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Here’s Why Dubliners Should Care About a Mayo Natural Gas Field

By: 
Andy Storey - DublinInquirer

Erris, County Mayo, is a long way from Dublin. But events there have huge economic significance for the country as a whole, including the capital city.

 

Gas is finally flowing through the controversial pipeline in Erris, bringing raw gas ashore from the Corrib field for refining. Shell, the project leader, is bragging about its success. At peak production, it is expected that the field will produce the equivalent of 45,000 barrels of oil per day.

But already local people are alarmed by intense levels of gas flaring – burning off flammable gas and potentially producing dangerous emissions – on New Year’s Eve, confirming many residents in their long held doubts about the safety of the project.

The various issues around the project include not just health and safety, but also environmental protection, human rights abuses, and the integrity of the planning process. All are important and have been well documented elsewhere.

But, from the point of view of the country as a whole, isn’t the fact that exchequer returns, energy security and jobs are all being boosted an overwhelming economic positive?

Well, it might be – if all those things were actually going to happen. A bookletLiquid Assets – published by the campaign group Shell to Sea in 2012 meticulously documents how limited are the gains Ireland as a whole will accrue from the project and from any future oil or gas discoveries.

Remarkably, the Irish state has no stake whatsoever in the Corrib gas field. The resource is now entirely owned by Shell and its partners.

Nor does the consortium have to make any royalty payments to the state. A natural resource that should be the property of the people of the country has, in effect, been transferred to the private ownership of multinational corporations. In a previous publication, Michael McCaughan and I referred to this as “the great gas giveaway”.

In theory, Shell and its partners are liable to pay 25 percent tax on profits – but all exploration and development costs can be written off against tax, so any boost to government revenues will likely be minimal. In the meantime, the state has incurred significant costs from heavy-handedly policing the project to protect Shell against legitimate local protest.

As for energy security, Shell is not obliged to supply the gas to Ireland. It could pipe it out to the UK and sell it to the highest bidder. If Dubliners and other Irish consumers do end up using the gas, we will be paying full market price for it.

And, as for employment, Shell itself admits that only 175 jobs will be generated by the project over the next 15 to 20 years.

International comparisons (the work of Amanda Slevin is especially revealing here) indicate that the Irish state is getting an extraordinarily bad deal, a result of successive governments relaxing the terms for oil and gas exploration to such an extent that the gains to Ireland have been whittled away to almost nothing. Particularly significant such changes were introduced by the then Minister for Energy, Dublin TD Ray Burke, in 1987. Burke’s dodgy record has been documented by Shell to Sea:

“In 2005 Ray Burke was convicted and jailed on charges arising from political corruption in office and was found to have received a number of corrupt payments in the late 1980s. While there is no public evidence that he received payments from energy companies, he did negotiate personally with company executives prior to his introduction of the 1987 terms, at times taking the unusual step of meeting directly with company representatives in the absence of his department officials – and against the advice of those officials.”

Far from being a triumph, the coming on stream of Corrib gas represents the culmination of a long process of what can only be described as “economic treason”. It is, as campaigner and Council of State member Ruairi McKiernan puts it, “one of modern Ireland’s greatest scandals, a stunning fiasco in planning, economics, environmental protection and the abuse of civil liberties”.

Remote though North Mayo may be, Dubliners will share in the price the country as a whole will pay for this debacle.

Posted Date: 
7 January 2016