Natural Resources

Overview

Overview

The Natural Resources area encompasses Mineral and Hydrocarbon (oil and gas) Exploration and Extraction, the Geological Survey and Inland Fisheries.

Hydrocarbon Exploration

Effective exploration activity is the only way Ireland’s potential for oil and gas will ever be identified and realised. Total investment to date by the private sector in exploration activity is estimated by the industry at approximately €3bn in drilling some 130 exploration wells, with limited success. To date there have been four commercial discoveries (3 off Cork, 1 at Corrib off Mayo) on the basis of approximately 130 exploration wells. This low success rate plus the time taken to bring first gas ashore from Corrib act as significant drags on exploration interest. The active promotion of opportunities for oil and gas offshore (and onshore) Ireland and the development of and management of the associate regulatory framework to encourage effective and timely exploration are priorities. A higher rate of Corporation Taxation applies to profits arising from hydrocarbon discoveries – 25% for pre-2007 licences and up to 40% for post-2007 licences.

Mineral Exploration

The minerals sector is highly cyclical and sensitive to international commodity price movements. Ireland is a significant source of zinc and lead, with mining directly employing over 1,300 (Galmoy, Lisheen and Navan) and an output value of circa €400 million per annum. However, mines have finite lives (e.g. Galmoy is in the process of closing and Lisheen is scheduled to follow over next two years), underlining the need to continue to promote exploration. Currently approximately one quarter of Ireland’s land area is under about 500 active exploration licences. Mines inevitably involve complex interaction of property and extraction rights and a key target is to consolidate and modernise mining legislation stretching back over 70 years in a new Minerals Act., which will be substantial at circa 400 sections.

Inland Fisheries

Inland Fisheries is responsible for the conservation, management and regulation of the inland fishery resource and is subject to significant EU legislative obligation under Habitats, Water Management and other EU Directives. Physically, the sector covers over 77,000 kilometres of rivers and streams and 240,000 hectares of lakes. In 2010, the eight Regional/Central Fisheries Boards were consolidated into a single entity, Inland Fisheries Ireland (IFI). In parallel, the budget to the sector has been cut by about a fifth over 2009 – 2011 and further reductions are actively being pursued. Sectoral interests claim there are about 70,000 anglers/ fishermen, who campaign on a wide geographical basis. The reality is that stocks of fish, especially of salmon and eels, have declined considerably over the last twenty years making the conservation and management agenda very sensitive.

Geoscience

The geoscience sector (embracing mining, quarrying, construction, consultancy services, research/education, tourism etc.) employs about 30,000 and contributes 2% - 2.5% of GNP, with a very low import content.

Geological Survey of Ireland

The Geological Survey of Ireland (GSI), supports the geoscience sector by providing objective geological advice and information crucial to the sustainable economic development of our natural resources and the wider societal issues concerning infrastructural development, environmental protection and geohazard mapping. It is also strategically involved in major data acquisition initiatives such as the INFOMAR seabed mapping programme (jointly with the Marine Institute) and the TELLUS Border project (jointly with the Geological Survey of Northern Ireland) which will continue to underpin economic rejuvenation both onshore and offshore.

Michael Manley

Assistant Secretary

March 2011

Petroleum Exploration and Extraction Division

Head of Division: Ciarán Ó hÓbáin

Functions of Division

The key task is policy development, promotion, licensing and regulation of exploration and production of petroleum in the Irish offshore and onshore.

Sector Profile

Production

• Kinsale Head Gas Field which is nearing end life provides approximately 5% of Ireland’s demand for natural gas
• There have been delays in the development of the Corrib Gas Field which is now expected to begin production in 2013
• While there have been some oil discoveries, no such discovery has been declared commercial as yet
• A number of small discoveries in the Celtic Sea are being evaluated to establish if they are commercial.

