Radical change in policy necessary to address Ireland’s energy needs

THERE is an unprecedented global demand for oil. Western economies are gorging on oil at record levels. Emerging economic powerhouses, particularly China, are now also consuming millions of tons of oil per annum.

On its current growth trajectory China will be demanding more oil than all of the European economies combined in decades to come.

Accessing the remaining oil reserves is proving more difficult, more expensive and more unpredictable. Increasing political volatility in the Middle East, especially in Iraq, is also threatening the world oil supply.

In South America the Chavez effect is spreading and is putting the future availability of oil at cheap prices, from that supply stream, in doubt. Meanwhile, the rate of new oil discoveries throughout the word is too slow to meet the growing global requirements.

There are different degrees of pessimism among experts as to when the oil shortage will come to a head. However, most accept that at some point over the next 10 to 15 years the world’s oil supply will peak - that is, that it will reach a point where it can no longer be increased.

It is in this context that the State agency Forfás this week published a detailed study of the extent to which Ireland is dependent on oil.

The purpose of the document was to lay down some of the framework for the policy debate about the challenges the insecurity about future oil supply presents for our economy and our society.

The findings of the study will come as no surprise to policymakers in this area, but they may be news to much of the public. Forfás’s headline conclusion is that Ireland is one of the countries most vulnerable to oil supply shocks.

Ireland depends on imported oil for more of its transport and energy requirements than almost any other European country. We are consuming 50% more oil for our transport needs than are other European countries.

The reasons for this include the dispersed nature of our population and our relatively poor public transport network.

As well as having one of the highest proportions of people travelling in motor vehicles as opposed to trains, we also have a relatively high level of goods travelling by road rather than rail. That trend, too, is going in the wrong direction. Road haulage doubled from 1995 to 2004.

More trucks and cars on more roads means Ireland’s oil consumption for transport has more than trebled in the last three decades.

Among the 25 countries of the European Union, Ireland is the sixth most heavily dependent on oil for electricity generation. This is partly attributable to the fact that, unlike many European countries, we have no nuclear power plants. The number of Irish stations relying on peat is declining and Moneypoint is our only substantial power plant fed by coal.

Our exposure to upward shifts in oil prices and/or insecurity in the world oil supply is getting worse rather than better. We consumed nine million tons of oil in 2004 - more than double what we used a decade and a half earlier. We are doing all of the things that are increasing our dependency on oil, when we should be doing the opposite - so radical shifts in policy are needed.

Forfás estimates that it will take up to 10 years to significantly reduce Ireland’s oil dependence so these changes in policy will have to come soon.

Our political system is relatively well geared up for a debate on policy in this area. This is partly because the Oireachtas committee on communications, the marine and natural resources, chaired by Noel O’Flynn TD, has led the way on the issue. This committee has been one of those making the best use of improved powers and facilities for our parliamentary committees and has been particularly innovative in exploring the emerging strategic issues about our energy supply.

It has held a series of interesting hearings on energy policy over the past few months. Last month, for example, the European Union commissioner for energy, Andris Piebalgs, was in Dublin to meet with the committee.

Meanwhile, outside of the committee, the debate on the topic has raged both within and between the parties.

The Fine Gael spokesman on natural resources, Brendan Durkan, has published a document on the energy challenge and just last week published a series of proposals aimed at encouraging the use of biofuels.

FIONA O’MALLEY, the Progressive Democrat backbencher with a watching brief in this policy area, has also published a document on the topic. The Green’s spokesman, Eamonn Ryan, has proposed that Ireland should follow the example of Sweden (to break dependence on fossil fuels by 2020), set aside short-term electoral considerations and instead establish a cross-party commission to take a strategic approach to the energy challenge.

Communications, Marine and Natural Resources Minister Noel Dempsey has focused on the energy challenge in many recent speeches and interviews and has said he is well disposed to a cross-party approach. Unfortunately, however, the suggestion of all-party cooperation on this issue has been shot down by both Labour and Fine Gael.

Dempsey and his department are undertaking the first review of energy policy since the mid-’80s. This review is due to culminate in a white paper in late summer or early autumn and all the signs are that it will suggest the necessary radical shift in energy policy.

Indeed, the solutions to the problem, advanced by the parties and again explored by Forfás this week, are largely self-evident.

We need to reduce our dependency on oil-generated electricity and replace it with more coal - in a way designed to minimise CO2 emissions - and use more wind, wave and biomass in electricity generation. Of course, we also need to have more fuel-efficient motor vehicles and better public transport.

The energy challenge Ireland faces is made all the more acute by the fact that as we face these difficulties with our oil supply, we are simultaneously facing insecurity in our gas supply. We import 80% of our gas needs and as the rest of Europe face shrinking oil supplies, they will increase their use of gas. In Ireland we live at the end of a gas pipeline that weaves all the way from eastern Europe, which puts us in a particularly vulnerable position. Indeed, the prospects of exploiting the newly available gas field off the Mayo coastline should be seen in that context.

Interestingly, Forfás argues that as well as exploring other options for energy diversification, the nuclear option should be explored. None of the political parties favours that option, and for good reason. Until we manage to generate power from the safer nuclear fission method, there will be no public support for nuclear power in Ireland.

On that aspect, at least, there has been no change since the anti-nuclear Carnsore Point protests of the late 1970s.

The parties and the public may, however, in another example of an Irish solution to an Irish problem, be less adverse to using electricity generated by the British nuclear industry and brought into Ireland through an inter-connector.

Those who have predicted that the world is running out of oil have been accused on previous occasions of crying wolf. However, like the boy in the fable, they warn of a real threat this time.