In Ireland, after robust debates over sectoral emissions targets earlier this year, a new issue is the Barryroe field. Barryroe is an oil and gas field off the coast of Cork. An independent study found it had 81 million barrels of oil – enough oil to supply Ireland’s demand for about a year and a half. And although the company doesn’t specify any quantity of gas in its most recent annual report, it’s likely that some gas would be discovered should the project go ahead. The field is owned by Barryroe Offshore Energy, formerly known as Providence Resources.
Right now, the oil and gas is in the ground. Barryroe Offshore Energy wants permission to start the process of drilling it. The person with the final sign-off is the Minister for the Environment, Climate and Communications, Eamon Ryan.
As Sean wrote this week, the stage is set for a showdown between Ryan and Barryroe Offshore Energy’s biggest shareholder, Larry Goodman. Goodman began building a stake in Barryroe last year. This week, he committed €40 million of loans, if needed, to move the project to the next stage. The 85 year-old billionaire has every interest in seeing this project through.
The context is that in September 2019, the government introduced a ban on licences for oil and gas exploration. But critically, the Government said all existing licences would be allowed to run their full term.
Ryan will be facing pressure from his cabinet colleagues. Besides Goodman, many would benefit from the drilling of Barryroe.
At today’s oil prices, 81 million barrels of Barryroe oil would be worth €6.5 billion. And when the Barryroe field was first discovered in 2012, the markets valued the company in the low billions.
Developing the field would bring jobs to Cork. There would be construction jobs, jobs on the rigs, and jobs onshore.
The field also helps with energy security. In 2020, oil provided 45 per cent of Ireland’s energy. All of that oil is imported. If Ireland were to be cut off from global oil markets, the economy would shut down overnight.
The environmentalist argument is simple: moving carbon from the sea bed to the atmosphere is a bad idea. The state should not be encouraging industrial-scale oil drilling.
The environmentalist’s other point is that Barryroe is, as it stands, an oil field (albeit with the potential for the discovery of gas). From the environmentalist’s perspective, oil and gas are very different.
The first difference is that there’s less carbon in gas, per watt of energy produced. Gas is simply a less dirty fuel.
The second is that gas power plants have the quality of being easy to switch on and off as needed, unlike oil power plants that need to stay running at a steady level. That quality of natural gas makes it a good complement to renewables. Gas power plants can be powered up and down, depending on how hard the wind is blowing and how brightly the sun is shining. So gas makes the economics of renewables more attractive.
The third is that, unlike gas, oil moves freely around the world on tankers. Ireland has a choice of dozens of oil suppliers around the world. Gas by contrast is mainly moved through pipelines, which makes it vulnerable to disruption. Security of supply is a much stronger argument for gas than it is for oil.
Meanwhile, in Europe, the energy debate is no less contentious. This week we learned about the EU’s long-awaited gas price cap. The cap would kick in subject to two thresholds being met: if the forward price for the EU’s main gas benchmark exceeds €275 per megawatt hour for two weeks, while at the same time the benchmark in Europe is €58 higher than the global LNG price for 10 consecutive days.
Taken together, the tests are highly stringent. They would not have been passed even when markets were highly stressed in August. Nonetheless, the cap has annoyed many. The group that runs a key energy trading market says the cap would cost traders an additional $33 billion in margin payments. A fellow at Bruegel, a think tank, called it “a non-cap” and “a joke”.
Meanwhile, the German government has broken from the rest of the EU and is offering generous energy subsidies to German industry. And there’s not much the rest of the single market can do about it. With energy policy, there are always losers as well as winners.
Elsewhere this week, Thomas reported from Paris on the signing of a €1.6 billion deal to build an electricity interconnector with France. The interconnector can give each country the option of replacing the equivalent of two gas-fired power stations with lower-carbon alternatives across the sea. “Reliance on gas is what’s making our electricity expensive so the more we switch, the cheaper it will get,” said Minister Eamon Ryan of the new infrastructure.
Stephen on Ireland’s infrastructure deficit. Ireland’s level of infrastructure is below what you’d expect given how rich it is. Some of that is because we’re bad at getting our money’s worth, some is because we stopped investing for years after the financial crisis. But now it’s clear what we need to do, he says. We need to build.
David Kindlon is the co-founder of Eppione, a company that’s building software to keep track of employee benefits. Having just completed a €2.5 million funding round at the most difficult time possible, it has global ambitions. Sean had the story.
On the podcast Rosanna spoke to Aubrey Dunne, co-founder of Ubotica, about the urgent need to clean up orbital clutter: “If two satellites smash into each other there will be a chain reaction effect, that’s the doomsday scenario.”
Tom writes that Derek Quinlan has conceded defeat in his effort to clear his Celtic Tiger-era debts to Nama. He has declared bankruptcy: “I will spend the remainder of my life under Nama’s shadow unless I accept I am insolvent”.