I move amendment No. 9:
In page 16, between lines 1 and 2, to insert the following:
“Amendment of Principal Act - Report on levy
28. The Principal Act is amended by the insertion of the following after section 64:
“Report on levy
64A. Within 24 Months of the passing of the National Oil Reserves Agency (Amendment) and Provision of Central Treasury Services Act 2020 the Minister shall publish and lay before both Houses of the Oireachtas a report on a review which will have considered—
(a) the effectiveness and appropriateness of limiting the levy to ‘disposals of petroleum products’,
(b) the potential for future introduction of levies which reflect the reserves, material assets, or capital held by oil companies, and
(c) the evolving national and international legal and financial landscape in respect of such potential levies.”.”.
Amendment No. 9 asks that the Minister would publish a review and lay it before both Houses of the Oireachtas. Because the Bill before us today involves the opening up of the National Oil Reserves Agency, it invites us to have consideration and a review of how it has operated, and of the changed landscape and the changing climate that surrounds it. This amendment is simply asking for a report, which the Minister might provide to us. I have given a very long timeline for this because I recognise there might be more immediate work. The timeline is 24 months, that is, within the first two years of the Minister's tenure, by which time the Minister will publish and lay before the Houses a report looking at: the effectiveness and appropriateness of limiting the levy to disposals of petroleum products; the potential for future introduction of levies which reflect the reserves, material assets, or capital held by oil companies; and the evolving national and international legal and financial landscape in respect of such potential levies.
I recognise that the National Oil Reserves Agency Act reflects a collective European commitment that each country should have an oil reserve, and that it was driven by an issue relating to energy security. I am not in any way disputing that but I believe that the decision was obviously made at that time, perhaps at the European level, that the focus should be in levies on the disposal of petroleum products. This is levies on sale or consumption of the products of oil as it is being sold and products as they are bought on a day-to-day basis. That was brought in at a time when this was entirely focused on a certain vision of energy security that almost presumed an environment in which oil would continue to be one of the main products trading, and that normal purchasing of oil would generate large revenue all the time. In fact, we are in a world where, due to the plastics directive at European level or from Ireland's divestment policy, we are moving away from the focus on oil and petroleum products on many levels. We want to move away from them being such a large part of the commercial market. We want less consumption.
When we look at energy security and the costs of changes in energy, is it appropriate that we base it on a levy on consumption of something that we do not want people to consume? Many other policies and laws that we will be bringing in relate to getting people to consume less of these things. There are nonetheless large accumulated assets. Fortunes have been made over decades from the sale of oil and petroleum products. The cost has been carried by society and by citizens in parts of the world who do not consume a lot but have reaped the impact of climate change for over a decade. This is not the future and is happening now.
Looking at Pigovian taxation, which I know has been looked at in the past, we need to consider how we ensure that oil companies are not simply contributing to our energy security but also contributing to the costs associated with the damage done by oil and petroleum. How do we ensure that oil companies are preparing us for the future so that we do not simply see a move from a long period in which we have subsidised oil and petroleum products because of the wide social dependence on them, but rather a move towards asking them to pay their share? It is not enough simply to ask consumers to pay their share in a levy on the product that they buy in the shop. We need to think in a different way. We know the concerns that have been expressed about that.
The main thing is the capital, assets and financial reserves that companies have. We know that they have them because, as I described earlier, we have seen that when those companies leave, they take that capital reserve and the moneys that they have and give it to small numbers of executives. I mentioned earlier that 250 oil and gas companies in the USA are likely to declare bankruptcy or close down by the end of next year. One of those companies required a €40 million clean-up. Whiting Petroleum gave €15 million in cash bonuses six days before it declared bankruptcy. There are too many examples to list. The chief executive of MDC received an €8.5 million payment just before the company went bankrupt. I am thinking of those capital reserves and the moneys that are there. Many of these companies will move on and reinvent themselves as the market rightly changes. We will be left with the clean-up costs and the reality that the companies will not be in a position to contribute in the same way to the NORA fund on an ongoing basis.
I am not asking for this today or even tomorrow but that within two years, Ireland would provide leadership. I am not saying to change the European legislation. That is outside our scope. I am asking for a report that shows that Ireland is giving leadership in thinking these issues through and, over the next 24 months, applying some expertise and thought to anticipating what securing a reserve for our energy security and appropriately ensuring that oil companies pay their costs may look like. We should have more imagination about that rather than assuming that things will stay as they are, because we know that is not true.
There may be other ways that the Minister can give this report. He may not have to commit to giving it as part of this legislation but it is crucial. We do not want to be responding after the fact. We do not want to be told that NORA is not paying very much into the climate action fund because those levies are not working as they used to. We do not want to find out that we have substantial clean-up costs associated with companies exiting. Let us get ahead of it and have ideas. When, at the European Environment Council in two years, for example, the ministers are collectively reviewing legislation about oil reserves, Ireland should have some ideas.