Banning gas exploration makes us reliant on UK
RECENT developments prove the Government’s decision to rely on the UK for critical gas supplies may not have been the right one. On May 21 in the Irish Independent, I set out the reasons I thought the Green Party’s proposal to ban future gas exploration in Ireland was not a good idea.
Unfortunately, during the protracted government formation talks between the Green Party, Fianna Fáil and Fine Gael, the Greens’ proposal made it into the Programme for Government.
One of the reasons I thought a ban was a bad idea was because it would mean “locking ourselves into a future where we are 100pc reliant on post-Brexit Britain for our natural gas supply”.
Sadly, we did not have to wait long for proof that relying on the UK may not be a good idea.
The choice facing the Government earlier in the summer was whether Ireland should try to produce some of the gas it needs at home and repeat the success of the Kinsale and Corrib fields or import the gas from the UK. The Programme for Government committed Ireland to the import option.
Around the same time the Government was opting to rely on UK imports, and only seven days after my article appeared, the British energy regulator Ofgem announced changes to its charging regime. So what, you might ask? What has this got to do with Ireland ending exploration?
Well, when the changes come into effect on October 1, the cost of importing gas from the UK will increase, which will in turn increase the cost to households and businesses.
Our Irish regulators and utilities spotted the potential consequences of the UK’s proposed tariff changes and asked for certain modifications and dispensations from Ofgem.
These included the introduction of a specific “Ireland security discount” at the key UK supply point, the Moffat interconnector.
The discount was intended to help ensure security of supply. The Irish pointed out that the Moffat interconnector was built specifically to end Ireland’s energy isolation as an EU member state so the discount, they argued, was appropriate.
Ofgem rejected the suggestions, effectively saying they were not prepared to make a special case for Ireland.
So, what does this tell us? It tells us the UK is not prepared to do Ireland any favours and is unmoved by the fact we rely on them so heavily for our gas supplies rather than finding our own. The UK is no longer a member of the EU club and so the requirement to look after Ireland as it did before no longer exists.
This is significant. The Kinsale gas field ceased production in July and the supply from the Corrib field continues to decline.
The Government’s decision to end future exploration means Ireland will have to rely more and more on the UK for natural gas.
In fact, the one guaranteed consequence of ending exploration is we will be 100pc reliant on the UK for these critical supplies in the future.
Gas is so critical because of the role it plays in our energy mix. During the first half of this year, it provided 50pc of all power generation and at times fuelled over 80pc of Ireland’s electricity. Many indigenous and multinational companies rely on gas.
Approximately 650,000 households depend on natural gas for home heating. When the weather co-operates, renewables can contribute hugely to our energy requirements, and their contribution will grow over the coming years.
However, the intermittent nature of renewables means we will continue to need large amounts of gas to run our country.
Natural gas provides the base load support our energy system needs, the type of support renewable energy is unable to provide. Without the flexibility gas provides, our energy system would not work.
In fact, gas will play an increasingly important role as Ireland decarbonises over the coming years, as we shut down coal and peat-fired generation.
It is why the Irish Academy of Engineering estimates that in the future gas will account for more than 90pc of electricity generation at times of very low renewables generation.
It is ironic then that at a time when our regulators were asking for and being refused a “security discount” from the UK, our Government effectively chose to make Ireland reliant on the UK for its energy security.
No country should consciously and voluntarily place itself in a situation where it must rely 100pc on another country for its vital natural gas supplies, yet that is exactly what we are doing by deciding to end future exploration.
It is clear from these recent developments that the UK post-Brexit will look after itself first and foremost. Its recently announced intention to break international law in respect of the Brexit Withdrawal Agreement tells us all we need to know about how the UK might behave in the future.
I don’t think it is terribly sensible to place Ireland’s energy security in the UK’s hands. We will have to swallow whatever cost increases these tariff changes bring. In truth, we will have to pay whatever price the UK deems appropriate in the future; after all, without our own indigenous production we won’t have a choice.
As recently as December 17, 2019, the previous government published a policy statement on petroleum exploration.
It talked about the importance of gas exploration, the “requirement to protect Ireland’s energy security”, including referencing the economic and environmental benefits “of using indigenous over imported source… in terms of lower carbon impact, employment and tax yield”.
In recognition of this, it announced it was going to commission an energy security review this year.
Unfortunately, the new Government has done a U-turn on this position.
It has chosen to ban future gas exploration before carrying out an energy security review. It has chosen to ignore the fact that importing gas is worse for the climate and for the economy than using indigenous production.
It appears determined to sacrifice important, common-sense energy policies for reasons of political expediency. It has no strategy or plan to diversify the gas supply and it is putting the country’s energy security at risk as a result.
We are only starting to see the consequences of this approach now. We can only hope our politicians reconsider their approach before the cost to Ireland becomes even higher.
UK requirement to look after Ireland as it did no longer exists
We will have to pay whatever price UK deems appropriate