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Dempsey plans to change legislation

Energy minister Noel Dempsey is to introduce legislation to avoid the sort of planning and regulatory problems that have dogged the Shell project at Rossport in Mayo.The dispute, which has seen five men jailed for contempt of court and forced Shell to suspend the €1 billion exploration project, has brought oil exploration back to the top of the political agenda. Dempsey now wants to ensure that problems do not arise with similar projects.“At the moment, this project [Corrib] has about six or seven different consents,” said Dempsey. “What I am looking to do is to create one piece of legislation that would cover all requirements for a project like this.” The draft legislation is s11 September 2005 By Laura Noonan Energy minister Noel Dempsey is to introduce legislation to avoid the sort of planning and regulatory problems that have dogged the Shell project at Rossport in Mayo.The dispute, which has seen five men jailed for contempt of court and forced Shell to suspend the €1 billion exploration project, has brought oil exploration back to the top of the political agenda. Dempsey now wants to ensure that problems do not arise with similar projects.“At the moment, this project [Corrib] has about six or seven different consents,” said Dempsey. “What I am looking to do is to create one piece of legislation that would cover all requirements for a project like this.” The draft legislation is still in its early stages, and it will be some time before it is brought to cabinet.till in its early stages, and it will be some time before it is brought to cabinet.
The Mayo dispute has also prompted a reshuffle in Dempsey's department.Until six weeks ago, the Petroleum Affairs Division (PAD), which looks after exploration issues, operated in almost total isolation from the rest of the department.Dempsey said that the Rossport dispute had taught him that people expected his department to have a more “robust regulating and monitoring presence'‘.The number of people working with the PAD has increased from three to seven since July. A technical group - including a pipeline expert, geologist and engineer - has been set up to advise the minister, and new monitoring structures for large exploration projects have been introduced.“We used to get the reports [from the oil companies] in here and we accepted what was in the reports with very little on-site inspection,” he said.“But the message that I have got quite clearly from people - and from the fact that there was a breach of consent - was that you can't do it that way.“People need reassurance that, if something is supposed to be done and consent is given, there's somebody who's going to spot if something's happening that shouldn't be.”Despite the Rossport controversy, Dempsey said that, “broadly speaking'‘, he was happy with the current licence system.“We have three choices.“One, leave the gas where it is, which would be stupid. Two, develop it ourselves, which is the equivalent of saying that the Irish government would gamble €20 to €30 million annually on a 30-to-one chance of actually getting something - and I am sure that would not impress taxpayers very much.“Or three, do what we are doing, license it and try and get companies in. You do not get them in unless you make it attractive for them.”Dempsey said that if Ireland had a number of commercial oil or gas finds, he would not hesitate to introduce a different regime.“What I would look at is a greater take for the state, whether in royalties, a higher rate of tax or state participation,” he said.“I have no hang-ups about saying it is a natural resource, it is our natural resource and it should benefit the Irish people to the maximum extent possible. But it's a bit of a pointless exercise saying that we should have royalties and the state should take 80 per cent of non-existent profits.“You can have all the wonderful left-wing socialist terms you want, but you would be sitting here waiting for donkeys' years for anyone.”Dempsey said that, even if there were significant oil finds in the future, he would not be able to change the terms for companies that had already been granted licences, some of which extend past 2020.Industry sources fear that the situation in Mayo could deter investment in Ireland.“If it means the country is being portrayed as not being a good place to do business, I would be concerned about that,” said the minister.“But I would not like to exaggerate the effect of what has happened yet. Shell are still talking in terms of bringing the gas ashore, and they are still talking about a 2007 start-up.”However, Dempsey said there were no guarantees that future projects would not face similar opposition.“You have no control over some of the people who decide that they are going to oppose everything they possibly can,” he said.“We have that on motorways and roadways and everything else.“What we can give is an assurance that, once procedures are followed, once the necessary permissions are granted and so on, a project will come to fruition - and that will happen in the case of Corrib.”

Posted Date: 
9 September 2005 - 2:19am