Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Seanad Éireann díospóireacht -
Wednesday, 14 Nov 2001

Vol. 168 No. 12

Natural Gas Grid: Motion.

I move:

That Seanad Éireann calls on the Government to make a financial commitment to extend the Corrib gas transmission line to Ballina and Sligo with spur lines to the smaller towns en route, in view of the statement by the chief executive officer of An Bord Gáis that this extension of the gas pipeline from Pollatomish in Mayo to Craughwell in Galway will not happen without direct Government funding.

I welcome the Minister to the House for this motion. He replied to a question on this issue in the other House a few months ago by stating:

Earlier this year, the Government decided, in principle, that the gas network should be extended to the north west. An evaluation carried out by Bord Gáis has determined that this would require grant aid, as the demand for gas in the long term would not be sufficient to pay for the capital cost of extending the system. Such grant aid would require State aid clearance from the EU Commission. Last month the Government announced that it was moving ahead with the next stage in the project which is to conduct a detailed study on extending the gas network to Sligo via Ballina from the proposed Mayo-Galway pipeline and to Letterkenny from Derry, which is expected to be served by a pipeline from Belfast. Bord Gáis is being asked to carry out this study, the purpose of which is to fully define the pipeline extensions and to give an accurate assessment of the levels of grant aid that would be necessary. At the same time it is proposed to submit a State aid case to the EU Commission.

Since this time last year, various Ministers attending functions throughout Mayo, Sligo and the north west have referred to this issue of bringing gas to Mayo. We have been so long listening to debate about the issue that someone will write a song about it soon. What will happen is that gas will be brought out of Mayo and there is no financial commitment from the Government to extend the pipeline to areas within the county.

The excuse has been given by the Government on various occasions that it is examining the costings of this extension. I can give them. They are well known. We are not dealing with rocket science. These transmission lines have been priced and any pipeline construction operator can say what it will cost to within a few thousand pounds per kilometre. It will cost between £300,000 and £500,000 per kilometre to lay the transmission line, with the average being £400,000 per kilometre. The Government knows the cost involved and any prevarication is only an excuse to delay this further.

We all know that both Bord Gáis and Enterprise Energy are well advanced with the initial stages of the laying of the pipeline. Much of the preliminary work has been done. All either is concerned with is the line from Galway to Pollatomish in Mayo. There is nothing else on their agenda. That is the reality of the position as regards gas in Mayo. We have heard commitments of £100 million for a pipeline but the fact is that Enterprise Energy and Bord Gáis are funding the original line from Mayo to Galway.

Another issue which arises is that the Government saw fit, presumably after evaluation, to sanction the second interconnector from Scotland to Ireland because the Kinsale field was running out. Some £200 million was invested in the project and, in light of the economic downturn and the dramatic decrease in worldwide energy demands, it must be asked why we could not wait just one more year for the Corrib field to come on stream. The second interconnector will only become operational towards the end of 2002 and the Corrib gasfield is scheduled to come on stream in 2003.

The Government has seen fit to invest £200 million in this pipeline. Would it not be better to invest the bulk of that money in the west to pay for the extension of the pipeline to Ballina, Belmullet and the other towns adjacent to the main transmission line? People in the county have been agitating for the Government to provide a definitive statement or a concrete commitment in respect of this project.

The Celtic tiger passed through Mayo almost unnoticed, although he stopped in a few places along the way.

He drank a Coke in Ballina.

Yes, but that did not keep him alive. Mayo needs this vital item of infrastructure. Nothing helps attract industry or improves an area more than a good road network, an available source of power and an accessible workforce. These are the important ingredients required to create a vibrant economy.

It is 20 years since the Kinsale gasfield, which has made a major contribution to improving our balance of payments and helping develop our energy infrastructure, came on stream. Given that the supply from Kinsale will be exhausted in the next few years, it is great that the Corrib gasfield will be coming on stream. We do not want to see a situation in County Mayo where, after the construction workers have returned home, gas will be transported out of the county via an underground pipeline. We do not want the ultimate result of this major gas find off our coastline to be the creation of only 40 or 50 jobs at the reception terminal situated on the northern shoreline of the county.

We are expecting a definite commitment from the Government in relation to this matter during this evening's debate. It is not a question of waiting around for costings to be carried out. Any builder worth his salt can estimate the cost per square foot to build a house, be it a bungalow or a two storey dwelling. If he looks at the site, he will be able to provide, within a few pounds, an estimate of the eventual cost. Likewise, it is totally implausible for the Government and the Minister of State to indicate that they do not know the cost because the costings involved are available to anyone who wishes to see them. We do not want further prevarication on this matter. We want a solid commitment that the pipeline, which is a vital element of infrastructure, will be laid.

As stated, there was great anticipation in the county when this find was originally announced. However, the air of expectation waned during the past year or so when people realised that the actual benefit to the county may be negligible unless there is a substantial commitment to invest in a new transmission line. Bord Gáis has a commercial mandate and will not, of its own volition, engage in an extension of a pipeline if this is not justifiable under certain criteria. There is an onus and an obligation on the Government to ensure that the pipeline is laid through Mayo and Sligo and to consider possible extensions to Donegal and Northern Ireland.

We do not wish to undergo another winter of listening to after dinner speeches by Ministers informing us that there is a commitment in principle. Enterprise Energy and Bord Gáis are on-site carrying out work and if a decision is further delayed there will be no way to incorporate the extension of the transmission line in the initial phase of the programme.

I second the motion. When the first tests were carried out on gas from the Corrib field, there was a great air of expectation and hope that it would lead to the creation of jobs and would help to rejuvenate certain parts of County Mayo. That will not be the case unless the Government takes action. In taking such action, it will be obliged to comply with the terms of the motion put forward by Senator Caffrey. The amendment tabled by Senator O'Toole draws attention to the need for a spur line to Belmullet, but this is covered in Senator Caffrey's proposal.

