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Irish Independent: Production from Corrib gasfield takes on a new sense of urgency

THE spat between Ukraine and Russia over the price of gas not only threw into sharp focus our own dependence on gas but also the painfully slow progress in bringing the Corrib field on stream.
Ireland, much like the rest of Europe, is a net importer of gas and with supplies from traditional sources such as the North Sea now in decline, the question of security of supply has become paramount. Estimates suggest that the UK, which has enjoyed the benefits of North Sea gas for four decades, will this year become a net importer of the fuel. That may seem an academic question as far as Ireland is concerned, but like the Ukraine, it leaves us vulnerable in the face of an exceptional event, for instance if a spell of unusually cold weather forced up consumption in Britain or a disaster caused a breakage in the North Sea supply lines. Would our neighbours be content to continue supplying us if those supplies were needed at home?
It is for reasons such as these that the European Commission has taken a keen interest in the gas market. Three years ago it failed in a bid to secure powers to compel member states to hold reserves of gas – and if necessary to sell them to other countries. This proposal is now back on the agenda and thanks to events in Ukraine may get a more receptive hearing – from countries like Ireland at least.
Bord Gais pressed ahead with the building of a second gas interconnector between Ireland and Britain despite persistent claims that it would lie empty and idle. It was a brave decision in the circumstances but still does not guarantee our gas supply. The second interconnector does reduce the chance of an interruption along the Irish Sea route as the chance of simultaneous breaks in the two undersea pipelines is very remote. But the same cannot be said of the land line delivering those imports across the Scottish landmass.
The vast bulk of the island's gas supply still goes through a single onshore pipeline in Scotland, so desite the provision of a second interconnector, we are still vulnerable to an accidental or intentional interruption of supply.
For this reason the ESRI has suggested that consideration be given to the strengthening of the onshore gas transmission system in Scotland on which nearly all of our gas supplies currently depend.
It is estimated that 86pc of Irish energy is supplied by imported fuels. Our own natural gas reserves have declined, and our only other indigenous energy resources are peat and renewables. Peat production is in terminal decline, while the renewable energy industry is at a fledgling stage and is still some years away from making a serious contribution to our energy needs.
Irish energy consumption is projected to grow by 26pc over the next four years as demand for heat, electricity and transport fuels continues to soar.
According to the ESRI, the country is increasingly dependent on gas to supply its energy needs and by 2010 the bulk of electricity generation will depend on gas.
The development of the Corrib field is critical as it will enhance the physical security of Irish energy supply. But Corrib itself will only provide a part of the answer, and a dwindling part at that. When first discovered it was thought that Corrib contained a trillion cubic feet of recoverable gas. This was later downgraded to 850bn cubic feet and, due to difficult structures, the recoverable reserves could be lower still.
The stark reality is, according to oil industry executives, Corrib is a marginal field in economic terms. Shell and its partners can justify the huge capital outlay on the project – running at about $1bn – because the offshore licensing terms introduced by Ray Burke are exceptionally generous. In effect, they mean that Corrib will still bring a return to its owners, albeit a small one.
While Statoil's drilling on the Cong prospect, located quite close to Corrib, proved a major disappointment, there are others waiting to be drilled. Top of the list is the Inishbeg Prospect, located to the north of Corrib and, ironically, quite similar geologically. Drilling is scheduled to commence here this summer, while another well is scheduled to be drilled on the Old Head of Kinsale prospect in the Celtic Sea.

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