It is with great pleasure that on my first occasion to speak in this House I find myself in a position to endorse what the Minister has said, particularly in his concluding paragraph. We are all aware of the high reputation of Bord na Móna both under its former and its present managing director. This is not a State body which has been subject to criticism as regards its dynanism or efficiency. Quite the contrary—both in its manner of setting about the business of developing our turf resources and the energy with which it has tackled that problem, and also in the technical efficiency with which it has done the job, it has made a contribution not only to the economy, but also I think in some degree to our prestige abroad. It is well known that visitors from other countries, and particularly distinguished visitors, are often brought to see the work of Bord na Móna which is something of a showpiece.
Another feature of Bord na Móna is its high technological content and the fact that it provides a training ground for technologists of which we stand in great need. Some aspects of its activities are, so far as can be judged, completely economic in character even judged by the most rigid standards. This is true, for example, on the peat moss side of its activity, and it is generally true also of the briquette production side, although one notes— and here I would be interested to hear the Minister's comments—that in the latest available report, 31st March, 1964, a loss is shown on the production of briquettes, and also milled peat from which they are made. This may be a purely temporary phenomenon, perhaps, associated with development on this side of the business. In the Progress Report on the Second Programme for Economic Expansion reference is made to some technical difficulties which had arisen at the briquette factories. One wonders whether they have since been resolved and if they arose at the briquette factories, in the plural, or whether there was some specific difficulty at a factory. Have the difficulties been resolved, and can we look forward to briquette production being profitable in the future as it has been in the past?
I also note in the Córas Tráchtála Report that exports of milled peat and briquettes were reduced in 1964. Exports of briquettes to Northern Ireland were down by one-fifth and exports of milled peat to Britain and Northern Ireland were down by a similar figure Is there some particular reason for this or can we look forward to a recovery in these exports in the period ahead?
The criticism and views one would have in connection with this Bill do not really relate to the execution by Bord na Móna of the policy laid down for it but would concern the policy under which the Board operates. The problem here lies in the fact that the milled peat which the Board produces, and which is purchased from it by the ESB for the production of electricity, is bought at a price which is very much higher than the price paid in terms of calorific value for other fuels, the difference being quite substantial. Indeed, this point was raised in part in the other House, and the Minister himself gave figures of the differences in the cost of output from different power stations using different types of fuel. Those figures show that the cost even for the economic milled peat power stations was significantly higher than the cost for those using coal or oil.
For some reason the Minister used the 1962-63 figures for this purpose, although at the time of the debate, a couple of months ago, later figures were available. The later figures show that the position has altered for the worse since then. It is true that the bulk of this deterioration arises from the fact that the load factors of the milled peat stations relative to those of the coal/oil stations have deteriorated. But even if one ignores that, and takes the fuel cost only, there is still a deterioration in the relationship. The market has moved in favour of coal and oil still further since the period of the figure which the Minister used. No one would propose on that account that the turf development programme should be abandoned.
I am sure no one would even suggest that within the present structure of the existing power stations there should be a determined switch-over to the maximum use of coal and oil in order to save a certain amount of money if this would involve a reduction in the activities of Bord na Móna or would go so far as to talk seriously about reviewing the decision to proceed any further with turf-fired power stations. The Minister mentioned the plans in this connection and the work is so far advanced that we can hardly go back on them now.
The question, therefore, is not really whether Bord no Móna should continue, as at present, to produce turf and the ESB should continue to take it to the extent they are doing at present, but rather is it a question of the price to be paid for it and who pays the price. There are no grounds that I can find for forcing the ESB to pay as at present a price for turf which is fifty per cent or more above the economic price—that is the price the ESB would itself freely pay on the market if it had a choice in the matter.
It has been argued that the consumer of electricity and the taxpayer are, in fact, one and the some person and that it does not matter which is charged. That is fallacious—they are not one and the same person because taxation could be so levied as to be borne primarily by the consumer and certainly the general burden of taxation falls mainly on the consumer and only to a limited extent on industry. Where it does fall on industry, it is on profits and does not necessarily affect costs. But when the costs of the development programme are charged to the ESB as is done at present this involves a significant increase which bears heavily on Irish industry. In this country at the present time with our plans for economic development and with the growing move towards freer trade, I do not think we can afford a policy of making power dearer, which is what the present policy is doing.
The Minister adverted to this in the Dáil and claimed that the cost of electricity in Ireland was lower than in Britain. Even if this were true, it would not be relevant to the fact that Government policy here is pushing the cost of electric power higher than is necessary. We, as a developing country, need cheaper power than elsewhere. Even if it were true that our power is cheaper than Great Britain's, this would not be convincing. I should like, however, to ask the Minister what was the authority for his statement in this regard. I have endeavoured to find the basis for such a comparison myself and I must admit I have failed to do so in the form of comparatively up to date data. What I have found is a comparison prepared by OECD in 1958 entitled "The Trend of the Selling price of Electricity". Table 43 of this publication gives the average price per kilowatt in a number of European countries. The latest year for which most of these figures are given is, unfortunately, 1955. Converting these figures by the currency rates shown in Table 45 we find that the average cost per unit of electricity in Ireland in 1955 was 2.24 US cents as against 1.6 cents per unit in the UK—that is, our average unit cost was then forty per cent higher than in Great Britain. I am not aware of any very substantial changes since then in the price of electricity in either country. I am certainly not aware of any change in the price of electricity in Great Britain of such magnitude as would wipe out that differential between our price and theirs.
