Gas Bill, 1976: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

The purpose of the Bill is to set up a statutory national gas board which will be the national authority responsible for the supply and distribution of natural gas.

Before dealing with the Bill itself, I would like to dwell briefly on the events which led up to the present proposal.

Surveying and drilling in our continental shelf area was initiated in the late 1960s by Marathon Petroleum Ireland Limited under an agreement concluded originally in 1959. The commercial gas field confirmed by Marathon in 1973 in the area south of Kinsale Head has been estimated to contain one million million cubic feet of gas, capable of sustaining a flow rate of 125 million cubic feet a day during a period of 20 years. This is not a major gas find compared to some of the North Sea deposits but it is equivalent to about 12 per cent of Ireland's present total energy requirements. Even more significantly it has confirmed the presence of hydrocarbons in commercial quantities in the Irish continental shelf and has given encouragement to the programme for the further exploration of our offshore area.

In considering the possible allocation of the gas, the Government had to take account of the fact that we did not have an established gas industry with the potential to absorb the flow of gas from this field from an early stage in sufficient quantity to remunerate the enormous capital investment involved. The Government, after careful consideration, decided to allocate this gas for a new plant to be built by Nitrigin Éireann Teoranta at Marina Point in Cork for the production of ammonia and urea for the fertiliser industry and for additional ESB generating capacity of 400 MW in a new station at Whitegate and the extension of the board's existing plant at Marina. An allocation is also being made available to Cork Gas Company to meet the requirements of their consumers.

The allocation of natural gas for the Nitrigin Éireann Teoranta project will assure supply of nitrogenous fertiliser to Irish agriculture and a surplus for export.

It has been stated by various commentators that the use of natural gas for electricity generation is not the most efficient method of utilisation and is a waste of natural resources. I would, however, like to emphasise that all conversion of fuel to energy is wasteful to some extent of the initial thermal content of the energy. The production of electricity, no matter from what fuel it is generated— whether imported fuel such as oil, or native fuel such as peat—involves some loss of value of the original fuel.

It has been suggested also that the allocation to the ESB is in conflict with the EEC directive on the use of natural gas in power stations. This is not the case. The directive in question, which incidentally was issued about a year after the Government decision on the allocation of the Kinsale gas find, does not prohibit the use of natural gas for electricity generation. What it does is to set out the circumstances under which the use of natural gas for electricity generation may be authorised. The use of part of the Kinsale Head gas for electricity generation is fully in line with the criteria set down in the directive. Moreover, the supply of natural gas to the ESB is on an interruptible basis and could be reviewed at a future date if circumstances made that course desirable.

While it is interesting to debate in a theoretical way the various ways in which natural gas can be utilised, one must not ignore the realtities which had to be faced in the allocation of our first gas deposit. Very heavy investment is necessary to develop the field and bring the gas ashore and distribute it. The financing of that investment can only be met from the revenue generated by the sale of gas. Our existing gas market amounts to only about 10 per cent of the output of the field and, while the availability of natural gas tends to increase the market, this takes place only over a period of years and also involves additional capital investment. The high rate of offtake required in the early stages to justify the heavy investment, both offshore and onshore, could in our present circumstances be provided here only by substantial users like the electricity and fertiliser industries. I would emphasise that the use of gas by the ESB will reduce the board's dependence on imported oil and thus safeguard the consumer against the worst effects of any future interruptions of international oil movements. This is, of course, an important element in our present energy strategy. In the light of all these considerations I firmly stand over the Government's decision to allocate portion of the Kinsale Head gas find to the ESB.

The development of the field and the associated onshore projects will involve total investment in excess of £200 million. The onshore construction projects will provide more than 2,000 jobs and there will be permanent employment for about 700 workers. The country's balance of payments will improve by an estimated £75 million a year and the total development will involve an accrual of new technology which will be of considerable benefit to the economy.

An important consideration in regard to the utilisation of natural gas and the arrangements for onshore transmission and distribution is the need for a system of co-ordinated national control. It is clearly important that indigenous energy resources should be developed and exploited to the best advantage of the economy as a whole and that the benefits both direct and indirect, should accrue to the community. Control on a national basis is also desirable so that uniformly high standards should be applied in the construction and operation of terminals, pipelines and associated installations. Accordingly, the Government decided early last year that a national gas authority should be established and they authorised me to undertake the preparation of the necessary legislation.

It will be appreciated that the preparation of legislation for the establishment of a new State-sponsored body takes a certain amount of time. To have deferred action on the development of the Kinsale Head field until a Bill was enacted and the new board established would have involved an unnecessary delay in bringing the gas on stream. Accordingly, in April last year I set up Bord Gáis Éireann Teoranta under the Companies Acts to undertake the conclusion of the negotiations with Marathon for the purchase of the gas and to initiate the planning of the onshore pipeline system.

The board's first task was, as I have mentioned, the conclusion of a contract with Marathon for the purchase of the Kinsale Head gas. The foundations for this contract had already been laid in the negotiations conducted initially by the ESB and NET with Marathon and, while ordinary commercial prudence dictates that the terms of the contract must remain confidential, I can assure the House that a very good deal was, in fact, negotiated. Contractual obligations between BGE and Marathon envisage a first delivery date of 1st April, 1979 for the gas. However, at my prompting and with the encouragement of the Minister for Industry and Commerce, both BGE and Marathon are pressing ahead with their projects with a view to meeting a target delivery date of early 1978.

As regards the onshore pipeline project, I understand that this comprises a combination of conventional engineering skills with certain gas technologies new to this country. I know that BGE saw this project from the outset as a pilot scheme on which the foundations would be laid for any future gas developments. Maximisation of the involvement of Irish enterprise and skills has been a plank in BGE's policy and it was in this context, and with a view to developing the gas technology expertise which was lacking within this country, that BGE found it necessary to obtain consultancy services from the British Gas Corporation. This decision met with a certain amount of adverse criticism at the time and it is only right that I should avail of this occasion to repeat my support for BGE's decision. The consultancy services being provided by British Gas are mainly of an advisory nature, covering matters such as safety codes and standards, design parameters and route selection, areas in which the necessary expertise was not available within the country. The engagement of British Gas does not mean that decisions on the placing of contracts have been taken from the hands of BGE. On the contrary, the awarding of contracts remains the responsibility of BGE and in this connection I was heartened to learn some time ago that two of the earliest contracts to arise were awarded to the ESB. These covered a feasibility study of the pipeline crossing of the river Lee from Little Island to Ring Mahon and detailed design drawings for the pipeline system.

The services of the Institute for Industrial Research and Standards have been retained by BGE to monitor the possibilities for Irish manufacturers and contractors and I understand that a number of Irish contractors have already expressed interest in the construction phase, some in consortia with experienced gas pipelaying contractors, a move which BGE welcomes and which I heartily endorse.

The principal onshore feature of any natural gas development is, of course, the construction of the underground pipeline. It is in the public interest that the construction of such pipelines should be subject to overall control by the State and it is with that in mind that I have framed section 8 to require the board to obtain my consent to the construction of a pipeline and to adhere to such conditions as I may specify regarding codes and standards of safety and efficiency in construction and maintenance. The section further provides that in the construction of a gas pipeline the Board shall take all reasonable measures to protect the natural environment and amenities including buildings and other objects of architectural or historical interest.

Furthermore, provision is made whereby the board in the selection of a route for the construction of a pipeline shall take into account the representations of any local or harbour authority or any railway, electricity, water or other gas undertaker concerned. The Minister for Local Government has agreed in the light of these statutory obligations that the laying of the underground pipeline shall be exempted from the requirement to obtain planning permission and he propeses to make appropriate regulations under the Planning Act in due course. In this respect the board's position will be similar to that of other gas undertakings. The provisions of this section will apply to the onshore pipeline being provided in connection with the Kinsale Head development, and, indeed, I understand from BGE that detailed consultations have already taken place and are continuing with interested parties, including the Cork local authorities, statutory bodies and other representative organisations.

The securing of wayleaves will be an important task in any natural gas pipeline project. Some 30 miles of wayleave are involved in the Kinsale Head project and the need for the co-operation of the farming community hardly needs to be stressed. Negotiations have been taking place between BGE and representatives of the landowners with a view to securing by agreement the wayleaves for the pipeline. It is, of course, important to ensure that a project as important to the country as a whole as the present one, or indeed any further natural gas development, is not frustrated or unduly delayed and, accordingly, provision is included in section 32 for the making of a ministerial order to authorise the board to acquire compulsorily land or rights over land. The Second Schedule to the Bill sets out the procedure to be followed in relation to a compulsory acquisition order. The board's powers to acquire land or rights over land are no different from those of other State bodies and local authorities who have to have such powers for the discharge of their functions. Provision is made for the normal safeguards for all interested parties such as provisions for the hearing of objections and representations and for independent arbitration on compensation terms.

At this point I should mention that the progress made by BGE to date gives every indication that, provided no exceptional difficulties arise, the gas should be on stream in accordance with our target date of early 1978. I am satisfied that this could not have been achieved if I had not taken the step of setting up BGE as an interim company in advance of the legislation. The company, Bord Gáis Éireann Teoranta, will, of course, be dissolved under the present Bill in the manner prescribed in section 35 but this does not mean that there will be any interruption in the project. Continuity and momentum must be maintained and the project will, of course, be carried through to completion by the Gas Board acting within the statutory framework which will be provided by this Bill. I think it is appropriate that I should express my appreciation of the work of both board members and staff in getting a new and complex project so well advanced within a comparatively short space of time.

The statutory board, which will be appointed by me, with the consent of the Minister for Finance, will comprise a chairman and not more than six other members. The First Schedule deals in detail with the constitution and membership of the new board, while sections 16 to 20 deal with matters relating to the employment of staff, consultants and so on.

The duty of the new board, as set out in section 8, will be to develop and maintain an efficient and economical system of supply of natural gas, as it may appear to the board to be requisite, with due regard to available sources of supply. The duty of the board will, of course, be influenced in large measure by the scale of natural gas deposits which may become available as a result of exploration activity in our continental shelf.

Offshore exploration activity is a matter which comes within the ambit of my colleague, the Minister for Industry and Commerce, and in this regard. Senators will note that section 36 provides for a consultation process on any development relating to a natural gas deposit. Furthermore, section 37 provides that all natural gas landed in the State or got in the jurisdiction of the State for consumption in the State, shall be offered for sale on reasonable terms to the board except in particular cases where it is considered that the gas should be offered for sale for a specified industrial use. Any dispute as to the reasonableness of the terms on which gas is offered to the Board will be determined by arbitration.

Section 8 also sets out the general powers of the board. These include powers to transmit, distribute and sell natural gas; to purchase and acquire natural gas from any source; to construct and operate pipelines, terminals and so on, and to carry out various works and activities to enable them to discharge their functions under the Bill. The powers provided in the Bill for the board are those which it is considered the board will require as far as can be foreseen. However, in a new area such as this, where rapid technological changes can take place, it may become necessary in the future to confer additional powers on the board and provision is therefore made in section 9 for the conferring of such powers on the board. These powers would, of course, have to be related to the provision of a supply of gas and could only be conferred by way of a ministerial order, which would be laid in draft before each House of the Oireachtas for prior approval.

