Description:Ireland is more dependent on oil and gas than most European countries - oil and natural gas are both key elements of Ireland’s energy mix. The high dependence of imports of fossil fuel makes further exploration for oil and gas an attractive Ireland proposition. Ireland’s transition to a low carbon economy will provide a substantial role for natural gas as facilitator of intermittent forms of renewable electricity generation.
The Minister for Communications, Energy and Natural Resources last December consented to the operation of a subsea natural gas pipeline from the Corrib gas field to Ballnaboy terminal. Commercial production is expected soon.
Implication(s):The high dependence on natural gas imports poses security and diversity of supply concerns, and the development of indigenous resources has the potential to reduce import dependence, create employment and generate tax revenue. The Commission for Energy Regulation recently reformed gas tariffs to mitigate the impact of new gas flows could displace imports from the UK which has implications for the operation of the transmission system, and ultimately increased costs for the consumer. Under the previous regulatory framework and tariff regime, the decreased flows on the interconnectors would have increased the tariff on a volume basis if the same operational costs were to be met, resulting in upward pressure on end-use prices. According to the CER, the reformed tariffs will bring a steady price for UK gas rather than the expected up to 74% rise that would have otherwise occurred.
Current Position:Ireland’s high dependence on fossils fuels requires a resilient oil and gas infrastructure is necessary to deliver secure and cost effective energy to Ireland’s economy. Diversity of natural gas and electricity, including indigenous supply are key aspects of Ireland’s energy policy. For oil this diversity can be achieved through indigenous refining and product importation structure to assist security of supply objectives.
However, there are a number of significant issues that need to be addressed to provide a well-balanced framework for indigenous energy resource development. Corrib was affected by persistent planning and permission delays; the Government needs to address the current complex and expensive regulatory process to planning and consent matters. The regulatory environment for foreshore licensing does not provide sufficient investor confidence. A coherent European framework is required in response to the emergence of unconventional sources of gas and oil. In 2016, the EPA is due to publish a two-year study on fracking.
Phone: +353 1 6051697
Last Updated: 01/18/2016