do this year to ensure the need is met without needing to raid the coffers in other areas? I understand there are difficulties regarding connecting renewable energy sources to the electricity grid as we develop new forms of renewal energy sources. I ask the Minister to comment on the matter.
In his initial statement the Minister clearly pinpointed difficult areas from his perspective. These were the ones he clearly wanted the committee to deal with. I am happy to support him if he has difficulties regarding the North-South interconnector, nuclear power or agriculture. Frankly it would be much more helpful if his party in Government made it clear that it supported the North-South interconnector and wanted to see it happen and that it was not going to use it as a political football in those counties that are affected. That is the way to deal with it. I do not believe there is any percentage for us to get involved in the debate on nuclear power. The Minister has put a protective shield around himself by suggesting having a debate. If the Minister wants a debate he should go ahead and organise it himself. Politically and legally it is a non-runner. We have enough to be doing without wasting our time on having a debate on nuclear power.
I want to work with the Minister in supporting progressive measures. I take the opportunity to flag one area. While it is not directly related, in the long term it has implications for what we are trying to do and what the Minister is trying to do. It does not make sense to break up the ESB. It is costly both in financial terms and in terms of the future capacity of the ESB. We will be dependent on the ESB for changes that will need to be made.
I will take one more submission and will then call the Minister.
If the Chairman does not mind, I would like to respond to one matter briefly before I lose my train of thought. While I do not know if this is the Deputy's experience, when we start talking about this issue in the media or elsewhere, the first debate we have is on nuclear power. Earlier I mentioned the Forfás report on energy security. It contained 50 pages on peak oil with crucial stark information. It contained approximately two paragraphs about nuclear power, which was not of any great consequence because oil is a liquid and nuclear power relates to electricity. It was a completely different issue. The only subsequent debate in the media was about nuclear power. I found that deeply frustrating. It was a crucial report and all the public wanted to talk about was nuclear power. They see it as a golden easy option that they cannot discuss because it is not politically correct which is why they believe it does not happen even though they believe it is the real solution. When considering the energy area the public and the media tend to home in on that. I believe we may as well get it over and done with, have a debate and move on.
Why does the Minister not state his policy?
I have stated my policy. I firmly believe that renewable electricity and energy efficiency are the twin key developments on which we need to concentrate.
Exactly. Let us move on.
I have a number of other points. One of the achievements of the past six months has been to inform the ESB, on behalf of its shareholder, that it must develop in this area and that renewable energy sources and energy efficiency are crucial for the future. As the ESB employs some of Ireland's best engineering brains, why should it not go in that direction? This will be its crucial mission and I hope, in conjunction with its board and management, to be able to set it in that direction. This does not constitute breaking up the ESB. It gives the ESB a crucial central role in the deployment of smart meters so that we can cut back on domestic use, in the development of a distribution grid to facilitate the development of renewable energy and in its development of renewable energy. The ESB must perform a range of tasks in this regard.
It already has been decided and agreed that EirGrid should be separated from the rest of the company. I do not perceive the consequential separation of assets to be as big an issue as the development of the ESB as a best-case green utility company, on which I am working. I have stated publically that I support the North-South interconnector. It comprises part of those energy plans about which I talked earlier that will provide us with a useful framework on our future direction. I stated during Question Time a number of weeks ago that I believe EirGrid, as a capable public company, is interested in ensuring safety and the delivery of power on time and effectively. I have confidence in EirGrid.
Although I could continue recounting the various measures I must take in my Department, one of the advantages of this joint committee is that it can do a certain amount. While Deputy McManus is correct to hold individual Ministers to account for their current actions, this also can be done at Question Time this afternoon or in the Joint Committee on Communications, Energy and Natural Resources. An advantage of a committee such as this is that it can consider issues that have longer timescales, are not easy to resolve and do not have obvious answers. I refer to issues that do not pertain to what one is doing in the next six months or where one's budget is being spent but to broad, long term policy changes that must be made about what the right thing to do is far from clear or certain. While the committee can hold Ministers to account in respect of day to day management, it should not miss the opportunity to discuss longer-term policy changes. No party has yet grasped the extent and nature of the changes required in this regard.
