Dáil Éireann Debate, Tuesday - 9 May 2017
54. Deputy Brian Stanley asked the Minister for Communications, Climate Action and Environment the discussions which have taken place in regard to the future of the part of the Irish strategic oil reserve physically held in the UK after the UK leaves the European Union. [21837/17]
Amharc ar fhreagraMy question pertains to the parts of our strategic oil reserves that are held in Britain or in the North because a serious situation could arise with Brexit. I ask what discussions have taken place at European level or with the British Government in this regard.
Ireland holds 90 days of emergency oil stocks, in accordance with International Energy Agency, IEA, rules and EU legislation, to be used in the event of a supply disruption.
The majority of these stocks are held in Ireland and some stocks are held in other EU member states, including the United Kingdom. Ireland has entered into bilateral agreements with those member states, including the UK, where our stocks are stored. EU Directive 2009/119/EC places an obligation on EU member states to maintain oil stocks within the Community at all times. Under the current legislation, when the UK leaves the EU, the stocks held in the UK would not be counted as part of our 90-day obligation under that directive.
It should be noted, however, that the UK is also a member of the IEA and therefore the continued holding of oil stocks in the UK, even after Brexit, would count towards the IEA's 90-day oil stocks obligation. After the UK leaves the EU, it still will be a member of the IEA and will continue to participate in the IEA collective actions that would be activated in the event of an oil crisis.
My officials and I take every opportunity to discuss the potential impacts of Brexit with our EU and UK colleagues, including with the European Commission task force and officials from the UK's Department of Business, Energy and Industrial Strategy, and the Department for Exiting the European Union.
As the Deputy may be aware, one of the four key Brexit energy priorities identified by the Government is accommodating Ireland's ability to meet EU obligations post Brexit. One of the main issues under this priority is the obligation on EU member states under EU Directive 2009/119/EC to maintain emergency oil stocks within the Community. My strong preference is that the current position remains, whereby stocks held by Ireland in the UK, including Northern Ireland, are counted as part of our 90-day emergency stocks obligation.
I should point out that, in line with the Government’s energy policy White Paper of December 2015, the National Oil Reserves Agency, NORA, is continuing to maximise the level of its stocks held on the island of Ireland subject to storage availability and value for money considerations. This policy of maximising stocks in Ireland precedes the UK Brexit decision.
This is an important issue, given that we are so dependent on imported oil and fossil fuels. We import 100% of our oil demands and 95.3% of our gas demands. Obviously, with the Brexit discussions, the rule of thumb is there are no certainties regarding anything.
I welcome the fact that discussions have taken place. If I heard the Minister correctly, he stated that the part of our oil reserves held in the UK following Brexit would not be counted as part of the 90-day emergency supply. The Minister might clarify that.
For EU rules it would not be counted, but for the International Energy Agency rules, it would.
The Minister also stated his own preference was-----
To maintain those reserves in the UK.
-----to maintain those reserves in the UK. The question here is, what proportion of those are held in the North? Hopefully, there will be an assembly up and running, an Executive and - who knows - even maybe a united Ireland fairly soon. With those institutions coming back into place, the more of those oil reserves that are on the island of Ireland, the more secure our oil resources are and the quicker they can be accessed, particularly in times of conflict, etc.
I agree wholeheartedly with Deputy Stanley.
To give the Deputy the figures, approximately 57% of Ireland's strategic oil reserve is held in Ireland, 20% is held in the UK, 9% in Northern Ireland and 11% in Scotland. The remaining 23% is held in the other EU countries, Denmark, Sweden and Spain. The reserve held in Northern Ireland is held in Derry and in Cloghan Point - those are the two storage facilities. We are refurbishing existing storage facilities in Great Island in County Wexford and in Poolbeg here in Dublin, and Irving Oil would have a substantial amount of it in Whitegate.
If we were to move away from the UK if we did not get a derogation to this particular EU directive, it would probably mean that we would have to store that in France, and more likely, in Spain because it is probably the only place where there is any bit of capacity at present. It makes far more sense to hold it on the island of Ireland than having that in France or in Spain. It makes far more sense to store that in Scotland than in France or Spain because of accessibility and it is my objective, as part of these negotiations, to ensure that we get a derogation that complies with what are the International Energy Agency rules anyway.
The Minister stated that there are facilities being refurbished in Wexford and at Poolbeg. Are those belonging to private companies? Who is funding their refurbishment? There was a State oil facility off Cork but it is in the hands of the private sector at present. The Minister might outline the situation with those facilities.
Given the constant volatile situation in the Middle East and in the big oil producing countries, there is always a vulnerability around oil. We are in a particularly precarious situation. The Minister's opinion that the oil reserves be held in the State or in countries near to the State until we increase our capacity is the correct one, but we are in a very vulnerable position because we are so dependent on fossil fuels. We had a discussion earlier about the need to accelerate the drive away from that dependency. It is also costing us nearly €6 billion a year that is going out of the country on imported fossil fuels. The Minister might answer those questions about Wexford and Poolbeg.
My long-term objective is not to increase capacity. My long-term objective is to drive down the need for fossil fuels in the first place.
To answer the Deputy's specific question in the short term, NORA funds the purchasing, financing and holding of strategic oil stocks by way of a 0.02 cent levy per litre on certain petroleum products in the State. NORA has reached an agreement with the ESB for the leasing of redundant oil storage at its site at Poolbeg in Dublin. Refurbishing of this facility for the storage of approximately 120,000 tonnes of Ireland's oil reserves has commenced. The completion of this project could provide a valuable increase in the oil reserves stored in Dublin Port, through which approximately half of all Ireland's oil product is transported. That project is expected to be completed in 2019. In addition, NORA has negotiated with SSE for the leasing of 55,000 tonnes of redundant storage at its site at Great Island in Wexford. It is hoped to complete this project in 2019. That will bring onto the island far more capacity than would have been the case.
In tandem with bringing that capacity back into the State, as well as trying to reduce overall consumption and develop alternative renewable energy sources on the island, we believe we can have a substantial amount of our needs based here in the longer term. Ultimately, it is my intention that we would not have a need for a significant amount of strategic oil reserves because we would no longer be dependent on imported fossil fuels, which is running at approximately €4.8 billion a year.