Exploration

• Investment in exploration in Ireland is small when compared with other oil and gas producing provinces such as the UK or Norway
• The cost of exploring offshore Ireland is high because of its remoteness and water depths (in the Atlantic Margin water depths are 7 – 8 times greater than that of the North Sea)
• Limited infrastructure (pipelines, terminals, platforms) due to the absence of production which in turn makes the development of a discovery expensive
• While Ireland’s fiscal terms are relatively attractive, the low success rate has had a negative impact on investment
• Exploration investment has been successfully encouraged through active promotion of the opportunities by the Department and the holding of regular licensing rounds
• While recent research and surveys have added to the knowledge of Ireland’s petroleum potential, it is through active exploration (in particular the drilling of wells) that the potential will be proven

Licensing Terms

A comprehensive review of Ireland’s licensing terms was carried out in 2007 following which both the fiscal and non-fiscal licensing terms were revised.

• The revised fiscal terms provide for a higher tax rate on more profitable fields, where the maximum tax rate is now 40% compared to 25% previously.
• The revised non-fiscal terms provide for more timely and efficient scheduling and completion of work programmes attached to licences.

Petroleum (Exploration and Extraction) Safety Act 2010

The Petroleum (Exploration and Extraction) Safety Act 2010 confers responsibility on the Commission for Energy Regulation (CER) for the regulation of upstream petroleum activities (including gas pipelines) with respect to safety. CER has commenced the process through which it will develop a Petroleum Safety Framework and then assume the responsibilities envisaged by the Act. Until then the Department will continue to act as safety regulator.

Significant Active Dossiers

Corrib

On 31 May, 2010, the Corrib Partners made a new application to the Minister for Communications, Energy and Natural Resources with respect to a modified pipeline route which reflected An Bord Pleanála’s (ABP) preferred route for the onshore element of the Corrib Gas Pipeline. A simultaneous application was made to ABP pursuant to the Planning and Development legislation and to the Minister for the Environment, Heritage and Local Government for a new Foreshore Licence.

Assessment of the Corrib Gas Pipeline application pursuant to the gas and petroleum legislation comprised a safety and design, environmental compliance assessment and engineering fitness for purpose. Final reports from the independent consultants and engineering assessment were received by 31 January and the overall statutory assessment process concluded with consents being granted by the Minister on 25 February. These consents include detailed conditions (47 in total) to be complied with by the developers.

On 20 January, 2011, An Bord Pleanála granted development approval for the Corrib Gas Pipeline subject to a number of conditions. It is understood that the Foreshore Licensing process is also nearing completion.

The developer has indicated that, should all of the required statutory consents be granted, construction of the pipeline would need to commence in early April in order to meet the target delivery date for first gas in late 2013.

Atlantic Margin Licensing Round

The 2011 Atlantic Margin Licensing Round is an invitation for oil and gas exploration companies to apply for new authorisations in Ireland’s Atlantic Margin. This round is the largest licensing round to date, covering an area of just over a quarter of a million square kilometres and is designed to boost the level of exploration activity off the Irish coast. The area on offer extends from about 30kms – 380kms from shore with water depths typically ranging from 200m, or less, to over 3000m.

The 2011 Licensing Round is different to all previous licensing rounds in that Two Year Licensing Options are being offered, rather than standard 15/16 Year Frontier Exploration Licences. The aim of the round is to create new momentum and interest in exploration in Ireland’s Atlantic Margin.

Key Industry/Stakeholder Groups

The Division liaises with both the Irish Offshore Operators Association (IOOA) which is the industry’s representative body, and with individual companies.

Minerals Exploration and Mining

Head of Division: Mairead McCabe

Functions of Division

Key responsibilities are the promotion and regulation of exploration and mining under the terms of the Minerals Development Acts, 1940 to 1999.[1] Article 10 of the Constitution asserts State ownership of minerals, but this is qualified to exclude those minerals held under other title. Overall, the State owns an estimated 60% of all minerals and Minister has the exclusive right to work most of the remainder resulting in revenue to the State from Royalties and Prospecting Licence fees[2] as follows:

€3.4m in 2005 €6.5m in 2008

€6.1m in 2006 €3.9m in 2009

€7.3m. in 2007 €7.2m in 2010

Mining

Mining is undertaken by private industry either under State Mining Leases for State-owned minerals or State Mining Licences for privately owned minerals. There are currently 22 valid facilities (lease/licences) with the main focus on zinc/lead deposits. There are approximately 1,300 directly employed in minerals sector. Output was worth over €314m in 2009. (This compares with €340 million in 2008, €676 million in 2007, €731 million in 2006 and €392 million in 2005.)[3].

