Tuesday, 25 March 2008

The Irish Govt, Shell, Corrib and all that gas...

I was down west over the weekend and passed the site of the new terminal at Bellinaboy - you could tell you were in the right place because the roads improve dramatically in the vicinity of the site - so +1 for Shell & it's cohorts on that score.

There are a number of issues which tend to be jumbled up together when people talk about Corrib Gas:

  • The environmental concerns

  • The tactics employed by Shell and the Irish State in pushing the project forward

  • The exploration deal which the Irish government struck with the Oil companies

The Environment and safety issues with the project; specifically in relation to the raw gas pipeline tend to grab the national headlines. I personally would not be too impressed if somebody knocked on my door and told me that they were going to pump untreated gas within 50 metres of my home. However, without trivialising the concerns of locals and environmentalists, I think that this is a secondary issue.

Likewise the tactics used to deal with individuals and groups opposed to aspects of the project seem to me to have been high-handed at best but we will not debate them here.

The real issue here is the sweet, sweet deal that the exploration companies have been getting and continue to get from the government of Ireland. This is something that affects every Irish citizen, not just the people of Erris. Apparently we are so keen to have exploration companies look for oil and gas in our territory that we will not charge them royalties; we will not take a stake in their company; we will not oblige them to sell a portion of the oil to us when they find it. We will take 40% (up from 25%) of their "profits" - if they ever make any in our juristiction but only after they have written off 100% of their exploration and development costs. On top of this we will use all of the instruments of the state the planning authorities, the Garda Siochana, the court service and the prison service to protect the oil companies interests.

So why do we do this? The most common argument is that we are "seeking to reduce our dependence on imported fossil fuels". Of course since we will have to buy the oil back at market rates and since there is no compulsion on the oil company to sell to us I am not sure that there is any difference between the oil found off west Mayo and oil from Texas, Saudi Arabia, Venezuela or wherever. Our dependence on other people's oil still exists.

Others claim that if we did not entice the oil companies to explore in Ireland that it would not happen at all. Is that such a bad thing? If there is no net benefit in terms of profiting from our own natural resources or securing our supply then why do we bother? Would we not be better off sitting on our hands until oil reaches $150?

For me the oil companies are not to blame - they are businesses that will do everything in their power to drive the best deal and to maximise profits for their shareholders. Unfortunately our government does not do the same for us. This is clearly demonstrated by the fact that Tony O'Reilly's Providence Resources was able to sub-license exploration rights which it was granted by the Irish Government to ExxonMobil. In return for this license it was granted a 20% stake in the new venture. If Tony can do it then why can't Bertie?

As ever the problem is of our own making, we have elected successive governments who have dealt with this issue in an incompetent manner which has the all-too-familiar stench of corruption. What is clear is that we, the citizens of Ireland, have been badly served by our government and that we as a nation have stood idly by while our natural resources have been sold from under our feet for NOTHING. We do not need a tribunal to tell us that we need higher standards in public administration. We must take responsibility by actively engaging in our own democracy rather than fatalistically accepting the status quo

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