I measc na n-aidhmeanna ba thábhachtaí a spreag na daoine a d'oibrigh agus a throid d'fhonn saoirse agus neamhspleáchas a bhaint amach don tír seo breis agus trí scór bliain ó shin bhí an mórdhóchas go mbeadh Éire—ach í a bheith saor—in ann lántairbhe a bhaint as na hacmhainní nádúrtha a bhí aici féin. Caithfear a rá freisin nach ina measc siúd a lean an traidisiún míleata amháin a cothaíodh an dóchas sin. Bhí sé mar spreagadh ag daoine a thug a ndilseacht do na gnéithe éagsúla den traidisiún náisiúnta—agus caithfear a aithint go raibh daoine a thug Aondachtóirí orthu féin a dhein a gcion féin chun go dtabharfaí tús áite dár n-acmhainní féin i ngnóthaí forbartha na tíre seo.
Léiríodh go minic sna blianta ina dhiaidh sin, agus go háiríthe in am na héigeandála, gur críonna, ciallmhar an dearcadh sin a bhí acu. I dtús an chéid seo bhíodh fir agus mná leis an dearcadh fadradharcach sin ag iarraidh a chur ina luí ar lucht a linne an tábhacht a bhain le saothrú na gcoillte in Éirinn, an tábhacht a bhain leis na haibhneacha agus an tábhacht a bhain le saibhreas na bportach. Tuigimid go maith sa lá atá inniu ann go raibh an ceart acu.
Anois i dtús na n-ochtóidí nuair atá an tír seo, mar aon leis na tíortha tionsclacha uile, ag iarraidh an fhadhb nua dhomhanda—fadhb an fhuinnimh—a réiteach, táimse, mar Aire Fuinnimh, ag teacht os comhair na Dála le hAireacht nua ach le seanteachtaireacht. Is é sin, go gcaithfimid an bhéim a chur arís ar ar n-acmhainní fein.
Ar ndóigh ní hiad na haibhneacha ná na coillte ná na portaigh amháin atá i gceist agam—cé go mbeimid ag brath cuid mhór orthu siúd. Is í an acmhainn is mó atá againne, dar liom, ná an cumas atá léirithe go minic ag ár muintir chun iad féin a chur in oiriúint don athrú atá tagtha ar an saol. Anois tá acmhainn thábhachtach eile againn—an cumas teicneolaíochta atá tagtha chomh mór sin chun cinn inár measc le 20 bliain nó mar sin anuas. Beidh sé mar aidhm ag mo Roinnse barr tairbhe a bhaint as na hacmhainní sin.
Since this is the first Estimate for the new Department of Energy to be the subject of a full debate in the House, I am sure that Deputies would wish me, in presenting it, to outline the role which I see for the Department and, in very broad terms, the objectives which we should set ourselves. I shall endeavour in the time available to me to cover as much of the ground as possible.
I would like first to comment briefly on minerals exploration and development and then to outline in more detail the circumstances which gave rise to the specific provision which is made in the Supplementary Estimate before going on to deal with energy issues.
The promotion of minerals exploration and development is an important sector of the area of my responsibility. I intend to continue to facilitate and support the prospecting and mining companies in their efforts to find new deposits and to maintain operations at existing mines. There has been comment from time to time on the fact that no new minerals deposit has been established as commercial since the discovery of the Navan orebody. This is certainly not due to lack of interest or endeavour by the companies engaged in exploration here—prospecting activity throughout the country continues at a high level. Certain deposits of potential interest have been identified. The possible development of these depends on the outcome of further exploration and delineation work and on the trend of world trade in the minerals concerned or on a combination of these factors. If the general pace of exploration and prospecting can be maintained at satisfactory levels I think there are reasonable prospects for the discovery and development of new commercial production in the years ahead.
Production continues at the lead and zinc mines at Navan, Silvermines and Tynagh and at the copper mine at Avoca. Within the next month or so a stage will be reached at Tynagh where the underground ore reserves will be exhausted but it is expected that work will continue there for a limited period on the treatment of tailings and of stock-piled ores at the mine.
