Government Energy Regulator confirms Shell Rip Off Deal

mayo | environment | news report Tuesday September 30, 2008 21:04 by Full Irish

Gas supply security not an issue, and price will be set by Shell, says Commission for Energy Regulation

Just in case you thought all the talk about the Great Gas Rip Off ® was lefty treehugger claptrap ®, it was confirmed today by no less a personage than the government's own energy watchdog, who turns out to be highly-paid civil servant called Dermot Nolan.

He works for a shower called the Commission for Energy Regulation (CER) , and he told the Oireachtas Energy Committee today that as far as the Irish consumer is concerned, the gas from the Corrib field may as well be coming from Outer Mongolia (he didn't use those exact words).

Minister fo Natual Resources Eamon Ryan will be weighing up evidence carefully before he gives Shell his full backing and support

He said something about the Shell scheme, if it ever gets done, adding to Ireland's energy security, but he made plain the fact that the gas from Corrib no longer belongs to the people of Ireland, and Shell can charge what they like.

He said "Corrib will improve the security of supply but it won't have any particular affect on price, because the international price of gas will determine that."

He reckons gas consumers in Ireland can expect more price increases in the New Year despite the recent fall-off in global fuel costs.

Security of supply depends, it seems, on willingness to pay whatever "the international price of gas" is. Mr Nolan didn't dwell on what would happen if the price that Shell could get in a foreign market couldn't be matched by Bord Gais.

Separately, the question of what threats actually exist to Irish security of supply was addressed by a spokesman for the CER earlier this week. It seems that even without Corrib gas, there is only a very slim possibility that gas supplies could ever be interrupted:

"In the extremely unlikely scenario of the coldest day in the coldest year for 50 years, and even then for a very short space of time (an hour at peak time) is there the potential for a very slight shortfall between supply and demand," a spokesman told the Sunday Tribune newspaper.

This didn't stop the Tribune from making the headline something like Ireland Faces Power Cuts Because of Shell to Sea Terror! (again, those may not be the exact words)

So to sum up, the Commission for Energy Regulation has this week said that
1, There is no particular issue around security of supply facing Ireland, and 2, Corrib won't make a difference to price, but it will help with the (non)issue of security of supply.

The Commission for Energy Regulation describes its remit as follows-

"In a world where energy supply and prices are highly volatile, the mission of the CER acting in the interests of consumers is to ensure that:

* the lights stay on;
* the gas continues to flow;
* the prices charged are fair and reasonable;
* the environment is protected, and
* electricity and gas are supplied safely"

So far the Shell scheme in Mayo is not living up to the last two for sure, but who knows, by the time this is over Shell may be able to claim they broke five out of five.

http://www.cer.ie/en/gas-capacity-statement.aspx