IRELAND NEEDS A REALISTIC DEBATE ABOUT INFLATION
Natural gas supplies 30% of all Ireland’s energy needs.
Apart from the Corrib field, to which there was so much objection, an increasing share our natural gas has to be imported from, or through, Britain.
The Corrib field is running out and our dependence of Britain for supplies will rise from 53% today, to 90% by 2030, on present trends.
The electricity interconnector with France will not come on stream until 2027.
Depending on one supplier, Britain ( with whom our political relations are bad), places Ireland in an inherently vulnerable position.
We need a short term, as well as a long term solution. Most of the solutions being talked of (hydrogen, off shore wind, building an LNG Terminal etc) are long term, and will be no use to us next winter.
700,000 homes, mainly in built up areas, use natural gas directly for heating.
50% of all our electricity is generated using natural gas, and electricity is vital for most farming service and industrial operations.
The reliability of our power supplies is the number one worry of the multi national firms located in Ireland, around whom we have built such a successful and fast growing economy. Power failures scare investors.
We need to think hard about all of this because there was an alarming report, in one of the Irish Sunday’s papers, about a risk that Ireland might be cut off from natural gas supplies coming from Britain, next winter.
The basis for the story was that, if a gas shortage occurred in the UK, due to the continuing war in Ukraine, under a contingency plan now in preparation, the British natural gas grid operator would be instructed to stop supplying gas to our fellow EU members, Netherlands and Belgium.
If it is legally possible for the UK to cut off these supplies to Ireland’s fellow EU members, one might assume that it would also be legally feasible for Britain to cut off supplies to Ireland too, citing the newly discovered “doctrine of necessity” it is using to back out of the Protocol.
The UK Ambassador to Ireland responded that the UK would not do this, and would
“ensure gas supply to Ireland in the event of any emergency”.
He was confident the UK would have enough gas for next winter anyway.
This assurance is welcome but it is given in the context of supply problems arising because of the war.
It is an open question whether the assurance would still hold, in the event of a Brexit related trade war breaking out between the EU and the UK.
Such a trade war is likely if the UK goes ahead with its threat of ceasing to operate the Northern Ireland Protocol it signed in 2019.
On the present parliamentary time table, that Brexit related crisis is something that could happen next winter, just as the electricity demand here is at its peak.
I do not believe that the departure of Boris Johnson from Downing Street removes this risk. His successor will have to court the large radical Brexit element among the Tory grassroots.
The EU and Ireland may have a very strong legal case on the Protocol in international law, but law cases will not heat our homes, or power our farms next winter.
This potential crisis of natural gas supply is simply accelerating a wider underlying electricity supply problem in Ireland.
Even without the war in Ukraine, we already were facing electricity shortages for the winters of 2022/3 to 2025/6, according to the Commission for the Regulation of Utilities.
In a report completed last year, and before the war, the Commission said we would need two new gas fired stations, and a prolongation of the operation of older inefficient gas fired plants just to maintain electricity supply!
But what happens if we cannot even get the gas, at any price?
The Government is not unaware of the problem. It has promised to produce a strategy statement on the security of energy supplies, by mid 2022.
It has been working on this since mid 2021.
We urgently need a transition fuel that will see us through, until off shore wind and other renewables come on stream in sufficient quantity.
This may require substantial investment, this investment may have to be a strategic, rather than a purely commercial decision. The taxpayer may have to fund part of it.
We need a large dose of realism.
The debate in the media in Ireland today seems to be mainly about how to treat the symptoms of inflation.
This needs to change. We need to pull together as a people to solve to deep seated problems, like power supplies for this, and future, generations.
Every morning on Morning Ireland, we have interviews about shortfalls in service , where the solution proposed by the interviewee is “more resources” coming of course , from the government of the day.
In consequence, the interviewee is able to blame the government for whatever is lacking, without much challenge.
The interviewer rarely asks the interviewee where the government is to get the required money. He or she does not ask the obvious question…… is the money to come from extra borrowing or extra taxation?
The government itself has no money, only what it can tax or borrow.
Either course has downsides, which need to be explored alongside any demand for more resources.
I realise most interviewees could not give a full answer to such a questions, not being experts in public finance.
But even asking the question would remind Irish radio listeners that government is about choices, often difficult ones.
For example, there is a choice between increases in pensions for older people and back to school payments for young families.
If borrowing is the option chosen, one is choosing the interests of the present generation over a future generation. Is that “social justice”?