As Senator Caffrey indicated, a sum of £100 million is required for the extension of the pipeline. The Minister for the Marine and Natural Resources indicated that a certain amount of money would be required to run a spur line to Ballina. Two or three days later that statement was contradicted by the Minister, which is not good enough. As it stands, gas will be brought ashore at Broadhaven or Pollatomish in County Mayo and will be piped to Galway, other areas throughout the country, Scotland, England and the other places to which it is carried by the interconnectors.

The Government allowed Bord Gáis to decide to build a new pipeline from the east coast which runs through County Meath, Athlone and on to Galway. The company has provided spur lines to various lines along that route. In this case no provision has been made for spur lines to towns such as Belmullet, Ballina, Westport, Castlebar, Claremorris and Ballinrobe, or, as Senator Caffrey said, for extensions to Sligo and Donegal. The Government has not even given a commitment in this regard. However, this is not the first occasion on which the current Administration has failed to provide such a commitment.

The west has been badly treated. The railway line which serves the region leaves a great deal to be desired. Eircom was sold without any commitment to provide broadband services to the west. The Government received a massive sum of money from that sale, but the west has been placed at a complete disadvantage because it does not have a broadband service. The Mayo county manager is currently putting proposals before the members of the county council to help improve the position, but this will come at a considerable cost to ratepayers and taxpayers in the county. The remainder of the country has access to broadband services which were paid for with taxpayers' money. Eircom should not have been sold without a firm commitment being put in place to roll out broadband services to the west.

The ESB does not run high power cable lines into the west, which also places the region at a complete disadvantage in terms of its ability to attract heavy industry because such industry requires access to a major supply of power. The east coast is again at an advantage in this regard. As Senator Caffrey indicated, the extension of the gas line would do much to change this. It would bring in an efficient fuel and would allow industry to come to this part of the country which is most disadvantaged.

The national development plan, when it was put together in 1992, made no provision for upgrading the national primary route from Longford to Westport, even though the Minister for the Marine and Natural Resources stated recently that the Minister for the Environment and Local Government could, at any stage, issue a direction to the National Roads Authority to change or upgrade it. This has been refuted by the Minister for the Environment and Local Government.

The west is hugely disadvantaged. The Government, which has probably served the longest term in the history of the State and will run almost a full term, has done little or nothing to provide facilities such as roads, railways, gas and electricity. The west is completely disadvantaged in all those areas when one compares it to the east coast.

I second the motion tabled by Senator Caffrey and believe the Government should make an announcement as quickly as possible and that it should give a commitment to put in place the necessary funds to make sure spur lines go to the major growth centres in the west.

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Seanad Éireann welcomes the unprecedented level of investment in natural gas infrastructure that will bring gas to many new areas of the country, and the Government's decision to move forward to the next phase of bringing gas to the north west."

I welcome the Minister of State, Deputy Jacob, to the House. Before I speak to the amendment, I would like to comment briefly on what my colleagues opposite have said. I assure them that the sentiments and views conveyed and the concerns expressed in their motion are laudable. It is commendable that they should speak up so forcefully and vigorously for the west and the region they represent. Because of the programme upon which the Minister has embarked and which is rapidly progressing, their concerns are not well founded. Although I am a frequent visitor to the west, as those opposite know, I am not as intimately familiar with its topography as they are.

While I acknowledge their concerns, the arguments they have put forward in terms of their commitment to and support for the extension of the Corrib gas transmission line throughout the west and the north west and the economic, social and environmental cases they have advanced, which are contained in Senator O'Toole's amendment to the motion, this question has to be seen in the context of a national plan which is incorporated centrally in the Government's national development plan. It is laudable to identify specific areas and highlight serious infrastructural weaknesses, but it is not possible, because of what we are dealing with here, to speak of them in isolation. As I said, it must be looked at in the context of the overall national development plan. It is for that reason we, on this side, will support the Government amendment.

Nobody with any grasp of the importance of balanced regional development, which is unambiguously promoted in the national development plan, could do anything other than ensure that all regions get fair and balanced development. Those parts of the west and north west included in the motion and in Senator O'Toole's amendment are an integral part of that plan. However, when we promote any region, we must do so as part of this plan. With the development of any national development plan, a start must be made somewhere. Routes must be planned and, in this case, the pipeline and the spurs must be put in place. Choices must be made about these routes which may be unpopular in areas. The overall determinant must be what gives the best deal to all the people because that is what a national plan is all about, as well as value for money, while seeking to adopt as balanced an approach as possible.

We must remember it has taken 20 years to develop Ireland's natural gas grid to its present standard. The first gas transmitted came from the Kinsale Head field, where the gas find originated, to Cork city. A 240 kilometre pipeline to Dublin was built in 1982 which took in towns en route such as Limerick in the mid-west. The expansion of the grid has continued to other parts of the north east, north central areas and the midlands. The most spectacular development of all in the expansion of the grid was, undoubtedly, the construction of the interconnector from north County Dublin to Scotland. It is important to emphasise that. It was a landmark project for late 20th century Ireland.

We all agree with the claim forcefully articu lated by Senators Caffrey and Burke that gas has become an increasingly vital component of our overall energy needs and it is vital that we manage the sector, continue the rapid expansion of the infrastructure and cope with the dramatic growth in demand. There has been spectacular growth in demand for gas as an energy and fuel source. In keeping with the need for infrastructural development, total expenditure by Bord Gáis on the construction of the new pipelines over the next two years will be over £650 million of which approximately £200 million will be invested in the BMW region.

I think I heard Senator Caffrey correctly when he said that perhaps this should be set aside for local emergency and priority. We are dealing with a national situation of which this is an inherent part. The best experts and consultants who have been employed have stressed the need for the various aspects of the national development plan in terms of infrastructural development to proceed. It would be difficult, therefore, to simply pluck out that amount and devote it to a region of the west which we all agree needs rapid assistance in terms of infrastructural development.