I asked specific questions. I have been around for a long time and do not need the Minister to tell me how to function in the joint committee. I have stated how I intend to function and will not change. I have asked him specific questions. How often has the Cabinet sub-committee met and how often has the Minister attended it? What is the Minister doing to sort out the problem with offshore wind power and the complaints emanating from that sector? What is the target for his Department for 2008 and how does he intend to meet it?
The Cabinet sub-committee met twice and the officials' group met approximately four times. Much of the work will be done outside the sub-committee, which is the place to which issues are brought for final discussion. Unlike the joint committee, the sub-committee does not have the flexibility to bring people before it in public session. However, the Cabinet sub-committee is crucial. As for the issue regarding offshore wind power, I have publically stated that I want Ireland to be able to provide significant offshore wind development. In the new year I will produce policy directions and proposals that I hope will facilitate this. The Deputy mentioned a third issue.
I asked about targets for 2008.
The 3% target is applicable across all Departments.
I asked about the Minister's Department.
My Department also has set a 3% target. The figures for 2006—
I do not understand that because my understanding is—
I do not want an ongoing debate as other speakers wish to contribute.
The problem is that I am attempting to get basic information.
I refer to the 3% target. If one excludes transport—
Is that agreed? Are the other Departments only setting a target of 3%? Is the Minister stating that everyone will implement cuts of 3%?
I expect cuts in the energy area will exceed 3%.
Has the Minister reached agreement with the other Departments on how to meet the Government's—
The programme for Government set out an annual reduction target in CO2 emissions for the five-year lifetime of the Government during the Kyoto period.
How has the target been allocated between Departments?
How is it allocated?
The allocation
As agriculture is responsible for 28% of emissions, will the Department of Agriculture, Fisheries and Food try to reduce emissions by 5%, 2% or some other target?
Much as one would wish to hit 3% on the dot every year in each area, it does not work like that. It will be a moving line.
I appreciate that.
All members are in favour of co-operation. However, the Minister is at the Cabinet table, as I have been, and when Estimates are being prepared within the context of a 5% cut in overall expenditure, such a cut must be doled out to various Departments. Nothing concentrates the mind as much as when one is told one must find cuts of 3% or 5%. I made this point earlier.
In respect of emissions, we are dealing with the Irish people in their entirety.
No, I am talking about how the Department of Agriculture, Fisheries and Food must be given a target. Otherwise it will do nothing.
One of the ways in which one can achieve such certainty is in the operation of a cap and trade system in which one allocates on a permit basis emissions per annum. One then lets the market decide how to do it. We do not have a cap and trade system at present and there is not one in operation on the planet. However, we should move towards such a system. This will take time and will require the kind of background policy analysis work that must be done in a range of different areas to establish the possible implications.
The Government programme calls for a 3% reduction per annum during the Government's five-year term. As a new year is about to begin and four Departments are directly affected, my simple question is, what is the Minister's allocation requirement? What has the Government decided on this issue? The only way to achieve this target is to have clear lines dictating that each Department must reach certain targets.
The targets are set out in the energy policy framework. In my area of responsibility, the target is to achieve 15% of electricity production by consumption from renewable sources by 2010. The current share is approximately 10%. However, I do not consider that target to be a limit and we should exceed it.
What about 2008? I am asking about next year.
As for 2008, I will revert to the Deputy with a detailed analysis of the percentage figure for each policy area.
I would appreciate that as it would be helpful and I thank the Minister.
I compliment the Minister on his presentation. He has made comprehensible a highly complex issue and has done so consistently since he took up his portfolio. He has communicated well with people. I refer to ordinary people who previously would not have had a particular interest or understanding and who now find it much more understandable and consequently embrace the vision on climate change and energy shared by the Government.
To follow up on the points made by Deputy McManus, I agree the ESB must change with the passage of time and as new challenges arise. However, I am concerned about the separation of assets. We must be extremely careful because we could leave ourselves exposed in future were the process to go too far.
