Gas supply and cost of living
Deputy Fitzmaurice questioned EU gas policy, Ireland’s opposition to an LNG terminal, reliance on imported gas, and the impact of rising household costs. The Tánaiste replied that Ireland uses relatively little Russian gas, explained current supply routes, and defended budget supports including welfare, tax, rent, childcare and energy measures.
The EU has a proposal to bring gas and nuclear in under the green banner. I do not have a problem with it where gas is concerned. However, the fact is we are relying on gas coming from Russia and it is like a tap at the moment, in that it can be turned up or down at any stage. US President Joe Biden announced yesterday they were going to do all in their power to ensure Europe was going to be okay and bring in liquefied natural gas, LNG. Ironically enough, Ireland as a country and the Government have decided that they are going to block a proposed LNG terminal. Yesterday, I listened in astonishment to the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, speaking on the radio about offshore wind. While I have no problem with offshore wind, at the moment it produces 1% of our energy. With the best will in the world it is nine or ten years away.
The reality is that in March 2020 a litre of green diesel for a tractor cost between 41 cent and 42 cent for the farming community, the contractors who do the work and indeed the builders around the country who work machines for building houses. Yesterday, it cost between 92 cent and 94 cent in bulk. For the people who drive to work every day, white diesel today costs €1.68 and petrol €1.78. These are people who, as the Tánaiste has said before, get up early in the morning and go to work. I fully agree with looking after the people who are on low incomes, such as those on the fuel allowance, and there has been much talk of that. However, what is this Government's plan? I do not mean eight years down the line when we get the offshore turbines. It is not going to happen tomorrow. What is our plan for the next three to six months for the farmer whose fertiliser has now gone from €350 or €400 depending on the type to €870 or €970, again dependent on type? What is going to happen the contractor who cuts the silage for the farmer with the Government putting in another carbon tax in May on green diesel? Bear in mind white diesel in 2020 was €1.20. Green diesel is going to be €1, from what we can see, over the coming weeks. What is going to happen to the people who get up early in the morning and drive to work, bearing in mind that we have not the facility for the LNG and that we basically brought in legislation in the previous Dáil that said there would be no more exploration? If the EU puts gas under the green energy banner, will there be exploration then? Will the legislation be changed so Ireland can do that? Are we going to put in the LNG stations so we can take it in? What are we going to do for those people who get up early in the morning and are now paying exorbitant rates to produce food if they are farmers or to go to work if they are consumers?
Comment on this
On gas supplies, I had my Department look at this for me the other day. Ireland does not use very much Russian gas. Pretty much half our gas comes from our own supplies in the Corrib gas field and the other half comes from Britain. Most of that either comes from Britain, Norway or Qatar. The gas comes from Qatar on ships to LNG terminals in Britain and then comes across the pipelines into Ireland. Thus, while we do not have an LNG terminal, we use LNG. It just comes in from Britain rather than coming into one of our ports. While any potential reduction or cut off in Russian gas would not directly hit supplies here, there would of course be a knock-on effect because if the supply goes down globally, the price will go up globally.
On LNG, I understand there is a planning application in from a private company, New Fortress Energy, to build an LNG terminal in north Kerry. The Government is not supporting that project because we believe the future is in renewable energy and hydrogen but we are not going to block it either. There is a planning process and if the company gets planning permission and can finance its project then it will be able to proceed. It is not the case the Government is blocking it but we have decided not to support it actively because we do not think long-term 30- or 40-year investments in fossil fuels of this nature make sense. The same thing applies to exploration. There are already many existing licences and those licences stand. People can use them. If more gas is discovered as a consequence of exploration on foot of those licences that gas will be brought ashore. We do not think it makes sense to issue new licences that would not be acted on for decades, perhaps, because we do not want to be taking that gas out in 30 or 40 years' time when we will have the alternative sources of energy we aim to have.
On the general issue of fuel prices and the cost of living, everyone in Government appreciates the cost of living is rising and that we are seeing levels of inflation at 5% and 6%, which we have not seen in 20 years. We used to see them a lot but we have not for about 20 years and that is creating a real squeeze. It is really affecting family budgets, creating a real squeeze for many families, increasing business costs and also having a significant impact on people on low incomes who, if they have to choose to spend more on petrol, diesel or energy, then have to choose to spend less on things like groceries, for example. That has a real impact. That is why I was an early advocate, as far back as last June, of ensuring we had a welfare, pensions and tax package in the last budget. The best way to help people with the cost of living is to increase their incomes, increase their take-home pay and give them the discretion as to how they spend their money. That is why I signed off on that increase in the minimum wage. It is why pay is being increased in the public service. It is why we had a welfare, pensions and tax package which many people actually opposed at the time. We appreciate we need to do more. One part of that is the energy credit that is being worked on at the moment.
Comment on this
It might be worthwhile for the Tánaiste to go back to his Department to look at the amount of gas we are getting from the UK or from Scotland for the simple reason that England, if you read the statistics and the facts, is in a slight bit of bother in relation to it, even though it has its own.
On the second part of the Tánaiste's answer, yes, there were social welfare increases and, yes, there were tax breaks and changes to the minimum wage but the reality of it is that at the moment the general household will probably be down €2,000 to €3,000 between driving to work, maybe doing a bit of farming and buying fertiliser. Where is this going to come from? What plan has the Government? It is lovely to talk about what the Tánaiste believes about the next 40 years. I do not have a problem with him on that, in the context of exploration, having LNG terminals or whatever. That is fine.
What I am talking about is not 40 years, not the eight years referenced by the Minister for the Environment, Climate and Communications yesterday or two years. It is about the next six months and getting the people of this country over the torture they are going through with the cost of living and fuel prices. What is the Government doing for those people? What is the plan?
Comment on this
As the Deputy rightly acknowledged, the budget provided for a social welfare package and a pension increase across the board, in addition to targeted increases for those who need them most, in particular, the fuel and living alone allowances. The budget also provided for reductions in income tax, increases in tax credits and widening of the tax bands so that people on middle incomes who are also struggling with the increased cost of living would get something. In that way, we made sure that somebody who is not getting a pay increase from his or her employer at least got something. That is why we were so determined to have an income tax package.
I remind Members who are complaining about the high cost of living that they are the same people who voted against the budget and those income tax reductions in this House. They complain about the fact that we have a high cost of living and yet would have middle income people earn less and take home less each day. If the Opposition parties were in the Government, the average middle income family would have €800 less a year in their pockets every year.
Comment on this
There has also been the real rent freeze of 2% or less, the freeze on childcare fees, in addition to improvements to the Student Universal Support Ireland grant, which will come in later in the year. As I said, when it comes to the specific issue of energy costs, the energy credit will be legislated for quite soon. We will deduct it from people's bills, hopefully, by the end of March. We are looking at other mechanisms to help because we appreciate that the cost is very high.