Three major zinc/lead mines currently operating:

• Boliden Tara Mines Limited, Navan, County Meath (largest in Europe)
• Lisheen, County Tipperary
• Galmoy Mines Limited., County Kilkenny. Underground operations ceased at Galmoy Mine in July 2009 and the company is working with the Department, the local authorities and the EPA on finalising the details of its closure and rehabilitation plan which will be implemented over several years.

Base Metal Mining Activity

(thousands of tonnes of metal in concentrates)

Exploration

Mines have finite existence, making exploration vital to the continued success of the sector. Exploration is conducted by the private sector, under exclusive Prospecting Licences from the State. There are about 30 companies involved with approximately 110 people currently employed directly. As with mining, the main focus is on zinc/lead but there is also interest in gold. While no new economic deposits of minerals have been discovered in recent years, recovery in metal prices has led to an increase in exploration activity. Exploration is actively promoted and exploration data, which is made available free of charge and on-line using Geographic Information Systems (GIS), assists in attracting investment.

Exploration is undertaken under a licensing system. Prospecting Licences (PLs) are issued for a maximum of 6 years, giving the holder the right to explore for certain specific minerals. Only holders of PLs are considered for mining facilities to develop such minerals within the licence area, whether the minerals are privately-owned or State-owned. PL areas typically cover 35 square kilometres and three-quarters of Ireland is covered by delineated licence areas. Not all these delineated areas are currently under licence, however. It is estimated that the area covered by currently held licences represents around a quarter of the land area of the State.

Exploration for Uranium

In December 2007, the then Minister indicated that he had declined to grant Prospecting Licences to two companies seeking to explore for uranium in Donegal. The Minister stated that this signalled a wider policy decision to prohibit such activity in Ireland and was taken in the context of Government policy on nuclear energy and environmental and public health concerns surrounding uranium mining. The Minister announced his decision not to license any prospecting for uranium in Ireland.

Significant Active Dossiers

New Minerals Development Bill

A major project is underway to update and consolidate minerals legislation since the foundation of the State and a Bill is in preparation with the Office of the Attorney General. This will be a major Bill (circa 400 sections), providing for greater transparency and predetermination of terms, including rents and royalties, which will streamline the permitting process, and will bring other aspects of the regulation of the minerals sector into line with current best practice. Publication of the Minerals Development Bill is expected in 2011.

Geothermal Energy Development Bill

A new Bill is currently being drafted to provide a regulatory framework for this area. Publication is expected in Quarter 2, 2011.

Renewal of Navan Mine State Mining Lease and Licences by Boliden Tara Mines Limited

Boliden Tara Mines Limited operates the largest zinc/lead mine in Europe at Navan and is currently expected to continue operations beyond 2017. Approximately 670 people are directly employed at the mine, in addition to contract staff. A new lease for a major extension to the mine is necessary as soon as possible if the mine is to continue at full capacity. Lease terms must be agreed with the company.

Implementation of the Kimberley Process Certification Scheme in Ireland

Control of commercial transactions involving rough diamonds as provided for under the Kimberley Process is an international trade matter and not related to mining in Ireland. The Kimberley Process, which has been in place since 2002, imposes extensive requirements on all participants to certify the origin of all exports of “rough diamonds” and put in place rigorous domestic controls over diamond production and trade to prevent certain classes of diamonds entering the diamond pipeline. The European Community (EC), represents the EU as a whole in this process and Council Regulation (EC) 2368 of 2002 lays down the procedures and criteria to be followed in the import and export of “rough diamonds” into and from the EC.

