Time to protect our future energy interests
Since 2003 the price of oil has shot up and recently broke through the $80 (€56) per barrel mark raising fears that prices could hit $100 (€71) per barrel in the year ahead.
Oil and energy in general has been pushed to the top of the world’s agenda as fears for future supplies of the hydrocarbon-based fuel has started to exercise the minds of politicians. Calls for a common European energy policy are becoming familiar as fears grow about Europe’s vulnerability to supply shocks. Those fears were made tangible when Russia cut off gas supplies to the Ukraine last winter.
As an island economy we are at the wrong end of a 4,800km pipeline deep in the heart of Russia so our exposure is real indeed and any moves or developments that will protect our energy interests are to be welcomed.
Despite all the hoopla about renewable energy the real concern that is not going to go away is that as energy stocks get scarcer, economies across the globe become more vulnerable to being left short of energy.
The issues have been well rehearsed in this forum, and it is interesting that just recently the European Parliament warned the EU’s “growing dependence on external energy supplies, largely from undemocratic and unstable countries, and particularly gas dependence on Russia, is worrying and may harm the overall security of the EU”.
Recently the parliament demanded the creation of a new post to ensure better co-ordination of energy and foreign policy in the 27-nation bloc which relies heavily on imports for its power.
The new official would work alongside the EU’s energy commissioner whose role would continue to be largely technical with little foreign policy clout.
Germany, normally central to any moves to develop fresh common EU policies wants to build a gas pipeline from Russia under the Baltic Sea. But Poland and the Baltic republics fear Moscow could use the infrastructure to apply political pressure.
At present, two billion people out of a total population of six billion in the world, do not have access to modern energy supplies and as they develop a voice pressures will rise even further.
As an island nation if we are not careful we could end up being the meat in the sandwich and the Irish Council for Science and Technology & Innovation within Forfás, the state’s strategic planning body, has warned we have to evolve rapidly into the energy sector. Avoiding such a calamity will involve this economy in becoming a new technology maker as well as a leader in certain strategic areas such as new and renewable energy technologies including wave energy, energy storage systems and offshore wind energy systems.
Failure to meet the challenges will push our external energy dependence up to 96% from 70%.
At present we import about 70% of our total energy requirement, and this figure will go to 90% as the Kinsale natural gas supply becomes exhausted, unless the Corrib gas find comes into to play and we develop a significant quantity of alternative energy.
On a positive note, Providence Resources this week announced it has made a commercial oil find off Hook Head.
It is a modest find of about 70m barrels of oil with some gas also. However, at today’s prices that’s worth about €4bn to the group and the discovery could also have a huge benefit on further exploration.
Of greatest importance is the boost the find gives to the waters around our coast as a potential source of modest, but nonetheless valuable, energy supplies in the years ahead. At this point every little helps.
