Mandy Johnson: State must not scare gas firms from Irish waters

A key moment for Ireland will not only dictate the supply of energy for our economic growth, but will also be an international barometer of our openness to business

Mandy Johnson: State must not scare gas firms from Irish waters

A key moment for Ireland will not only dictate the supply of energy for our economic growth, but will also be an international barometer of our openness to business, investment, and cutting-edge technology.

Soon, the Government will unveil a policy paper on offshore exploration, the implications of which will be with us for decades.

Ministers must use the opportunity to put in place policies that will guarantee long-term energy security to attract investment and jobs.

Exploration companies, which collectively have invested over €1bn in Ireland over the past 10 years to try and repeat the success of the Kinsale and Corrib gas fields, are anxiously awaiting the publication of this paper: it will determine international investment attitudes.

At the very least, steps must be taken to restore confidence to a sector that has been operationally paralysed for almost two years.

During this period, evidence and facts have been sidelined in favour of high passion and emotion.

The well-motivated and ambitious plans outlined in the Government’s Climate Action Plan, while challenging, have been welcomed by energy and exploration industry leaders.

However, other arguments, aimed at grabbing headlines rather than cutting carbon emissions, are little more than opportunistic virtue signalling.

This charged political atmosphere has created uncertainty about existing offshore exploration licences. There has been little regard for the negative impact this debate is having on those licences, not helped by the ambiguity of the Government’s goal of separating oil and gas exploration for future licences.

As a sector, we have been working to restore the international energy industry’s confidence in the attractiveness of investment in Ireland.

It has been difficult and, at times, frustrating.

The current policy and regulatory void has left global investors wondering why the Government seems determined to hand over the security of its energy supply to foreign powers, an act that will also, ironically, increase Ireland’s carbon emissions.

The fact that importing gas (via post Brexit-Britain) that originated in Qatar or Russia is likely to create up to 30% more carbon emissions than using our own has either been lost on those with political goals or conveniently ignored.

Worldwide, these same energy companies and investors also underpin the development of cutting-edge renewable energy technologies, including the world’s largest floating wind farms, all-weather solar farms, as well as cleaner gas.

Such investments are made where energy companies are satisfied that the regulatory process is transparent and includes firm timelines and deadlines. Right now, Ireland does not fall into that category.

A lack of political will is leading to the real danger that not only will companies walk away from current investments, but they will take with them all their expertise and funding for future renewable energy.

In the energy supply sector, forward planning is made across decades, not the next month, year, or next election.

In terms of developing our offshore wind and wave potential, the impact of the current uncertainty could be devastating. The potential to repeat the €25m a year that Corrib pumps into the economies of Mayo and Donegal, and the similar injection by Kinsale into the economy of Cork, will end.

Energy-intensive industries, like pharmaceuticals, our IT sector, as well as farming, manufacturing, and production will all be reliant on the whim of the international markets.

After Brexit, Britain, Russia, and Qatar will be deciding the price of our gas, and it will be for nuclear-powered France to determine the cost of our electricity. Another unintended consequence will be more carbon-intensive gas imports, which will leave us struggling to meet our international environmental commitments.

The upcoming Cabinet deliberations on this issue are an opportunity to bring long overdue certainty on energy supply back to Ireland.

The deliberations are an opportunity for the Government to be clear to Irish and international investors that existing exploration licences will be honoured; to show that we are a country that wants to maintain some energy independence; to acknowledge that doing this makes sense for regions, jobs, and climate action; and to show that we remain open to energy companies who are diversifying their portfolios.

- Mandy Johnston is chief executive of the Irish Offshore Operators’ Association

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