Exploiting our own energy sources

Donal Hickey reports on Ireland’s Atlantic oil basins.

THE soaring cost of oil is again prompting the Government and prospecting companies to look to the west coast where up to 10 billion barrels of oil are lying under the seabed, according to scientific studies. With the cost of oil currently around $140 per barrel, the value of that untapped “black gold” could be heading towards $1.5 billion.

Given that we import 85% of all our oil and gas, it makes sense we should exploit our own resources. Before getting too carried away, however, it’s as well to point out many exploration companies have tended, in the past, to shy away from drilling the Atlantic.

The sea environment is notoriously hostile and there are very significant engineering challenges. So, it’s unlikely that Ireland can be turned into another Alaska, or Kuwait, overnight.

Nevertheless, the reserves are there if only we could get at them. The Porcupine and Rockall Basins are believed to hide at least 10 billion barrels of oil. Estimates are based on comparisons with the geology of other regions that have proved successful. A recently published scientific report by the petroleum affairs division of the Department of Communications, Marine and Natural Resources, titled Atlantic Ireland, said the potential showed volumes of over 130 billion barrels of oil and 50 trillion cubic feet of gas.

It is believed most of these deposits are along an underwater ridge known as the Atlantic Margin which runs parallel to the west coast in a sort of straight line before swinging off towards Scotland and the North Sea and onwards towards Scandinavia.

The Dunquin gas field, 200km off the coast of Kerry, is estimated to contain a tantalising 25 trillion cubic feet of natural gas and 4,130 million barrels of oil. If this field is developed, it would meet our gas needs for more than 60 years.

Being mainly developed by Exxon Mobil, the Dunquin field is in deep water and would take about five years to get into production. For that reason, it would be 2015 before tangible results would be seen. The idea is to bring the gas ashore in a pipeline.

A relatively short distance up the cost is the Spanish Point field, about 200km off the coast of Clare. The field has known reserves of one and a quarter trillion cubic feet of gas and 206 million barrels of oil.

Further north lies the Corrib field, off Co Mayo — the scene of much controversy — being developed by Shell, Marathon and Statoil, which is owned by the Norwegian government.

Inland lies the Lough Allen basin — an area which was largely famous as a bog — estimated to contains 9.4 trillion cubic feet of gas and 1.5 billion barrels of oil. This enormous field lies beneath Lough Allen and straddles Cavan, Fermanagh, Leitrim, Roscommon and Sligo.

Also, at present, up to nine exploration licences have been granted for the Donegal coast.

Under new terms for oil and gas exploration licences in the Porcupine Basin, Marine and Natural Resources Minister Eamon Ryan announced profitable fields will pay up to 40% in taxation to the Exchequer.

The acreage on offer in the Porcupine Basin covers unlicensed blocks in an area of approximately 63,500 square kilometres. “As we approach a (international) peak in oil finds, Ireland has become much more attractive to oil and gas companies,” Mr Ryan said.

Meanwhile, in the US, President George W Bush has called on Congress to end a 27-year ban on drilling for oil in US coastal waters so as to reduce dependence on imports.

His move comes as US consumers are calling for action to tackle high oil prices that have pushed prices at the pump to more than $4 (€2.54) a gallon.

US energy needs are set to be a key issue in November’s presidential poll and Mr Bush told Congress that there was no excuse for delay in lifting the ban. “Families across the country are looking to Washington for a response,” he said.

Environmentalists have reacted with alarm to Mr Bush’s call, arguing that off-shore drilling would take at least a decade to have any effect on oil supply and would exacerbate climate change.

Since 1981, a congressional moratorium has prohibited oil and gas drilling along the east and west coasts and in the eastern Gulf of Mexico. Since then, offshore drilling and exploration have only been allowed in the western and central Gulf of Mexico regions and parts of Alaska.

The federal bans were enacted in part to protect tourism and lessen the chance of oil spills washing on to beaches. Democrats, and some Republicans who represent coastal states, oppose ending the moratorium, urging that alternative sources of energy be explored.