Irish Times: Power struggle: “The main reason why this 900 million project has been delayed is that Shell E&P, the company involved, chose to pursue its highly controversial plan to pipe it nine kilometres inland to the terminal.”: Saturday January 14, 2006

Russia's recent squeeze on gas supply must act as a wake-up call, writes Frank McDonald, Environment Editor

It gave everyone in Europe the shivers. That Russia could - and did - choke off supplies of Siberian gas to Ukraine on New Year's Day was a lesson to us all on our energy dependency, not just now but in the near future. For by 2020, the EU will need to import three-quarters of its natural gas, mostly from Russia.

Even though the row between the two former Soviet republics was sorted out within days, the issue of energy supply has been placed high on the agenda for the next EU summit, in March. The European Commission is also producing a new policy paper on the emerging "energy gap" and what might be done to plug it.

Oil is running out, which is one of the main reasons why its price has hit the historic high of $63 a barrel. The world is now consuming four to five times as much oil as is currently being discovered to supplement the traditional oilfields that have already peaked, so it is fantasy for anyone to imagine that the price will fall.

Dr Colin Campbell, a former oil company geologist and founder of the Association for the Study of Peak Oil, now predicts that global oil production will peak as early as 2008. And even the conservative French prime minister, Dominique de Villepin, conceded last October that the world had entered the "post-oil era".

Demand from China to fuel its burgeoning economy is, and will continue to be, a key factor in keeping the price high. So what we're witnessing is not an aberration in the market, but a long-term upward trend as oil becomes scarcer. And for Ireland, which is the ninth most oil-reliant economy in the world, that must be a real concern.

Oil accounts for nearly 64 per cent of our overall energy consumption, significantly above the EU average of 43 per cent; indeed, we're even more dependent on "black gold" than the US. What's more, according to Gerard O'Neill, head of Amarach Consulting, for every 1 per cent of economic growth here, oil use goes up 2 per cent.

Until the Celtic Tiger era, as O'Neill noted in his contribution to Before the Wells Run Dry, Irish oil consumption per capita was lower than the EU average. But that was before the explosion in car numbers and road traffic, which has vastly increased our dependency on oil as well as adding enormously to carbon dioxide (CO2) emissions.

IRELAND NEEDS MORE gas too, not just for space heating and fuel for large industries but also for electricity generation. In 2004, 44.8 per cent of our electricity was generated by power plants fuelled by natural gas (see pie chart).

Michael Kelly, spokesman for ESB National Grid, points out that most of the Republic's gas-fired power plants can use oil instead and have oil stored on site for that purpose - Poolbeg in Dublin Bay is one example.

"That's specifically because of the need for fuel security," he says. But he concedes that such a switch would obviously be dirtier.

It was the fuel-security issue that persuaded the Government to drop a proposal in its National Climate Change Strategy to switch the Moneypoint electricity-generation station in Co Clare from coal to gas. If it had been converted, 80 per cent of our generating capacity would then be gas-fuelled and "we could be held to ransom over gas supplies", as Noel Dempsey warned.

An Taisce described the 900- megawatt (mw) plant, which supplies about 20 per cent of electricity demand, as "the single most problematic greenhouse gas and acid rain-producing stack in Ireland". And though the acid rain problem is being dealt with, Moneypoint is set to continue belching out five million tonnes of CO2 a year, at least until 2025.

New peat-fired power plants, though more efficient than the old ones, are also CO2 factories. Edenderry Power's 120mw plant in Co Offaly emits 634,000 tonnes of CO2 a year, which is now being augmented pro rata by two newer peat-fired stations at Lanesboro, Co Longford (100mw) and Shannonbridge, Co Offaly (150mw).

To meet the rising demand for electricity, the ESB is commissioning two new combined cycle gas-fired power plants at Tynagh, Co Galway (400mw), and Aughinish, Co Limerick (150mw). Another gas-fired unit of 350mw is to be added to the existing power station at Huntstown, north of Finglas, owned by Northern Ireland energy utility Viridian.

With the Kinsale Head gas field running out, Ireland has a clear vested interest in getting supplies of natural gas ashore from the Corrib field as soon as possible. The main reason why this 900 million project has been delayed is that Shell E&P, the company involved, chose to pursue its highly controversial plan to pipe it nine kilometres inland to the terminal.

A 1998 report by international oil and gas consultants Wood MacKenzie estimated that there were seven trillion cubic feet of gas in the Corrib field - enough to supply up to 60 per cent of Ireland's natural gas demand for at least 10 years. After it runs out, and assuming no other fields are developed, we will have to import all of our gas.

