Key issues ignored in gas battle, says expert

The battle between the Council for the West and the Government over gas supplies to Connacht from the Corrib Field is "fragmenting" a crucial debate on the State's natural resources offshore.

This is the view of Michael Cunningham, a Mayo-based international offshore gas and oil exploration consultant who has worked with the Norwegian giant, Statoil. He has called for a review of fiscal terms set in 1992, and the Government's overall policy for offshore oil and gas finds.

"We are not just talking about Corrib, but about four wells, one of which, on Sarsfield, off the south-west coast, is a particularly interesting prospect for Statoil," he says. "The fact is that the multinational oil and gas companies pick up the phone and this Government comes running, when it should be the reverse."

The Minister for the Marine and Natural Resources, Mr Fahey, who shares this part of his brief with the Minister for Public Enterprise, has ruled out such a review. He has pointed out that the licensing terms were introduced in 1992 against a backdrop of steep decline in exploration activity.

His Department cites the success rate in Irish waters at 132 wells drilled with two commercial finds; that is 66 to one, compared to a British rate of 12 to one, and a North Sea rate of less than 10 to one.

However, Mr Cunningham doesn't buy the argument that the multinationals will quit Irish waters if less attractive terms are introduced. He points to the Norwegian approach, which ensured there were economic and socio-economic benefits from a well-managed industry after its first oil and gas production in 1971.

It is an argument echoed by SIPTU's offshore oil and gas committee spokesman, Mr Padhraig Campbell, who has described the agreement by Bord Gais to build a pipeline from Mayo to Dublin via Galway as a "double subsidy" - at taxpayers' expense - for both Enterprise Oil and Statoil.

The spurs promised by Mr Fahey to towns in Connacht represent another form of this "double subsidy", Mr Campbell says. "The exploration industry now has the raw material, the means of production and distribution and the markets under their control in Ireland," he says.

Mr Campbell, himself a rig worker, has long argued that the oil and gas companies should be bound by the Government to avail of Irish goods and services. The Minister's Department says that under EU law it is precluded from insisting on such use.

Mr Campbell forecasts: "Local politicians in the west will be delighted to announce the arrival of gas into the market towns of Mayo and Galway, so that advance factories can be built in the hope that multinational companies will set up".

The energy used will have been subject to little or no tax, no royalties and no realisation of the wealth-creating opportunities lost to the west, he says. Both he and Mr Cunningham are not impressed with the promise of 50 jobs at the pipeline terminal onshore.

Enterprise Energy Ireland's managing director, Mr Briain O Cathain, welcomes a debate on the gas find, if it is "positive, constructive and balanced". Speaking at the recent Council for the West seminar in Knock, Co Mayo, he said the west remained one of the world's most challenging locations for offshore exploration. The debate must also recognise the substantial costs and risks borne by his company and its partners, Marathon Petroleum and Statoil, he said.

Boladh Gais (A Smell of Gas) is the title of next Tuesday's edition of Leargas at 7 p.m. on RTE1 television, which will carry a report from Pollatomish, Co Mayo, where the Corrib field gas is to be piped ashore.