Oil exploration to be banned in Irish waters and gas to be phased out

Minister of State for Natural Resources Seán Canney due to update Cabinet on ban today

An oil rig operating at Barryroe, 50km from Co Cork.  Photograph: Finbarr O’Rourke/Providence Resources/PA Wire

An oil rig operating at Barryroe, 50km from Co Cork. Photograph: Finbarr O’Rourke/Providence Resources/PA Wire

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Oil exploration in Irish waters will be banned and gas exploration will be eventually phased out, according to a memo due to go to Cabinet today.

The Minister of State for Natural Resources Seán Canney is due to update the Cabinet on the ban and will bring forward a new policy document in order to give clarity to the industry in relation to the Government’s plans.

Licences are currently issued either through a closed licensing round, which covers the Atlantic Area, or through an open application process which covers the Celtic Sea and Irish Sea.

The ban will apply to both the closed and open areas, and will apply to any application received since the initial announcement of the plans made by Taoiseach Leo Varadkar at the United Nations in September.

Gas exploration will not be banned although the Cabinet is expected to discuss the future framework for the production of gas as a transition fuel. A source said no timeline has yet been set for the eventual phasing out of the extraction of gas.

Policy

In September, Mr Varadkar said the Government would pursue a policy of ending fossil fuel exploration on foot of scientific advice about its climate impact.

“In the last week, on foot of a request from me, our independent Climate Change Advisory Council recommended that exploration for oil should end, as it is incompatible with a low-carbon future,” he told the UN Climate Summit.

The Government had been embroiled in controversy before the announcement because exploration licences continued to be issued by the Department of Communications, Climate Action and Environment, which environmental NGOs said was not sustainable given the climate crisis facing the world.

The Government’s ban on oil exploration will not apply to those who have already been granted licences.

The climate council previously recommended exploration for natural gas should continue for the time being until such a time as alternatives are developed.

Transition

A source said that since Mr Varadkar’s announcement, there have been no new applications for oil exploration.

“This is us as a country putting our hand up and saying fossil fuels are something we need to wean ourselves away from, but in the transition, we do need gas. If we have an exploration company who want to drill and they don’t know what they are going to get, well if they find oil, they will have to cap it off,” said the source.

This could have an implication for how gas and oil companies “calibrate their potential investments in Ireland”.

It comes after a survey of the Irish oil and gas industry by accounting firm PwC found that the oil and gas sector met Mr Varadkar’s statement with “trepidation”.

None of the companies exploring for oil and gas in Irish waters rated the industry’s prospects as “extremely favourable” over the next two years while just 17 per cent thought they were a moderate “fairly favourable”.

Many of those surveyed were also unhappy with the licensing and regulation system.