Hydrocarbons may eventually kill us but the economy could die first

Anyone with young children knows the quandary. Occasionally, they will ask for something that you do not want to give. But nor do you do want to directly refuse, in case it sets off a tantrum that creates even more stress.

For example, it might be over an ice-pop. You must not say yes because they had chocolate barely an hour ago. But you are wary of saying no lest they start rolling around the floor of the supermarket, and you end up buying them a Loop the Loop just to get the afternoon back on track.

So what should you do? Parenting gurus will tell you to impart positive discipline and communicate clearly with your child. Others still swear by an old tried and tested formula – just ignore them. Drag it out. Barely acknowledge it. Don’t give an answer and, eventually, they’ll get tired of asking and give up.

That appears to be Eamon Ryan’s approach to Ireland’s oil and gas exploration industry, if that is not too extravagant a description for the unloved (by investors) and unwanted (by the Government) collection of penny stocks that got in under the wire before the State banned all new licences last year.

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The Minister for the Environment doesn’t want to say yes to fresh permits or leases that might allow existing licensees to make progress on their exploration blocs – if they start pumping oil or gas out of the ground it would embarrass the Green Party leader politically. But he is loath to say no, lest it causes a big scene and the companies turn to a third party, such as a judge, to make their case.

Instead, Ryan simply ignores them, dragging out their requests in an extravagant show of can-kicking, deep into the road ahead.

Barryroe prospect

Providence Resources, which is soon to change its name to Barryroe and whose largest shareholder is Larry Goodman, has been waiting for 16 months for a lease from the Government for an appraisal well that is essential if it is to bring the estimated 300 million barrels of oil at its Barryroe prospect to the surface of the Celtic Sea bed.

Meanwhile, Europa Oil & Gas last week received a patronising brush-off from the State, as it waits impatiently for an extension to the first phase of a 15-year exploration licence for an area adjacent to the Corrib gasfield off Ireland’ west coast.

Europa believes the Inishkea prospect has a decent chance of turning up gas, and wants to conduct more technical analyses before moving on from phase one, the deadline for which ran out on July 31st. It needs State permission. Last week, two days before the egg timer ran out, it told investors that State officials say its licence for Inishkea “will remain live until the department notifies the company otherwise”. Please, Dad, can I just have a Freaky Foot? Why won’t you answer me, Dad, pleeeeeeease?

There are two very distinct camps in the debates that surround such cases. In true fence-sitting fashion, I believe it is very easy to see both sides. Each has credible arguments that cannot easily be dismissed by the other, although that doesn’t change the fact that Ryan’s aloof attitude towards decisively dealing with the issues risks one of the companies eventually throwing a hissy fit on aisle seven.

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Ryan has made Ireland a global leader in the school of environmentalist thinking that holds there should be no more oil or gas exploration and the industry must be put to bed, as quickly as possible. If we keep pumping the stuff out of the ground, we will keep burning it and ruining the planet. The less we pump, the less we can burn. You can’t reason with the scientific inevitability of what will happen if emissions aren’t drastically reduced.

Secure supply

Ireland is a founding core member of the Beyond Oil & Gas Alliance (Boga) that has as its aim nothing less than the death of the hydrocarbon industry. Ryan was on the stage at Cop26 in Glasgow when Boga was launched. He is clearly committed to the cause.

Yet the weakness of Ryan and his side in the debate is their unwillingness to acknowledge the credibility of the arguments of the other side. Whether we like it or not, we still need new, secure supplies of hydrocarbons until more renewable and cleaner forms of power can fully take over. Otherwise, we will become reliant on importing fuels from autocratic regimes that spread instability, or else the most vulnerable members of our society will suffer as prices spike.

Ryan may flinch at the political discomfort of being seen to facilitate pumping oil from the Celtic Sea or gas from off the west coast. But that is vanity. Producing hydrocarbons at home is infinitely better than buying them from the imperialist Vladimir Putin or the regime of Mohammed bin Salman in Saudi Arabia. They will never sign up to an initiative like Boga. Their type will always be around, and others will always want to buy from them.

It is inarguable that our economy and society still need hydrocarbons and we are nowhere near ready yet to ditch them for other sources. That must remain the aim. But even Ryan knows it is going to take more time, even if it deepens environmental damage. The State knows it, too. That is why Irish regulators awarded tenders in February for nine new gas-fired power plants to be built by 2024 to cope with demand for electricity and prevent a power shortage on the island.

How can that acknowledgment of reality be squared with Ryan’s indulgent foot-dragging on Providence and Europa? His approach helps to leave Ireland vulnerable to external price shocks and security of supply issues.

Yet, human nature being what it is, it may also be true that developed economies such as ours may never make a proper leap to renewable energy until we are made to feel the true pain of relying on hydrocarbons.

Should we burn the planet, or the economy and, with it, the living standards of ordinary people? What an awful mess we have got ourselves into.