In the present situation of economic recession throughout the world the base metals markets for zinc and copper particularly have been depressed. A number of mines around the world have been closed in recent years. Others have been kept going only through State subvention of their operations. The current low level of copper prices on world markets has been one of the factors which has given rise to fresh cash flow problems at the Avoca mine which necessitate further State support.
Deputies will recall that a Supplementary Estimate was approved on 3 April, 1979 to provide State support amounting to £4.35 million for Avoca Mines Ltd. This followed consideration by the Government of a report on the Avoca Mine operation by a firm of international mining consultants which concluded that, making certain assumptions about future copper prices and other critical factors, a mining programme over a period of about four years would hold out the prospect of recovery over that period of all, or a significant part of, the State funds amounting to £4.35 million which would have to be committed up to the end of 1979.
The mining programme was based on forecast copper prices which seemed optimistic at the time but were, in fact, exceeded during 1979, with the result that the operating loss for the year was £133,000 as compared with an anticipated loss of £250,000. The result would have been even better were it not for a sharp rise in operating costs, a deterioration in the grade of ore mined and difficulties encountered in maintaining ore output at the desired level of 65,000 tonnes per month.
Operations at Avoca have been kept under constant review and an independent study of the copper market has been obtained from a London firm of consultants. It is clear from trends in copper prices and the adverse elements I have mentioned, which have persisted in 1980 to date, that it is unlikely that the relatively favourable outcome hoped for at the beginning of 1979 can now be achieved. The current break-even price per tonne of copper for the company would be about IR£1,300 compared with the current market price of about IR£920, which means that significant losses are being incurred. A further major problem is that the ore reserves available may now not extend beyond about September 1981.
The Government have carefully considered the position in the light of the economic and social consequences which should arise from closure of the mine and the dis-employment of the 246 men involved directly in mining and the other ancillary employment involved. Prospects for new jobs in the area from IDA projects are reasonable but it would take some time for these projects to come onstream. In the circumstances, the Government have decided to provide additional finance, as indicated in the Estimate, to maintain mining operations for the time being. My Department will continue to monitor very closely the situation at the mine.
It will be clear from my remarks so far that the development of our mining resources is an area of my responsibility which must continue to receive close attention. One of the most heartening developments of recent years is the practical proof we have seen that the older schoolbook picture of Ireland as a country seriously lacking in minerals resources was far from true. Today, the great cause for concern is our heavy dependence on imported, expensive energy sources. I believe—and indeed it will be the major, broad objective of my Department to realise that prospect—that before the end of the present century we will have achieved breakthroughs in the development of indigenous energy sources no less emphatic that what has been achieved in relation to minerals.
During 1979, particularly about this time last year, we all witnessed—and indeed contributed to—the reaction of the oil-consuming countries to what was, in fact, a relatively moderate shortfall in overall supplies. In the past year oil and energy prices generally have escalated dramatically. In common with other consuming nations we have taken a severe knock to our balance of payments and more generally to our economic prospects. This year we have been fortunate that supplies have so far been adequate to meet demand but this is occuring against a background of continuing political tension and uncertainty in the middle East and a sharply increasing price trend. There is no certainty, therefore, that the supply problems of last year or even worse cannot occur at short notice.
It is only within the past few years that the concept of an integrated national energy policy has become a preoccupation of governments. In the days of cheap and plentiful energy it was a relatively easy burden to support an economy which was wasteful, indeed profligate, in its use of fuel and power. In the narrow context of those times it seemed economic silliness to allocate any substantial funds to saving or substituting other fuels for oil which was in abundant supply at $2 a barrel, at least $30 a barrel less than the present average price of crude oil. After the supply and price crisis of 1973-74 there was a flurry of activity, nationally and internationally, on proposals to reduce the vulnerability of consuming nations which the crisis had so painfully highlighted. Within a year or two, with oil once again readily available and with prices dropping in real terms, a lot of the edge had gone off this earlier resolve.
But the recent crisis carried a more forceful message that the days of cheap and plentiful energy were dead and gone. There will again be periods such as now when adequate supplies—some people even talk of a surplus—may seem to emerge. Nevertheless there is now general consensus among market observers that, even leaving aside the impact of political upheavals in producing areas which seem all too likely to occur, the long-term prospects point to recurring acute pressures on supplies and prices.