The existing network took 20 years to build. Over the next couple of years the second interconnector, the ring main between Dublin, Galway and Limerick and the pipeline between Pollatomish and Craughwell outside Galway, over which the Government deliberated at length on the basis of consultants' reports, will add 750 kilometres of new pipeline to the existing network to bring the Corrib gas to market. That is a huge commitment by any standards in the space of a couple of years and a substantial part of that will go to the west as part of the BMW region. The onshore extension of the natural gas network will greatly increase the number of households and businesses which will have access to natural gas both across the midlands and into the west.

When I spoke on the Gas (Interim) (Regulation) Bill, 2001, I referred to the Government's decision to move to the next phase, extending the gas network to Sligo and across the Border from Derry to Letterkenny. This is indisputable evidence of the Government's very definite commitment to improve the energy infrastructure in the BMW region. However, we must recognise that these extensions will require substantial grant aid. Senator Caffrey rightly referred to the commercial mandate of Bord Gáis. Detailed planning will be carried out by Bord Gáis Éireann and I understand this work will establish an accurate figure for the grant aid required, although figures have been mentioned by Senator Caffrey which I am not in a position to dispute.

Overall, it is proposed to complete what will be a national ring to connect Galway, Mayo and Sligo and to bring the other connection from the North through Letterkenny. The commitment is manifested in a £10 million investment which the Minister and his Department have made to the Northern Ireland development. Consultants have emphasised the strategic importance, nationally and in terms of the all-island market, of having a connection between the North and South pipelines. There is a very firm commitment there.

There is no doubt that demand is phenomenal and has exceeded the wildest expectations of An Bord Gáis. The anticipated demand of 23.5% per annum in the next two years is expected to double by the end of the decade. It will be difficult to keep pace with that level of demand. Those who have said there is a shortfall in infrastructural development to match demand have conceded the shortfall is not due to a lack of a commitment on funds, but to the democratic deficit in planning which is working its way through the system. There is no doubt that demand will continue apace irrespective of the downturn which I expect will of short-term duration.

I congratulate the Minister of State and the Government on the commitment they have shown, not only to the national grid, but to the investment in infrastructure in the west and north-west.

My colleague, Senator Joe O'Toole, asked me to propose his amendment, but I understand that, for technical reasons, it may not be possible.

The Senator may refer to it.

Thank you for your guidance. I propose to do so, but first I wish to put the wording on the record because it is important. The amendment Senator O'Toole, supported by you, Acting Chairman, and me, wished to move was the following:

After "Seanad Éireann" to insert:

"in recognition of the acceptance by the people of north-west Mayo of the significant environmental impact on their countryside caused by the Corrib gas pipeline and of the need for an improved infrastructure in that area demands that the Government financially supports extending the pipeline to the west as far as Belmullet and also".

It is important that we put this on the record because, apart from anything else, Senator O'Toole and I who happen to live in Dublin should show a kind of fraternal concern for the people far removed from us in the west. The reason Senator O'Toole is not with us this evening is that he is engaged in official business in the west.

It is important that we demonstrate our commitment to people in the west. There will be an impact in this area. They will have to pay a price in terms of a certain amount of environmental change that not everybody would see as positive. In other words, the physical structures will pass through sections of this area. It is important when a natural resource is discovered the area in close proximity to it should be allowed to benefit as much as possible. I know there is an argument about the national plan, but is it not extraordinary when there is something positive to be put into the pot, it is grabbed for the national plan? If what was discovered there was negative, I do not think there would be the same appetite to grab it for the national interest.

In terms of north Mayo, particularly north-west Mayo, there is, as my colleagues on this side have said, a significant lack of infrastructure. There has been a consistent falling out of the system and an inability to benefit from tourism, infrastructural and development grants, all of which are fairly thin on the ground for people in north-west Mayo. What Senator O'Toole was concerned about was that the benefit seemed to be travelling very rapidly eastwards and he wanted to ensure that at least a certain level of benefit deriving from this natural resource remained in the area from which it derived. Of course, where it derives from is out in the Atlantic.

It is remarkable that technology has advanced to a stage where there can be deep water drilling. These resources are very important. I understand the find is off the coast of Broad Haven, that it is extremely significant and may well last for a good number of years and that it is of the same magnitude and significance as the previous discovery at Kinsale which had an appreciable impact on the economy of Cork. It is only fair that people in the area should be allowed benefit from it.

It is a significant resource in a world where energy resources are becoming rarer, more expensive and often environmentally detrimental. When a country like Ireland is lucky enough to discover such a resource it should be exploited in such a way that local people benefit.

On the subject of gas – I do not wish to raise the ire of the oil interests – I regard it as the best and most efficient method of heating. I use it for cooking in my own house. It is by far the best for cooking. I am sure the housewives of north-west Mayo would agree with me and would be delighted to get their hands on this resource. Apart from anything else – better than electricity, most of which is generated from oil nowadays – one can vary the temperatures immediately if one is trying to cook. In terms of home heating there is much less nuisance in respect of spillage, smell and so on. It is a nice clean consumer friendly method of exploiting these resources.

It is important that the Government gives consideration to allowing the benefits which derive from this geographical area to be thrown back into it to the extent that that is possible rather than simply grabbed for the national interest. It reminds me of the mantra one hears on a certain satirical television programme when something unpleasant is coming up and a voice of a well known colleague from the Lower House is heard intoning "in the national interest". It must be particularly galling for people living in places like Belmullet to find when they have the goodies that across the airwaves from Dublin comes the voice "in the national interest we have to grab all your resources and repatriate them and you will get sweet damn all out of it." I think there would be general consent in the House that the Government should look at this to see if it is possible to develop an area of the country that has its own beauty, its own remarkable people and that has had proportionately smaller investment than the rest of the country.

I am pleased to have been given the opportunity by Senator O'Toole to make these few remarks. I regret it will not be possible to move the amendment, but I always try to be a political realist. There is a sporting chance that the Government will win the day on this one when we all troop through the lobbies in the next hour or so. I appeal to it to consider the people of this part of our island as having a special entitlement to consideration. If one finds something outside one's front door, one should share it with others, but I think one is entitled to a slightly larger cut because it is in one's territory.

