Wasting away: facing Ireland’s energy crisis
Mr O’Reilly is chairman and chief executive at the US energy giant, which is one of the biggest in the world, with a turnover close to €200 billion.
Mr O’Reilly left this country when opportunities were less plentiful and believes we have the capacity to beat the energy situation provided we tackle it with imagination.
Consuming countries like Ireland require a well-functioning international energy market to sustain growth, but tell that to the Government and the Commission for Energy Regulation, who seem oblivious to the concern facing Irish businesses.
Invoking the Celtic Tiger success story, Mr O’Reilly said the same model that’s allowing Ireland to prosper economically was also the most promising path to energy security.
In his address to the Dublin Chamber of Commerce annual dinner he said: “I ask all of you to remember that it was openness and engagement that allowed Ireland to escape economic stagnation and race past the rest of Europe. When you think about energy, don’t let go of those principles.”
As an aside, he joked that he probably could not afford to come back to Ireland at this stage due to the enormous cost of houses which is of course the other side of the Celtic Tiger nobody at official level wants to do anything about.
While Mr O’Reilly was complimentary about what he encounters on his trips back to Ireland, he might be a bit underwhelmed if he had to face the more prosaic realities of trying to do business here.
Is he aware, I wonder, that the State is pocketing an extra e1bn in taxes on fuels due to the sharp oil price rises of recent years?
Or does he know that the Government rejected recent recommendations in the Deloitte & Touche report on the energy market that it sell off some ESB operations to the private sector?
No said the Government. Not much Celtic Tiger openness there I’m afraid.
Since its inception, the Commission on Energy Regulation has more or less sanctioned the hikes in oil and gas prices requested by the two monopolies here, resulting in huge increases to industry and consumer in the past 12 months.
Since the so-called liberation of the electricity market we now have a situation whereby companies who left the ESB cannot return to their former suppliers.
That surely is anti-competiton and is a point IBEC and energy experts McKinnon & Clarke (Mc&C) have raised separately.
According to Kevin Cogan, who works in Ireland with Mc&C, a ground swell of big Irish companies including Wellman International and Green Isle Foods have raised their concerns about the huge rise in energy costs here.
It is understood also that Green Isle, in a letter to the Commission, has threatened to withdraw its operations from Ireland unless it gets satisfaction in this regard while, according to Mr Cogan, other big companies, some of them clients of his in Ireland, are also examining their options.
That view chimes with the concerns raised by IBEC as well as ISME who argued yesterday that cost competitiveness or the lack of it is being destroyed by high energy price and indeed rising labour charges.
Kevin Cogan fears the energy regulator is a toothless wonder and the deregulated market is actually punishing industry rather than freeing up competition.
According to Mr Cogan: “The price of energy has fallen in recent times. The Government should force the Commission for Energy Regulation to introduce immediately some mechanism to reflect this fall.”
It the €150m it has undercharged business in power generation is that big a deal then it should sell some of its stations, as Deloitte recommended, to make up the loss in the short term.
That would inject some real competition into the market and give firms badly needed breathing space.
That’s a very different take on Ireland post-Celtic Tiger and might change Mr O’Reilly’s panegyric to the economy somewhat if he lived with the realities of doing business here.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