In those circumstances the development of certain long-term policies in the energy field is not just prudent but is essential for our economic and social well-being. The principal dilemma which we face can be very simply defined. Irrespective of the success or good fortune we may have in developing or discovering substantial domestic sources of energy, the plain fact is that for a number of years to come the great bulk of our energy requirements must of necessity continue to be imported at increasing cost in terms of internal prices and the strain on our balance of payments. This is an inescapable consequence of the length of time necessary to bring new resources, or additional production of existing resources, onto the market. This fact of life must be reflected in our energy planning.
A major objective of policy will be to ensure that our import dependency will be spread over as many fuel types as possible, that these imports will be used in an optimal way and that our ability to cope with interruptions of supply will be improved. We must have effective contingency plans to meet import shortages of various dimensions. The stocks of fuel immediately available in this country to meet any serious disruption of supply are not adequate and steps are being taken to put them on a more acceptable footing. We must continue the process of securing firm, government-to-government arrangements for a certain proportion of our oil supplies and we must see to what extent comparable arrangements could be made for other fuels.
The Irish National Petroleum Corporation have, in the short period since they were set up, made very good progress towards achieving their initial objectives. Like my own Department the corporation have had the problem of getting down to business while at the same time providing themselves with the staff and other resources necessary for their work. By the autumn the corporation will be handling a substantial volume of crude oil arising from government-to-government contracts already concluded. The possibilities of obtaining supplies on a similar basis from other quarters continue to be pursued actively. There remains the question of the long-term, corporate strategy for the corporation and this is something that I will be discussing with them in the coming months.
The foregoing measures are designed to secure an improvement in the security of our imported supplies but the use of these energy sources, and indeed of all energy forms, in various sectors must be critically examined so that we will have a realistic plan—not necessarily an inflexible nor an immutable one—for the optimum use of energy forms and fuels. This involves conservation, substitution and, perhaps, some specific measures to influence demand for certain fuels.
When the Department was being established, I provided for a new section in the organisation specifically to deal with energy conservation. This section is working on an overall energy conservation programme which will be an integral part of my strategy, co-ordinating the many initiatives taken in recent years, giving a new focus to conservation and the opportunities which it presents and drawing up new proposals in which specific targets for conservation on a sectoral basis will be set.
The key element in conservation is to make more effective use of the fuels available to us. I have already announced a major initiative which, if certain important conditions can be met, could over a period of years bring about a major change in our present pattern of energy use. I refer to the possibility of constructing a pipeline to connect Dublin and possibly other towns near the selected route to the natural gas supply in the Kinsale Head field. If this project goes ahead on planned lines the result would be to transfer a very substantial proportion of the heating and cooking load in a number of major population centres from oil or oil-based fuels to a native gas supply and to use that supply in a more energy-efficient way. I have asked the Dublin Gas Co. to produce a development plan aimed at eliminating identified inefficiencies in management and work procedures which is intended to plot the transition to a modern, efficient gas company. Bord Gáis Éireann would have a big role to play in the planning and development of such a major national undertaking as an extended natural gas system. The first phase of the board's operations in the Cork area was completed well on time and with commendable regard to the financial aspects of the project. This work will have enabled the board to get expertise and practical experience of a kind which should prove invaluable in the planning, construction and management of an extended grid.
The next main objective must be to reduce our excessive import dependency by development of alternative, home-produced energy sources. This involves expansion of existing production of indigenous energy resources and the search for new native resources. At present about 80 per cent of our energy requirements are imported and this ratio has been increasing as a result of the growth in the economy and related demand for energy. This is far, far too high.
I have already taken steps to have our known limited supplies of native coal examined. Planning is proceeding for the design and construction of a new electricity generating station which will apply the very latest technology to the burning of low grade coal deposits in the Arigna area. Research work on the extensive use of this technology for utilising other low grade fuel sources is under way. The potential of our admittedly limited reserves of untapped hydro resources is being urgently reviewed.
I have recently had the opportunity, during the course of the debate on the Turf Development Bill 1980, of outlining in very considerable detail to the House the immediate and longer-term plans for Bord na Móna. It will suffice now to remind the House that these plans call for a very substantial increase in the board's output, particularly of milled peat, to be used for new electricity generating stations and for new briquette factories, the first of which should be in production next year.