Deputy Coveney mentioned that the programme for Government includes the introduction of a minimum requirement for the use of bio-fuels and he referred to a target of 5% of the existing bus fleet. Representatives of Dublin Bus appeared before the Oireachtas Joint Committee on Transport last week. While I imagine this also applies to Bus Éireann, they stated that their first hybrid bus was due to come on-stream next May. There is a commitment to achieve a 30% biodiesel blend in their new buses and it is planned to provide 300 new buses to Dublin Bus in the coming years. However, I did not sense that Dublin Bus was embracing the 30% target in respect of the new buses and it was unclear whether 30% of the 300 new buses would use the biodiesel blend.
I urge the Minister to ensure that the 300 new buses will use the biodiesel blend and to exert pressure on Dublin Bus and Bus Éireann to ensure they live up to this commitment. I did not form the impression that the representatives of Dublin Bus were enthusiastic about it so I ask the Minister to exert pressure on them. The Minister may not have the details to hand, but he should provide members with details on those targets in respect of Dublin Bus and Bus Éireann.
I will have to check the stage bus fleet development is at. If one gains in one area, one will gain in another. By moving towards a biofuel bus fleet, we will have a secure supply so that if there was an oil crunch, we would know that we would be able to run public transport services. The question of biofuels like biodiesel and bioethanol is very complex. In some instances the emissions reductions and environmental effects are far from clear. Under World Trade Organisation rules, one cannot discriminate between one biofuel and another in market arrangements. However, it would be of benefit to us as a State to ensure we had a percentage of biofuels available — 5% or 10% — in order that if there was an oil crisis for any reason, geopolitical or otherwise, we could be certain of being able to run crucial machinery and public transport services. It behoves us to develop such security of biofuel supply quickly in order that we would be able to meet such circumstances
Does the Minister think a figure of 30% is realistic or even achievable?
Yes. One finds that the transport area is technically very complex. It is hard to know exactly what the developments will be, as the position is far from certain. People talk a lot about hydrogen fuel cells as being the source of a fuel supply. About one year ago we had a meeting with the senior engineers in Toyota, which I think other members may have attended. The engineers made the point that it was difficult and slow to turn vehicles around. They said that even moving from concept to prototype stage could take ten years. My instinct is that electrically powered vehicles such as plug-in hybrids will probably be developed and suitable for urban driving. There is a range of solutions, one of which will be offered by the use of biodiesel.
I welcome the Minister. It is great to hear him speak with such enthusiasm about the subject. I can imagine that around the Cabinet table he demonstrates an equal amount of enthusiasm and has persuaded many of his colleagues of the value of the work that needs to be done. The trip to Bali certainly opened my mind and eyes in terms of what is happening in the development of new technologies, what Ireland can learn and the important position Irish people hold internationally in delivering on the Kyoto Protocol. We met many Irish people from a variety of institutions throughout the world. It also made us very aware, not only of the 2020 target about which the Minister spoke, but of what lies beyond that date. One man made a telling point about the carbon changes that must be made by 2050 which would involve reductions of up to 80%. He said life as we knew it would have to change totally. What was so beneficial about the trip was that one had all the experts talking about what we must do. One session we attended dealt with the future of cars and the issue of car efficiency. As the Minister said, the message constantly received was that we needed strong signals from governments. The Bali road map is one very strong signal. Therefore, the part we can play in facilitating necessary changes in terms of public policy is very clear.
I have a number of specific questions. The one thing that annoys me about the grid study which will be published is that it does not take into account the long-term potential of offshore energy projects and the capacity of the grid to deal with such developments. I am talking about large-scale offshore developments. I appreciate that the Minister is focused on the 2050 deadline just as much as on the 2020 one. While it may not be economically viable today, deep-sea offshore developments will provide enormous opportunities for the country. I would like to see the grid study now being prepared including this. I would like to hear the Minister's comments on this issue because I know of his commitment to renewables. This is his opportunity to prepare for the future he wants to see. I would hate to see that opportunity being missed
The Minister spoke about our overdependence on imported gas supplies. Will he outline his thoughts on the Corrib gas field? It has been an unfortunate incident in an Ireland which is trying to show that it is capable of extracting gas and becoming less dependent on imported fuels. Everybody has been afraid to touch on the issue which I do not think has been handled well. Again, it is very important that we send a signal that we are trying to avail of an indigenous fuel source. I would like to hear the Minister's ideas about how quickly we will extract this gas for supply to the Irish market.
