Ireland Kills off Bill Banning Drill Permits (Update)

(Adds comment from producer at end)

Ireland’s oil and gas industry has welcomed the government’s decision to block a bill that would have restricted the issue of new drilling permits.

The controversial Climate Emergency Bill, championed by opposition party People Before Profit (PBP), sought to amend Irish petroleum law, limiting the award of new licences for fossil fuel exploration and production. The bill was cleared by Ireland’s parliament last year, and had been due to proceed to the committee stage.

However, Dublin’s environment minister Richard Bruton recommended on July 4 that the bill be made subject to a “money message” – a provision in the Irish constitution that can be used to prevent laws if they increase public spending.

Explaining its decision, the government said that passing the bill would cause the state to incur losses from obligations to existing holders of offshore permits, the refund of application and other fees, as well as legal costs if operators challenged the legislation in court, which it considered likely. It also pointed to the loss of future tax revenues from oil and gas production.

The Irish Offshore Operators’ Association (IOOA) said it backed the government’s decision in a statement on July 5.

“[The] government has recognised that using our own natural resources is not only good for energy security but also good for the environment and jobs,” the association's CEO Mandy Johnston commented. “The facts speak for themselves: Russian gas imported to Ireland creates 34-38% more greenhouse gas emissions than using Irish gas, while LNG imported from Qatar creates 22-30% more.”

Ibec, Ireland’s biggest business lobby group, has expressed similar support.

Ireland currently meets 60% of its gas demand with output from the Corrib gas field and several other large offshore deposits, with the rest of its needs covered by pipeline gas from the UK. As Corrib is now in decline, industry lobbyists argue that new projects are needed to avoid increased dependency on imports. According to the IOOA, the bill’s prevention will pave the way for new discoveries as large as Corrib.

Predator says Ram Head now looking good

The new "pragmatic," political development has sharpened Predator’s focus on the gas discovered in 1984 by Marathon, 40 km east of the Kinsale platforms at Ram Head, the Jersey-based producer said July 8, adding that it could start to market equity once more.

“Unlike the majority of new gas opportunities around Ireland, the Ram Head gas has already been discovered and is now a strategic fit with stated energy policy. Mid and best estimates for the prospective gas resources net to the company are between 508bn ft³ and 1.37 trillion ft³,” it said in a London stock exchange statement.

“The decision by the government of Ireland not to proceed with the Climate Emergency Bill may be the catalyst for investment decisions regarding the development of proven gas in the Celtic Sea,” it said. 

CEO Paul Griffiths said: “We are encouraged by the pragmatic approach being adopted with respect to the importance of developing indigenous gas offshore Ireland. Ram Head contains two gas discoveries and lies in an area of the Celtic Sea that has a long tradition of gas production and was the catalyst for the development of the gas industry in Ireland. The Ram Head prize is potentially large enough to attract interest from substantive parties. Conditions are right in Ireland now to re-approach some parties.”