I second the amendment proposed by Senator Liam Fitzgerald. There is little between the two proposals in the sense that they have a common interest in trying to support the development of the gas find off the north Mayo coast. One seeks a financial commitment in respect of the field while on the other side the Government is committed to supporting the development and providing the necessary State funding.

The contribution of Senator Norris was laudable, upright and fair. There is a great fear in the west. We have come through the Celtic tiger and witnessed tremendous job creation and a huge repatriation of our people. In view of the downturn in the economy and substantial job losses in the IT and high tech sector there is a fear that the west will never realise its true potential. While it is included, specific and definitive decisions have not been made in relation to the national development plan in the BMW regions and the grant support structure. There is a fear that the region will be left out because of the emphasis on cities, where substantial losses have occurred, and that the people in the west will not gain as they should.

The gas find off north Mayo provides an opportunity to the people of the west. Bord Gáis, as the agency developing the pipeline to the source in north Mayo, has been up front and informative in its deliberations with Mayo County Council in terms of its development and progress is being made.

The Government is committed to providing the money, subject to regulation from the responsible authorities at European level. It will provide the necessary funding to allow Bord Gáis install the main pipeline into the source and extend it when they have assessed the feasibility of providing service into the north-west and Northern Ireland. Like our tourism sector, we are now beginning to look at our gas and natural energy sectors on a national basis. This is good news for our long-term energy supply, its management and the range of sources, particularly in an open economy where we can buy and sell our energy on the open market internationally.

There is a feeling that things are not happening fast enough, as evidenced by the motion before us from Senator Caffrey and others. It is understandable because there have been substantial objections to the development of the gas terminal in the north Mayo area. While constructive arguments have been put forward and concerns expressed, Enterprise Oil has tried to deal with the specific worries of the people concerned who live in close proximity to the terminal's intake in the Belmullet region. It is important that is done because this area lacks major economic activity and people must be dealt with in a reasonable and fair way and compensated for disadvantage or interference with their land or property.

I understand from Enterprise Oil that discussions are on-going and that progress is being made on a daily basis. The company is advancing its environmental impact study. It is looking at the issue of its foreshore licence and will be applying to the Department of the Marine to advance that aspect of the development. This is to be welcomed. I understand that the necessary professional advice has been taken in the EIA and I hope that the requirements, concerns and needs of a high quality environment are being considered and incorporated into the EIA.

Bord Gáis has made the necessary compulsory purchase orders for the laying of the pipeline to where it meets Corrib Oil and there will be an oral hearing later this month in relation to the CPOs and necessary compensation. Progress is being made. While there may have been a duplication of statements at some stage, this Government is fully committed to providing the necessary money, through Bord Gáis, to extend the services and provide the supply. It will provide a substantial number of jobs in north Mayo during its construction. Mayo County Council recently welcomed the decision by Rolls-Royce to apply for planning permission to build a new electricity terminal in the north Mayo region and we hope that will be positive in the long-term and will take advantage of the gas that will be brought onshore in the region.

There are certain constraints in that area in the lack of jobs and the jobs that will be lost with the closure of Bord na Móna and the peat-burning power station which has been of such importance to the area. Any jobs that can be created by the increase of power and infrastructure in the region will be of great benefit to the county as a whole. We will see substantial benefit to the county when it is in place and substantial rates being paid to the county council as our major industries and growth centres avail of natural gas.

I respect the views expressed in relation to service to smaller towns. Bord Gáis indicated at our last meeting that they would connect the main centres immediately and then progressively connect the smaller centres of population where economies of scale apply. Substantial jobs will be created in those areas. It is important that Mayo benefits, through job creation, from having the necessary infrastructure in place from that natural resource which will play a major role in our economic development and its maintenance.

I am pleased to have an opportunity to outline to the House the very significant progress that is taking place in the development of the natural gas network. Over the course of the next couple of years, Bord Gáis Éireann (BGE) is planning to spend more than £650 million (€825 million) on new gas infrastructure. Of this, £450 million (€570 million) will be spent on the Dublin-Galway-Limerick ringmain and the Mayo-Galway pipeline incorporating an investment of £200 million (€250 million) in the BMW region. In addition, the Government recently decided to move forward with the next stage in extending gas to the north-west.

In order to place the developments now under way in context, it is worth reflecting back on the Kinsale discovery in the 1970s, because it acted as a catalyst for the development of the gas network as we know it today. The first gas came to Cork in 1978 and to Dublin four years later upon completion of the Cork/Dublin pipeline. Subsequent extensions were to Limerick and Waterford in 1986 and to the north east in 1988. This incremental growth reflects the usual development pattern of gas networks. By the early 1990s projected gas demand exceeded Kinsale's projected supply capacity and an interconnector with Scotland was completed in 1993, allowing for imports of North Sea gas.

The dramatic expansion of the network now under way is a positive endorsement of the Government's view that improved infrastructure is one of the key elements in ensuring a solid foundation for the economy into the years ahead. The scale of development of the network should not be under-estimated. Between the second interconnector, the ringmain and the Corrib pipeline, over 750 kilometres of new pipeline will be added to our gas network.

As the Kinsale field depletes, an increasing amount of our gas is coming through the interconnector. BGE estimates that 80% of our gas this year will be imported through the interconnector. With Corrib not due to begin supplying gas until 2003, the Government decided that the Bord Gáis proposal for a second interconnector from Scotland was the only supply project capable of ensuring that projected gas demand in the winter of 2002 could be met. This project is going through the statutory approval process and is on schedule to be completed before the end of 2002. I have kept under review the need to proceed with the second interconnector with Scotland in the light of revised economic forecasts and supply-side developments and I am satisfied that the case for proceeding in the envisaged timeframe remains valid.

The fact that we are now relying so much on imported gas is a prime example of the critical importance of the network in connecting consumers with the sources of gas. This reliance on imported gas will lessen when Corrib comes on stream, but the network will remain critical. It will allow consumers to have a choice of supply, which will exert downward pressure on price, thus improving competitiveness, and it will enhance security of supply, thus improving investor confidence.