The carbon budget is another issue on which we received ideas from other countries. How does the Minister see that budget working? The Minister for Finance is to provide for a carbon element in his next budget. Does the Minister have any ideas on this or can he talk us through what we can expect to happen between now and the next budget?
On the co-firing of biomass, about which the Minister spoke, one of our major problems is the extraction of peat. Peat stations in the midlands are major contributors to our CO2 emissions. I like to think the Minister has plans to change the fuel source for those stations. If he has any thoughts on the matter, I would be grateful to hear what they are.
The sense of urgency in this country and others is only increasing slowly because it is such a slow global process. When I met Dr. John Sweeney, one of our most eminent climate change scientists, he told me that what was happening on the planet was way ahead of the models being used. If one looks at the IPCC model, with its stranded projections, one will see we are at the very top of the most extreme forecasts. Perhaps in the short term this will not have immediate harsh consequences for this country but it will for others. It is starting to have harsh consequences, be they the unavailability of water as glaciers retreat, encroaching deserts or extreme weather events. As those extreme weather events start to build, we must expect the global response to become increasingly urgent. Therefore, we cannot opt out and must be seen to give a lead. When one travels to places such as Bali one gets a sense of how urgent the issue really is.
On the grid, I agree with Senator O'Malley that we should be very ambitious and consider what large-scale offshore projects can be developed here. The reality is that we are increasingly becoming interconnected with the United Kingdom on the electricity side. We are already dependent on the UK market for gas supplies and will witness further interconnections, regardless of the number of interconnectors provided. We should also look at the prospects of providing high voltage DC cables in the Irish Sea to feed into a European offshore renewables grid in order that we would able to connect up any offshore plants we may develop. When one is part of a much larger system, it inevitably leads to greater security of supply in our own system. While we could develop a significant onshore resource, ultimately, it would be limited in terms of what we would be able to do. We could use wave, tidal and wind power and a range of other technologies to move beyond the targets sets and reach the next stage. I have that vision. It is a matter of co-operation with the UK Government, which will be difficult because it has a rock system whereas we have a feed-in price system. The development, despite the complexities involved, should be facilitated.
Everyone agrees that the development of the Corrib gas field was not done in an appropriate way. The Department's job is to ensure that any future development is done in a way where safety is clear and the development is properly delivered in an orderly manner because we will need the gas. The company has planning permission for an extensive site at Bellanaboy. During the past six months, I visited all of the sides in the dispute and the site. Its scale and the development that has occurred are remarkable. The planning permission has been agreed by the State, so we must find a safe way to bring gas to the terminal with EPA approval while providing the essential consultation and safety checks.
The graph shows how the Corrib gas field will only give an injection of gas for approximately half of our needs for a short number of years. Significant other developments are occurring. One that got no attention was a decision by the Norwegian Government in recent weeks not to connect its Troll gas field to the UK, of which we are a part in terms of gas. This will have considerable consequences for our energy security because we will no longer get an injection of Norwegian gas, which was to be our stopgap after the depletion of the North Sea source. The Troll field is Norway's main gas field. Other than those in our area, there are developments in terms of gas of which we should be cognisant.
The issue surrounding the carbon budget must evolve because there are not many instances in which it has been done. We are experimenting with something different. A crucial development this year that did not get much attention — we may need to determine how to gain it greater attention — was the publication of the SEI's latest statistics on what occurred in transport, energy, agriculture, and so on in 2006. They are estimates, but they are fairly accurate. These crucial statistics were forgotten in the budget, but they were important red letter statistics. They showed that we achieved a reduction of approximately 3%, not counting transport. However, transport increased by 7% and threw the figures askew. The statistics will be important and part of the purpose of the carbon budget is to put them up in lights because they are worth due consideration as the signs of where we are going.