There is also substantial annual production of peat by a small number of private producers and co-operatives, by Comhlucht Siúicre Éireann and by individual farmers. I am most anxious to encourage private development on bogs which are not suitable for méchancial large scale commercial exploitation by Bord na Móna. With this in mind my Department are currently considering the formation of schemes to co-ordinate and promote bog development by private interests.
World wide there is now a substantial concentration of research and development on new energy systems and I am ensuring, through my Department and their agencies, that we are fully conversant with the programmes in this area which seem of most interest to us. Our geographical position and our climate suggest that wind and wave energy are likely to be possibilities of considerable interest. The commercial production of power from wave energy is inevitably many years in the future. The present state of research is at the classical initial stage where the design and testing of quite a variety of systems is in progress. We are keeping in close touch with the most promising areas of research and when the range of options and potential performance of systems become better established I intend to examine the possibility of having pilot work done here.
The wind has been harnessed to provide power for centuries but the specifications in today's world for the manner and scale in which this power must be delivered have necessitated a completely new look at this very old technology. It is quite clear that there is considerable potential for developing wind power systems in Ireland. There have been two extremes of opinion on this and I can assure the House that I regard both with some caution. There can be no assumption—and certainly not until suitable pilot schemes have been developed and tested over a period of time—that the development of wind power can largely solve our current dependence on imported fuels. Claims of that kind will only result in disappointment if results are obtained which seem limited in that context but may well be very acceptable in realistic terms. Neither do I accept that the potential of this source is insignificant in national terms. The answer to that one is that to date we simply have not tried.
I announced the preliminary steps of a new wind power programme at the end of March last when I indicated that I had commissioned the National Board for Science and Technology to examine the steps necessary to set up four pilot wind energy projects. I mentioned on that occasion four project types on which the views of the NBST were sought. These were a coastal/mountain project, a midland located project, an island project and a wind energy machine linked to an agricultural co-operative or small rural industry.
In the meantime I announced on 19 May that I had agreed to the appointment of a firm of consulting engineers who had been given the specific task of picking a site on Inis Oirr for the island demonstration project machine. The consultants were also asked to indicate the most appropriate type of machine to erect. The aim is that the installation will supply about one-third of the island's current needs. I chose Inis Oirr because I have been very impressed with the detailed work on the advantages of windpower to an island community which has been carried out by the enterprising local co-op on the island.
I expect to have shortly the report of the NBST on the other projects. It is my intention to ensure that all wind machines that were installed as part of this programme are comprehensively and uniformly instrumented so that the data can be centrally and economically analysed and that the results of the experimental programme can become available at the earliest possible date. To ensure that this will be achieved I intend also to circulate the NBST proposals to a number of State agencies and in particular to the ESB, which is one of the most highly regarded electricity utilities in the world.
One further point which I would like to repeat from my announcement on 19 May is that these projects are only part of a broader programme which I am preparing aimed at assessing in a complete fashion the potential contribution of wind energy.
I have asked the ESB to take a more active and positive line on research into alternative forms of energy. I appreciate the work which the board have carried out into, for instance, low grade "crow" coal from Arigna, biomass conversion and timber combustion and their contribution to research into wind, wave and tidal power. I am confident that they will step up their efforts successfully in this field. I have asked them to co-ordinate their efforts with those of other interested bodies in view of the importance of the role which the board can play in the development of viable indigenous resources.
It is hardly necessary for me to dwell on the importance which must be attached to our offshore exploration programmes. The discovery of a commercial oil field would bring about such a change in our future energy position that it overshadows all the other possibilities which I have mentioned. Offshore exploration over the next couple of years will be crucial and it is an area in which I intend to apply all the effort and resources necessary to ensure that exploration is pushed ahead as vigorously as possible.
Fifty-six exploratory wells have been drilled in our offshore territory since operations commenced and every effort is being made within my Department to encourage the exploration companies to maintain the exploration momentum so that the existence of a commercial deposit of hydrocarbons will be established.