The new board will be subject to the controls normally applicable to State-sponsored bodies. Accordingly, provision is included in section 21 for control of the capital commitments of the board. Sections 22 to 25 deal with the board's borrowing powers and are generally similar to the provisions applicable to other State-sponsored bodies. The Bill sets a limit of £25 million on the aggregate amount of long-term borrowing which may be incurred by the board for capital purposes. I should like to emphasise that this is a limit and not an allocation. While the limit may be more than enough to meet the board's requirements arising from the Kinsale Head development, and for investigating the possibilities and forward planning for the utilisation of any further finds, it would not be adequate to meet requirements arising from any significant gas finds and any proposals for financing of any substantial new projects will therefore have to come before the Oireachtas in the form of an amendment to this Bill. This will, of course, give the Oireachtas the opportunity of debating the general activities of the board and the policy being pursued in natural gas development.

It is intended that expenditure and borrowing by the board will be financed from revenue from sales of gas. Section 10 deals with this aspect and, in this connection, Senators will note that a separate section—section 11—is included to permit my giving the board directions as to financial objectives and pricing policy and the application of the board's profits. The latter could, if I so directed, be applied for the benefit of the Exchequer. It has been suggested that the Bill should impose a statutory limit on the amount of any State take under this provision. It has also been suggested that in giving directives under this section, I should be required under the legislation to keep the price of gas as low as possible even if it is significantly lower than the price of other forms of energy. I am not in agreement with these proposals. I consider that it should be left in the hands of the Government of the day to take decisions in these matters as best suits the national interest from time to time. Furthermore, I do not consider it equitable that all the benefits from a natural gas deposit should necessarily be restricted to particular users. The benefits of a gas find could as far as possible be spread over the nation as a whole and it would be very unwise to make rigid statutory provisions at this stage which might limit the future options in this area.

I have not dealt in detail with all the provisions of the Bill because many of them are fairly standard for any State-sponsored body and also because an explanatory memorandum has been circulated which gives a general outline of the Bill. If, however, there is any matter which Senators may wish to raise about any of the provisions which I have not dealt with, I will be happy to deal with them in my reply to the debate.

With the possibility of further gas finds, it is now necessary to give careful consideration to all options for the utilisation of natural gas. Within the energy sector, gas could be used for power generation and could be fed through a pipeline system for direct heating and cooking uses. Natural gas also has considerable advantages as a feedstock for petrochemical industries. Decisions on the allocation of gas will have to take account of all relevant factors including market capacity, investment costs and the related economic consideration and the comparative efficiency ratios of various uses. The nation is entitled to use its resources in a way which will optimise the benefits in terms of energy security and stability, employment creation and value added to the economy.

With those considerations in mind I am arranging for an objective and authoritative study of all possibilities of natural gas. On the basis of such study, realistic options on the allocation of future finds can be identified and assessed without delay. Decisions will have to be taken within the context of general energy and economic policy and matters of such great significance for our future development will obviously be decided at ministerial level.

The setting up of Bord Gáis Éireann is a complementary measure to the offshore policy decisions already announced by the Minister for Industry and Commerce. It is an important stage in the planning and utilisation of our national energy resources and it is a step into the future which will broaden our technological base and strengthen our infrastructure in a way which will significantly facilitate our economic progress. I commend the Bill to the House.

In view of the record of ineptitude in this whole matter over the past two years it is certainly highly desirable, as suggested by the Minister, that some objective and authoritative study of all the possibilities of natural gas should now be made. I cannot understand why this was not done long ago and, indeed, why it was not done prior to the Government decision of two years ago. Frankly, that decision emerges now as being a very grave mistake, having regard to the importance of preserving and conserving our natural resources and, in particular, natural gas and maximising its value to the country by making optimum use of it as an energy factor in our overall requirements. In this Bill we are merely implementing and making possible the decision made by the Government two years ago by providing more than £25 million as a limitation of expenditure on behalf of the new board to enable the board provide the onshore facilities necessary to divide the utilisation of this natural gas, 40 per cent to the proposed nitrogenous fertiliser plant and 60 per cent to the two ESB power stations, one proposed at Whitegate and the other at Marina Point in Cork. This Bill provides the structure for the establishment of a new board to look into in a serious way the enormous possibilities that exist in this area for the country and I have no objection to that. The more experts and people who know what they are talking about that we have in this area to advise whatever Government is in office on the proper utilisation of natural gas the better.

The other leg of the matter is one on which I must take serious issue with the Minister. Along with establishing this board, which is overdue by two years, we are also implementing a gravely wrong Government decision taken two years ago in regard to the utilisation of the natural gas in the existing field. It is quite clear that the 40 per cent utilisation towards the proposed NET plant for providing fertiliser is maximum utilisation of the gas and that is agreed by all the experts. It was a correct decision to allocate 40 per cent towards the requirements of the NET plant to render us independent of the importation of fertiliser and, at the same time, give substantial employment and, hopefully, provide a spin-off industrial development giving employment in that area.

Similarly, any type of utilisation of natural gas in any allied petro-chemical type industry represents a maximum or near maximum utilisation. This is agreed and the Minister would not cavil with that. However, the burden of our serious issue with the Minister is that a short term expedient decision was made two years ago to transfer to the Electricity Supply Board 60 per cent of this natural gas find on a conversion utilisation that is estimated, conservatively, by the Institute for Industrial Research and Standards at a 70 per cent wastage. In regard to 60 per cent of this natural gas coming off-stream, there is a natural, ordinary, expected wastage, according to the Minister's own experts in the Institute for Industrial Research and Standards, of 70 per cent. We can argue about the percentage but all the experts, European, Irish and American, agree that the wastage is somewhere in the order of between 50 and 75 per cent in the conversion of natural gas to power purposes. The figure in between is 70 per cent and is the one the Institute for Industrial Research and Standards has found.

This is a horrifying prospect when we are emerging as a country with limited resources. The Minister said in the Dáil, and elsewhere, that we have only this find so far. What I am going to say accentuates the importance of the matter. If we have only got this field, and we are not in the way of getting any other fields, does this not emphasise to an enormous degree what I am saying? If there is just a limited field there surely we do not utilise 60 per cent of that in a wasteful conversion manner to the extent of 70 per cent waste involved? Surely that is cutting down the number of years substantially and knocking about one-third of the time span of the utilisation of this natural resource? I do not believe it is a limited field. I think we have substantial resources there in the general area. I am not talking about the Kinsale area alone but the west coast and, possibly, off the east coast also. But, if it is a limited field, surely the arguments are stronger for keeping it on tap and utilising it to the maximum extent.

There are industrial uses other than the nitrogenous fertiliser to which I referred and to which 40 per cent of the natural gas is being devoted. I mentioned the petro-chemical industry but the smelter industry is another area where possible industrial spin-off with maximum utilisation might be investigated. The most logical one of all is the whole area of domestic and industrial consumption, providing the basic matters for domestic, industrial and commercial consumption that at present are highly priced. I am talking of domestic central heating, domestic cooking, in the area of industry and commerce in replacing diesel oil and light fuel oil and electricity for space and water heating.

I will give the Seanad some basic facts in this area. They show the enormity of saving of costs involved in utilising this natural gas as opposed to other fuels at present. It is authoritatively estimated—I ask the Minister, and his advisers, to argue this out with me because this assessment may be wrong as it is a prognostication but the area of difference is so enormous that give or take a few pence it is right— that the average price in pence per therm of natural gas, if anybody wants to utilise it commercially by 1980 or utilise it on the basis of reserving funds either for State purposes or for reinvestment purposes, can be 10p. If we are concerned about its re-development in the appropriate way it can go up to 30p per therm. I am talking about 10p to 30p per therm and 10p is on by 1980 for natural gas and 30p is the outside figure having regard to all sorts of State disbursements, development and reinvestment disbursements and research disbursements that may be necessary.

The similar figure in regard to electricity by 1980 will be 90p per therm. We are talking about 10p to 30p per therm as against 90p per therm. With regard to town gas cooking it is 51p per therm and for town gas heating it is 46p per therm, diesel oil 24p per therm, and light fuel oil 22p per therm. Electricity is at the top of the league at 90p. The most expensive natural gas could be by 1980 would be one-third of that at 30p per therm. We are talking in the area of a facility that can feed into a national grid and service areas that are now serviced by electricity and town gas—domestic, commercial and industrial areas. It can provide a service that can range anything from one-ninth to one-third of the cost of electricity. It can cut the cost of town gas by half both in the cooking and heating areas. Yet the Minister says the proposal to utilise this natural gas in lieu of town gas is not on because town gas as it stands has only 20 per cent utilisation as a whole.

Surely in view of the sort of figure I have mentioned we will get a massive switch from town gas and electricity into domestic, commercial and industrial utilisation of natural gas. It will not happen overnight but the 10 per cent utilisation in regard to natural gas will very rapidly become a 30 per cent, 40 per cent or 50 per cent utilisation, having regard to the disparities in price as far as the consumer is concerned, both on the domestic front and the industrial front, that will be available if natural gas is utilised properly and not wasted by handing it over to the ESB for power purposes and allowing 70 per cent of the 60 per cent of what we have to be dissipated in the manner I have suggested. The Minister is well aware that this power conversion of natural gas has been well ascertained to be the most wasteful way of converting this natural asset. If we have a limited field, then we should be concerned about preserving that limited field and maximising its utilisation. If we had much stronger resources than we have ascertained at present, the argument is equally strong. We should again conserve and plan ahead for the future.

This is not just the Fianna Fáil Party talking. I have got all the European directives here which have been well researched in the past and well investigated by the Commission, the Council of Ministers, the Parliament and various technical committees. The research was going on before the energy crisis. Since the energy crisis the argument has doubled for the maximum utilisation of natural gas for the purposes for which it is best suited. In other words, to conserve Europe's energy resources and to conserve Ireland's energy resources. The Committee spelled out the policy and the Minister is well aware of it. He said in the Dáil there was not such a directive. He says here the directive does not preclude the utilisation of natural gas in power stations. It does not preclude it but, in so far as you can read European language, it does. That is the only practical meaning of it when we strip the actual directive of the hedging clauses. What it basically means is that it is only under the most stringent conditions any member country should utilise natural gas in power stations. I quote from the Council Directive of 13th February, 1975. It is headed "On the Restriction of the Use of Natural Gas in Power Stations" and says that more stringent national measures restricting the use of natural gas in power stations and conforming with the provisions of this directive may be maintained or adopted.

It says that whereas special reasons relating to the protection of the environment can, in certain cases, likewise necessitate the use of natural gas in power stations, and whereas the main economic and technical reasons for the use of natural gas in power stations are the following, and so on. Then it says in the hedging clause that the quantities of natural gas available cannot be disposed of in any other way. In that sort of situation they will recommend the use of natural gas in power stations, or where it cannot be disposed of on the premium market. We have a highly geared premium market in Ireland in the domestic and commercial area by our own national grid.

It finally states that whereas it is necessary in the interests of optimum allocation of resources and security of supplies to prevent the natural gas being covered by provisions which differ from one member state to another, and so on. Then it has adopted the directive— this is the important one—to protect Ministers and Governments, like the wasteful Irish Government. The wasteful Irish Government have apparently made their own decision in advance of the establishment of this board. It says that the conclusion of new contracts for the supply of natural gas to power stations, the extension of contracts upon expiry and the construction of new power stations using natural gas must be subject to prior authorisation by the authorities of the member state responsible for the power station concerned.