Much of the onshore network development currently being undertaken by Bord Gáis is in the BMW region. In 1996 Bord Gáis began examining the possibility of extending the network to the west. Following extensive research and analysis it concluded that the optimum development and enhancement of the network would be to build a pipeline between Dublin, Galway and Limerick, thus completing a ring main. This project will strengthen the network and enhance security of supply, open up new markets in areas of the country previously without a gas supply and enhance their attractiveness as investment locations.

The gas network here has grown progressively since the first gas came to Cork in 1978. The current period of development is a different proposition. The network is being expanded dramatically to encompass increased security of supply through the new interconnector, and the ring main and Corrib pipelines will see both the midlands and a corridor from Limerick to north Mayo connected to the gas network for the first time. These developments signal a very significant change in the focus and pace of development of the gas network. In all, it is estimated that the number of households with access to gas will increase from 500,000 to more than 750,000 by 2010. In addition, countless small businesses, shops, pubs and so forth not currently connected will have access to gas.

I would like to give the House a brief update on the status of the development of the two onshore pipelines. An environmental impact statement for the Dublin-Galway-Limerick ringmain has been submitted to me by BGE. This has been appraised by independent consultants who have confirmed that it meets all statutory requirements and will not have significant environmental effects in the long-term. I convened an oral hearing on 24 September last to inquire into BGE's application to construct this pipeline and its associated applications for acquisition orders. This hearing has concluded and I am considering the independent inspectors' report and recommendations. BGE has a scheduled completion date of October 2002 for this pipeline.

Independent consultants have also concluded an evaluation of the environmental impact assessment for the Mayo-Galway pipeline, which will bring Corrib gas to the network. The consultants have indicated that it also meets all statutory requirements and will have no significant effect on the environment in the long-term.

The public consultation process on this pipeline, which is separate from the planning process, concluded on 29 October last. Seventeen objections were received during this process and I have decided to convene an oral hearing to inquire into this application on 11 December 2001 in Castlebar, County Mayo. BGE has a scheduled completion date of August 2003 for this pipeline. It has signalled that Castlebar, Claremorris, Tuam and Athenry are likely to be connected in the first instance.

I would like to turn to the extension of the gas network to the north-west. Earlier this year the Government decided, in principle, to extend the natural gas network to the north-west. Having considered the issue, the Government has now decided to move ahead with the next step in this project. The first phase of extending the pipeline network to the north-west has begun. BGE was asked to conduct a detailed planning exercise on the extension of the network to Sligo via Ballina from the proposed Mayo-Galway pipeline and to Letterkenny via a cross-Border pipeline from Derry, which is to be served by a pipeline from Belfast, planned by the Northern Ireland authorities. I will return to pipeline developments in Northern Ireland.

Preliminary analysis carried out for BGE has confirmed that these extensions would not be viable on the basis of anticipated gas demand and that considerable grant aid would be required. The level of grant aid depends on the balance between the capital and operating costs of the extension and the estimated gas demand in the new area being served.

The Government has taken a broad view of these projects. Clearly it would not be commer cially sustainable or financially feasible to extend the network to all towns in the north-west or in any other area of the country for that matter. However, given the wider regional and socio-economic benefits of extending the network to Sligo and Letterkenny, the Government has taken a positive view of the project and has decided to proceed with the next stage of it. Detailed engineering and planning for the project will define the pipeline extensions in greater detail and identify the level of funding which would be required. The accurate carrying out of that exercise is crucial. I understand this phase of the project will take between six and nine months to complete. I emphasise this will give an accurate picture of the level of grant aid which would be necessary to proceed with the project.

At the same time as the detailed engineering is being carried out, my Department is preparing a State aid case, which will be submitted to the EU Commission for approval. This is an infrastructure project which, when constructed, will be available to all gas suppliers. It will be capable of supplying indigenous and imported gas and will enlarge the total customer base for the liberalised gas market. Once the detailed engineering phase has been completed, the issue of grant aid will be considered again by Government, provided the necessary clearance has been obtained from the European Commission.

In regard to proposed developments in the Northern Ireland network, BGE and Questar, an American pipeline company, have applied to the Northern Ireland regulator to build two pipelines, one linking Belfast to Derry that would supply the planned new Coolkeeragh power station and the city of Derry and the other comprising a South-North interconnector from Gormanston, County Meath, to Antrim to tie into the proposed Belfast to Derry line. Having regard to the wider benefits of cross-Border links, the Government supports these pipeline proposals and has decided to make a £10 million grant available towards the development of the Northern Ireland gas network. This contribution recognises the benefits such developments will have for energy supplies in the north-west and for the development of an all-island energy market which is a shared aspiration, North and South.

Last week I announced the outcome of my review of gas transmission tariffs following widespread consultation with interested parties. Under the new arrangements the current single overall transmission charge will be divided into separate charges for onshore pipelines and for entry points to the Irish network such as Corrib gas in the west and the interconnectors from Scotland. This was necessary to ensure a level playing field in the gas market and to underpin the largescale expansion of gas pipeline infrastructure, including the ring main and the second interconnector from Scotland. The new arrangements are in line with the recommendations in the report by the Brattle Group on Third Party Access Tariffs. We now have a gas transmission tariff model that accommodates multiple entry points, a development that reflects the growing maturity of the Irish natural gas transmission system.

In reviewing the tariffs, I decided to reduce the rate of return Bord Gáis would be allowed to earn on its transmission assets from 7.5% to 6.5%. This reduction in the rate of return will limit the increase in tariffs needed to finance the new pipeline investment. The return of 7.5% at present allowed to Bord Gáis was high given the cost of debt in the euro zone and by reference to the rate of return allowed to other utilities, including electricity networks.

The review of transmission tariffs will result in increases which would be spread over two years, this year and next. This will see a rise in gas costs of about 1.7% for power stations and about 2% for large industrial consumers in each of the two years. Because An Bord Gáis has a price freeze in place for domestic consumers up to 2003 the new tariff arrangements will mean no change in the price of gas to these customers. An Bord Gáis confirmed that this would not result in cross-subsidisation of charges to domestic customers by other categories of customers.

