Caught in the grip of a black gold fever

THE recent call by the Government’s think tank for the State to at least look at the nuclear option in terms of future energy needs should have sent shockwaves across the country.

However, the reaction was muted. In the 1970s when Dessie O’Malley, then Fianna Fáil Energy Minister and later PD founder wanted to build a nuclear plant at Carnsore Point, County Wexford, the nation revolted.

But the low key reaction to the suggestion by Forfás that we at least look at the nuclear option is indicative of just how much the nation overall realises it is in the grip of an energy quandary.

It seems we have an unspoken consensus that the energy has to come from somewhere, and so be it if it has to be nuclear.

The Green Party argues we have to cut back on our reliance on oil. Even US President Bush said the US is addicted to oil.

Since the major upheaval of the late 1970s, when oil in real terms hit $150 a barrel at today’s prices, the West has seriously reduced its dependence on black gold. We now use about one third of what was burnt up back then across industry to fuel the economy.

But personal consumption has gone through the roof and an addiction to retail therapy means the amount of fuel consumption in this country has grown massively over the last 10 years.

Green Party Energy spokesman, Eamon Ryan has accused the Government of acting on the basis we will have cheap oil forever.

As an island state, we have become one of the most oil-dependent countries in the world.

Echoing the fears of many, Mr Ryan says it is now clear that global oil supply can no longer meet demand.

A recent statistic from Peak Oil expert Colin Campbell claims that for every four barrels of oil used, we are finding just one replacement.

Half of the oil we use is in the transport sector, with the growth of the car and road freight responsible for most of the increase.

We have gone from the European average in terms of the use of oil to being 50% above the norm.

In 2006, roughly 300kms of new roads will be opened but not one kilometre of new rail line. which has left us exposed seriously to the emerging oil crisis, according to Mr Ryan.

How bad things are is hard to judge overall. As of now, we are pretty exposed when it comes to a near total dependence on imported oil and gas, despite the fact that Fianna Fáil, through Ray Burke and Bertie Ahern, when he was Finance Minister, abandoned any claim by the State on any future oil and gas discoveries exploration companies make in the years to come.

As a result, the benefits of the Corrib gas find, which was about two thirds the size of the Kinsale Head Gas Field, will go totally to Shell and its partners.

And Shell, if it plays its cards right, will hardly pay a cent in tax because of the ability to write off exploration costs against future profits.

On the other hand, we ought to be glad Shell will, hopefully, in the near future start pumping badly-needed gas ito the Irish economy, which should lift concerns about future supplies.

However this is a long-term issue and the State at this point needs to hammer out a new policy that will be fair to all sides.

With the search for oil and gas likely to intensify in more marginal areas like offshore Ireland, it is important the State makes some move to redress the national giveaway overseen by Fianna Fáil in the good old days.

That scandal ought to be addressed particularly when Island Oil & Gas is sounding sound positive about potential finds off Donegal and Rockall.

But the bigger question, as Mr Ryan highlighted earlier this week, is long-term security of supply.

The bad news is our track record in the oil and gas business is pretty dismal.

Of 130 wells drilled offshore, we have Kinsale and the Corrib Gas field and a few step-out developments from Kinsale.

No oil has been brought ashore, despite all the hype.

We have a problem and some imaginative moves are required soon before we end up at the end of a long queue from a gas pipeline out of Russia.

The world saw the consternation recently when Russia cut off gas supplies. We could suffer the same fate if supplies get unexpectedly tight.

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