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Bad politics behind great oil and gas giveaway

Fintan O'Toole - Irish Times

OUR CHILDREN and grandchildren will see us as a weak and inept generation.

They will wonder how we blew the boom, why we put €30 billion into Anglo Irish Bank and Irish Nationwide, how we gave up our economic sovereignty without much of a fight. They will feel bitterness at the way we pushed them, as children, to the top of the queue for so-called austerity.

And unless we act now, that bitterness will turn to contempt. They will hate us for the way, as well as leaving them with a legacy of unpayable debt, we also gave away something that might have been of real use to them, the chance to use our natural gas and oil resources for their benefit.

I’m returning to this issue because it seems to me to be a touchstone for our entire political culture. We can use it to address three big questions: have we learned anything? Is there really a shift in the way we do politics? And have we any capacity for the kind of radical thinking we need?

The question of what we’ve learned is stark. In September 2008, our system of governance – Civil Service, regulators, government – faced a historic test. It failed catastrophically. Why? Because, under the pressure of the banking crisis, it fell back on its ingrained habits and attitudes. It had acquired the habit of doing what the banks asked it to do. In a closed system of decision-making, that habit made a grotesquely irrational decision seem like common sense.

Just as the Department of Finance was habituated to doing what the banks wanted, the mindset of the Department of Natural Resources is shaped by the perceived needs of the oil and gas companies. That mindset has proved to be resilient. Two successive ministers – Eamon Ryan and Pat Rabbitte – have entered it from the outside, with some history of scepticism, and quickly gone native. Each has ended up speaking a language that is indistinguishable from that of his Fianna Fáil predecessors.

Which brings us to the second question: has anything changed in our governing political culture? Leave aside for the moment the substantive issue of why we’re ceding control of our natural resources on the worst terms in the developed world. Just consider the way this is being done. It is closed, top-down, peremptory. Even our parliament doesn’t get to have any say.

Rabbitte’s position is that an Oireachtas committee can consider the licensing terms but that, in the meantime, he’ll go ahead and award the licences anyway. As a process, this is the same parody of democracy that has us where we are.

Third, is there the slightest possibility of imaginative thinking? Last week, I made a concrete suggestion: that the State seeks a partnership with Norway in the development of our oil and gas. It is not a mad idea. Norway has the money and expertise. In the 1970s, it offered us a deal on sharing oil and fisheries. Norway (unlike Ireland) has a large stake in the Corrib gas field. It is actively expanding its operations around the world.

Rabbitte replied to my piece in these pages last week. He didn’t dismiss this suggestion or show why it is absurd. Rather, he completely ignored it. He’s comfortable with a phoney argument between “fantasists” who think there’s a free pot of gold out in the Atlantic and pragmatists like himself. But the idea that there might be an imaginative pragmatism, a hard-headed defence of the public interest, simply cannot be countenanced.

And this, I’m afraid, is where official thinking is still at. It poses false alternatives: we either submit to the abject position of powerlessness we occupy or we’re deluding ourselves. Any notion that we might actually use the collective power we still have is literally unimaginable. So we have to accept “reality”, however miserable it may be.

Just how miserable it is is illustrated by figures cited by William Hederman in the Sunday Time s. He quotes the former managing director of the Corrib Gas project, Brian O’Cathain, as predicting that the State may end up with as little as €340 million in tax over its lifetime. O’Cathain actually suggested at a public debate in December that Corrib may in the end pay no tax at all.

Nor is there anything in the current regime to force companies even to land oil and gas in Ireland; they can ship it or pipe it to the United Kingdom or Holland if they wish. There is no guarantee of a single Irish job being created. But none of this is even up for discussion.

If you knew nothing at all about the issues at stake here and merely looked at the process by which decisions are being made, you’d put your shirt on those decisions being bad ones. It’s always a good bet that closed, top-down policymaking, with minimal information and no serious willingness to consider alternatives will have awful results. We know that from very bitter experience. Or we would do if we hadn’t forgotten it already.


Posted Date: 
23 August 2011