The tariff directives place a transparency obligation on An Bord Gáis to publish underlying data in order that interested parties can understand how the tariffs are derived. The directives are available on my Department's website. An Bord Gáis has also placed the new tariffs on its website and has announced that it will be holding an information seminar in the near future.

Let me refer briefly to the Gas (Interim) (Regulation) Bill which passed all stages in this House recently. The Bill will establish independent regulation of the gas sector and speed up the opening of the market to competition. The contributions of Senators during the passage of the Bill through the House were very constructive and I would like, once again, to express my thanks.

The infrastructure and regulatory changes now under way in the natural gas sector will be seen as an investment in the future. The creation of a mature and robust gas network will serve as an important element in Ireland's infrastructure that will help to underpin the economy for many years to come.

Some Senators mentioned the pace of what is happening. I emphasise that the pace has been incremental over the past 23 years. Indigenous gas was first brought ashore at Kinsale. Only two weeks ago I launched the new gas infrastructure in my constituency in County Wicklow. It took 23 years to get there. The neighbouring County Wexford, as Senator Walsh has reminded me many times, is devoid of any gas infrastructure. He and his colleagues and other public representatives in the constituency have been beavering away to secure that most important infrastructure for their county. I met them and their county manager some months ago and suggested how they might go about achieving their very meritorious aspiration. The pace at which matters are moving now cannot be compared with the pace of the past – the current pace is dramatic.

I emphasise that the Government is resolved – the Taoiseach has taken a particular interest – to bring this necessary infrastructure to the west and north-west. Its decision to extend the gas network to the north-west was taken in the full knowledge that it would not meet the commercial criteria to which Senator Caffrey and others referred, and that an input of funding would be required. Consolation, comfort and confidence should be taken from this fact. There is a resolve. The decision has been taken by Government to bring the natural gas infrastructure to the north-west, and the necessary work is going on apace. What BGE is required to do is being done and what needs to be done with regard to preparing applications for State aid is being done within my Department. There is a resolve and I am quite satisfied that it will be met.

There is little difference in content or substance between the proposal and the amendment. The proposal seeks the extension of the gas pipeline to Ballina and Sligo and recognises that the financial viability of this is a question that must be addressed by Government. The amendment rightly recognises that in this area of activity the Minister of State has been strenuous in his efforts to ensure a comprehensive policy of developing the network is in place. Bord Gáis Éireann also deserves certain commendations for its effort in this regard.

It is interesting that 80% of gas is now imported. It is in the national interest that this be redressed as soon as possible. Gas is a great natural resource. Those areas that have had the benefit of it in the past two decades will testify to its social, economic and environmental benefits – gas is a very clean fuel.

The proposal to invest of the order of €825 million is significant by any standard of investment today, and the ringmain pipeline which will connect Dublin, Galway and Limerick will also benefit the west. Although I am from the south-east, I concur fully with those who believe that the west needs infrastructure to facilitate economic development. It is lagging behind the rest of the country. It is a phenomenon in many European countries and also in Asia that the biggest challenge facing governments is to achieve uniform regional development. Recently the Deputy Prime Minister of Slovakia spoke about the fact that Slovakia's per capita income is about 49% of the European average, which accords approximately to where Ireland was when it joined the European Union. However, Bratislava, the capital city of Slovakia, is on a par with the European average. This indicates that right across Europe there is a need to focus on areas that need assistance to bring them level with other areas.

We talked today about decentralisation and encouraging people to disperse to different regions within the country. However, if we do not address the economic imbalances, it will be difficult to achieve this. To succeed in keeping people living in their areas is a laudable aspiration for any government. The BMW region will benefit significantly from the Corrib gas pipeline. It will represent an investment of the order of €250 million in the area. I compliment the Minister of State on ensuring Bord Gáis Éireann has proceeded to the next stage of establishing a detailed plan for the pipeline to examine its viability and assess the economics of the projected use of the gas in the area. This is a fundamental first step if the European Commission is to be persuaded to allow the necessary grant aid which will be essential to bringing the project to fruition.

I compliment the Minister of State on the fact that this sector is an example to other areas of the economy in the context of developing North-South co-operation and addressing the imbalance of trade. We trade more abroad than with Northern Ireland and it does likewise. There is a huge potential economic benefit to people on both sides of the Border if we can generate greater co-operation and activity in the area of business. Many in Northern Ireland aspire to do this because they have seen how well the economy here has progressed, particularly in the past decade. Because of political instability and the troubles they encountered, their growth has been retarded by comparison.

I compliment the Minister of State on availing of the opportunity presented by the North-South gas pipeline. The extension from Derry to Letterkenny is to be welcomed because Donegal, as a peripheral county, needs the assistance this will provide to develop economically. The Department's contribution of almost €13 billion could be used as an example to other Departments dealing with other sectors of the economy. This money has been a significant factor in the decision.

The Minister of State referred to the Kinsale gasfield which was developed 23 years ago. It has serviced many parts of the country since and is now servicing County Wicklow. The Marathon platform from which the gas is brought ashore was built at Ross Company shipyard in New Ross. It is an anomaly that 23 years later, County Wexford is one of the few counties which has not benefited from it. While we were instrumental in providing the infrastructure and the platform in order to facilitate Marathon, we are still awaiting the arrival of the gas into our county. As a county which has a very low industrial base it is essential that we get it.

I acknowledge what the Minister of State has said and thank him for his assistance to us, particularly at a recent meeting where he gave us good advice about how we might pursue the issue. I hope that in the not-too-distant future he will be instrumental in ensuring that both the north-west and the south-east receive this sought-after infrastructural facility.

I welcome the Minister of State to the House and am delighted that the gas supply will be coming to Sligo and Ballina on the Corrib gas transmission line. However, I worry about objectors who could delay its arrival. It is becoming difficult for the west to survive among all the objections. It is not this Government's fault as it has been going on for the last 20 years. It is impossible for any development to take place.

