Minister rejects industry criticism of oil levy plans

Published by Niall Sargent on

July 12th, 2019

The Minister for Climate Action has rejected criticism from the Irish Petroleum Industry Association (IPIA) over plans to finance the €500 million Climate Action Fund using oil levies.

Last year, the Government announced that the National Oil Reserves Agency (NORA) levy would be re-purposed so that any surplus – currently standing at around €200 million – would be invested in the new climate fund to support projects to cut reliance on fossil fuels.

The levy, currently set at 2 cent per litre, is paid by consumers and transferred by oil companies to the NORA. The Agency is tasked with maintaining at least a 90 day stock of oil reserves on behalf of the State in case of a shortage of supply.

The IPIA, representing 95 per cent of the Irish oil industry including Applegreen, Circle K, Maxol and Texaco, is reported to have told Richard Bruton that all funds generated from the levy must be used solely for the operations of the agency itself.

The IPIA’s CEO Kevin McPartlan said yesterday that any surplus must be used to either offset future NORA levy liabilities or to establish a fund to support users of oil-based fuels in transiting to low carbon alternatives.

Speaking this morning, however, Mr Bruton said that the Government will “not contemplate a situation” where the industry determines how the surplus is invested or used.

“This levy is not paid for from the pockets of the oil industry – it is entirely paid by the consumer at the pump,” he said, adding that the IPIA’s proposal is “not a runner”.

“I cannot contemplate a situation where this money is handed back to industry, or that a new fund is created where industry could oversee or determine the types of projects to be supported,” he added.

“Such an approach would not give the public confidence that the money was being used in a fair and independent way to support our climate objectives.” 

Mr Bruton said that the climate action fund is a “crucial part” of delivering on the Government’s policy plans and regrets that the oil industry is threatening legal action.

“I hope that in the years ahead the oil industry concentrates on diversifying into renewable energy and supporting the transition towards net zero carbon emissions. It would be counter-productive for them to try to stall important climate action,” he said. 

Minister for Climate Action Richard Bruton at stakeholder meeting Photo: Niall Sargent
Minister for Climate Action Richard Bruton at stakeholder meeting Photo: Niall Sargent

First round of funding

The first round of the €500 million fund has supported seven projects with the potential to reduce annual emissions by over 200,000 tonnes of carbon.

The seven projects include plans from ESB to develop a nationwide, state-of-the-art electric vehicle charging network over the next decade. The State will provide the utility company with €10 million to install over one hundred high powered chargers at key locations on the national road network.

 In addition, and subject to planning permission and approval, ESB intends to replace 100 old charging points with fast chargers that can recharge a car to 80 per cent battery life in 25 minutes.

Gas Networks Ireland will also receive up to €8.5 million to install Ireland’s first transmission connected Central Grid Injection facility for renewable gas and a grant scheme to support 74 compressed natural gas vehicles. Irish Rail is also set to pocket €15 million to design new hybrid power-packs for intercity railcars to reduce diesel use and emissions.

A further €20 million will go to Dublin City Council to capture waste heat generated at the Dublin Waste to Energy Plant and pipe it into homes and businesses in Poolbeg, Ringsend and the Docklands. South Dublin County Council will also receive funding to tackle heating issues, with €4.5 million set aside to help establish sustainable district heating in Tallaght.

The Road Management will get up to €17.5 million to retrofit all 326,000 non‐LED Local Authority public lights to high efficiency LED Lanterns. Public Lighting accounts for almost half of the total energy use of local authorities and the project will reduce CO2 emissions by 40,000 tonnes.

The Three Counties Energy Agency, operating between Wexford, Kilkenny, and Carlow, will receive €1.4 million to support the transport sector in reducing fuel consumption by installing monitoring equipment in 1,000 vehicles and providing driving performance training over a two-year period.

Deputy Brid Smith in Dail July 2019 Photo: Oireachtas TV

Industry Lobbying

The developments come just days after an intense exchange between People Before Profit’s Bird Smith and the Taoiseach over lobbying of one of Leo Varadkar’s advisors about her stalled Bill to block new exploration licences.

The Bill – opposed by the Government – is currently blocked as the State will not recommend a money message allowing it to progress to Committee Stage.

The fiery exchange occurred over a meeting between the head of policy at the Department of the Taoiseach John Carroll and Feargal Purcell, a former press secretary to two Taoisigh, and now Director of the public relations firm Edelman Ireland.

One of Edelman’s clients is the Irish Offshore Operators’ Association (IOOA) that represents the offshore oil and gas industry in Ireland, with The Sunday Business Post revealing last weekend that Mr Purcell met with Mr Carroll earlier this year on behalf of IOOA.

The meeting took place on 2 May 2019, with Ms Smith stating that it was “interesting” that the meeting took place just a few weeks before the Government wrote to the Ceann Comhairle asking for a reconsideration of whether the Bill needed a money message.

Data received this week by Sinn Féin Deputy Brian Stanley through a Freedom of Information request shows that the Government met oil and gas companies 49 times over the past two years over proposed new drilling and exploration licences.

Mr Stanley said that is it “bad enough” that Fine Gael is blocking Ms Smith’s legislation, but “even worse that this Government is pro-actively going out of its way to meet with the oil and gas lobby on such a regular basis to ramp up the extraction of our fossil fuels”.

“Fine Gael can launch all the climate action documents they want, the reality is that this FOI blows their climate credibility to bits. Sinn Féin’s position is clear, we believe that we are in the middle of a climate crisis and we want to see an end to oil and gas exploration. Anything else would be climate suicide,” he added.

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Niall Sargent

Niall is the Editor of The Green News. He is a multimedia journalist, with an MA in Investigative Journalism from City University, London