Gas valued at €420 billion off the west coast of Ireland, while Fianna Fáil speeds us towards the IMF
Conor McCabe – Dublin Opinion
Just a quick post to highlight the Shell to Sea factsheet, that there is €420 billion worth of natural gas of the coast of Ireland – all of which has been given for free to Royal Dutch Shell, Statoil, Exxon Mobil.
Ministers Ray Burke and Bertie Ahern changed Irish law in 1987 & 1992 so that multinational oil companies:
• own 100% of the oil and gas they find under Irish waters;
• pay no royalties on it;
• can write off 100% of their costs against tax, even costs incurred in other countries;
• have profits taxed at 25%, compared to an international average of 68% for oil-producing countries;
• can export the oil or gas outside Ireland;
• can sell to Bord Gais at full market rates.
Green Party minister Eamon Ryan has continued to issue licences to multinationals on these terms.
Now, call me old-fashioned, but I would have thought that the current situation would constitute a game-changer as regards that deal.
Anyway, have a read of the Shell to Sea leaflet, and have a think about it the next time someone tells you that the IMF is our only option.
This is just a short extract, the entire piece is linked below.
*The figures in detail
€420 billion is a lot of money. However, the true value of Ireland’s gas and oil is probably much higher. Our figure is based on the estimate, issued by the Department of Communications, Energy & Natural Resources (DCENR) in 2006, that the amount of gas and oil in the Rockall and Porcupine basins, off Ireland’s west coast, is 10 BBOE (billion barrels of oil equivalent). Based on the average price of a barrel of oil for 2009 of $60, this works out at $600 billion, or €420 billion. This does not take account of further oil and gas reserves off Ireland’s south coast. The total volume of oil and gas which rightfully belongs to Ireland could be significantly higher. The DCENR has also published much higher estimates at various times. Also, as the global price of oil and gas rises in the coming years, the value of these Irish natural resources will rise further.
A better deal is possible
Several countries have recently changed their laws to reclaim a greater share of gas and oil wealth
Even supporters of the Corrib Gas project rarely try to defend the outrageously generous terms of Ireland’s gas exploration laws in public. Instead they rely on the myth that the deal, once done, cannot now be changed. Nothing could be further from the truth.
The existing deal already allows Ireland to halt work on the Corrib Gas field. The licensing terms state: “The Minister may … require that specified exploration, exploitation, production or processing activities should cease … in any case where the Minister is satisfied that it is desirable to do so in order to reduce the risk of injury to the person … or damage to property or the environment.”
In fact, there is a worldwide trend of governments reclaiming ownership of privatised gas and oil reserves. In 2006 in Russia, the state-owned Gazprom took back control from Shell of the largest integrated oil and gas field in the world, Sakhalin-2, after Shell was accused of breaking environmental laws.
Bolivia nationalised its entire gas industry in 2006. At first, the reactions from the corporations and international markets in both cases were furious, with dire warnings given about how the countries would suffer from lost investment. But these warnings came to nothing: in the end the oil giants simply went along with these changes when they realised there were still enormous profits to be made.
There are many examples of successful nationalised oil and gas industries. Norway is one of the best examples of state-controlled extraction of gas and oil. Ironically, a significant chunk of the Corrib Gas profits will benefit the Norwegian people through Statoil, as it is majority-owned by the Norwegian government and has a 36% stake in Corrib.
Venezuela has begun nationalising the industry within the past two years. Most Venezuelans lived in degrading poverty throughout the 20th century, while enormous revenues from oil and gas went to foreign companies and a tiny Venezuelan elite. The government has redirected oil wealth into public spending, bringing health, education and dignity to the poor.
Even if Ireland’s gas and oil fields were not nationalised, hundreds of billions of euro could be raised if Ireland took a similar share in its own gas to that which applies in other countries.