Many of the worst objectors are national outfits with no connection to the area, who object, for example, on environmental grounds. In Sligo, if the hospital has to do any amount of work they must bring in heavy generators as there is not enough power to operate all the equipment at once. The ESB has been trying to build a line for the last ten years but the objections have been so great that it has not happened. We tend to blame councillors or the Government, but I appeal to the Western Commission, to all the chambers of commerce in the west and all organisations with an interest in developing the area to give support to the Government and the councillors.

In Mayo the county council has given permission for gas to be brought ashore but there have been 17 objections. I am sure this was discussed with Mayo County Council if those people had any case to make. The council felt it was right, yet it has been held up again. It is the same in my home town in Sligo. A through road and a bridge were held up for over 20 years before being built. There were always objections in the way, but none of the objections voiced at the time has any relevance now. None of it was true. Now the road is held up again for another 20 years. Objectors are becoming so strong that we must find another way.

I have no problem with farmers whose land is affected, because land is near and dear to the Irish, but it annoys me that the objecting organisations are often based here in the metropolis of Dublin. They go down to these areas and object. It was once attempted to put a little bit of a runway into one of the hundreds of acres of derelict bog in the Gaeltacht. Groups from Dublin went down and objected to it and that airstrip could not be built. It would have been very useful to Mayo and to the whole area in attracting people for the purposes of showing them development land and so on.

This Government is to be congratulated on the amount of money it puts into development in the west, but it is hard that we cannot spend it. I have spent my lifetime campaigning for the west and I made my living there, refusing to go to England or any other country despite the popularity of the emigrant ship. The slogans at election times concerned the flags of our railway stations which were washed with mothers' tears as they bid goodbye to their loved ones. I have seen all that and worked hard for development. It hurts me to the bone when I see organisations objecting to a farmer building a house for his son or daughter. A way must be found to put an end to the hold-ups, otherwise we will never be able to spend any money and the west will stagnate even more.

There are parts of the west where the addition of another light bulb would nearly put out all the lights in the area. The electricity shortage is acute, yet people object to hydroelectric or turf-fuelled power stations. Why do we not have wind or wave-fuelled power? We have enough wind in this country. Those who have never seen a wind farm are objecting to them. They wonder how people could stick their noise, but they are absolutely silent. There is no noise. The west's e-commerce industry is at a standstill due to lack of power. We are not allowed to spend the large amount of money the Government is making available and we cannot have the services we need because everything is being held up.

I appeal to all people with an interest in the west to take control of the area and tell those people who come in from outside to object that their day is done. We will not listen to them. We will run the west of Ireland and we will not be dictated to by cliques and groups of well-heeled and comfortable people living in beautiful suburban homes, driving Jaguars and Mercedes, coming down for holidays to the west and objecting to the very thing we want, which is to create jobs and create work.

No Government can do what is required. The county councils are doing their best but they cannot succeed unless we take a grip and do not allow any more interference from outside objectors. We are the people who live there. If we could live on scenery we would be very fat and would have no need to worry, but scenery is not everything. As the poet once wrote,

Ill fares the land, to hast'ning ills a prey,

Where wealth accumulates and men decay. . .

. . . But a bold peasantry, their country's pride,

When once destroy'd, can never be supplied.

Unless the people of the west make positive decisions about development, it will not happen. We cannot blame Governments. I thank the Government again for the amount of money it is making available. I hope we will be allowed to spend it.

I welcome the Minister of State to the House. There has been much comment in the debate about the north-west, but as the person in this House who comes from the most northerly area of the north-west, I am delighted to have an opportunity to speak to this motion.

The Minister of State outlined the position clearly for Senator Caffrey. It is impossible for the Minister to give a financial commitment, or indicate the amount of that financial commitment, until the studies and the necessary planning have been carried out. When that is done, he will know the shortfall and the subvention the Government will have to give to Bord Gáis.

I attended a meeting four or five months ago at which the Minister of State gave a commitment to public representatives and others from the Sligo, north-west and Mayo region. He said the Government had discussed the matter and it would do its best to ensure that gas would be brought to the north-west. I am delighted the Minister of State has fulfilled that promise with the recent announcements. We all accept that it is not viable to bring gas to Mayo and into Sligo, and it may not even be viable to bring it from Coolkeeragh to Donegal, but the commitment has been given and when the financial, design and planning issues have been dealt with, the Minister will be in a position to indicate the amount of the financial commitment.

This is not the first time I have spoken on the issue in this House. When I first became a Member four years ago, I met the Minister for Finance, Deputy McCreevy, in his office about a lot of work that had been undertaken by a body based in Killybegs, which was confident that gas would be found off the Mayo cost. It wanted Killybegs to be developed as the harbour where all the service industry involved in this project would take place, in the same way as Aberdeen was used in the north of Scotland when oil and gas was found there. The Minister told me at that time that the commitment for Killybegs Harbour would be enormous and that information available to him indicated that it could be up to ten years before any gas would come ashore. Both the Minister of State and the Minister for Finance, Deputy McCreevy, have delivered in that regard. Even though it will not get off the ground before the next general election, at least the commitment has been given.

At the same time, I attended a special meeting of Donegal County Council at which the group of 22, which was formed in Derry city because the Coolkeeragh power station was to be closed, was present. At that stage it had been pushing for at least 20 years to get gas piped from Belfast across to Coolkeeragh. That commitment, through cross-Border co-operation, is now about to be fulfilled.

I believe the gas pipeline will reach Sligo, Derry and possibly Letterkenny, and if the Minister of State continues in his position after the general election, I know he will do everything in his power to ensure that what I seek comes to pass. The pipeline should continue from Sligo, eventually connecting with the pipeline coming into Letterkenny. I do not want a gas pipeline in every small town and village in Donegal, but I want gas for the principal towns on that route such as Bundoran, Ballyshannon, one of the largest towns in Donegal which has been starved of industry over the years, and Ballybofey, which has suffered much as a result of unemployment over the past year. Ballybofey is one of the best commercial towns in Donegal.

