MINISTER FOR Energy Pat Rabbitte has said he has “no plans” for a moratorium on issuing new petroleum licences off the west coast before any review of the State’s existing terms for oil and gas companies.
The Minister’s response to a Dáil question last week effectively rejects a recent call by the union Siptu for such a moratorium until a promised Oireachtas review of the licensing system is carried out.
Fianna Fáil energy spokesman Éamon Ó Cuív, who tabled the written question, has criticised the Minister’s apparent “haste” to issue licences when a review of existing terms would “only take months”.
Several months ago Mr Rabbitte agreed to a Fianna Fáil proposal for a review at Oireachtas committee level.
Mr Ó Cuív yesterday questioned why this review could not be done immediately before Mr Rabbitte sanctioned decisions on 15 new licence applications submitted for the Atlantic margin round.
The “record” number of applications was submitted at the end of May for blocks covering over a quarter of a million square kilometres off the west coast. Once licensing options valid for up to two years are granted, successful applicants have first option on an exploration licence or licences.
“The successful applicants won’t be starting exploration work before next summer so why not delay and get it right,” Mr Ó Cuív said. “This is an issue of public importance given the potential of this resource, and public confidence needs to be restored in the ability of the Oireachtas to ask the right questions.”
He said the State should also commission a seismic survey which would provide more information on the resource.
A 2006-7 consultancy study for the Department of Energy estimated a total reserve of 10 billion barrels of oil equivalent beneath the west coast sea bed.
Siptu’s recently published report on the issue has said the 2007 estimate was “potentially worth €750 billion” at current prices, and “the equivalent of Ireland’s supply needs for 100 years based on current consumption”.
Siptu notes the current licensing system transfers ownership of resources to the lease holders, and companies are not required to sell any oil or gas or both into the Irish market – but can sell at full market price.
It says a revised fiscal system – such as a contractual system – would afford the State more return and more control, and could be used to pay for the transition to renewable energies.
Mr Rabbitte has “no response” to the Siptu report, according to his department.
In his response to Mr Ó Cuív last week he said terms were last reviewed in 2007, when the tax rate was increased from 25 per cent to 40 per cent for more profitable finds for new licences.
He said he would keep the terms “under review”, but his department’s focus was on attracting a “larger share of international exploration investment to Ireland to increase the chances of new commercial discoveries being made”. He would be “happy” to engage with “any Oireachtas committee that might decide to consider this issue” but had at this stage “no plans for a moratorium”.