Dempsey: Lies and more Lies

mayo | rights, freedoms and repression | opinion/analysis Friday August 05, 2005 15:27 by roisin

Was anyone fooled by Minister Dempsey, who on Monday of this week ordered Shell to dismantle (unweld) the pipeline it has illegally constructed? Did any one imagine that at last, after the country wide outrage expressed over the last month at the imprisonment, on foot of an illegal injunction, of the Rossport 5, that Minister Dempsey had changed his tune? How wrong they would have been.

The order issued to Shell to desist was a cheap thrill, because as Minister Dempsey knows well, protestors at the Bellinaboy site have blocked any work on the site, since the relevant consents have not been given to the consortium, and they intend to continue to blocade the site.

But the very next day, Tuesday (August 2nd) Dempsey after his much publicised order to Shell, gave his consent to Shell to start laying the 92kms offshore, under sea, pipeline through which Shell plans to bring the raw gas from out at sea, to the shore through Broadhaven Bay.

‘Solitaire’ on Standby

Solitaire is a state of the art boat, nearly 1000 feet long, which welds the pipe on board, and is reportedly able to lay between 4 and 8 kms of pipeline a day. It is reckoned that the boat will have the 92kms laid within a couple of weeks.

As Miceal O’Seighin commented after the announcement by Dempsey, "It makes a complete nonsense of the supposedly independent reviews Dempsey has ordered only last week, on the safety aspects of the onshore pipeline. He might just as well not have bothered with these reviews, if at the end of the day, the pipeline, irrespective of the review results, will go through to the shore."

In breach of EU law

But adding insult to injury, the construction of the offshore pipeline is also in breach of the law – the EU law, and this too is well known to Minister Dempsey.

Minister Dempsey was able to give his consent to this offshore part of the Shell project because the government has ‘split’ the project into different sections. The practice, known as ‘project splitting’ is illegal under EU law, because of course it means that the whole of the project, judged in its entirety, can then avoid assessment, and planning regulations as a whole project..

Consent cannot under EU law be given piecemeal. So the Minister’s consent to proceed with this part of the project, whilst the next stage is under serious objection and review, which the minister himself has ordered, is quite clearly illegitimate.

Nevertheless Shell, acting on behalf of the consortium, characteristically intends to go ahead with this separate part of the project.

Shell Characteristic Behaviour

Eddie Diver, chairman of the Erris Inshore Fishermen’s Association was warned by Shell last week that they would not tolerate any interference with this work on the offshore pipeline. Eddie replied that the EIFA would not cooperate with Shell while 5 men are still in Jail.

Last year, Eddie Diver wrote to the then Minster of Marine, Dermot Ahern about the location of the terminal effluent discharge pipe which is also to go through Broadhaven Bay, with its outfall to be located 18 Kms off shore, a mere 500 kms from the boundary of the EU designated Special Area of Conservation (SAC) in Broadhaven Bay. Eddie is still waiting for a reply.

Is the Solitaire going to lay this pipeline at the same time? Has the ministerial consent been given for this too?

Price of Gas Rises

Meanwhile only last Friday, the Commission for Energy Regulation (CER) announced that it was planning to approve a huge 25% increase on the price An Bord Gais can charge residential and small business customers for gas. This increase comes on top of a 20% increase since April 2003.

The average domestic heating bill is E756 a year. The proposed price increase would raise this cost by E190 to E946 per annum. Small businesses which rely of gas for energy, were up in arms.

According to Pat Delaney of the Small Firms Association, this price rise would have a substantial impact on competitiveness of small firms, especially in export markets which the small firms in the Irish economy seeks to penetrate.

And this is only a part of the story. Such an increase in the price of gas would bring a considerable inflationary pressure on the Irish economy, as sell as the key effect of lowering everyone’s real wage. All Irish people who are dependent on gas for home heating and energy requirements become that much poorer.

It is typical behaviour of the Dublin Government to negotiate with the social partners an increase in money wages, but then to negate the effect of this on real wages, by facilitating an increase in prices of essential goods and services upon which all wage earners depend.

Value of the whole Project

The proposed increase in gas prices allowed by CER to Bord Gais is doubly reprehensible, when seen in the context of the Shell’s Corrib venture. It pinpoints the huge gains forgone by the sell out of our national gas resources to the oil companies.