The results to date and, in particular, those from 1978 and 1979 have been very promising and they have established that hydrocarbons do exist in our offshore territory. The flow rate of 730 barrels per day from a 1978 well in the Porcupine, together with a flow rate of over 5,500 barrels per day tested last year, also in the Porcupine, have encouraged us to hope that within not too many years we will be producing Irish oil. These recent results have stimulated an interest in our offshore to such an extent that a number of companies have entered into arrangements for the allocation of further acreage.
There will be further exploration and appraisal of the prospects in the Porcupine this year. The two companies who discovered the sub-commercial deposits will shortly commence drilling further wells in the area.
Whether oil finds in the hostile environment of the Porcupine will be developed will ultimately depend on the size of the discovery, the amount that can be recovered, and the availability of the technology at a cost which will make the undertaking a commercial proposition. Based on recent advances in recovery methods from conditions similar to the Porcupine, we are confident that the technology will be available when required. However, even if significant deposits are discovered, and if the technology is available to exploit them, it would be some time before the oil would begin to flow on shore. The great water depths at which oil is likely to be found would inevitably slow down operations. Thus, even if a potentially commercial oil find were identified quite soon, we would be talking about the mid eighties before this oil would begin to be landed.
The frontiers of our exploration have recently been pushed forward with the allocation of additional acreage on an option basis to two major companies in the Goban spur area. They have undertaken to carry out extensive seismic surveys over the area during the period of the option. This area is about 170 miles to the south-west of Ireland in water depths ranging from 2,000-5,000 feet. Obviously, these companies would not invest heavily in terms of money and effort if they did not feel the area had potential and also that the necessary technology would be available to exploit any finds made.
I have outlined four of the major planks of national energy policy. These are, efforts to improve the security of imported supply arrangements and stocks, conservation and more effective use of all energy forms available to us, in particular those fuels which must be imported, the maximum development of our existing sources of energy and a strong emphasis on the search for new indigenous sources.
The next major objective of policy I would like to mention is that we must develop flexibility in the use of various energy sources so as to achieve a better spread of the import dependency which we cannot avoid in the medium term. This would, in time, permit a better response to changes in supplies and prices. In this area the ESB have a major role to play. About one-third of our energy consumption is in the form of electricity. Electricity is now our one absolutely essential form of energy which can be derived from a variety of primary energy sources but this vital resource is at present heavily dependent on imported oil.
For the immediate future, the board can do little to change this heavy dependence because of the lead time required for the construction of new generating stations. However, the board are constantly endeavouring to maximise use of existing plant utilising indigenous resources—mainly peat, hydro and natural gas, with a small contribution from native coal. For future plant, they have taken steps to diversify a large part of electricity generation from, for instance, imported coal instead of oil. Discussions I had recently with the board members showed that they were fully aware of the vital importance of diversification, both of fuels and of sources, in the interests of security of supplies.
The Board have also assured me of their willingness to play an increased part in the national campaign to eliminate the wasteful use of energy. The board offered their co-operation in any measures which may be necessary to avoid a significant demand transference to electricity, and in measures which will serve to ensure that different forms of energy are used to the best economic advantage having regard to national circumstances.
Industry too can play a vital role in this area. There is a renewed interest by industry in the use of coal rather than oil both on grounds of cost and diversity of sources of supply and this must be encouraged. Liquid petroleum gas—LPG—is a widely used fuel for heating and cooking, particularly in rural areas and it is used by industry and transportation. Within the past year or so there have been quite conflicting views about the medium to long-term supply prospects for this fuel. Recent reports suggest that these prospects are now considered fairly good and I believe we should continue to regard LPG as a major element—with solid fuel—in planning diversification of our energy imports.
This brings me to the last major option in diversifying sources of energy supplies. I refer to the question of nuclear power which has been—and remains—a complex, controversial and emotive issue. Since I took office I have on a number of occasions indicated my general attitude on this. It is obvious that nobody, and I can say least of all myself, is anxious to pursue the nuclear issue simply as a matter of principle. The great majority of people would regard it as a very acceptable outcome if it were to be established that our national energy requirements, both in supply and economic terms, did not require an early decision to construct a nuclear power station.
