Tuesday, 3 July 1990
Dáil Éireann Debate
That Dáil Éireann calls on the Government to establish an Enterprise Fund for the Arigna area, which would be used to develop alternative employment for those involved in coal mining and power generation at Arigna, and that the date for termination of coal purchases by the ESB be extended to give an opportunity for these alternatives to become established.
It is important to view this motion in the context of the very serious job losses that would occur in the area should the decision of the ESB to close at the end of this month go ahead as planned. There are 57 people involved directly in the power burning station and an additional 180 to 200 workers in the coal mines. Very many of those workers are under 45 years of age and have a very high dependency and have a long number of useful working years stretching out before them.
Mr. R. Bruton: As I have said, most of the workers involved are particularly vulnerable and are living in an area where there are scarcely any alternative employment opportunities. The Minister has already recognised the very serious plight of people in this region. The only alternative that many of these workers will face is either migration or sole dependence on social welfare. It will deal a further devastating blow to a region where emigration is already at haemorrhage proportions.
The case has been made that Arigna mines are no longer able to supply the ESB with a competitive energy source. While this may now be the case, it must be recalled that at the height of the oil crisis in 1979-80, Arigna provided an invaluable source of indigenous energy and it can be seen from the ESB annual reports that it produced electricity which was competitive with the predominantly oil-fired generating capacity at that time. It was an indigenous resource while we faced the prospect of continuing escalating oil prices. At that time and indeed shortly afterwards the present party in Government, Fianna Fáil, promised that a second power station would be built in order to exploit the attractive indigenous resources of the area, a fuel that offered great hope at that time. That promise was never fulfilled.
The years of service given by Arigna impose an obligation on Government to give this region a realistic opportunity to develop alternative employment. Throughout Europe at present the Government of every single country which had a significant indigenous solid fuel industry are funding on a very large  scale schemes to assist the establishment of alternative industries in those coal regions: Germany, Spain, the United Kingdom are involved in heavy programmes of subsidisation of the fuel industries in order to keep them going and allow a phased adjustment of employment in those areas. Every one of those regions have suffered from the impact of a sharp fall in energy prices in recent years and are facing competition from very cheap energy imports. Those Governments are facing up to the problems in their areas and are directly subsidising the fuels and schemes for alternative employment; they are lucky enough to be able to avail of EC funds to help them support the revitalisation programmes for the coal regions in Europe. Tragically, the present Government allowed regulations under the Rechar programme at EC level which excluded Arigna from the terms of the programme and deliberately left out regions like Arigna simply on the grounds they were not employing more than 1,000 people. Anyone knows that there is no possibility of a coal region in Ireland employing that number of people but the effects of a decline on a region like Arigna will be every bit as great as the decline which will be experienced in Germany, Belgium, Spain, France and indeed the United Kingdom from the impact of cheaper coal coming on to the world market. The blunder by this Government in not ensuring that the Rechar programme accommodated Arigna puts an even greater onus on them to allow Arigna develop employment opportunities.
I recognise that the Minister, when he spoke to the Seanad and decided there would be six months stay of execution by the ESB, established a task force and showed some concern for the very real problems of the area. The task force have not yet reported and at the end of this month we are facing the imminent decision by the ESB to cease all further purchases. The mines will close in four weeks time and redundancy notices have issued. In effect, the hour glass for Arigna is coming close to the end. If the mines close without other projects in the  pipeline, workers will be forced to emigrate and the prospects of then getting alternative activity on the ground will be slim. I am worried that the Government are hoping that with the closure the political pressure will dissipate and fade away and it will be permissible for the Government to continue to hope that the task force will come up with something but, in effect, nothing will happen.
This slow strangulation of the region is totally unacceptable. It is for that reason that we in Fine Gael have put forward a proposal that there should be an enterprise fund which would provide venture capital for new businesses in this region. This is a vital element that has been missing from the task force's efforts to date. The task force have simply been looking at alternatives and possibilities but have not had the essential ingredient of money to spend on bringing forward viable projects.The vital element is money which is needed if we are to expect enterprise and projects to come to fruition by the end of this month, mark you, to meet the needs of the numbers of people who will be thrown on to social welfare. The onus is now on the Government and on this Minister to do as he did back in February and recognise that the work of the task force is far from complete, that there is a need once again to put off the imminent decision by the ESB to stop further purchases and phase out the continued operation of the plant when stocks are all gone.
It is crucial that the task force should not continue as they have been going along to date but they key element is that there must be an enterprise fund with explicit funding from both Government and from the ESB to back alternative employment. The ESB have already acknowledged their willingness to put such money into a fund and have shown some evidence or that goodwill in funding leaflets and promotional material for the region. That money they have put in to date is only buttons compared to what is needed to bring forward viable projects for the area.