Gas is normally sold several years in advance of on-stream supply. Had the government retained a stake, like other countries across the world, in the exploitation of Irish hydrocarbon resources, then Bord Gais could have been selling gas forward, for years to come, at a given low price, from which all Irish domestic industry, and all consumers would have stood to gain through the resulting competitive advantage.

As it is, whatever gas Shell may have already contracted to sell to Bord Gais, or other suppliers of gas to the Irish market, will be at a price of Shell’s making. It is believed that Shell gas from Corrib is to go 60% to 40% to the Irish market, there is no option that allows the Irish government to ensure that all Corrib gas comes to the Irish consumer, at an advantageous and lower price. Shell under the terms of the present contract is free to sell gas over the pipe lines to English or European markets at no preferential advantage to the Irish consumer or the Irish economy.

More Lies

Minster Dempsey, in justification of his decision to give Shell consent to build the off shore pipeline, said that "it was strategically important for Ireland in terms of enhancing security of gas supply". Nothing could be further from the truth, as Minister Dempsey well knows.

The security of Irish gas supplies is copper fastened, not because of the fruition of Shell’s exploration plans at Corrib, but precisely because of the two interconnectors which give the Irish grid access to European gas supplies, and in the longer run to suplies from Siberia and the Caucasus.

This point, ironically, is all the stronger in the light of the recent decision to build a gas interconnector between England and Norway, which allows the Irish market to access Statoil’s gas produced in Norway.

It is blatant deception to argue that Irish ‘Security of gas supplies’ depends upon allowing Shell to progress its plans to exploit the Corrib field which are so disadvantageous to the Irish people.

As the Shell to Sea campaign has repeated asked, ‘when will the Minister wake up to the fact that his job, under the constitution, is to defend the interests of the Irish people, not to lie to them in the interests of the oil companies, or to defend his policies to give them carte blanche to do as they please with the resources which belong to the Irish people?’

Recent Estimates of the value of Corrib Gas

As Miceal O Seighin is reported to have said on a recent visit by family members "the issue which has stirred the Irish people in our defence has been not just the injustice of our imprisonment, but the fear of loosing what is theirs."

What is theirs, on recent estimates made by Mike Cunningham, ex- Statoil CEO are huge. The Corrib field, he says, is about 1 Trillion Cubic Feet (TCF), but the potential over 3 years in the Erris Slynne basin, which is the area opposite Mayo, is between 4 and 7 TCF, with expectations of between 4 and 5 TCF in the subsequent period.

This sums over the whole period to between 9 and 13 TCF. At the present value of Gas, estimated, on the basis of oil equivalent, of an oil price of $60 a barrel, values each TCF at $5 Billion (dollars). This values the reserves in the Erris Slyne basin at between £45 Billion (dollars), and £65 Billion (dollars).

If the price of oil were to rise to $100 a barrel over the next 5 years, as most experts predict, this gives a value on the Gas reserves in the Erris Slyne basin at between $63 Billion (dollars) and $91 Billion (Dollars).

These figures take no account of the Dooish field off Killybegs. Nor do they take any account of the spin off industry which would come to Ireland and the West Coast, if the gas were processed at sea, and Shell could not pipe the gas from all these wells to one central hub or manifold, from which unclean gas would be piped to be processed centrally at the Bellinaboy recovery station. This Shell plan means no spin-off to the Irish economy in terms of servicing the rigs at sea.

Processing the gas at Bellinaboy, means, according to Dempsey, 50 full time jobs, and even in this he is lying, because Shell themselves are on public record as saying that it would bring 27 highly skilled jobs to the area, few of which, Padraig Campbell, Chairman of the SIPTU offshore oil workers committee, points out, will be filled by Irish or local people.

The value of the gas represents a huge sum, by any accounts, all of which Shell will take, because the terms of the agreement Shell has with the Irish government mean that the exploration costs of realising the value of the gas can be written off against any tax owed, which is charged only at the ridiculously low rate of 25%.

And these costs, which may be written off against tax are not field or time specific. It is carte blanche to the consortium to do what they like with the reserves that belong to the Irish people.

A strange way for a Minister to defend the interests of the Irish people!