Mandy Johnson: Gas times in Kinsale as production winds up after 42 years

Our political system needs to wake up to potential risks to our gas supply and explore the options, writes Mandy Johnson
Mandy Johnson: Gas times in Kinsale as production winds up after 42 years
A Marathon Kinsale gas rig
A Marathon Kinsale gas rig

Our political system needs to wake up to potential risks to our gas supply and explore the options, writes Mandy

Johnson

This weekend saw the end of gas production at the Kinsale Head gas field after 42 years of production. Indigenous gas production started in 1978 when the Kinsale gas field commenced gas deliveries. Kinsale supplied all of Ireland’s natural gas from 1978 to 1995.

Since reaching peak production in the mid-90’s production from Kinsale has gradually declined and Ireland has become ever more dependent on imports from Britain – 95% of Ireland’s gas was imported from Britain in 2015.

For over four decades, gas from Kinsale Head has been a mainstay of the economy in the Cork region, a catalyst for many industries and provided Ireland with a reliable, secure, clean, and safe source of energy.

PSE Kinsale Energy, through its Marathon Oil predecessor, has been involved in exploration offshore Ireland for more than half a century. Marathon Oil drilled the first well offshore 50 years ago, in summer 1970.

The following year, with only the third well drilled in the Irish offshore, the company discovered the Kinsale Head gas field, 50 km off the coast of Co Cork, in 90 metres water depth. Several satellite gas fields (Ballycotton, Southwest Kinsale and Seven Heads) were discovered between 1991 and 2003 and were tied back to the platforms.

Production from the field began in 1978 and peak production occurred in 1995.

The Kinsale Head field initially supplied gas to the power station at Aghada and subsequently to the entire country. The gas came ashore through a subsea pipeline to the Inch Terminal near Midleton, Co. Cork where it was metered and transferred to Gas Networks Ireland (GNI) for distribution nationwide.

The Southwest Kinsale field was redeveloped and operated from 2001 to 2017 as Ireland’s first offshore gas storage facility.

The Kinsale Head gas field and associated satellite field developments transformed Ireland, being the primary enabler for the formation of Bord Gáis Éireann and the gas pipeline infrastructure, creating a large number of jobs and stimulating significant industrial development in the Cork area.

The national grid, Aghada and Poolbeg power plants and the NET fertiliser plant at Marino Point in Cork were all constructed on foot of the Kinsale Head development, while Kinsale Energy spent €20m-€30m annually in the local Cork economy for more than 45 years.

In addition, the Kinsale Head development has also had considerable downstream impacts in terms of jobs and value add-ons to the regional economy, including the cluster of chemical and pharmaceutical companies in Cork Harbour that grew from the availability of gas from the Kinsale Head field.

The gas field was also a catalyst for many industries in the Cork region, some of whom developed into global companies.

Most rational observers accept that given the recent political uncertainty surrounding exploration in Ireland it is unlikely that any new indigenous sources of gas supply – apart from biogas – will be developed before 2030.

In the event of a gas find, the timeframe for development would be at least 10 years due to the complexity of Ireland’s permitting and regulatory environment. Corrib production started 20 years after initial discovery and 15 years after the project was sanctioned for investment by the developers.

Comparable developments in the Norwegian and UK sectors of the North Sea were completed in three and six years, respectively, from project sanction to start of production.

Our political system needs to wake up to the exposure to our security of supply and our regulators need to be aware of their role in progressing the existing licences.

Under European law Ireland must demonstrate that we have taken all the necessary measures so that in the event of disruption we have the capacity to satisfy the demands of society and our economy.

Ireland will be almost totally dependent on Britain for gas supply within 10 years unless new supply sources are established.

For this reason, it is worthwhile examining how Britain’s supply situation is changing. There are several factors which are likely to impact Britain’s security of gas supply in the medium to long term.

Britain’s gas production is declining. Prior to 2000, Britain was self-sufficient in gas. Britain now imports about half of its gas supply. UK North Sea gas production in 2030 will be 50% below current levels.

Britain will then be importing about 75% of its gas needs. Norway could supply up to 25% of Britain’s gas demand but Britain will rely on pipeline imports from continental Europe, mainly Russian gas, and LNG imports for more than half of its gas supply.

In view of the criticality of gas for Ireland’s energy supply, it is important to have more than one source of supply and supply route.

Brexit may also have significant implications in terms of Ireland’s gas supply security. Ireland will no longer have a physical gas interconnection with the EU and could find itself isolated from the EU’s internal energy market.

Without doubt climate change is the central issue challenging Ireland economically, politically, and socially in the decades ahead; it has certainly influenced public policy in the shape of the new Programme for Government.

A point often missed in the debate is that the social consequences are as big as the economic ones. Because what is required of a single generation is a scale of change ordinarily phased in over several decades.

The politics to deliver that change will require political courage and skill. Repeating the success of Kinsale for Ireland and for the local Cork area also requires political courage, an acceptance that the right and logical course is not always the popular one.

*Mandy Johnston is CEO of the Irish Offshore Operators Association

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