By Mandy Johnston
Not long before Christmas, the Government quietly placed online a policy paper the significance of which will be with us for decades to come. The paper on offshore exploration may seem of niche interest – but in reality it affects us all.
The new policy represents a vital sea-change for a sector hit by two years of political uncertainty and regulatory delay, but alas it may all be too late to restore the confidence in the Irish investor landscape. There may be a degree of political shyness about publicising a new pro-active approach to offshore natural gas.
But this rethink by Government is badly needed if as a country we are to continue to have enough power to keep the lights on and the economy vibrant.
It also moves to reassure companies that all existing exploration licences, both oil and gas, will continue through all stages.
In another significant move, the regulation of the sector is to be moved out of politics and over to An Bord Pleanála. This is in line with our calls as a representative association for politicians to stop playing football with something that is far more important than the next election.
The sector is now considering the paper in full. We will need to see that Government is serious about delivering the commitments which it has set out. There will have to be timelines and deadlines. In the new year, we need to see an end to uncertainty. The saga surrounding offshore exploration has shown the dangers of gesture politics to Ireland’s reputation as a good place in which to invest and create jobs and do business.
Lessons should be learned from what has happened. Part of that reflection must be consideration of the messages we want to send as a country to investors, both national and international, committed to pushing new boundaries, developing new technologies and willing to take a leap of faith in order to ensure a better future.
When it comes to pharmaceuticals, IT and social media, we have been at the forefront. Those companies discovering new medicines and cures have found a welcoming home in Cork and elsewhere; the biggest names in social media have made Dublin the Silicon Valley of Europe, while the Intel success story in Kildare is the envy of the world. It is unfortunate that the experience of the energy sector has been very different in recent times.
Political and regulatory obstacles sent out a message that companies that are world leaders in meeting the challenge of keeping the lights on while protecting the planet found Ireland one of the most challenging places in which to do business. If this happened by design, it is an unfortunate indication that the powers-that-be do not accept our energy security vulnerability; if it happened by default, it is an unforgivable dereliction of duty that could compromise our environmental protection and our economic progress.
Our member companies are the leaders not only in developing new technologies that would allow us to repeat the success of the Kinsale and Corrib gas fields, but also in developing offshore windfarms, solar, hydrogen and geothermal power, as well as harnessing the power of waves and capturing CO2 emissions.
Many have come to me and asked what is going on in Ireland? The contrast between the approach of Scotland and here was often mentioned. Companies that are being actively encouraged by the Scottish government to develop wind, wave and solar alongside a well-established oil and gas exploration sector feel frustrated here. Scotland knows energy companies plan decades ahead, not months or years, and it is working towards a future when renewables will largely replace oil and then gas.
What made the situation even more difficult to fathom is that our politicians embarked on this course knowing that post-Brexit we will be vulnerable when it comes to energy. Without another offshore gas field like Kinsale or Corrib, we will be reliant on imports via Britain.
Not only is this a strategic risk, relying on a country which itself has only the capacity to store eight days’ supply of gas, but it also does not make sense in terms of climate action. The UK has to import supplies from Qatar and Russia, generating a much higher carbon footprint.
The Government has finally made clear that it is policy to support and encourage gas exploration. It has again acknowledged the importance of natural gas as a transition fuel and its key role as we move towards a zero-carbon economy.
The policy paper brings us in line with other European countries and those further afield who recognise that natural gas gives us that bridge and allows us to have power to sustain and create jobs while also meeting our climate obligations.
It will provide a clear commitment that Ireland is open for business to develop the energy potential of our offshore.
For more than four decades, natural gas from Kinsale Head and Corrib has kept us safe from a repetition of the energy shortages, rationing and long queues resulting from the 1973 oil crisis. However, both fields are now in decline, with Kinsale Head due to cease production in 2020.
It is time to return to the frontier and harness new technology and ensure Ireland becomes a leader in developing and implementing new energy solutions involving all sectors of the energy industry.
Mandy Johnston is CEO of the Irish Offshore Operators’ Association