It may be that there is some statistical problem here, but certainly prima facie it would not appear that power in this country is cheaper than in Great Britain. I wonder whether there is any significance in the fact that the Minister referred to the cost of electricity and not its price. From experience of reading Parliamentary Debates I have learned how important it is to read every word with care. I wonder if in fact the Minister intended some distinction between the cost of electricity and its price. Would his comparison have referred to fuel costs, work costs, total generating costs or overall costs, including distribution and sales? If, in fact, the Minister meant costs at all, what kind of costs was he referring to? I think it is important that this point should be clarified and that we should not be vague on matters of this kind.
It is quite clear, in a developing country, that the cost of power is one of the most crucial factors. The relevant cost of turf and of alternative fuels in the late 1940's and early 1950's was such that it was not unreasonable for the Government to embark on a policy of turf development, not alone on social grounds, but also on economic grounds. Again, during the Suez oil crisis prices generally were pushed up, but there is, I think, no prospect whatever of a return in the foreseeable future to a situation where turf would be as economic as other fuels. However, even if there is a difference in terms of cost, the policy of using turf, and even the policy of charging the electricity consumer for it, might conceivably be justified in a closed stagnant economy such as we had in Ireland in the 1950's.
Our Government have, however, embarked on a free trade policy and on a policy of economic expansion which requires cheap power and not, as at present, a tax on power. We should be thinking of how to make power cheaper, even, conceivably, by subsidising it. We certainly should not be, as we are at present, taxing it to make it dearer. I think a rethinking of this policy is required in the light of the Second Programme for Economic Expansion.
The same situation applies to transport, whose price is being pushed up by restricting the use of surplus capacity in private haulage and by limiting the entrance of hauliers to the haulage business, and to steel, for which protection is being introduced at a time when steel-using industries are being asked to face tariff reductions. We cannot afford thus to increase the cost of electricity, transport and steel—basic requirements of a modern economy. Such measures are quite inappropriate to policies of economic expansion and free trade. I think the Government must face up to the fact now that with our problems and disadvantages we cannot face free trade with such policies. I think that a statement of policy is required now from the Government on energy matters. The Second Programme for Economic Expansion gives us lots of facts and figures about generating power but there is nothing whatever about policy. The aim of energy policy is stated in the Second Programme for Economic Expansion to be to ensure “that energy supplies are adequate and that needs are provided from native sources as far as is economically possible.” Nobody, as far as I am aware, has ever defined what is meant by the last few words. I think it should read to ensure “that needs are provided as economically as possible, preference being given to native resources where this entails no significant cost disadvantage.” On page 170 of the Second Programme for Economic Expansion we read that the use of turf marginally increases the cost of electricity. That seems to me to be an abuse of the word “marginally.” The increase can readily be calculated as lying between £1 million and £1,250,000 a year which adds 5 per cent to the average cost of electricity throughout the country. I do not think that in this country one can properly use the adverb “marginally” with regard to something that involves more than £1 million a year.
There is one particular problem in this area and that is the problem of the small hand-won turf stations. This problem is in fact highlighted in the Second Programme which reports, one must say, very discouragingly on the subject. I do not know what conclusion the Government draws from this. I should like to quote from Paragraph 5, Chapter 5, of the Second Programme:
The ESB were directed by the Government in 1953 to establish four small turf-powered generating stations to provide outlets for surplus hand-won turf. The stations came into operation in 1957-58, and cost £1.46 million. Each was designed on the assumption that a minimum of 30,000 tons of hand-won turf would be available to it annually. Supplies have reached this level only at one station. At none of the others has the average supply over the last five years exceeded 15,000 tons, and the quantities supplied to two of them have included large amounts of machine-won turf bought from commercial operators. Losses have been incurred in the generation of electricity at these four stations.
We all knew when these stations were established they would not be an economic success but that was accepted. It was hoped they would fulfil a social need by providing an outlet for hand-won turf in this area. I am afraid we are back again with a case similar to the potato alcohol industry which was set up to absorb surplus potatoes, but for which molasses had to be imported after potatoes ran out. I hope we will not now find that we have to use large quantities of machine-won turf imported into these areas to keep these stations going.
I consider some review of policy is needed in regard to this matter. I should like to know what conclusion the Minister has drawn from that paragraph of the Government Second Programme or whether it is intended to continue to operate all these stations as at present despite the lack of local support.
The Second Programme also states that by about 1970 all bogs capable of being worked economically by present methods will have been developed. It says the problem will be to maintain output. I am not quite clear what that means. This means that turf production will decline after 1970. Perhaps, the Minister will say something about that because, from the employment point of view, that would be undesirable for the area concerned.
There is one final point I should like to make. I wonder whether there is any possibility, in the light of the new relations we have established with the Government of Northern Ireland, of co-operation in this particular area. I know interest has been shown in Northern Ireland, not simply by Nationalists, but by Unionists and supporters of the Government, in the possibility of turf development in that particular part of the country. I hope the Minister will feel it appropriate to offer whatever assistance the Northern Government feel they would like to have from us in regard to this matter. Bord na Móna have gone as far as Pakistan to advise and assist other countries in their problems in this matter. There is an opportunity now to offer similar assistance at home as part of the general movement towards closer co-operation between the North and the South.
I would reiterate on my own part and on those on this side that there is no criticism of Bord na Móna in their work. The sole issue is the Government's out of date policy in regard to this matter.