Mine Closure for Existing Mines

Currently operating mines have closure plans and bonds in place sufficient to ensure orderly and proper closure. The Department works closely with the EPA and other regulatory authorities to ensure fulfilment by mine operators of all statutory and permitting obligations in relation to closure and aftercare. This process is already in train for Galmoy.

Lisheen Mine - Acquisition by Vedanta

On 1 February 2011, the then Minister gave his consent to the acquisition of the Lisheen lessee companies by a company owned and controlled by Vedanta Resources plc. There was some disquiet within the local community and among staff at the mine and local political representatives have voiced concerns. The company has denied the allegations in relation to human rights/environmental issues, stating it is committed to sustainable practices at the mine and seeking further exploration opportunities in Ireland. The acquisition was completed on 15 February.

Silvermines Rehabilitation Project

Silvermines is an old extensive mine site, which includes some areas covered by a mining lease which expired in 1998. In 2002, a conceptual remediation plan for the six sites at Silvermines was drawn up.

The Energy (Miscellaneous Provisions) Act 2006 provides for the appointment of a Local Authority to act as the Minister’s agent for rehabilitation projects. North Tipperary County Council (NTCC) was appointed as the Minister’s agent.

The major remaining element of the project is the work at the Garryard lagoon.

Avoca Mine Site – Remediation Study

A major study was undertaken in 2007/8 to develop plans for the management and remediation of the Avoca former mining site. Mining in the Avoca area began around 1720 and continued intermittently until the mines were closed in 1982, leaving a legacy of unfilled open pits, shafts and openings, unsafe structures and contaminated spoils, all of which present hazards to the public. Much of the mining site land is in the ownership of the Minister for Communications, Energy and Natural Resources or the Minister for Finance.

Following on from the study, the then Minister advised Government of his intention to invest €3m over the period 2011/2013 on essential health and safety works at the site. The full cost of remediation would be approximately €50m is not feasible in the current economic climate

Tynagh Mine Site

The Tynagh mine site is located 1.5kms north of the village of Tynagh and occupies an area of approximately 115 hectares. The mine was operated by Irish Base Metals Limited from 1965 to 1980. It has similar but less serious problems than those at Silvermines and parts are currently in industrial use. However, there is an active local campaign seeking that the State actively involves itself in rehabilitation at the site. The State’s consistent position has been that since the site is privately owned, the primary obligation to clean it, as with any post industrial site, rests with the property owner/holder.

Inventory of Closed Mine Waste Facilities (Historic Mine Site Inventory).

The Extractive Waste Directive has been transposed into Irish law by the Department of the Environment, Heritage and Local Government (SI566:2009). Article 20 of the Directive provides that Member States shall undertake to compile an inventory of closed waste facilities (including abandoned facilities) located on their territory and causing serious negative environmental impacts or having the potential of becoming in the near future a serious threat to human health or the environment. The inventory is to be made available to the public.

Since 2006, a joint Environmental Protection Agency/DCENR study was undertaken and Volume 1 of the work has been published. This Volume provides a list of such sites and as required by the Directive the listing was compiled using risk-based analysis. Work is continuing on the second volume of the inventory which will deal with physical hazards.

In the context of wider remediation policy for post industrial sites in general, the former Minister had initiated discussions with other Departments and Agencies on the question of a more coherent approach, including more effective enforcement and cost recovery where possible, to such sites. In the present climate of reduced budgets, Departments and Agencies are hesitant about changes that may enlarge responsibilities or place other charges on budgets.

Ordnance Survey Ireland (OSi)

OSi is the national mapping agency of the Republic of Ireland, mandated to achieve excellence in providing quality mapping and spatial information services to meet society’s needs. DCENR assumed responsibility for OSi from 1 January 2008.