That article is trying to deal with people within a State who may try to utilise natural gas. That article presumes that the member governments, including the Irish Government, will be so anxious to stop that, that no contract for the supply of natural gas for the utilisation of power stations can be adopted by the ESB—the obvious one in this country. That article means that the ESB cannot on their own go ahead and do that without the authorisation of the responsible Minister.

What that directive did not envisage was that we would have a Government here who would actually themselves propose this wasteful utilisation. It is not just a power authority within the State going mad. It is not just the ESB going mad within the State. It is the Government. Despite all the recommendations here, the Government concluded an agreement and arranged two years ago for the ESB to get 60 per cent of natural gas. Here the directive in Article 1 is designed to protect the Irish Government against maverick power station organisations like the ESB. But the Government decided two years ago to take an initiative to waste the natural asset to the extent of 60 per cent of its utilisation.

The purpose of this directive is to control and corral the whole utilisation of natural gas in power stations. That directive was issued following on a policy proposal. I quote from "Natural Gas, European Communities, Brussels 27th January, 1976":

Electricity generation on this basis is certain to rise from approximately 143 twh in 1975 to 150 twh in 1985, but a considerable reduction will be noted from 1980.

This is a satisfactory trend. It corresponds to the correct application of the Community Directive on limiting the use of natural gas in power stations. It would not be sensible either to prevent the construction of gas-fired power stations in certain cases provided for in Directive No. 75/405, or to hope for the abandonment of plans for gas-fired power stations commissioned before the Directive mentioned above was brought into force which must be put into service in order to compensate for any shortfall in the electricity balance around 1980.

What that is saying, in effect, is that if power stations were commissioned prior to the Community directive and if construction work had actually started and contracts had been signed, that is all right; if there is no other conceivable utilisation, as might be the case in some remote area, they will allow that as an exception. All the Commission is doing is trying to put sense into member government's heads, and to say that if they are wise they will maximise the utilisation of natural gas and divert the resources from the power station utilisation into whatever is seen to be available in the member country.

This is not just the thinking in 1976 or 1975; it was going on in 1974 when the Government decision was made. There is a proposal from the Commission for a new energy policy strategy for the European Community and it says on page 40 of this document of 26th June, 1974:

1. The use of natural gas in power stations in the Community began when large deposits of natural gas were discovered in Europe.

2. The consumption of natural gas by power stations is only justified when for economic and technical reasons it cannot be used more profitably elsewhere or when there is a grave supply crisis in other fuels which require it.

3. A ramified network for the transport and distribution of natural gas has now been constructed in the Member States of the Community and will be further developed in the future.

This comes to what I want to talk about, and this is where we have fallen down completely. What the Commission and the Community envisage there is that Europe will, to a greater degree, be dependent on its own resources, particularly its national gas resources for the whole area of domestic and commercial utilisation. In the current issue of their journal for May, 1976, the European Investment Bank have a very interesting map which bears out what the Commission had proposed in 1974, that a network distribution be organised so as to supply the appropriate commercial and domestic fuel to members. In the past two years the European Investment Bank have spent over £250 million or 500 million units of account by way of loan facilities, which we have not availed of at all, to a large number of member countries and in some cases even non-member countries, that is Norway and Algeria, for the purpose of constructing right across western Europe a massive network distribution precisely for domestic and commercial industrial consumption.

Some of the figures and the distances which these pipelines are going on this map which I have in front of me are very interesting. There is a very large find off the north Netherlands coast at Gronirger, and that is finding its way by pipeline down to Paris on one leg of the pipeline and to northern Italy on another leg of the pipeline. This makes nonsense of our problem in bringing natural gas from Cork to Dublin and providing a minimum network for our industrial regions and housing areas which can be served from such a pipeline. That one is already constructed and financed by the European Investment Bank. They are envisaging a similar type of pipeline proposals from Norway to Britain and from Norway down to Memmel in northern Germany and into Germany itself. There are proposals being programmed through the European Investment Bank for underwater pipelines going from Algeria across into Italy, southern France and Spain.

This is the sort of thinking at the moment but it is not the sort of thinking in this Bill. This is far-reaching, dynamic thinking which is looking ahead to a situation where, as is said in the statement from the European Investment Bank, because they know the realities, although gaseous fuels generally only contributed 2 per cent of the total energy consumption of the present member countries in 1960, the target for 1985 is that 23 per cent of the total energy consumption will be based on natural gas, which is a jump of 21 per cent between 1960 and 1985. That is the trend. I have just referred to the increase in consumption, and it says on page 1 that this:

is being increasingly reserved for the premium end of the market where preciseness and cleanliness are most valued (such as in domestic heating, glassworks, potteries and the food industry).

It was away from the power consumption area. The trend in regard to power station utilisation of natural gas is declining and will, if the Europeans have their way be a disappearing factor through the eighties. The Minister is correct that there is consumption of natural gas for power purposes but it has stopped totally since the energy crisis. The futility of the whole development of natural gas in this area was quite evident, particularly from the energy crisis on. In any event prior to that it was becoming evident that it was wasteful utilisation, but the energy crisis of 1973 certainly brought the message home in a big way that this is not the way for sensible people to utilise their resources. The figure at the moment indicates that about 19 per cent utilisation of natural gas within the EEC serves power station purposes. That is a declining figure. It was 23 per cent some three years ago. It is going to be a declining factor. I would like to know from the Minister if there is any example of a contract being placed by a member country with a power authority in that member country to build a power station catering for the use of natural gas since the EEC directive was issued. That is the directive position of a year ago; the thinking was well in hand a year before that. The Government made this decision two years ago when all this information and data were available to them.

I hazard an opinion that we are the only country, not alone in the EEC but probably in the western and North American world generally, that is starting at this stage to convert natural gas into a power outlet. My information is that the EEC directive is being fully observed and the only utilisation in regard to conversion of natural gas to power purposes within the EEC at the moment all relates back to a pre-1974 situation, that post-1974 there has not been any and there certainly will not be. To what extent are we bound by this arrangement with the ESB? To what extent does the State have to go ahead with it at this stage? This is a serious matter.

From what the Minister said in the Dáil I understand that the proposed power station at Whitegate and the extension at Marina are both easily convertible to oil, that the basic structure and plant are not very different. If they are different at all I would like some information on that. If that is the case, then the ESB can continue with the erection of their proposed extension and new power station in that area and have it converted to oil in the ordinary course. I do not know at what stage of construction they are and I would like some information on that. I do not know how binding the contract is with the ESB. There is a contract with Marathon, that is for the landing of natural gas. Apparently some arrangements were made with NET, of which I approve, for 40 per cent. All the expert opinion is with the Government side in that respect. Let that stand.

In the national interest, have the Government to go ahead with the ESB contract? After all, the ESB is the creature of the State, of the Government who are acting on behalf of the people. The Government should make it known to the ESB that, in the national interest, it was undesirable that we should give them an asset to be utilised in a highly wasteful form by them. This would not even be in the long-term interest of the ESB. This involves a short-term expedient gain for the ESB as against a long-term serious matter for them and for the country as a whole. If the ESB were approached in that way, as a responsible State body subject to the Minister, the Government and taxpayers as a whole, their attitude would not be unresponsive.

Of course, the Minister may think that the decision is justified. I am trying to surmise but probably it was a decision not fully based on the facts of the matter. Two years ago the Minister did not have what he is now proposing in the Bill. He did not have a board with back-up expertise and knowledge to enable the proper advice to be given. I am trying to explain why the decision was made. Probably at that time the ESB advised that they should get their hands on it because it presented them with an immediate short-term gain in the sense that they would be provided with a very cheap fuel, which, even with the waste, as far as they were concerned, would be very good value for money as against diesel oil. Perhaps the Government and the ESB at that time had an over-fixation about the situation in regard to imported oil.

Surely it is wasteful either way. If we are speaking of having to import oil, that has to be done, but then the converse is also true, that if native natural assets are being wasted to the extent of 70 per cent for power utilisation, surely that is more wasteful than importing oil. Surely the spin-off benefit of having natural gas used domestically, commercially and industrially throughout the State from the national grid, the reduction in energy costs and in the cost of living as far as the household is concerned and in energy costs as far as industry and commerce is concerned, would be incalculable, having regard to the high energy costs at present in regard to industry. Surely, apart from the actual erection of the national grid for provision of gas services with the direct employment involved—and we need some direct employment schemes from the Government at present—the growth in industries which would follow in the areas through which this pipeline would pass would ensure a spin-off in employment. The growth in industry would reduce costs involved, and this would be a beneficial factor.

In all of these arguments I do not understand why the decision was made, but it was made two years ago and, I suggest, used for expediency to get over an immediate situation, to get cheap gas into the power stations and relieve the ESB of a financial problem. On the Minister's own admission in the Dáil, that provided an immediate utilisation for this gas. That is the worst reason of all. The Minister's argument was that with the provision by the ESB of a power station the bringing in of the natural gas adjacent to the power station would mean immediate utilisation and that there was some great gain in getting this natural resource and starting to waste it immediately.

I reject this argument completely. I dispute the logic of saying in regard to an asset of this kind that we will have a great quantity of it for a long time ahead and that there is some benefit in providing for its immediate utilisation irrespective of the benefit or effectiveness of that utilisation. If any proper planning went into the matter that is certainly the worst argument. It is the sort of argument used if you want to throw out the bath water; if you want to get rid of it quickly throw it out the window. This is the effect of the Minister's argument. He used it several times in the Dáil, that there was no other way in which this resource could be used expeditiously except by sticking it into a power station.

If that arrangement was made with the ESB two years ago, it is still not too late to change it. The gas will not be available for another two years. The ESB are building power stations which can be utilised as oil-fired power stations. We must get the gas ashore. That is provided for in the Bill. The deal between Marathon and the new board stands and we will be able to get the gas ashore. But have we to be hog-tied to a Government decision of two years ago to give it to the ESB? I am sure if there are any contractual obligations on behalf of the State with the ESB, that the ESB are responsible people who have the national interest at heart and who will not hold the Government to a contract. The Minister made one constructive point when he said, and I quote:

I am arranging for an objective and authoritative study of all possible uses of natural gas. On the basis of such study, realistic options on the allocation of future finds can be identified and assessed without delay. Decisions will have to be taken within the context of general energy and economic policy and matters of such great significance for our future development will obviously be decided at ministerial level.

I agree with that. My point was that this should have been done two years ago. If the Minister, in arranging for his objective and authoritative study, would arrange for an immediate part of that study to be a discussion on the arrangement with ESB it would be a constructive area of investigation. I am not alone in this opinion. Everybody in the production and conversion of energy area will agree with that. If the Minister will be advised by the people in the production of gas the Dublin Gas Company will say what I say. The Cork Gas Company have said it and caused the Minister to vary, in some way, the initial Government decision when they came in at a late stage for 5 per cent of it to be used as natural gas converted into the Cork domestic and commercial grid. That was a very good decision. That puts the sums out a little. I do not know where the different percentages come from but 5 per cent of the total will now go to the Cork Gas Company. I do not see why the Minister cannot take advice from the various energy authorities here, in Britain and in the EEC. I know that within seven days they will confirm that what I am saying is true.

