Energy: Taxes on fuel will not be cut in the budget despite sharp increases in international prices in recent months, Minister for Finance Brian Cowen has said.
Speaking in Westport yesterday, Mr Cowen rejected calls to cut VAT and excise duties on petrol, diesel and home heating. Finance ministers from EU countries using the euro had agreed not to cut energy taxes so as not to "disrupt the market".
The State's future energy needs featured significantly during the first day of the two-day meeting of the Fianna Fáil parliamentary party in Westport.
In the face of rising oil and gas prices, the Government has decided to sharply increase the percentage of Ireland's energy needs that will be supplied by renewable energies in 2020. A major Green Paper will be produced "in coming months" by the Minister for Natural Resources Noel Dempsey.
Yesterday's meeting was addressed by international energy expert Dr Dieter Helm, fellow in economics at New College, Oxford, who also answered questions from TDs and Senators.
Dr Helm said the days of surplus oil supplies and low prices were over, while damage to the global climate by the use of fossil fuels would have to be dealt with.
Ireland was particularly vulnerable because the State was one of the EU's smallest markets, while the ESB and Viridian were operating a "duopoly", he said.
An increase in the number of inter-connectors to the UK and elsewhere was "the single greatest contribution that can be made to security of supply", he added.
Seventy per cent of all of the European Union's gas supplies were "now coming from and, indeed, one company, Gazprom", Taoiseach Bertie Ahern said.
Despite recent rises, Ireland's energy costs were still 28 per cent below the EU average, though the increases that had taken place threatened Irish industry's competitiveness, he said.
"There is an inevitability that we are into a period of supply difficulties. We have already seen price increases. We are already importing 86 per cent of our gas supplies."
Further price rises were "inevitable", he went on. "We have to look at alternatives, new technologies. We are 90 per cent dependent on fossil fuels."
Higher oil and gas costs had contributed "the lion's share" of the current inflation rate, causing 0.8 per cent of the 3.4 per cent figure produced in the last survey.
Mr Cowen said Ireland must tackle the current difficulties in alliance with other EU states, increasing the number of interconnectors and creating a single electricity market on the island.
Ireland was one of the tiniest energy markets in the EU, consuming just 4,000 megawatts compared with 50,000 in the United Kingdom and 70,000 in Germany.
Minister for Communications, Marine and Natural Resources Noel Dempsey said "no simple solution, and no single solution" existed to guarantee Irish energy supplies.
"We are at, or near peak oil . That is generally agreed now, when it might not have agreed three, or four years ago.
"We are a small market with a very high demand, with little inter-connection, with a huge investment catch-up in common with elsewhere," Mr Dempsey said.
Questioned about local opposition to wind farms, the Minister insisted that the 50 existing ones had encountered "very little" objections.
However, the situation would get more difficult as remote locations became harder to find and ones closer to built-up areas were proposed.
"We must ensure that the guidelines are reasonable and sensible. We will then have the option to go offshore but that has price implications," the Minister said.