Inland Fisheries Division

Head of Division: Frank Sheridan, Principal Officer

Inland Fisheries

The Minster has overall policy responsibility for the conservation, management, regulation and development of the inland fisheries resource, which is largely achieved through the corporate governance of Inland Fisheries Ireland (IFI) and the Loughs Agency. The principal function of Inland Fisheries Ireland, established by the Inland Fisheries Act 2010, is to provide the protection, management and conservation of the inland fisheries resource in Ireland. Separately, the Loughs Agency is an agency established under the British Irish Agreement Act 1999 to discharge broadly similar functions in the Foyle and Carlingford areas.

The fisheries resource, across many species, is under threat from a range of factors, has an economic value to the Irish economy and an ecological value (underpinned by EU law), making it a national asset which should be conserved and protected as well as being exploited as a resource by all on an equitable and sustainable basis.

Fishing and angling interests actively campaign for the sector (Minister might recall controversial ‘rod war’ dispute) and the reality of declining fish (e.g. salmon down circa 90%; eels reduced to circa 4% of baseline stock; the salmon catch is down 90%[4] on the commercial catch in 2002. Similarly recruitment of glass eels is also at a historical low level and continues to decline. Current recruitment is between 1% and 9% of that observed in the 1970s and makes the conservation and management agenda very sensitive. Appendix A sets out a number of ongoing sensitive issues.

Inland Fisheries Ireland (IFI)

In parallel with consolidation of the Central and Regional Fisheries Boards into a single body, its budget has been cut by about one fifth in the period 2009 – 2011 and further reductions are being pursued. Under the employment figures underpinning the IMF/ECB/EU agreement, the staffing for the sector will need to be reduced.

Significant Active Dossiers

• Modernisation of legislative framework

Work is underway to modernise and consolidate the numerous fisheries statutes stretching back to the 19^th Century into a single Act. This will involve a full Regulatory Impact Assessment (RIA) (demonstrating the range of policy options, criteria, etc.) and a full public/ sectoral consultation process.

• Establishment of the National Inland Fisheries Forum

The Inland Fisheries Act obliges IFI to establish and manage a National Inland Fisheries Forum (the Forum) to facilitate broadly based, stakeholder input (voluntary) into policy formation. The Public Appointments Service, at the request of IFI and approval of Minister of State Lenihan, is conducting a competition to determine the most qualified candidates (approximately 60) for appointment to the Forum.

• Publication of Inland Fisheries Ireland and Loughs Agency Corporate Plans

The Inland Fisheries Act 2010 obliges IFI to adopt a five year rolling corporate plan for submission to the Minister for approval. This is being finalised with IFI for submission to the Minister for approval and subsequent preparation of a Performance Contract based on the Plan which will be agreed between the Department and IFI. Similarly the NSMC must approve the Corporate Plan 2011-2113 for the Loughs Agency.

• Continued oversight and support for the North-South Body: The Loughs Agency of the Foyle Carlingford Irish Lights Commission

The Loughs Agency, based in Derry, is one of the six North-South Bodies established under the British Irish Agreement Act 1999. It employs 53 staff and its annual budget for 2011 is €5.5 million approximately, which is jointly funded. The Agency reports regularly to the Aquaculture and Marine sector of the North South Ministerial Council, which is attended by the Minister.

Geological Survey of Ireland

Acting Director: Patrick O’Connor

The Geological Survey of Ireland (GSI),[5] provides independent geoscience information and advice to underpin informed decision-making in the management of Ireland’s natural resources and in compliance with a range of National Policies and EU Directives[6]. It is a small organisation (approximately 46 staff) which through strategic collaboration with a range of stakeholders strives to ensure Ireland has access to contemporary high quality geoscience advice and databases, which meet societal needs.

GSI delivers systematic modern digital map coverage of Ireland’s geology and mineral resources which have highlighted our mineral prospectivity and promoted significant inward exploration investment over the past 50 years leading to new base and precious metal discoveries. A new Minerals Map of Ireland will be published jointly by GSI and GSNI in March 2011 at the Prospectors and Developers Association of Canada convention in Toronto – a global networking event for the minerals industry.