There are financial mechanics involved. The national grid from Dublin to Cork presents a financial problem. The various estimates, or guesstimates, I suppose, are all you could make now, would depend on how many side routes you had, amount to something in the order of £150 million to £200 million. If you did a comprehensive one to Dublin city, and branched off to Waterford and Limerick, it is probably in that order, branching also, possibly, to Athlone or some other towns and major industrial centres.

At any rate, this is something that should not be too difficult to do fairly quickly. It should not be too difficult to make up the sort of sum that will be involved and put that on one side of the balance sheet, the capital involved, and put on the other side the sort of immediate gain involved in building a power station and providing employment at a power station. Is there much gain in that? That is the other side of it.

From the employment and social viewpoints there is probably far greater benefit in building your grid, in bringing in industry to follow the grid, in providing cheap energy for existing industries. In converting people from town gas to natural gas, you create a whole area of economic activity. These are sums that have to be worked out. I do not think it will require any great length of time to work them out. Everybody is agreed on the basic fact, and I do not think the Minister would dispute it, that the conversion of natural gas to domestic and commercial industrial use through the provision of a national grid for these purposes is by far a more economical way.

Problems arise with regard to creating the infrastructure for this—whether it is to be done by way of liquified form, conveyed in tankers, or by way of providing a grid through a pipeline system. I think the latter is the right way, socially and economically. There is an initial capital cost involved and that represents the only risk element. I mentioned to the Minister that the European Investment Bank are now engaged in a massive programme of contributing loan finance to precisely this development. It has lent over 500 units of account and I quote from the May issue of the EIB journal:

...£250 million ranging from Norway, without the Community, the North of Scotland right down to the South of Italy. It has proposed loans to Algeria, North African countries...

We have not sought any money from this loan agency for this purpose. That could help in solving the financial problem. Has any effort been made to contact the European Investment Bank? Has any effort been made to go to this loan agency who are obviously vitally interested in implementing a positive European policy in this area of natural gas and the utilisation of resources, and above all else the utilisation of resources in a planned way so that they are properly conserved and maintained for maximum utilisation and most effective use as far as the Community as a whole is concerned. I have made my point. I may say that is my only point basically on this Bill. I think the establishment of the board is long overdue. The board should have been established two years ago. The board, if established with the proper research and scientific back-up and know-how, will certainly advise in the direction I am talking about. I know that the sort of people the Minister will have on the board and has employed on the board, will be giving him that sort of advice. If they had been there two years ago they might have given this sort of advice and the Government would not have walked into a decision that is totally based, in my view, on expediency.

If this Bill in setting up the board does anything to prevent this sort of thing happening again, I am all for it. I am all for an Irish Gas Board properly established, properly staffed, properly financed. I might say that the financial provision is a bit meagre. On the Minister's own admission I think it is £25 million. That is only designed to cover the existing works, landing the gas and conveying it to the ESB and NET in Cork. I do not think that is enough. I know the Minister can come back to the House again, but I should like to see the Minister coming back very quickly with another Bill considerably enhancing the loan limits of the board with a view to engaging in the sort of development that is now going on in western Europe.

However, that is another point on the inadequacy of the Bill, which is reflected in the fact that while I am with the Minister in setting up the board, hoping that the board will be working with him in a dynamic way in the near future, the Bill basically as it stands is only designed to finance the board, to deal partially with the major undertaking of the provision of natural gas for power purposes. The board will have to provide the lines to deal with that, the pipelines and landing facilities and so on. The only thing I will ask the Minister again is whether it is possible to get this board to reconsider the Government error of two years. Is it possible for this board to make an immediate ad hoc study, as the Minister suggested they should do, on the overall basis of gas utilisation? Would it be possible, once this board are established, to get down as a priority job to look at the Government decision? In other words, is the Government decision vis-a-vis the ESB irrevocable?

I am asking can it be revoked? Could not further examination by the board now to be established, if they are given that examination as a matter of priority, bring home to the Minister that it might be a matter of considerable national importance if he went along to the ESB and if the Government and the ESB had second thoughts about this utilisation of natural gas before it is too late? It will not be too late until 1978. This board will be established within the next two months. They will have a chance, given this task as a matter of priority, of reporting back to the Minister, and there is nothing wrong with the Minister or the Government saying that the mistake was made. There have been plenty of mistakes made by all Governments in the energy field, mainly resulting from the absence of long-term planning, because the resources and the facilities and the research were not available either to this Government or the previous Government. I do not have to go into them. We all know about them in regard to the oil concessions off the south coast, the main reason being the absence of authoritative research and scientific back-up to Ministers and Governments. We are doing something about that in this Bill in this area.

I would ask the Minister to give this board the first task of investigating whether a wrong decision was made vis-a-vis the ESB two years ago and whether, if a wrong decision has been made, negotiations can be entered into before it is too late between the Government and the ESB about the revocation of that decision.

I welcome the Bill. We must realise that this is not a major find; in fact, it is a very small natural gas find. Are we now going to agree with Senator Lenihan and invest in a national grid that he said would cost £200 million or more. I think it will cost substantially more than that if we are to do the job properly. Are we now to invest that much on chance? There is no guarantee whatsoever that we will find more gas. It is speculation. I am sure Senator Lenihan accepts that it is only speculation that there is more gas to be found.

If we do not find more gas, then are we going to invest this substantial amount of money in a national grid? If the Government accept the argument that Senator Lenihan made and begin investing in this national grid and eventually after two or three years we find that there is no gas to put through this grid, then who is to blame? Senator Lenihan will be up here two or three weeks after the Government finding out that the gas is not there condemning the Government for this substantial investment. That investment would be a waste and there is no doubt that it would be a waste. We have already a national distribution system of energy, and that is the ESB. With the type of find we have, I believe that what is now being done, what is now being proposed in the Bill, is the correct method of distribution of this energy. I have no doubt in my mind about that. I am not a gambler. If I were a gambler maybe I would guess that Senator Lenihan may be right, but I am not a gambler. I do not think the Government should gamble in this regard. We are not talking about gambling £2 million or £5 million, we are talking about gambling £1,000 million or more. Therefore, I suggest that what the Minister has proposed here is the right thing to do. We are a small nation. We cannot throw away our money on speculation. There is no doubt that extra work will be available in the ESB because of the proposed system, and in the fertiliser factories.

As everybody knows, we have imported fertilisers at a substantial cost to the nation. If we have our own fertiliser industries, that will mean further investment in agriculture and in the land. This investment is badly needed and will produce substantial finance for the nation. If we can get the farmers to use this cheap fertiliser on their land, we will be doing a good thing and will have more produce from the land to export.

I agree with the Bill before the House. As I said, I hate waste of money and I hate the gambler who is not certain of winning.

I would like to welcome the Bill as initiating a new and very important development in our country. I agree very much with the sentiments of the last speaker, in that what we have at the moment is a relatively small find. We must all remember that this was found in 1973 and we have not produced anything since then. Our whole policy and development should be conditioned to what the next two to four years show of the resources off our coast.

While the EEC appear to be very definite at present about an energy policy, about the utilisation of natural gas, and so on, in point of fact, a long-term energy policy is very dicey. Indeed, Senator Lenihan and his colleagues in Government were belaboured often with many figures on the shockingly wasteful process of making electricity from turf. It was by far the most wasteful way we could generate electricity. Yet now, less than ten years later, we find that turf is second lowest in the list. In other words, economics have changed drastically and these economics can change very drastically in the future again, because a question mark that hangs over the whole of energy is the question of solar generation. We are only beginning to tap the commercial utilisation of that. In this we are heartened by the earlier results which give the astonishing facts that in our climate, taking the good with the bad, with the overcast and the sunny, we can generate 50 per cent as much energy per acre as the most arid desert can produce. In short, when solar energy becomes feasible, we will be in this in a very big way, because we have under-populated areas—stretches of the country that would be ideal for suitable energy collection.

If that is to be done, it will be on a relatively local or regional basis. It raises a question mark on the question of this national grid which, of course, would be the ideal way to develop extensive finds off the south coast, provided there were no other finds being found elsewhere around the coast. Your guess is as good as mine on that.

The pattern for development of solar energy could be very different from the pattern of the development of this. We all accept the fact that both oil and gas are relatively short-term. There is some talk of 20 years, 30 years, even the most optimistic would not hold that you would have ample supplies for much longer than that period. Naturally, their utilisation and their conservation will have to be investigated and guarded. In short, it is a field where we do not have the answers. In such a situation we cannot take up committed positions. I do not say that the Government are right and Fianna Fáil are wrong in their approaches; I say we just have not got the answers either way. When the answers do come, we have to recognise that the ESB are a semi-State body, under the control of Parliament. If at any stage in the future economics and the judgment of the Government say that gas should no longer be used for electricity generation, I do not see there being any difficulty whatsoever in Parliament imposing their decision on the ESB, no more than there should be a difficulty in imposing it on any other State body created to serve the nation, and the best interests of the nation as a whole.

On the other hand, the present arrangements, in providing for nitrogen as applied to the fertiliser industry, make a start on what is the most profitable and most beneficial utilisation of natural gas in the petro-chemical industry. It has the advantage that the cost of the pipeline is relatively low. They have a good start and with more finds off the coast, there is no reason why the scale of activities there should not increase very spectacularly in the years ahead and develop a very profitable and worth-while export business.

We also have the utilisation of gas in homes. A pilot gas scheme has been started in the Cork area. If that is the success I know it will be, and if further finds are made, we will have to produce some kind of a link-up to Dublin. How that can be done depends on many factors in the future.

We will be watching developments in Europe, where they already have a much better established supply of gas, with some reasonable long term prospects. We have to see how well they develop and so on. Perhaps if our finds here do not materialise or do not prove to be as extensive as we would wish, the question of whether or not it is an economic proposition to import gas with an underseas gas main line from Europe will be considered. That is something we will probably debate in six, eight or ten years' time. For my money and for the development of an energy policy here, I pin far more faith on the development of solar energy, and the potential it has for this country than what seems likely in our present gas finds. They are a short-term boost, but they will not solve our energy problems for any long term, and so I welcome especially the setting up of this advisory board suggested by the Minister.

I would like this board to be seen to be a relatively independent body, not a type of inter-departmental committee. I would prefer it to have a separate existence, because we would like to feel that the advice coming from it will be scientific and balanced and will not be dominated by the Government thinking of the day or by the ESB or any other unit. I know that it makes good economic sense for the ESB and it solves their short-term problems that they can get this gas allocation.

It also of course in a very vital way decreases our dependence on imported fuels. At this juncture that is a move that is very desirable, even though it may look costly in the economics of today. What will it be in the economics of three or four years' time? We cannot hazard a guess. In other words, it is a case where you hasten slowly, and where, with all the other commitments that we have to face, we cannot rush into exceedingly high cost capital development. Our priority at the moment is surely, employment, and employment that we can afford in some way or other. All this investment is fine, but the amount of employment created is very costly indeed. All petro-chemical industries are exceedingly high-cost and if you try to write off a national grid over any short number of years —you have to do that with present interest rates—again you get that priced out. In short, our supply of money is very limited, and I think our present priorities have to be to try to produce jobs one way or another.

