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Irish people lose out when it comes to oil finds

Let the good times roll (again). Recoverable oil has been found in two areas around the Irish coast. A valid excuse for the Irish to don stetson hats and adopt a smug swagger perhaps?

It is after all the first time, after many years of prospecting, that a well has been discovered which is, in the words of Tony O'Reilly, chief executive of Providence Resources plc, “a huge success which has exceeded expectations”. The Ballyroe well contains about 280 million barrels worth of oil.

In terms of discoveries this is tiny. Global output/demand is around 85 million barrels per day, so 280 million barrels is small fry. It will no doubt provide a decent income but for how long? So  maybe not really a good enough reason for ten gallon hats and cigars just yet.

This too seems to be the jaundiced opinion of people around Cork city and county to the Ballyroe find. After too many “false dawns” and the abysmal record of various Irish governments in making the most of such natural resource finds as there have been, people are understandably sceptical. “Our oil and gas may as well be off the coast of Brazil for all the good it will do us,” was one weary opinion.

The truth of the matter is that however large or small the latest find actually is, and some estimates put the find of recoverable oil at over a billion barrels, the people of Ireland have benefited not at all from previous exploitation of these kinds of discoveries.

Contrast with Norway, a country that can bear some comparison with Ireland in terms of population, with an agricultural heartland, a fairly comparable colonial history and also historically poor with a legacy of emigration. Over the course of the latter half of the 20th century, Norway has pulled itself out of poverty to become the second most prosperous country in the world, while at the same time managing to achieve an enviable record of economic and social equality.

The difference? It has made sure that income from its huge oil reserves has been paid into the exchequer and used for the good of Norwegian society as a whole. 

Not so the government of Ireland which has altruistically simply given it all away! The tax rate is so low as to amount to an almost Christ like degree of charity. It is not certain that Christ would entirely endorse a policy which lines the pockets of a few and enrich the likes of Exxon and Shell, however.  

To the delight or consternation of various strands of opinion, a well has also been discovered 10 kilometres off the coast of South Co. Dublin near to the well-heeled village of Dalkey. The same exploration company is involved – Providence plc.  A similar future will no doubt unfold.

The oil will be brought ashore and refined elsewhere. It is not even certain that any work would be provided to Irish workers in its extraction. It is also as unlikely that environmental considerations will be taken into account. The consequences of a spill so close to Dublin Bay would be disastrous for instance.

All this is not without precedent, the very long-running Shell to Sea controversy provides an instructive example. The profits from the gas currently being extracted by Shell from the Corrib sea-bed off the west coast of Ireland are repatriated and the destruction of the farm lands and delicate eco-systems of the region is the only legacy of the local people.

There could be demands that the Irish government tear up all the past agreements and adopt the Venezuelan model. Indeed, such demands have been made, but so far have fallen on deaf ears and are not likely to be seriously considered. However, even that is to expect that business will continue more or less as usual.

The wider global issue is of course our continuing failure to use the opportunity of the crises that face us, climate change and resource depletion among others, to constructively re-think our entire relationship to oil and other fossil fuels and to adopt sustainable methods of energy use for the good of all our futures.

Fiona Harrington
16 October 2012

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