Ireland needs to develop its own energy resources

Few things are more foolish than sanctioning a country to depend on gas, writes David Horgan.

On a recent RTÉ Prime Time programme, a TD claimed we import our gas from Norway. This is untrue.

Europe, which includes EEA countries like Norway, consumes 454bn cubic metres of gas a year, of which 166bn is imported by pipeline from Russia.

Europe is, therefore, 37% dependent on Russia and is more exposed in winter. If Russian supplies are interrupted, Ireland is vulnerable, because we are at the end of a long pipeline.

That’s why the US has long-opposed European dependence on Russian gas pipelines, even as Europe depends more on Russian gas each year.

So far, Russians have been reliable suppliers — as long as customers pay. But why kick a sleeping bear? It suits UK prime minister, Theresa May, to distract attention from Britain’s Brexit woes, but it is foolish for Ireland to

provoke key suppliers.

About 89% of Ireland’s primary energy mix is fossil fuels and only 10% of primary energy is based on renewables and 1% on hydro-power.

All Ireland’s oil is imported. In this, Ireland is not unusual: 88% of the world’s primary energy mix is fossil fuels, which is slightly up over the last 15 years, due to the relative decline in market share of nuclear and hydro-power.

You would think, therefore, it would be a national priority to reduce import dependence. Instead, a Friends of the Earth initiative to keep fossil fuels in the ground led to a bill passing the first stage in Dáil Éireann.

But it is not more environmentally friendly to burn gas that has been piped from Siberia than gas produced locally. Around 15% of the gas is depleted to power compressors and to pay transit fees en route.

Opponents of exploration are therefore increasing greenhouse emissions by 15%. Intermittent renewables need 100% reliable, immediately available back-up. In Ireland, this effectively means gas-fired generators, which undermine the viability of wind and solar energy.

Inconsistently, the opponents simultaneously argue that the State has ‘given away’ the resources to oil companies, only for citizens to have to buy petroleum products back at market rates.

They are against finding or exploiting new hydrocarbons, but want the State to own hydrocarbons, and sell them at below-market rates.

Most doubt that such tree-hugger initiatives could make it into law, but, last June, the Dáil passed a blanket prohibition on onshore hydraulic fracturing, even though no one proposed fracking wells at depths shallower than 1,000 metres.

Limiting the fracking depth to below 1,000 metres, with normal environmental protections, eliminates any danger.

When TDs legislate without understanding, they are like the West Virginia mother who blamed “fracking for turning her son gay”. Such legislation increases your energy bills.

Meanwhile, policymakers ignore profound changes in the energy market. Exploration expenditure has been slashed and projects have been delayed.

Oil stocks, which were at record highs in 2016, are now returning to normal levels. And, for the first time, Russia has effectively been co-opted as a member of the OPEC nations.

The world economy is growing, while several oil-producers struggle. Venezuelan output has collapsed from 3.35m barrels a day in 1999 to under 1.5m in 2018. Yet, policymakers act as if stocks remain high and as if there is surplus capacity sloshing around the system.

The only available capacity is in Saudi Arabia, Kuwait, and the UAE. Iran is struggling to maintain output, due to a sanctions hangover from US president Donald Trump’s election and poor fiscal terms worsening investor worries.

Iraq faces infrastructure problems that will take a decade to resolve, after nearly 40 years of conflict and sanctions.

Nigeria and Libya remain embroiled in conflict over oil assets and their output is stolen. Angola’s output is

declining, with problems at its major fields.

Ireland needs to develop its own energy resources and cultivate relations with existing suppliers.

David Horgan is director of Irish exploration company, Petrel Resources