Let us not take up political positions on this. It is not a political question. It is a guessing question, where the guess of the politician is no better than the guess of the scientist at this stage. We are entering into a new era, a new period in the history of energy development. Let us keep open minded on that and let us neither criticise the Government at present for apparently being rather cautious in the allocation to the ESB nor criticise the Fianna Fáil Administration of the past in pinning so much faith on turf development or electricity generation at a time when all the economics were against them.

Let us be thankful for what we have got, and proceed carefully, noting that the size of the finds over the next three to four years will determine very much what we should do. If there is only a little there, it will have to be conserved. At the moment we have to be watchful and keep an open mind on it. Within those limitations, I think the Government's approach is prudent. I do not think they could have done anything else, and I welcome the Bill.

Naturally, I also welcome the Bill. I would welcome any statutory board set up to control our natural resources. However, putting it in the idealistic way, I would rather be talking about something that was absolutely State controlled. In the circumstances of the society we live in, and the reality of the problems facing us in that direction and the fact that we have not as yet got the thinking of the people moving in that direction in toto, we must welcome any move that will take control of our natural resources and move in the best direction we can to get the best deal possible out of it. Any effort in the direction of a system of coordinated national control of energy resources must give heart to those of us that hold the view I have just expressed.

From the point of view of direct and indirect benefits, we naturally believe that the fullest possible benefits must accrue to the community as a whole, but I think we are sensible enough to acknowledge the fact that at this time, when the climate of opinion is not in that direction, and the economic situation and so on not moving towards that, we must accept that the best possible deal has been arrived at in the circumstances. It is encouraging to see that we will have a statutory gas board to deal with these energy assets we come across from time to time.

Although the find constitutes only 12 per cent of our energy requirements, in these times of high unemployment it satisfies a hope that the employment this venture will give, coupled with the activities of organisations such as Fóir Teoranta and the Employment Premium Bill, will convince the people that there is an earnest desire on the part of the Government, to explore all avenues that might lead to easing the unemployment situation. It would be dishonest to say at this time that we are talking about a solution to the unemployment situation, but any measure that can be engaged in by the State, which will help to ease unemployment must be encouraged, and must be accepted as being desirable.

I do not think anyone will quarrel with the allocation of the Kinsale gas to NET for the manufacture of fertilisers and to the ESB for the generation of electricity and to the Cork Gas Board. There would be no quarrel with the allocation of gas for those purposes. In the case of NET we cannot deny the importance to the economy of the agricultural sector. It is important that we should realise the value of that usage because fertilisers increase production and by having our own fertilisers, we can compete more keenly in the present situation.

We must welcome the Bill on the basis that there will be probably 500 people permanently employed. If we take the service industries such as transport, haulage, maintenance and shipping into account, by and large, I would accept the Minister's figure that somewhere in the region of 2,000 people will be employed. In the ESB alone through being able to avail of the gas now, there is the possibility that a couple of hundred jobs could be created there also.

It is also encouraging that the Bill should be introduced at a time when the whole question of the commercial resources in our Continental Shelf area is not as yet fully known. If there should be further encouraging signs of resources being available in the gas or oil fields, then the experience gained from the recent round of negotiations and consultations that we sought should lead to a strengthening of bargaining power in any future deals which might be contemplated in respect of other finds with which this present Bill is not concerned.

I think the Minister has cleared up some concern and confusion about engaging British gas experts. Many people were under the impression that there was more involved than just a consultancy service. Having read the Minister's statement and the Dáil debate on it, I am satisfied that the Minister has cleared that point up very satisfactorily and the involvement of the British gas people goes no further than just a consultancy service. While there may be a good explanation for it, I am not happy that we never seem to be ahead on the technology side in the oil and gas fields and yet we have many Irish engineers working in similar fields in various countries throughout the world.

Not having had the benefit of either secondary or higher level education, I am wondering whether there is a lack of interest on the part of the educational authorities. My belief always was that there were no natural resources. That could be one of the underlying reasons why we have to call on British Gas Board expertise to advise us in situations like this. I am not sure whether an educational programme—now that we have this advice and expertise— should not be embarked on and that some encouragement should not be given to people to take up those branches of technology provided there is sufficient confidence that opportunities will be available in this area. It may be argued that it might be a matter for the Department of Education or the various educational authorities. If such a programme to assist Irish people to apply this gas or oil expertise or gas or oil technology or mining technology is feasible we should realise that it is not very acceptable not to have Irish people with technological expertise specific to these important areas, particularly when we have to argue that because of the technical nature of the enterprise there is tremendous risk involved and we cannot gauge the risk. We have to take the word of entrepreneurs who operate in this field that the risks are very large. If we had our own experts, perhaps on a further examination the risks, while still existing, might not be really as great as they seem at present through lack of technical knowledge.

The conclusion of a contract with Marathon by BGE for the purchase of the Kinsale Head gas by NET and the ESB I have already welcomed. I wonder whether we can convince the public that we got a good deal without the public knowing to some extent—perhaps not in total detail—the commercial aspects of it. If I were not involved in politics I would want to know a little more about what type of deals have been done. Some information was given about the type of deals done in the case of other resources. I would accept the Minister's word that we have got a good deal, but there is the possibility that the "knockers" and the cranks who issue the various "rags" will take advantage of this lack of information. It might be worth considering giving further information out in relation to such deals.

It will not satisfy people to say that section 37 of the Bill provides that all natural gas landed in the State, for consumption in the State, shall be offered on reasonable terms to the gas board because it does not indicate that the gas board may dispute whether the terms are reasonable or not. You can tell the nation we have a good deal: under section 37, the Bill provides that natural gas landed must be offered on reasonable terms and yet we have what to me seems a contradictory argument, that if you are not satisfied with the terms, you can dispute them and go to arbitration. It is a paradoxical situation to me and I would like the Minister to clear up that particular point. It is not very difficult to confuse me and the Minister might show me wherein my confusion lies. I make the point in all sincerity in the interest of allaying fears the public have.

On the question of policy in dealing with energy resources, credit must not be denied to those who have been handling the matter. Whilst I will be critical of some aspects and confused about others, it would be wrong for me not to express my appreciation, and the appreciation of some of my colleagues, in that, despite the need for a change-over, from the very beginning there has been great continuity of endeavour. That will be very helpful in bringing the gas to shore much quicker. It will also help in our balance of payments situation. It will, I understand, make the situation healthier to the tune of £75 million. I have heard the figure expressed as £100 million but the Minister has made a conservative estimate of £75 million. I commend the way the matter was handled. We are up against the question of the high cost of imports and where imports can be replaced by our own raw materials that is a very desirable evolution.

Again, the job situation crops up. We have the job situation, the balance of payments situation and the allocation situation which have all helped to sustain a certain impetus. I am confident that the energy situation is being handled, by and large, very well indeed. My ambition is to have an overall energy policy. Perhaps there is some thinking about such a policy. I do not know if time plays a part in that one must wait on developments and then, in the light of experience, adumbrate an energy policy.

I venture to suggest that with the mining situation, the oil situation and these gas finds we have a situation now where we could have a policy covering all aspects of natural resources. There is great harmony between the various Departments. I note that even the Minister for Local Government has gone out of his way to facilitate planning permission so that there would be no undue delay in bringing the gas ashore more quickly than it might have been had there not been co-ordination between the various Departments. I include, of course, the Department of Industry and Commerce in that.

There should not be any criticism of the utilisation of natural gas for the production of electricity by the ESB. In an ideal situation there might be some grounds for criticism but we have to think about our security. The ESB are a very large and important body and play a very important role in that security. It is only right that bodies like the ESB should be facilitated in the use of natural gas for the production of electricity and I would oppose any other approach.

We are not living in an ideal world. There were situations in the past where we could have run into trouble. In the oil crisis we had not sufficient reserves and we had no control. I have heard the date given trouble. I have heard the date given as April, 1978, when we may expect to get the gas ashore. I hope this is true for the sake of the employment situation in regard to NET, ESB and the Cork Gas Company because, if it is not brought ashore then, there will be some difficulty. Having considered the situation, they have probably geared their schedules accordingly but, if it does not come ashore at that time, I can see all sorts of problems. It may even jeopardise the employment situation.

In making that point, I do not think for a minute that nothing can go wrong but I have no doubt that the synchronisation between the various bodies has been very good. I believe the gas will come ashore. Perhaps the Minister might have a little more information than just the broad expectation of its coming ashore by 1978. The ideal would be to have total State control over our energy resources, but one must face the realities. Sufficient leeway must be given to the Minister. As one who has been involved in negotiation, not at the same level but very extensively over many years, I say that no negotiator should be sent in to negotiate with his hands tied, and I would not like the Minister to think I was implying that in anything I said. In fact, I refute any suggestion of that by other speakers. The Minister must be quite free because in that way he will get the best kind of deal. If we start tying the Minister's hands the risks will be big and we may not get the kind of deal we want. The strategy must be the Minister's. The strategy has been good and I hope we will realise the full potetial in the near future.

I am not sure about the demands we can make on the exploration companies. It has been said that the Minister's hands should not be tied. I hope that as the negotiations develop and this expertise grows a little there will be a revelation of the type of terms that are possible to advance rather than settle for the terms now offered. That is a reiteration of the point that when we have got more technical expertise in gas and oil fields we should be able to strike a better bargain. I do not believe that you can go much further on that particular point.

On the question of the purchase of Irish goods, I wonder how realistic that is having regard to the type of material which is needed. Would the Minister clear my thinking on this particular matter? I welcome the idea and I know the Minister has put a lot of effort into putting this as a condition of bringing the gas ashore. I know his problem with regard to overlapping into the Department of Industry and Commerce and so on but I wonder if sufficient stress has been put on this. Even if we do put sufficient stress on it, how far can Ireland go to supply the type of material needed and how far can we go to build the type of structures and plants needed?

The find is only 12 per cent but it is very, very encouraging to see that the employment content could be stepped up. I am like the fellow in America who fell off the 56 storey apartment block and said when passing the 40th storey, "So far so good." I am an optimist. I hope there will be a lot more gas found and that when we find it we will have the same capable, competent people to deal with the people involved in it. With the experience they have gained I hope they will be able to make an even better deal in the future.

Is é príomh-chuspóir an Bhille seo bord a bhunú—bord Stáit atá i gceist agam—chun gás a sholáthar. Measann an tAire agus an Rialtas, is dócha, go bhfuil bord den saghas sin riachtanach.

When we come to talk about the gas board we think of the various sources of energy that are available —what comes to mind immediately is the hydro system which has been in operation here for quite a long period, harnessing many of our rivers and in that way creating electricity which was fed to the country through a national grid. This was augmented by turf-burning and coal-producing stations. Later on oil was used but this has become very expensive. Some people have been directing their attention towards atomic and solar energy; others have considered whether tidal waves might help us in the years ahead to create the energy needed to keep our industries and people in reasonable comfort.

