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Sharing energy with Norway

Letters to the Irish Times - 26/08/11

A chara, – A small ray of hope is entering my heart that at last there is the germination of a public debate on who owns our hydrocarbon resources (Fintan O’Toole, Opinion, August 16th and 23rd, Pat Rabbitte, August 18th). The public apathetic disconnect on this vital issue is lessening somewhat if the well-thought-out letters on the matter in your paper are anything to go by.

For years, Irish based oil-rig workers, myself included, tried to highlight to various ministers and clueless civil servants in the Petroleum Affairs Division (PAD) of the Department of Energy, Communications and Natural Resources, the huge oil and gas potential in Irish waters. We were a highly experienced, highly skilled group of professionals, numbering over 900 people who had worked in many areas including Scotland, Norway, Canada, Indonesia and the Middle East.

We had returned to work in our own waters for the development of the Kinsale head gas field and later off the west coast of Ireland. Repeatedly we told the department that the proper information regarding oil and gas discoveries that we made in Irish waters was not being given to the Irish State by the oil companies.

After the Labour Minister for Energy Justin Keating had introduced a fair and balanced tax deal in 1975, we felt that Ireland’s interests were being protected. However, throughout the 1980s the oil industry created the illusion that Ireland’s tax regime was a barrier to exploration; even though the reality was that the price of oil had fallen to around $10 a barrel and there was no effective deep-water production technology developed at that time. The oil industry found a willing energy minister in Ray Burke, who in 1987 completely decimated Keating’s 1975 terms. Further changes in 1992 by then finance minister Bertie Ahern, ensured that the oil companies would be the main beneficiaries of any oil and gas found in Irish waters (or on land).

To add insult to injury, not alone have we one of the lowest hydrocarbon tax rates in the world, but most of the value-added highly lucrative jobs, goods and services are now outsourced out of the jurisdiction, even though 100 per cent of these costs spent abroad can be written off against Irish tax. Further, the oil companies have been allowed to sit on oil/gas prospects, without declaring their commerciality, for extraordinary lengths of time and as they grow in value.

This must not be allowed with the latest round of exploration licences. They should not be issued until the current licensing and taxation terms have been reviewed by a properly advised and resourced Oireachtas Committee. The oil companies have systematically and incrementally gained control of Ireland’s oil and gas resources without a shot being fired. They have dictated the terms and set their agenda. As for Norway – come back and help us, Vikings, all is forgiven! – Is mise,



Bearna, Galway.


Sir, – The recent controversy surrounding Ireland’s fabled wealth of oil and gas serves to highlight the deficiencies in our educational system, in particular the lack of logic, critical analysis and statistics in the form of conditional probability.

All of your correspondents, including Fintan O’Toole, speak of “strike rate” which is really a probability of finding something “given” that it is there in the first place, like the chances of finding the car keys in the garden given that they were dropped there.

However, with natural resources, there is a second even more important probability – “endowment”. This is the unknowable probability that they remain to be found, as if the car keys were dropped in the bedroom and not the garden but you continue searching in the long grass.

Finding oil and gas, like minerals, is not just a problem of looking harder and harder; it could be there are no more to be found! No Government agency can or will make that statement as it is unknowable, it can only be guessed at, inferred, hoped for, etc, and it is usually described with an adjective like “potential”. Historic strike rates are not a reliable predictor of future ones, just like they say in the small print of investment documents. – Yours, etc,



Blessington, Co Wicklow.

Posted Date: 
28 August 2011