The situation may evolve. As we move into the Kyoto phase in 2008, annual financial commitments must be budgeted. If something occurred in X number of years, we will have a financial obligation for which we will make a projection for next year. A financial budget aspect evolves naturally in a carbon budget. We may move towards a wider cap and trade system or carbon tax system in which carbon tax could be mirrored by a permit system in the ETS, which would be done at budget time. In the next five to 15 years, the carbon budget will become a larger part of the budget because it will determine significant financial flows and measures of policy success.
Senator O'Malley asked other questions, including coal firing and peat supply in respect of which there are complex issues. In energy policy, one must juggle three constraints — security of supply, competitiveness and environmental measures. We have a problem with environmental measures in terms of peat and coal-fired power stations, but a decision must be made. If we shut them down and relied completely on gas or renewables, would we be left exposed? Complex analysis must be done on an ongoing basis.
My general instinct is that, if we can deliver renewables, it would bring environmental and security of supply benefits. The emphasis tends to be on competitiveness. While that is important, we must also assess risk. If we choose the immediate, short-term and cheapest cost price of electricity, we will leave ourselves exposed in terms of security of supply. Offshore wind energy is more expensive than a coal-fired or gas-fired power plant, but by building and perhaps subsidising offshore wind power in the same way as the German and British Governments, we will insure ourselves against fluctuating gas prices. Sometimes that is not easy. On a simplistic analysis, people see a price of X for offshore wind energy and believe it will increase the price of electricity, a bad news story. If one thinks in the short-term and looks at the top-line figure alone, one may see the measure as being expensive. However, if one considers the broader picture, the measure insures for the future and provides cheaper long-term supply. We must subsidise and support certain power supplies and make it clear to the business and other communities that it is the right investment decision.
I want to comment on the Minister's reference to the site at Bellanaboy. It would be no harm for the committee to visit it. Not until a person walks through the site does he or she have a concept of how large or important it is or of the work taking place. During the summer, I walked through the site and the committee should consider doing so during the first half of 2008.
That is a great idea.
We will consider it.
Shell is more than willing to facilitate a visit.
I thank the Deputy.
I have one or two supplementary questions and one or two new questions. They are not long. We have not discussed one of the great successes of Bali from an Irish point of view. Thanks primarily to an adviser of the Minister's, the new year will see a consultation, hearing or event in Ireland to discuss future developments in the technology transfer area in terms of carbon emissions and the developed world sharing technology with the developing world. The previous head of the Department, Mr. Brendan Tuohy, worked with Irish Aid and the Department of Foreign Affairs on linking the development aid budget with IT development. Does the Minister intend to continue this type of thinking? While Ireland would reduce its carbon footprint, we could examine how to give our development aid budget both technology and development benefits. The former would affect greenhouse gas emissions in the developing world. Ireland has a good relationship with partner countries in Africa in particular and this would be an interesting and ambitious way to try to affect the developing world's greenhouse gas emissions in a positive and proactive way as well as helping to provide for energy needs and telecommunications demands within those partner countries.
The Minister and I know that ethanol and biodiesel have limitations. Demand is developing across the world for both, but the supply cannot keep up. What are the figures in respect of the hectarage of energy crops planted in Ireland this year, be they plants for ethanol or oilseed rape for biodiesel? The biodiesel and bio-fuel plants being built by the private sector must be serviced. The concept of importing biodiesel and the fuel needed to transport it would make irrelevant the emissions benefits accruing from bio-fuels. Is the delegation satisfied that we will spend the €40 million allocated in the budget on purchasing carbon credits next year? That is taxpayers' money spent on a fine for our poor performance in the past ten years regarding the commitments made under the Kyoto agreement.
We are still involved in sensitive negotiations to see if we can have that event occur in Dublin. Dr. Morgan Bazilian who works as my energy adviser was centrally involved. I hope we can have it confirmed because it would be beneficial but it is not definite. I commend Ms Bríd McGrath, one of my advisers who has worked with Irish Aid. It is an issue we should consider but one should be sensitive in providing aid and careful of conditionality. Offsetting the effects of Government travel will be connected to the REEPS scheme, a UN renewables technology transfer system. It has a gold standard offsetting system, used by the UK Government and Ireland. That is an example of a practical development. I am supportive of developments in that direction.