With the introduction of this legislation, it is only now it is beginning to percolate to many people that gas has been discovered here. Nevertheless, the ESB were very quick off the mark in getting in here and collaring so quickly for themselves almost 60 per cent of this natural energy which was found around our coast. I have no axe to grind about the 40 per cent which is being allotted towards the utilisation and implementation of a scheme which will help to produce fertilisers in the future at a very competitive price, much cheaper than if they were imported. The farming community will welcome this development. Last year fertilisers were too expensive and were left lying in many stores. That had repercussions in so far as the industries which are based on agriculture are concerned, in particular fruit-processing factories, milk production, butter, cheese and so on. For that reason I think the Minister was very wise in allotting the 40 per cent to the fertiliser factory in Cork. Perhaps in the north we may be a little bit jealous of the fact that Cork seems to be lucky at all times, even to come up with the natural gas finds.

I wonder what information the Government have on the other types of explorations which have been made throughout the country regarding findings of natural gas inland. In my own county when work on boring a well last year was being carried out gas was found instead of water and about ten years ago in the other end of the county where the oil company were drilling they also came upon gas. I have actually seen the flame alight there. Probably that indicates a very small flow but if they had gone down deeper there might be better results. When gas is found on the continental shelf around our coast, and geography and topography being what they are, it is only natural to wonder if there may be natural gas resources right around our coast and even inland.

I am not an engineer and I am not very well up in the way of strata, rocks, gas formation and so on but there are geologists and engineers who know about this and I am quite sure we have a number of them in this country. Many of them have gone abroad and distinguished themselves in work on discovering gas and manning many of these intricate gas rigs which are stationed in dangerous parts of the ocean. We train many of them in our universities and it is a pity they have to go abroad and give their expertise to these foreign countries so that when we have a natural gas find as the one in Cork we may have to import foreign labour. It would be a grave reflection on our universities and colleges of technology and the whole educational system so far as our country is concerned. We have the potential here and I think Irish workers have what is needed. They have matched themselves with workers in any part of the world. Like riding a bicycle, when you have the know-how there is nothing much to it. If a short-term course is necessary for some of our top engineers, I think the Minister would be wise in making sure that Irish engineers avail of such a course. We know they built many of the power stations and they were a credit to them.

This find is a very great asset to the country and I would like the Minister to pursue it as best he can within the national resources to find out if there could be a link-up throughout the country, not alone in the Twenty-six Counties but into the Six Counties to cover the whole island. There may be some sense in what has been suggested, that instead of wasting the other 60 per cent in feeding it into the ESB there might be a case for running a pipline through the whole country and connecting off at various points, at big centres of population especially along the east coast. There is no reason to doubt what has been said, because these people seem to have expert knowledge that there is two-thirds wastage in the supply of gas when you use it to manufacture electricity.

That is very great wastage indeed. While it may create some extra employment in County Cork, it will not reduce the price of electricity for the ordinary consumer. The ESB have made great strides in the past but their charges throughout the country at present are of a crippling nature. They are contributing greatly to the depopulation of rural Ireland by the fact that they have terminated the scheme through which electricity was supplied to a person building a new home out in the country. It is now costing £1,000 for a person building a home outside a town to instal electricity. That is a wrong policy to adopt. Towns will be built up but the countryside will be depopulated and as a result there will be a shortage of houses, schools and so on. This is something the Minister and the ESB need to examine.

In the past, the ESB have provided amenities throughout Ireland. It is wrong for them to cease to do this in 1976 and fall back on a type of policy which will make it almost impossible for a person to live in the countryside because of the exhorbitant charges for rural electrification.

If this gas were piped throughout the country, particularly to populated areas, it would be of immense benefit to the ordinary domestic consumers. This should have been considered. Unfortunately, the decision has already been taken before either the Dáil or Seanad had an opportunity to discuss it. The Minister and the Government may have valid reasons for doing this but they would have benefited if they had held discussions first. This country seems to be the only one in Europe adopting such a policy. Surely, if we are a member of the European Economic Community, understand the implications of this and know what is happening in the EEC and in areas outside, where they are piping the gas down to the Mediterranean and into Africa, we would be wise to study this development. There is a European fund which would have been of great assistance to us in this respect. If that fund, which would alleviate the high cost which will be involved in this development, is available, then the Government should approach the Community to get our share of it.

The Minister will probably come back to the House again to report on other finds. It may be necessary to introduce legislation which would enable the new board to lay pipelines across the country. In this connection, it is important that discussions be held with the farming community. With all due respect to the ESB, when rural electrification was a novelty and much sought after, many of the farmers were very foolish in the way in which they allowed the ESB plough up their fields, put up unsightly grids and lay their wires with total disregard for the person who owned the land. That may have been necessary. then for economic reasons but with the advent of modern machinery the ESB would need to have a look at some of their installations in the countryside. Indeed, some farmers have been killed through touching overhead wires with machinery. In particular, the Minister should ensure that, if there is a national gas grid laid throughout the country, the farming community, who are very reasonable, should be consulted.

I do not intend to detain the House very long in discussing this Bill which should be welcomed not alone by Members of the Dáil and Seanad but by all forward-looking people in relation to our industrial advancement. The Minister is to be commended for setting up this board so that the process for the exploration of natural gas will be an ongoing exercise. This factor will justify the heavy expenditure involved in the early stages of this or any other innovation of technical advance.

The find of natural gas off the Cork coast is such a welcome event that the people may regard it as the forerunner of other finds in the Celtic Sea. This find may be very small in comparison with the immense area of gas likely to exist there or in adjacent areas. The cost of exploration at this stage has been relatively high but further exploration and new finds will justify this expenditure. It will justify the effort being made by the Government.

In regard to what the ESB will get out of this gas find, it is only fair to say that the equation of that cost or loss, although I would not regard it as such, should be on the basis of the price we pay to import oil for the ESB to generate an equivalent amount of electricity. It would be entirely justifiable on this basis. It is easy for those who argued against the ESB having this facility to say that this is a natural gas and should be utilised for consumers in Cork, Dublin and the rest of the country.

I admire the extent to which Senator Dolan was able to draw on his imagination when he said that a line should run from one end of Ireland to the other, right into Northern Ireland. We have been told that the amount of gas that is available at this stage is to some extent not as much as would lead one to believe in an unending amount of energy for the future.

A wise and prudent application of the system will be necessary in the areas where gas is found in future. We should have technicians to forecast locations. This would enable us to explore with reasonable hope and expectation finds off the entire east coast. If you have gas off the Head of Kinsale you could reasonably assume that there will be gas finds along the coast from the extreme south-east to the north-east point of Antrim, parallel with the North Sea find. We should be able to find gas, or have a reasonable chance of finding gas, in sufficient amounts to meet the needs of the nation. Exploration should be an on-going exercise. The Government, I am sure, will be planning on the basis of the outcome being satisfactory, and in proportion to the finds. It would be wrong to say that the cost might be prohibitive to utilise gas for other purposes, such as in the case of NET or our other industrial projects. It would be wrong if we were to shut our eyes to the fact that it is a natural means of producing employment. The people who will find employment as a result of a gas find will be our own people. It will be a means of putting money into the pockets of the workers, money that would normally be going to the Arabs, Dutch and Italians for the gas that we are at present importing. Our economy will benefit to the tune of £75 million a year on the basis of what we now see and what we now know exists.

I am hopeful—and I am sure every right-minded person is hopeful—that we will be able to counter our adverse trade balance by not only £75 million a year but by hundreds of millions of pounds over the next four or five years. It would be the greatest satisfaction we could have if we were able to say that we had discovered sufficient quantities of oil and gas. This would make us as confident in the outlook for our economy as the British are in relation to the North Sea finds. We are likely to have a rosy future from discoveries of gas and oil. I should like to compliment the Minister on the setting up of this board and on all the exercises that his Department are engaging in for the purpose of improving our industry.

I want to change the emphasis a little from what has gone before. In fact, the debate in an almost monomaniac way has concentrated on the point raised initially by the Minister in his speech and then by Senator Lenihan, that is, the question of the allocation of 60 per cent of the gas to the ESB for the generation of power and the rightness and wrongness of that decision. That has been very skilfully debated. It would be churlish not to refer at all to it. It seemed to me that Senator Lenihan's case and the case made by his colleagues was a very strong case and extremely well documented. On the other hand, it was difficult not to take the weight of the Minister's own argument. For instance, he said:

I would emphasise that the use of gas by the ESB will reduce the board's dependence on imported oil and thus safeguard the consumer against the worst effects of any future interruptions of international oil movements. This is, of course, an important element in our present energy strategy. In the light of all these considerations I firmly stand over the Government's decision to allocate portion of the Kinsale Head gas find to the ESB.

It was argued on the Fianna Fáil side of the House that because the decision was made two years ago it was a hasty measure, almost a panic measure in the light of the fact that the whole distribution of oil throughout the world had changed with the Arabs upping the price of oil, and that because it was taken at that time it is a suspect decision, a decision which now, in the calmness of 1976, is one that should be reconsidered if not extinguished.

On the other hand, it is possible to argue that in the apparent calm of 1976 we have allowed ourselves to be lulled into a false sense of security in the whole matter. There is no reason on earth for the Arabs or some other source of power not to upset the applecart again. The arguments on both sides are powerful. The arguments put forward by Senator Lenihan were largely technical. The arguments put forward by the Minister were in a sense strategic. I suppose all one can do is to ask the Minister to look with even greater intensity at the question before finally committing it. It is not committed to legislation at all. It does not arise out of the Bill itself.

I was impressed by Senator Dolan's point because—and perhaps this is a reason for praising the modesty and limitation of the Bill, the recognition in the Bill that it may be replaced by another Bill—the uncertainty that exists with regard to power on our planet at the moment is enormous. The discovery and the development of power, I would argue, is only in its infancy at the moment. Senator Dolan is perfectly right to raise the point that inland oil strikes are a possibility. We do not know what are possibilities. Senator Quinlan very properly referred to solar power. It is not a viable proposition now but in ten years, with the galloping technology of our time, it is very possible that these things may come to pass. The Bill has the necessary flexibility to deal with that and it has a provisional quality about it that makes it a limited Bill and one that can easily yield to a far more comprehensive Bill and perhaps ultimately to a comprehensive policy on energy for the entire country.

The two limited points that I want to make, which are not related to that issue, are in relation to the environment. I note that subsection (9) of section 8 deals with this issue. I do not want to delay too long on this but it strikes me that the provision for the environment is inadequate. To summarise, rather than laboriously to read the section, this provision instructs the board to take all reasonable measures to protect the natural environment and to avoid injuring the amenities of the area, and in particular and without prejudice to the generality of the foregoing and so on.

It talks about flora, fauna, wildlife, and the geological and the archaeological riches that might possibly be destroyed if this reasonable care is not taken. It then goes to to say that in thinking on this subject they should consult such bodies as the harbour authority, the Electricity Supply Board and Córas Iompair Éireann, and a gas undertaker is named too.

Surely this is a very important aspect of the Bill. If you talk about flora and fauna and so forth, that is within the ambit of the Department of Lands, so should it not be mandatory on the board to consult with the Department of Lands? With regard to archaeological riches and historical buildings, should they not have to consult with the Board of Works?

With regard specifically to archaeological finds and possibilities, should they not have to consult with the National Museum? If ever there was a good example for the case I have been trying to make here for a long time, that is, the establishment of a Department for the Environment, surely it arises directly out of that. It seems to me that the provision is there.

