The State is about to sign away almost all our resources on terms by far the worst in the developed world
SOMETIMES, YOU have to consider extraordinary things. I want to suggest two of them at one go.
The first is that the State is simply incapable of dealing with one of the key challenges and opportunities facing Irish people: getting the best for the Irish people from the potentially huge resources of oil and gas off our shores.
The second is that we should therefore split those resources with a state that has proven its ability to manage this challenge for the maximum public benefit. That state is Norway.
Learn from Norway
I am suggesting, in all seriousness, that we should give joint ownership of our oil and gas to the Norwegian state.
But there are two kinds of folly here. One is the delusion that all we have to do is declare our full control of all the oil and gas and our problems are over. The other is the idiocy of simply giving away all of this potentially vast wealth for next to nothing. And that’s what we’re currently doing. There’s no public stake in any field, no royalty to be paid on the gas and oil, and no control over the sale of the resources when they do flow. All we get is a tax on profits of between 25 and 40 per cent – after all the costs of prospecting and development have been written off. A US government study in 2007 found these to be the most generous terms in the world, except for Cameroon.
The current licensing round is due to result in rights of pretty much all the remaining territory – a quarter of a million square kilometres – being given away.
Whatever the reason, the outcome is obvious: the State is on the brink of signing away almost all of the resources we have left on terms that are by far the worst in the developed world. The election has done nothing to change this.
Hence my second proposal. The State lacks the psychological, financial and political strength to make a decent deal. We need to get that strength from somewhere. As it happens, there’s a small, friendly state that knows how to do this stuff: Norway.
The Norwegians, led by tough politicians who had risked their lives fighting the Nazis, stood up to the multinationals. They got great deals for their own people.
They ended up with a €400 billion public pension fund, 200,000 good jobs and decent safety and environmental standards. Norway actually offered Ireland a deal for direct assistance in developing our resources in the 1970s.
Why not go back to them now, offering a half share of ownership in return for their money, expertise and, above all, their guts?