It is not my intention, at this time, to prejudge either way the ultimate decision on the desirability or need of a nuclear power plant. Certain factors—the principal one being the slowdown in the world economy which has affected our rate of economic growth—have arisen which give us some additional time to assess the position. I intend to use that time for two purposes. Firstly, as I have already outlined in detail, we must thoroughly investigate the extent to which our future energy needs can be met by expansion of our current resources, a more effective use of all energy forms and, most importantly, the development of new indigenous resources. Secondly, we must assemble as much information as possible and benefit to the maximum extent from experience elsewhere about the safety aspects of nuclear power.
The analysis of our future energy needs and of the latest developments affecting safety will emerge, in the first instance, from a detailed and factual review of all the parameters involved. When this data base is available and taken account of in the work being done by the inter-departmental committee, their report will be published and we will then reach a stage at which an informed public debate and inquiry could proceed. It will obviously be essential that, before it reports, the committee will have had an opportunity of studying all the crucial information in relation to the Harrisburg incident and I understand that some of this information is unlikely to be available for a considerable time. It would be premature to bring the committee's report to a conclusion before this information is available and do so would be contrary to my conviction that the future public debate and inquiry into this issue must be conducted with all the relevant information available.
The initial timetable envisaged that the committee would report in time to enable the necessary legislation to be prepared and the public inquiry to be commenced during the present year. It is clear that this timetable will not be adhered to. There have been suggestions that a date should be set for the inquiry or at least that the necessary legislation should be introduced. I fail to see the logic of those suggestions in present circumstances. While the timetable envisaged in the original proposals will not now be observed, the sequence of events set out in these proposals should stand. There is a validity and logic in the relationship between progress on the committee's report, the introduction of the legislation and the holding of the inquiry which have not been affected by the changed timetable.
I will conclude on the nuclear issue by saying this. What is really crucial in this matter is that, at the end of the day, when all the factors such as energy demand projections, alternative sources, the economics and security of supply parameters, the environmental and safety aspects have been first examined and reported on objectively and then reviewed in a public forum—after that long and painstaking process—the decision which emerges, whatever it may be, should be seen by the great majority of reasonable people as justified and prudent.
What I have outlined represents a many-sided and, in certain respects, an ambitious role and programme of work for the Department of Energy. The achievement of satisfactory progress towards these objectives will require assistance and co-operation from many quarters. I intend to make full use of the experience and expertise available within existing State agencies, particularly, but not exclsively, those associated with my Department. The relationships between the new Department of Energy and these agencies are therefore extremely important. The effective development of such relationships is central to the task I have set myelf. I have already initiated, through discussion with the boards of semi-State bodies under my aegis, a dialogue which I hope will develop and contribute to policy formation and implementation. There are also important sources of knowledge and competence in the private sector and in the universities and other higher educational centres. It will be an important function of my Department to tap these resources so that the best use can be made of all our talents natinally.
In order that effective policies can be devised and implemented I have concentrated on developing a structure for the new Department appropriate to its important task. Central to this structure will be a properly staffed Planning and Finance Division which will concentrate on the policy priorities. The new Department will also develop its own technical competence. This is essential if the Department of Energy is to be in a position properly to evaluate and co-ordinate the programmes of State energy agencies.
There are obvious constraints. Time is needed. People must be recruited, motivated and, if necessary, trained to handle and co-ordinate the work. A great deal of the data and information on energy supply and use which we need to review and develop policy options is either incomplete or not available. This has to be assembled and put in usable form. Funds have to be provided. On top of this there are urgent day-to-day problems which cannot be left aside while the medium- and long-term programmes are being developed.
But it would be wrong to emphasise the constraints without also pointing to the very positive factors from which I take considerable encouragement. The work to be done is of the highest national importance. There is widespread recognition of this with the public generally and among the people in industry, agriculture, transport, commerce and other sectors on whose help and co-operation we must rely. I believe that there is a very substantial consensus on the main objectives which we should adopt.
The great uncertain factor is, unfortunately, outside our control. It is one I have already mentioned—the time factor. Despite the current easing of the supply situation, the international outlook is fraught with uncertainties. If we could be reasonably assured that the next two or three years will be relatively free from major supply crises, then we could feel a lot more confident of getting under way the kind of major adaptations in our energy posture which are essential to meet the inevitable difficulties which will arise in the later eighties and beyond.