There is not an over-arching body that takes care of the environment, the environment being interpreted in cultural as well as natural and tourist terms. For instance, recently we have had a most unhappy and bitter quarrel about the chemical plant that was to have been set up in Waterford, where a very great industrial resource was lost to us because of the activity of a very limited and non-statutory interest who took on the defence and championship of the environment.

I do not think that difficulty would have arisen if there were some Ministry or Department for the environment who would look into every aspect of a matter like this and report. Such a Department would be able to deal with the situation of ill-will that arises when non-statutory or voluntary or sort of crank-like bodies sometimes come into conflict with the Government. Such bodies can exert all kinds of almost indecent pressure from time to time, very often because of the irresponsibility of the media in the matter. If we had a good Department of the Environment that kind of unseemly confrontation would not arise. My specific consideration in regard to that section is that more people than those who are decided on here should be consulted. It does not seem to me to be quite enough just to hope that the board will take reasonable measures. I put that very strongly to the Minister for his sympathetic consideration and, indeed, I hope to embody it in an amendment.

The only other point is a kind of local point and relates to the First Schedule, to the setting up of the gas board itself. I am a bit dense with regard to the reading of strictly legal and technical documents. I cannot quite glean from the internal evidence of this document why the board have to have another name called "the company". I am not asking for an explanation of that. I am sure there is a very good reason for it. Suddenly the board becomes a company occasionally.

The company are an interim company. The board will take over from that when the Bill is passed. It is not as mysterious as the Senator thinks.

It is not as copiously explained as that on the first page. Thank you very much for that. A lot of effort has gone into ensuring that this board will be properly set up and will be protected against any kind of abuse to which a board with such responsibility might be subjected. Section 2 provides that the board shall have six members, and then in section 15 it says that a quorum for a meeting of the board shall be three or other such number not being less than three as may be determined from time to time by the board. It seems to me that three is too small a number there. I think it should be four. Any gathering involving three will be regarded rightly or wrongly not as a meeting, but as a conspiracy.

The other point which seems to me important is that it is laid down that the Minister shall fix the date, time and place of the first meeting of the board. Thereafter, it is up to the board to fix their own meetings. I am thinking of a combination of these two issues—a quorum of three and no statutory obligation on the board to give notice of a meeting. It seems to me that that itself even smacks a little more of a conspiracy.

It says in section 17 that every question at a meeting of the board shall be determined by a majority of votes of the members present and in the event that voting is equally divided the chairman shall have a casting vote. This means that three people being present to form a quorum, a vote of two to one could carry a decision. I might summarise the points arising out of this. It seems to me that once the Minister has set up the first meeting thereafter it is free to a quorum of three to decide what kind of notice would go to members for the next meeting and when that next meeting took place if only three people turned up, a majority of two to one could carry a decision. Putting a sinister complexion on this—I am interpreting it in the worst possible way—it seems to me that there should be a proper provision that a quorum for a meeting be four, that there be provision in the Bill saying what is the proper notice for a meeting. If these two provisions were there or at least, if it were provided that the limit should be four, justice would be seen to be done.

I am not casting aspersions on the people that the Minister would appoint. I am sure that they would all be admirable people but if a man was very determined and very sinister in these circumstances, surely he could manipulate a meeting where the mere quorum of three would be present and where a two to one vote could carry an important decision. It is purely a matter of practice I am concerned with.

It has been said that the Bill is overdue. There is all the temptation in a situation like this to rush judgment. There is also a temptation to hesitate too long. It seems to me that the Minister has struck a reasonable balance between these two considerations. With the few reservations I have about it I would like in those terms to welcome the Bill.

I should like to thank the House for the unanimously favourable reception given to this Bill. Every speaker, from Senator Lenihan to Senator Martin who has just concluded, welcomed the Bill coming to the House. Senator Dolan and Senator Lenihan did have reservations about the allocation of portion of the existing natural gas finds to the ESB. That has nothing to do with the Bill, as they admitted, because a Government decision was taken outside the confines of this Bill. I am very pleased that this Bill, which is dealing with a new form of energy of which we have no experience in this country, should have got the unanimous support of the Senators.

A number of pertinent and interesting points were made on the Bill and I shall endeavour to refer to them. Senator Lenihan, as I said, while welcoming the Bill, said he regretted the Government decision to allocate 60 per cent of the finds of natural gas to the ESB for generation of electricity. I think subsequent speakers answered very adequately the Senator in this regard, particularly Senator Harte and, of course, Senator Martin. You could engage experts from all over the world; you could write tomes about the various options open to anybody in the use of gas, from a commercial point of view, from a strategic point of view or any other. However, it boils down to the fact that the buck stops here and the Government, on my advice, have got to make decisions. We cannot engage in academic debate on the desirability of adopting option A over option B or option C over option D. We have to do things. We have a find of natural gas in this country—the first one we have ever had. It is small in relation to our total energy needs and in relation to finds of natural gas all over the world it is very small. We have to decide what to do with it.

Senator Lenihan inferred that the decision was made in a hasty manner two years ago in the aftermath of the oil crisis and for that reason perhaps the best decision was not taken and it should be reversed. Senator Martin also said that. But even if that were so, has anything changed so much in the last two years that this decision should be changed? Is there any more guarantee now about the price, the availability of oil supplies from the primary source of production in the world, the Middle East? Have the producers in that area found out their own strength? Are they more conscious of the effect they can and have had on the economies of the world by shutting off the oil taps so important for the industrial and commercial life of the whole of the western world? In those circumstances what Government would not grasp the opportunity to lower our dependence on that source of energy, and to try and ensure the amount of oil we would have to use in the future was lessened by even this amount. I think strategically it was the right thing to do. I think for other reasons it was also the correct thing to do.

Commercially, this is a relatively small field. Senator Lenihan stole one of my best lines when he said previous Governments had made mistakes in this regard. He having said it, I cannot repeat it. Having invested over a number of years in the exploration for gas and oil off the south coast, these people were naturally concerned to get their money back in a reasonable time. This is what business is about and these are business people. We cannot expect them to be motivated by the same concern for the Irish people as we are. We have to build fences and write rules and introduce legislation that will control what is our natural resource. At the same time we must require what many feel: that we have not the capital to do it ourselves in many, perhaps all, areas, and that we have not the technology or the expertise available to do it ourselves. Therefore the involvement of huge, very powerful State companies has been and is accepted by everybody in this country as being the correct partnership in the development of our natural resources in this regard.

When these people announced the discovery of their field—and one of the conditions of the discovery was that it should be landed—they then had to approach the Government to do a deal on price and rate of take-off and on usage of the gas. On the other side, because the Government want to get the benefits of that energy into the economy as quickly as possible, they want to get it at the lowest price. But the Government did not want to be inobligate in the use of natural gas.

We have the choice of engaging in the hothouse exercise of mining consultants to engage in studies, to present reports for decisions to be taken by the Government on how to make the best use of natural gas in this quantity—grid, if possible; major users of large quantities essential; location, a consideration. We are talking about a grid, and the rate at which you take the gas off a field is a determining factor on the price. You take it off at twice the rate we are taking off in this field then the price will be lower because the people who invested the money for the exploration will get their money back. Should we take it off at half the rate the price will be higher, but you have your "afters" for longer for the use of future people. The price will be higher because the people who invested the money will not get their money back for a longer period. These are ordinary commercial equations which broadly can be done on the back of an envelope but the fine print of which takes a long time.

The Government had a look at the location, the NET plans for expansion and the ESB generating stations. The Government decided that it should be broken down, as it has been, between a fertiliser plant and the ESB. You must remember we were also conscious at that time of the effect the oil crisis had on the price of fertilisers in this country and the slackening off and dropping in demand for fertilisers by farmers with, as Senator Butler and Senator Kilbride said, the consequential lowering of production by the farming community. So we were able to make ourselves self-sufficient in fertilisers—no imported fertilisers with a balance for export. We were able, by giving it to the ESB, to reduce our dependence on imported oil. Giving the use of the gas to the generating industry, together with the use of turf or peat for the generation of more electricity, we were putting ourselves a good way on the road to self-sufficiency in one form of energy.

The building of a national grid to cater for this find would have set us back in the use of this gas, because the fertiliser factory at Marina Point is almost ready and the ESB generating plant at Whitegate will be ready by March, 1978. Senator Harte asked how real was the date March, 1978, for the taking of this gas and I should like to state that the contract with Marathon is from March, 1979. Therefore, it is only if we fail to take the gas after that date, or if they fail to deliver it after that date that there is a contractual penalty imposed on either party.

Early last year I contacted Marathon and asked them to bring forward, if possible, their date of delivery and said we would be ready to take it in March, 1978. The Minister for Industry and Commerce, who is responsible for NET, backed up my request. We pushed to see that Bord Gáis Éireann was set up. That is the company Senator Martin had some trouble about, and which was established after the gas was found but before the statutory instrument to establish it was put through both Houses of the Oireachtas. They were at the same time working on a gas route and had negotiations with the farmers Senator Dolan spoke about. I can assure Senator Dolan that I am as anxious as he is that the relationship between the farming community and Bord Gáis Éireann should be as amicable as possible. The primary purpose of the Bill is to deal with the national gas board but, hopefully, in years to come this company will assume an importance in the economy and the effectiveness in the economy as the Electricity Supply Board or Bord na Móna do. I am as anxious as Senator Dolan to ensure that they have proper relationships with the IFA, the ICMSA or any other body, or individual farmers with whom they deal.

We must provide in the Bill that, if in any one instance one farmer in any part of Ireland should at some future time, after all reasonable negotiations, hold up the laying of a pipeline that is for the benefit of people beyond his bit of land, the State should have the power compulsorily to acquire it.

Senator Lenihan quoted the instance of pipelines being laid from Holland to Rome and Paris and transporting natural gas. Holland generates 80 to 90 per cent of its electricity from natural gas and the British Government are at present considering putting a natural gas generating plant in Scotland. Every country in Europe uses natural gas to generate electricity. The EEC directive Senator Lenihan referred to is very carefully worded to ensure that it would not interfere with——

I said that no country in the EEC has commissioned a plant for the consumption of natural gas for power purposes in the last three years.

Yes, the United Kingdom have. I am pretty certain that is so. The directive referred to by Senator Lenihan says:

Authorisation for contracts providing for the possibility of interruptable deliveries may be granted.

That is what this Government have done. It is an interruptable contract with the ESB. Therefore, we are within this directive if the use of the natural gas in a power station proves necessary for technical reasons or if the natural gas can be put to more profitable use. Under those conditions we are within the directive.

Technically, the Minister is within the directive and I said that. The Minister will agree that the overall purpose of the directive is to curtail——

To discourage, not curtail. Senator Harte said we do not live in a perfect world. We might read the correct decision on a blackboard but in real life a Government have to take different decisions taking the facts as they are at the time into account. To lay a pipeline to Paris, which has a population of two-and-a-half times that of this country and concentrated within a radius of 25 square miles, is a different commercial proposition altogether than to lay a pipeline all over this country. The pipeline from Strand to Cork city will cost in the region of £15 million. The distance between Cork and Dublin is five or five-and-a-half times that distance. Therefore, the minimum cost of the pipeline will be £80 million. In Dublin, if the Dublin Gas Company be the prime user, they have only 10 per cent and they must engage in capital investment to either (a) convert the gas to town gas as it is called or (b) convert the cookers, or whatever, for the end function of the gas. There is a capital cost in the pipe and in the Dublin area. On top of that, even if it is doubled, it would double over a number of years. The rate the use of natural gas grew in England was something like 11 per cent per annum. It will take, therefore, six to seven years to double. That will interfere with the contract with Marathon and will shove forward the take-off date, meaning higher prices.