I do not have the figures for the number of hectares sown in Ireland in one year. Therefore, I will have to revert to the Deputy.
Concern was expressed in an article in the New Scientist in which it was indicated that if 50% of fuels were turned into biofuels, it would take all the water in every river in the world to support that level of agricultural production. It is not possible.
World food prices are rising because the US Government has taken a strong position on replacing fuels with ethanol. It sees it as the future in the context of peak oil. President Bush and Dick Cheney are oil men. When they say the United States is addicted to oil, they do not say it from a green perspective but because there is a real problem. Having reduced production levels from 10 billion to 5 billion barrels of oil, the United States sees the global picture. As a country with a much higher dependence on imported oil, Ireland should see this as an incentive to change its ways but it will not be easy.
As long as we do not have to invade Iraq. I apologise, I was being facetious.
What was the third question?
I apologise, my interruption was inexcusable.
We are into the complex territory of the mechanisms of the Kyoto Protocol. I presume one can only determine these after the fact. One has to have a mission certified by the UNFCC and it is paid retrospectively. We paid some €20 million last year to a clean development mechanism fund. This hedges our position because one will not know the amount in any one year. It will take two years for the certified UNFCC figures for any country to be cleared. I do not know the details of how the mechanism works. One can make an estimate.
About €40 million was allocated this year.
It depends on the price of carbon also but the Deputy's figures do not sound unlikely.
I want to finish now.
I came in halfway through Deputy Coveney's contribution. Was he trying to determine to whom we were paying €40 million? Somebody asked me that question recently and I could not answer. I replied it went into a fund.
We spent a lot of time discussing that issue in Bali and received satisfactory answers eventually. Even so-called experts cannot give a straight answer. A person working with the EPA has a good understanding and this committee would benefit from having her appear before it. She was considered to be an expert on the mechanisms used. She happens to be an American, which is ironic given the reputation of the Americans. It was unusual to have an American leading a European delegation.
Deputy McManus asked what the sum of €15 million was for. I understand it was for an advertising campaign by the Department of the Environment, Heritage and Local Government to raise awareness of climate change. One of the tasks we all have in this long-term political project is to translate complexity into simple language for the people. Part of the problem is a lack of certainty. People wonder if biofuels are good or bad and if offsetting is good or bad. We must be certain and then translate it into simple language.
In simple terms, we have committed to reaching a target of producing 63 million tonnes of carbon. We produce 70 million tonnes and must pay a fine in the form of purchasing carbon credits, reducing emissions elsewhere in the world to compensate for the fact that we are overproducing carbon.
We could be using the sum of €40 million far more advantageously.
It is a double negative.
I wish to make a final point on the role of the committee. We have concentrated on the Kyoto Protocol until 2012 but that is not the big picture.
It will get much worse.
The big picture is how much further we must travel and the recognition that to get there will take time. Decisions we will make now will affect the position in 2020, 2030 and 2040. The scale of the challenge is not widely known.
I thank the Minister and his officials for attending and for his open answers. We do not intend this committee to be a talking shop. These are the initial stages of our development. We have been in operation for six weeks. In that time I have learned a reasonable amount, including about the seriousness of the problem. Despite the talk, the problem is serious but not insurmountable. The Minister has been invited not to be political but to seek answers. The time for talking is over, we want to know what action is being taken.
As Chairman, I am writing to ask the Taoiseach to attend the committee, to link the work of the Cabinet sub-committee with that of this committee and to ask him about the targets in problem areas. Unless we set targets, we will not witness immediate action which is necessary. We can talk about this issue forever but we want to see action, growth, changes in transport and liquid petroleum gas in the back of a taxi. We must know that the Department of Communications, Energy and Natural Resources is carrying out an audit and will give us results. We have asked the Ceann Comhairle to do the same. We will follow up on a regular basis and will annoy the Minister by inviting him to appear before the committee.
I wish members a happy Christmas and a prosperous new year. We will meet for lunch after Christmas. We thought it would be better to meet then.
There will be no tales from Bali at lunch.
The joint committee adjourned at 11.30 a.m. until noon on Thursday, 17 January 2008.