Because the gas pipeline is being extended to Letterkenny, everybody believes it will be extended to Donegal also. Most of the jobs created in Donegal in the past two years were in Letterkenny and I am aware, from working in Letterkenny, that the delays one encounters as a result of traffic are almost as bad as those in Dublin. Letterkenny can take only so much. The other towns I have mentioned in Donegal should be given a chance. When the studies are completed and the financial commitments are decided on for the line to Sligo, and what is happening in relation to the line to Letterkenny, I hope the Government will consider extending the Sligo line to Letterkenny.

When the original gas pipeline was installed from Kinsale to Dublin and on to Dundalk to connect with the pipeline from Scotland, there were plans to extend the line from Dundalk to Sligo. Unfortunately, it only got as far as Kingscourt due to financial restraints. Even though we are currently experiencing a minor downturn in the economy, the pessimism expressed in the motion before us tonight will not be fulfilled. Things will get better again and I hope that we will succeed in bringing gas into the whole north-west area.

I want to raise a number of other matters. I come from the area with the highest level of unemployment. Senator Farrell mentioned objectors earlier. Those of us living in the BMW region have always suffered in that regard but in Donegal, particularly Donegal south-west, it appears we will continue to suffer. If there are cutbacks in terms of the national development plan, we believe we will be put to the bottom of the list again. That is not the reason we sought to obtain Objective One status. It was because of regions such as ours that Ireland received Structural Funds over the years. If they are not prepared to take funding for roads in the South due to objections by landowners, we will gladly take it to improve our road infrastructure into Donegal.

Recently, An Bord Pleanála refused to give permission to the ESB to bring the new 110 kv line around the north-west coast to Letterkenny. The ESB stated recently that Letterkenny needed the power. We have an industrial estate in Gweedore with more than 1,000 people employed and we are not able to attract new industry because of the lack of power.

Senator Farrell also mentioned wind power. It has been proven that Donegal has the greatest source of wind power in Europe, and the Minister of State has opened windmills on two or three occasions in Donegal. Last year, when debating the Donegal county development plan, I fought tooth and nail to get changes approved in relation to wind power and the location of wind farms, but an Independent Member of the Oireachtas on the other side of the House objected and said that people should be refused permission to build wind farms if they were above a certain height level. I succeeded in getting that objection removed because the issue is not the height of the windmill but the effect on the landscape. There are many fine mountains in Donegal behind which windmills can be hidden.

The Minister of State has always delivered anything that was asked of him. If he continues in his position after the election, I ask him to ensure that when the line is brought to Sligo and Letterkenny, it will also be extended to Bundoran and into Ballybofey.

I welcome the Minister's honesty in acknowledging the current situation, but unfortunately I did not get any great joy from his contribution. The essence of what I wanted to say tonight was highlighted by Senator Walsh who said that even though Wexford was instrumental in getting the Kinsale gasfield off the ground, it has waited 23 years for its own supply of natural gas. I have visions of that happening in Mayo if we do not get in on the first phase of the development because in the normal course of events few towns in Mayo and Sligo, apart from Sligo town, would qualify for a gas pipeline on strictly commercial criteria.

I have no doubt the rolling programme of gas pipeline extensions the Minister of State mentioned will continue, possibly unabated. This gives me no consolation because I believe that, in the normal course of events, the rolling programme will not include the towns in Mayo to which I referred. We want to be included in the first phase of the development. We do not want to wait on commercial assessments or projects assessed on strictly commercial criteria. We need to be included in the initial phase of the rolling programme, not placed in a queue.

There are special reasons for giving us a high priority in the first phase of the development. As Senator Norris said, the gas is on our doorstep. We are entitled, perhaps not legally, but certainly morally, to special consideration and positive discrimination with regard to the location of the gas pipeline.

The Minister of State stated it will take between six and nine months for the assessment to be completed by the consultants drawing up the plans, including engineering plans and the pipeline way leaves. The fact remains that the cost of these pipelines is well established. One might need a consultant to advise on the location of the pipeline, but certainly not to inform one of its cost.

Senator Farrell's comments on planning hit the nail on the head. At a recent meeting of Mayo County Council I called for the abolition of An Bord Pleanála and its reconstitution in regional appeal boards which would have more empathy with the people living in the locality they represented. Senator Farrell referred to the objectors. They have a platform. The final arbiter is An Bord Pleanála. In the county I represent we waited 14 years to get a bypass scheme on the drawing board. An Bord Pleanála has been sitting on this for another year, bringing the total wait to 15 years. These are the types of timescales which concern me.

The sole reason I tabled this motion is to get the first phase of the development in Mayo launched. I do not doubt this programme will continue, but it will continue solely on commercial lines possibly without our demand for special consideration being examined.

Amendment put.

Bohan, Eddie.Bonner, Enda.Callanan, Peter.Cassidy, Donie.Chambers, Frank.Cox, Margaret.Farrell, Willie.Finneran, Michael.Fitzgerald, Liam.Fitzgerald, Tom.Gibbons, Jim.

Glennon, Jim.Kett, Tony.Kiely, Rory.Lanigan, Mick.Leonard, Ann.Lydon, Don.Moylan, Pat.O'Brien, Francis.Ó Fearghail, Seán.Ó Murchú, Labhrás.Ormonde, Ann.Walsh, Jim.

Níl

Burke, Paddy.Caffrey, Ernie.Coghlan, Paul.Costello, Joe.Cregan, Denis (Dino).Henry, Mary.

Jackman, Mary.Norris, David.O'Dowd, Fergus.O'Meara, Kathleen.Ridge, Thérèse.Ryan, Brendan.

Tellers: Tá, Senators T. Fitzgerald and Gibbons; Níl, Senators Burke and Caffrey.
Amendment declared carried.

As amendment No. 1 has been carried, amendment No. 2 cannot be moved.

Amendment No. 2 not moved.
Motion, as amended, put and declared carried.
Barr
Roinn