The view taken by the energy division of the Department of Communications, Marine and Natural Resources is that the Irish market is so miniscule and unimportant internationally that we won't be "held to ransom" by the Russian giant, Gazprom. In any case, as its experts say, we would be importing the gas we need directly from Britain.

But as Britain's reserves of North Sea gas run out, it will become increasingly reliant on the European gas grid supplied by Gazprom. And whereas Russia had no hesitation in "using geology for geo-politics" in its row with Ukraine, "it doesn't bite the hand that feeds it" so it will be cautious about disrupting the European market for Siberian gas which is so vital to Russia's economy.

THERE IS A real sense of complacency. Just this week, the department admitted that Ireland does not store any gas to cope with an emergency. By contrast, Austria keeps enough gas in a strategic reserve to meet a third of its annual consumption, or about two months of winter supply. The EU wants all member states to do this.

So where do we go from here? Owen Ryan, principal officer in the Department of the Environment, Heritage and Local Government, with responsibility for climate change policy, says the priority has to be to "reduce the carbon intensity" of the Irish economy "sooner rather than later". Possible measures will be included in a revised climate change strategy, due shortly.

As for alternative sources of energy, the wind power lobby is now more confident that Ireland will achieve the EU target of generating 13.2 per cent of its electricity from renewable sources by 2010. Wind will account for 80 per cent of the 1,400mw renewables mix, with existing hydro and new small hydro schemes making up the balance.

In the first half of 2005 alone, more than 300mw of wind farms received offers to connect to the national grid, to add to the 500mw already generated by 50 wind farms in counties such as Donegal, Galway, Kerry, Monaghan and Wexford. A further 40 planned wind farms have signed contracts entitling them to connect to the grid in the future.

"This means that, four years ahead of deadline, there are now enough wind farms either already constructed or with connection offers and agreements to push renewable energy generation beyond 1,100mw and ensure that Ireland achieves and exceeds the [ EU] renewable energy target," says Michael Kelly, the grid's spokesman.

The Irish Wind Energy Association has seized on the Russian gas scare and the hike in both gas and oil prices to claim that "home-grown" wind power "could hold the key to safeguarding electricity supplies into the future".

The association's chairman, Tom Cowhig, said: "If we are to avoid an energy crisis we must urgently look at the alternatives."

The only problem with wind is that its supply is intermittent, so it can never provide a complete "solution". That's why natural gas will continue to be important for as long as EU countries can rely on supplies from Siberia and Algeria,which also exports gas to Europe. Coal and oil will also continue to be used, for as long as they last.

THE NUCLEAR OPTION is not on the agenda, however. Unlike Britain, where the latest energy review is likely to recommend building more nuclear power stations, or France, where the "mighty atom" supplies 75 per cent of electricity, national policy here is against having nuclear power and there is no indication that this is about to change.

The powerful nuclear lobby has been exploiting concern about climate change to tout its CO2-free technology as "the answer". But British taxpayers have had to fork out a staggering 82 billion to write off the industry's liabilities, and it has yet to put forward a credible, environmentally sustainable solution to the problem of radioactive waste.

Even apart from the fact that the waste they produce will have to be looked after for thousands of years, nuclear power stations do not come cheap. The contract price in 2003 for the latest 1,600mw plant being built in Finland - the first since Chernobyl - was 3 billion, or three times the cost of a gas-fired power station of equivalent size.

Despite more than 50 years of development, the nuclear industry supplies less than 3 per cent of the world's energy needs.

The Green Party has been making the most of advocating a switch to renewables, with the aim of slashing our dependence on fossil fuels from 87 per cent at present to 50 per cent by 2025 and zero by 2050.

"This is not wishful utopian thinking but the reality we must face", says its energy spokesman, Eamon Ryan TD. "The renewable future is going to have to be based on a wide variety of wind, wave, tidal, solar, geo-thermal and bio-mass technologies."

This would involve a large number of small local generating stations rather than big centralised plants such as Moneypoint.

"It will also require a massive investment in energy-saving technologies," says Ryan.

The biggest challenge is on the transport front, where CO2 emissions are increasing by 10 per cent every year. But with oil prices rising inexorably, people will have to adapt by driving cars less often, living closer to where they work and taking fewer trips by air, according to economist Richard Douthwaite.

"There isn't a 'get out of jail' card on this," he says.

Before the Wells Run Dry: Ireland's Transition to Renewable Energy , edited by Richard Douthwaite, is published by Lilliput Press, 2003, 14.99

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