Political Party responses on renegotiating the oil & gas deal

On the 8th of February Shell to Sea emailed each of political party spokespeople for natural resources. Each party was asked:

If in government, would you renegotiate the current deals surrounding Ireland’s oil and gas resources to provide the people of Ireland with a greater return? What changes to the current system would you implement?

Fine Gael and the Green Party failed to respond

Below are the responses we received:

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Labour Response

---------- Forwarded message ----------
From: Liz McManus <liz.mcmanus@oireachtas.ie>
Subject: Re: General Election Question

Dear Caoimhe,

Thank you for your email and letter in relation to Ireland's oil and gas resources.

As you may know the Labour Party, as part of its Energy Revolution policy document proposed a review of the tax regime relating to oil and gas companies.
 
From Labour’s Energy Revolution:
 
"While the government did introduce a new royalties and tax regime to govern new oil and gas exploration licensing rounds, they kept the old royalty-free rules in place for the fields that were already licenced. This includes the Shell project in Co. Mayo. However, in reply to a Dáil question the government conceded that there were no constitutional, statutory or contractual rules that prohibited the new rules from applying to the existing fields rather it was a question of reputational damage. The Labour Party does not accept the logic of this situation.

Ø       We propose that the current royalty regime be extended to cover to the Corrib gas field.”

Our manifesto states “Labour will also ensure that Ireland’s royalty regime extends to the Corrib gas field as part of a wider review of the tax regime and conditions of oil and gas exploration.”

Kind regards,
Liz.

Liz McManus
Labour Spokesperson on Communications, Energy and Natural Resources
www.labour.ie

 

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Fianna Fáil Response

Dear Caoimhe

Thank you for your email dated 8th February 2011 which I reviewed today at my Constituency Offices in Limerick on the subject of Ireland’s Oil and Gas resources.

It is not possible to revoke or change contracts halfway through. To do so would have significant implications for the reputation of the State across a range of businesses.

Where any future commercial discovery is brought to production, the tax regime that will apply will
be determined by the date of the exploration licence under which the discovery was made. In the
case of exploration licences issued prior to 1 January 2007, a tax rate of 25% will apply and, in the
case of licences issued from 1 January 2007, a tax rate of up to 40% will apply in the case of very
profitable fields.

The Corrib Gas project has been a protracted and sometimes painful process for many of
the people involved. We have a duty to protect the rights of all its citizens. This includes local
communities and the developer who is working under statutory consents granted.

However we also have a duty to act in the best interests of the Irish people. For energy security of
supply and economic development, I believe this project is in the national interest.

The Corrib Gas Field will strengthen Ireland’s security of energy supply and at peak production
will provide over 50% of Ireland’s gas needs. By providing an additional gas supply source for the
market in Ireland, the Corrib Gas Field could also help bring down gas prices for consumers in
Ireland.

Yours sincerely
Willie O’Dea T.D.

 

Shell to Sea comments:

First of all, the developer of the Corrib Gas Project is not a Irish citizen as Mr O'Dea indicates in his reply, they are Shell, Statoil (Norwegian State owned company) and Vermilion (Canadian based multinational)

Second, Corrib provides no security of supply, because it allows the companies to export our gas rather than sell it to the Irish market.  In the 2010 oral hearing counsel for Shell, Esmond Keane stated that it would be illegal for contracts to be signed that the gas would only be supplied to Ireland.

Third, Mr O'Dea's claim that the "Corrib Gas Field could also help bring down gas prices for consumers in
Ireland" is directly contradicted by the Commission for Energy Regulation as well as Bord Gais.  See articles: That's gas -- bills up 15% after Corrib field opens and Energy bills hikes on way despite drop in fuel costs

 

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Sinn Féin Response

---------- Forwarded message ----------
From: Martin Ferris <martin.ferris@oireachtas.ie>
Subject: Re: General Election Question

Caoimhe,

Manifesto was launched today. Following is the section on oil and gas companies:

Ensure the State finances benefit from natural resources by increasing licence fees for off-shore exploration companies.  The State to take a 51% shareholding in these resources. An  immediate levy of 48% and a royalty of 7.5% should be applied on landed gas and oil.
 

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United Left Alliance Response

 ---------- Forwarded message ----------
From: Joe Higgins MEP Constituency Office <info@joehiggins.eu>
Subject: Re: General Election Question

Dear Shell To Sea,

The Socialist Party is in favour of the complete nationalisation of our natural resources under democratic workers' control and management.  Our natural resources should not be used to enlarge the profits of the multinationals and instead should be used as a source of employment for thousands of ordinary workers currently languishing on dole queues as well as providing a secure and cheap source of energy for people in Ireland.  

The revenue raised through exploiting our natural resources should be used by the state to invest in the economy creating further jobs, providing critical infrastructure like schools, community centres and youth cafés in our communities as well as allowing massive investment into our education and healthcare systems providing free quality healthcare and education for all.

Regards,
Stephen Rigney
Parliamentary Assistant

--
Office of Joe Higgins MEP
Socialist Party
150 Pearse Street
Dublin 2
00 353 1 6795030
 

 

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Shell to Sea Email

 

To: Natural Resources Spokesperson

In light of the current general election campaign, we would ask you to please clarify your position on the issue of Ireland’s significant oil and gas resources.

Ireland has 10 billion barrels of oil equivalent off the West Coast, with a value of over €600 billion according to your Department of Communications, Energy and Natural Resources. This excludes the known resources both inland and off the southern and eastern coasts.

Under the current licensing regimes, when oil companies produce Irish gas and oil, ownership of these resources is transferred to the oil companies.  The Irish state is not guaranteed a supply of its own resources. Furthermore, if these companies sell Irish gas and oil back to the state, it is at full market prices.

Research from a variety of international, national and state-funded sources demonstrates that Ireland has one of the lowest rates of return to a state from its gas and oil anywhere in the world.

If in government, would you renegotiate the current deals surrounding Ireland’s oil and gas resources to provide the people of Ireland with a greater return? What changes to the current system would you implement? 

Shell to Sea is a national campaign with branches across the island of Ireland. We have sent this letter to the spokespeople for natural resources of all political parties standing in the forthcoming general election. We will be posting the responses to all our members and supporters on our email lists regionally and nationally, on our facebook pages regionally and nationally, and on our website for the duration of the general election campaign, www.shelltosea.com which received over 18,000 ([Shell to Sea] would actually be closer to half a million) hits in December 2010.

 We would appreciate it if you could send us your reply by the 13^th February, as we will be posting the responses on the 14^th February. Please email replies to dublins2s@gmail.com.

 We look forward to hearing from you. If you have any queries please do not hesitate to contact us on 085 8328130.

Yours truly,

__________________

Caoimhe Kerins, Spokesperson

Dublin Shell to Sea