For those reasons, the Government were right to find immediately users for this gas, and to set up a board whose function it would be to engage in a detailed study as to what the best use of future finds would be. If we had had a study to deal with the existing find it should have commenced in 1971, assuming a study takes about two years. It was not commenced because we had no natural gas. Although exploration was going on off the south coast, none of us really believed there was anything there. It was only when we made a find that we could engage in any real studies, discussions or debate on its use. I am glad that debate is going on now.

At a conference on natural gas held here about three months ago both sides of this case were put forward. The chairman of the ESB who read a paper is technically very well qualified to argue this case. As well as being chairman of the board he is also very highly qualified academically. He argued about whether the Government were justified in building a second energy grid here when the ESB grid is there already. He said that not alone were the Government correct to give this find of natural gas to the ESB but he felt they should give future finds of natural gas to the ESB. There is a loss in any fuel that is converted to electricity whether it be oil, turf or natural gas, but there is also a loss in the use of the fuel at the end purpose. Electricity is, in that part, far more efficient than gas because there is less loss at the point at which it is used, not the point at which it is generated. He argued that we have a distribution system for energy here. It is the ESB electricity grid which is established and goes to all parts of the country. It would be a waste of capital resources to build a second grid to distribute natural gas.

Another paper read at that conference put exactly the same point of view as the one put here by Senator Lenihan and Senator Dolan. I subsequently made a speech outside that conference in which I said I was very glad to see this debate going on. I hoped many more people would engage in the debate, but eventually I would make the decisions. In the Dáil I was presented with amendments which would have effectively removed from the Government, or the Minister for Transport and Power, the freedom to make those decisions. I resisted those amendments. A Government must make decisions of that nature. The instrument in this case to see the decisions are implemented is Bord Gáis.

Senator Lenihan also said it relieved the ESB of a financial obligation. I do not think that is correct. It may, in fact, have imposed some financial obligations on them—not severe—because it meant they brought forward the building of a power station although they might not want it so soon. The Senator said £25 million was not enough for all that is envisaged for the Gas Board. I agree it is not enough for all that is envisaged, but it is sufficient to deal with the Kinsale Head find. It is sufficient to provide the board with money to engage in studies about a national grid or about any other possible use of natural gas. It is right that Bord Gáis should come to me and I should come back to this House and justify any further money I give them. If Bord Gáis say they will give all the gas found in future to the ESB, then I should come back to the Dáil and Seanad and justify that decision. If you gave the Gas Board £100 million, as was suggested in the Dáil, no Minister for Transport and Power would be back here for the next ten years to justify anything done by An Bord Gáis. This £25 million will enable them to complete the job now on hand. If there are further finds the Minister for Transport and Power of the day will have to come to the Dáil and Seanad to amend this Bill to increase that £25 million to £50 million or £100 million and justify the uses for which that money will be put to develop gas in the future.

The argument Senator Butler made regarding investing money in a grid when we did not know its future is unanswerable. We do not know what gas will be there in the future. We know what is there now and to invest huge sums of money in a gas grid— perhaps it will be the only gas grid— would be unjustified at the moment.

Senator Butler is entitled to a reply as to what the allocation for hydrocarbon research is. Senator Quinlan is entitled to an answer as to what resources are available for solar energy.

I am sorry.

I am trying to be helpful. Senator Butler is entitled to an answer to his question regarding the amount of money being invested for hydrocarbon research. Senator Quinlan is also entitled to an answer to his question regarding how much money is being invested in research into the use of solar energy as an alternative. It is a technical point.

It is a technical point.

The Minister has adverted to it. I agree with the Minister's speech which is imaginative.

It would be a good idea to allow the Minister to continue his speech.

The money for research and development comes under the Department of Industry and Commerce. I am not just palming that off. That is where the allocation is made. We are taking part in all the research and development functions engaged in in Europe. The matter of the generation of electricity from other sources within the technical competence of the ESB has been done by them. I frequently use their advisers in this regard. The research regarding nuclear energy is done by the Nuclear Energy Board.

What Senator Quinlan said about the future is quite right. You cannot write down in capital letters "This is Ireland's Energy Policy" and put it on a shelf and leave it there forever. There are too many question marks over the whole future of energy. We must have a—that awful word— pragmatic approach to it. We must deal with what we have now in the most suitable way possible for the economy. There is solar energy, fusion and wave energy. There has been research into this whole area for the past three years. We have to be thankful to the Middle East countries who raised the price of the oil in that money was not allocated for research of this nature prior to that because of the cheap fuel available from the Middle East. It now warrants research and hopefully the development of further and other forms of energy in the future.

Natural gas is short term in the life of a country. We are talking about a term of 20 years for the existing find. Experts all over the world would hold that the use of any fossil fuel of this nature as energy is wrong because it is of a limited nature. It will be gone, perhaps, in the first ten years of the coming century. If the world has not, at that stage, developed another form of energy to replace it —fusion, solar or some other form— then the world will be in trouble. The date for the development of fusion energy seems to be like a ping-pong ball on a slope. Any time you grab it, it moves ten years ahead of you again. I hope it will come. I suppose the fellow drinking the pint in the pub is totally oblivious to it. Perhaps I am not as conscious of it as I might be. Scientists all over the world are very worried about the future energy sources of the whole world. In the first half of the next century if some breakthrough is not made——

The Indians utilised solar energy 3,000 years ago.

Not in the quantity now required. Senator Quinlan also referred to the new board being independent. I think he was referring to the study being conducted by the new board. I assure him the board, as set up under this Bill, will be independent of the Minister. They will be the same as a board of any semi-State company. They will not engage in this study themselves but will hire consultants and people who are knowledgeable in the field to ensure that the best input possible is got for the study of the future use of natural gas.

Senator Harte made many pertinent points in his contribution which I thought was extremely good. He said the experience gained by An Bord Gáis in negotiating the contract with Marathon, in laying the pipe, and in dealing with what will be their first customers—the ESB, NET and the Cork Gas Company—will strengthen their ability to negotiate in further finds and further deals. I agree completely with that. He said there was no technology here to deal with oil and gas, although he understood there were highly qualified engineers, technologists and scientists working with oil companies abroad.

It is fairly natural that people who wanted to live here and who took third level education in any field would turn towards agriculture because that is our industry. Up to now oil and gas were not industries associated with Ireland. Therefore, young men who wanted to live in Ireland and wanted to develop a technology would develop it in a field that existed in Ireland. Those who wanted to study oil and gas would have to go abroad. Hopefully these people who are abroad working for other companies, as the Minister for Industry and Commerce advances with his legislation, and when this Bill becomes law, would come back and work for us. As Senator Harte says, we could use these to oversee the operations of the oil companies, and we wonder if the risks were quite as great as the oil companies said they were.

Before the find of gas off Kinsale Head there were about 21 drillings and it was either the 21st or 22nd which produced the gas. On average, throughout the world there are about 15 holes bored before there is one find of gas. Considering that and depending on the depth to which the drilling is done in the water it could be as high as £2 million for each drilling, so the risks are pretty considerable.

Does the Minister agree with Senator Harte's suggestion that there be a scientist on every boat to give us national information?

I did not hear Senator Harte saying that, but I would want to think about it. Of course it would not be our boats that they would be on. The Senator also said it was a very good deal, but he wondered why the man in the street would be questioning this even though he would be willing to take the Minister's word for this. It is ordinary commercial prudence not to tell people who would make further finds of gas the price you are paying for the existing one, because that becomes the base on which you would then negotiate. It may not be possible to keep this quiet forever, but it is just ordinary commercial prudence not to tell the next person what you are paying at the moment.

The Senator also thought there was a contradiction between the terms used in the Bill about gas being offered at a reasonable price and the next subsection which says that, in the event of the parties not being able to agree with that they would go to arbitration. A reasonable price is a matter of opinion. When Senator Butler thinks one price is reasonable and Senator Higgins thinks it is unreasonable, then we call in Senator Harte to decide which is correct. That is a fairly reasonable approach to it.

I agree with the point which Senator Dolan made about agriculture. Senator Kilbride said that because there was gas off Kinsale Head it was reasonable to assume that gas existed off all our coasts and perhaps inland. Perhaps it is and perhaps it is not. We would hope this is so from the number of companies of international repute and quite long pockets who have shown an interest in exploring for oil and gas on our Continental Shelf, but you cannot be sure until it actually comes up out of the ground.

Senator Martin said this was a limited Bill, but I am not quite sure what he meant by this. My view of this Bill is that this is a Bill for all time to deal with all finds of natural gas. It may have to be adjusted and amended in the future, but it will deal for all time, I hope, with natural gas. It is certainly not intended that it should become void when the present find of natural gas has run out. This is a Bill to deal with any natural gas in the future and it is not just to deal with the Kinsale Head find. If that is what he meant, I do not agree that it is limited.

I meant it in the larger sense that concern has been expressed that we did not have an over-arching kind of energy Bill.

No. In that sense the Senator is correct, in that it is dealing only with natural gas. The Senator also said that in listing the people who should be consulted, the Department of Lands should be included because they were the people who were responsible for the environment. If he looks at the definition section of the Bill, section 2, he will see the commission referred to in section 28 is the Irish Land Commission which, of course, is under the Department of Lands.

But it does not dispose of the other two points, that is in relation to the Board of Works and the National Museum.

This came up during the ordinary inter-departmental conference and I have agreed informally by letter with the Ministers involved in the Board of Works and the museum that they would be consulted before Bord Gáis do anything in this regard.

It would be too late to incorporate that unless there is a Committee Stage on another date.

Yes, unless there is a Committee Stage.

Why, if the Minister is willing to make that concession did he not call it the Resources Bill, 1976?

I called it the Gas Bill, 1976 because it is dealing with natural gas, and the point which Senator Martin was raising had nothing to do with the resources as such but it was about the damage Bord Gáis might do in laying pipes and the people with whom they should consult before laying the pipes to ensure that that damage would be minimal or non-existent. It had nothing to do with resources. I think the point which the Senator raised about the voting of the board is technically correct but it really does not arise because where three is a quorum then two could make a decision. As I will be appointing and have the power of removing the board, I would very quickly appoint another board and have that decision reversed if I thought it was not in the national interest. I think any other Minister would reserve that power for himself and if he thought that the chairman, who would be the one to call the board and another member operated like that to get decisions in their own favour, he would very quickly sack (a) the people who did not turn up and (b) the people who did to allow this decision to go through.

I would like to thank the Seanad for their approval of this Bill and their acceptance of it. I hope I have answered adequately the points they have raised during the debate which I found extremely interesting and thought-provoking.

Question put and agreed to.
Committee Stage ordered for Tuesday, 13th July, 1976.
The Seanad adjourned at 5.05 p.m. until 2.30 p.m. on Tuesday, 13th July, 1976.