In response to an increasingly broader stakeholder base, GSI is providing critical information, through NDP and EC funded projects on such strategic topics as:

• Geohazards (flooding, landslides, subsidence, groundwater pollution, soil contamination, radon exposure etc.).
• Groundwater resources and their vulnerability.
• Carbon capture and underground storage potential (onshore and offshore).
• Subsurface ground conditions in our cities
• Distribution/quality of aggregate resources for construction and road building
• Geothermal energy potential
• Geotourism/ecotourism promotion

GSI is also a world leader in marine seabed mapping and jointly manages INFOMAR, the national marine mapping programme which has completed the mapping of Ireland’s deeper waters and is currently focussed on mapping priority areas in support of Ocean Energy, Marine Safety and Fisheries. In association with the Geological Survey of Northern Ireland, GSI has attracted €5m funding from INTERREG IVA to carry out the TELLUS Border project over the next 3 years. The project will provide high resolution geological and environmental data for the six border counties of the Republic and allow integration with similar data that already exist for Northern Ireland; the results are also likely to stimulate mineral exploration in the border counties of the Republic.

GSI adds value to the data it acquires by integrating it with its other databases, interpreting it to meet the needs of customers and providing it in an easily accessible way to help solve societal problems. Since 2010, GSI has also been working with the geosciences industry and Enterprise Ireland to promote oversees services export opportunities for the Irish Geoscience sector.

APPENDIX A

Fisheries Conservation and Management Issues

Castlemaine Pilot - Results due in April and Options Arising

Government policy is that management of the fishery must be aligned with scientific advice. Since the closure of the mixed stock fishery, Castlemaine harbour has been closed to commercial fishing given the status of the wild salmon stocks in the rivers which flow into the common estuary. While three of the five rivers flowing into Castlemaine are above their Conservation Limits, two of the five rivers (Behy and Emlagh) are currently below their Conservation Limits. The fishery did not operate in 2009. The decision of the High Court upholding the closure has been appealed by the fishermen to the Supreme Court. This case is unlikely to be heard for some time.

Operation of a Pilot Fishery

In 2010 a surplus was declared for the Maine River for the first time since 2006. Minister of State Conor Lenihan permitted the undertaking of a pilot fishery (by IFI in conjunction with the fishermen) in Castlemaine Harbour to determine if and how a salmon fishery could be operated on salmon stocks. IFI are due to report to the Minister in April 2011. The results of the analysis will be critical.

Inland Fisheries Ireland Rollout of Grant Schemes

Coarse Fish Scheme

The Inland Fisheries Act, 2010 provided for inter alia the dissolution of the eight Trout and Coarse Fisheries Co-Operative Societies (established following the resolution of the rod licence dispute) and the establishment of a grant scheme for local development groups which will be administered by IFI and implemented within existing resources previously deployed through the Co-Operative Societies. The scheme will be rolled out in 2011.

Salmon Conservation Fund Scheme

A Ministerial Direction required Inland Fisheries Ireland to prepare and implement a programme for rehabilitation of salmon stocks. To date funding has been allocated to, for example, rehabilitation projects and the purchase of counters. Inland Fisheries Ireland proposes to earmark some of the fund for projects to be undertaken by salmon stakeholder groups. The scheme will be rolled out in 2011.

Impact of Aquaculture on Wild Fish Stocks

This is a controversial issue. Wild Atlantic Salmon is a protected species under the EU Habitats Directive and the management of all fisheries (including salmon farming) must make an appropriate assessment of its impact on wild stocks in compliance with the Directive. This is to ensure that aquaculture development is well managed and co-exists in a sustainable manner with wild fisheries. Concerns have been raised nationally and internationally surrounding the incidence of sea lice in salmon farming and the associated impact on wild salmonids including sea trout stocks. Responsibility for the aquaculture sector and salmon farming is a matter for the Department of Agriculture, Fisheries and Food. There have been widely diverging long held views at both at official and Ministerial level regarding this issue that remain to be resolved.