That is why we feel it is vital that the Government commit themselves tonight  to an enterprise fund that would be the focus for concerted effort not only by the agencies that the Minister has included in the task force but by the local community, local businesses and the workers, so that they can support a fund with a clear mandate to develop business ideas to the take-off position. That is a simple proposal we are putting to the Minister tonight. I hope he will recognise the sense of urgency felt on this side of the House. I am convinced the Minister will recognise his responsibilities in this area. We face a situation where falling energy prices have caught most indigenous energy producers off guard. We cannot ignore industries like these which have served the country well just because energy prices have fallen and it is no longer strictly economically viable for them to continue in operation. We need to have a much more responsible attitude to these industries, in particular, to Arigna which has served us so well. It is for that reason I ask the Minister to give consideration to this proposal. As I said, there is strong international precedent for doing this and it in no way breaches the rules the Government have sought to impose financial rectitude, etc. Such a project is very acceptable. The Germans, who have led the field in running their economy efficiently and sensibly, have gone down this road. I ask the Minister to recognise that this is the way forward for this area.
If there is no fund for viable projects in place before the mines close those people will never have an opportunity to be re-employed. There is an urgent need for the Minister to put in place a project which will provide employment opportunities in this area. By doing this we can preserve this region intact. Not only will it give employment to members of the 260 families involved, but there will be money and activity in that area. The alternative is that the State will have to face a bill for those families who will have to go on social welfare. This could run to millions of pounds, probably about £3 million or £4 million per annum. It would be far better to put this money into an  enterprise fund which can provide realistic and alternative employment for these people who have developed very valuable skills and who have served this country very well through the various energy crises during the seventies.
Mr. G. Reynolds: I thank Deputy Bruton for giving me some of his time. Last autumn the communities in the Arigna catchment area were plunged into a mood of darkness by the announcement of the closure of the ESB coal burning station and the consequent impending closure of the coalmines. Since then the Minister has set up a task force and redundancy notices have been given to the mine workers. This is a repetition of previous announcements by the ESB to close the power station at Arigna and to abandon the use of coal for the purpose of generating electricity there.
During the eighties a similar proposal was formulated which agitated the mine proprietors and workers and the ESB workers in the Arigna area to the extent that several deputations were sent to different Ministers and promises were given. As a result the ESB withdrew their threat of closure and mining and electricity generation continued. Recently the same threat has been posed and people in the mining area are being laid off.
Mining in Arigna was established in the 19th century. It was carried on during this century by one mining proprietor and subsequently by at least two others. The Arigna miners played a crucial role in the national economy during the war years when some 350,000 tonnes of coal were taken annually to many of the ESB and other State company operations. In 1958 the power station at Arigna was commissioned and has since performed at a very high efficiency level within planned parameters. In 1989 it was the fifth most efficient power station in the ESB network, well above the efficiency level of even the Moneypoint power station. It has produced electricity for over 30 years at a very economic price and at a technically efficient level.
In 1989 the works costs were almost £4 million, almost £1 million less than they  were in 1988, 45.8 million units were generated and 42.3 million units were sent out into the system. What, therefore, was initially established primarily for social consideration has become an efficient user of a national resource in the area. We have, therefore, reached the point where a natural resource in the Arigna area has been produced and used efficiently providing 300 well paid jobs that are now to be taken from the area. The employees have a considerable fear of the problems ahead with respect to their future and alternative opportunities.Three hundred jobs in an area such as Arigna has the same impact, relatively speaking, as the loss of a major multinational enterprise employing thousands of people in a major industrial zone. However, the major difference in this case is that these people who will have to go on the dole queue do not have alternative employment within the State, will be forced to either emigrate or move to larger centres thus depriving the businesses in the area of their spending power. This will have knock-on effects in the loss of more jobs in the retail and services areas.
Since the oil crisis of the seventies EC member states have sought to reduce external dependence on energy supplies through greater efficiency, the diversification of sources, increased use of solid fuels and the development of renewable energy. Coal is still one of the major sources of energy throughout the world. A recommendation has been made in other Community countries, for example, France, Germany and Spain, to concentrate on the construction of new environmentally-friendly small coal fire power stations able to generate sufficient electricity for a region rather than feeding the national grid. This development should be considered for Arigna.
Over the years promises were made to provide a larger generating station for Arigna and tests were carried out on the availability of suitable coal and the use of same through a fluidised bed system for the generation of electricity in that larger power station's generating unit. However, it was considered at the time  that the capital outlay was considerable and no other reasons were given for not proceeding with this larger station. As the Minister is aware these promises were given in the early eighties when general election promises were being bandied around with considerable aplomb. Unfortunately they had no intention of meeting these promises once the election was over. This has left a very bitter feeling in that part of the country and the politicians, who are now trying to do something worthwhile to help the people in the area, are not believed. Because some politicians acted irresponsibly at that time, we are all paying the price now.
Mr. G. Reynolds: I hope I am being taped at the moment. The people in the Arigna area believe that this proposal should be developed in order to save these jobs. I know the Minister has already set up a task force to report from time to time to Roscommon County Council, Leitrim County Council and Sligo County Council. I welcomed the setting up of this task force but I prefaced my remarks by saying a task force should have been set up years earlier as this part of the country has suffered greatly over the years. Special incentives should be given to this area where jobs are badly needed.
In quoting from an article in the Leitrim Observer of 10 February last I am not attempting to score a political point but to indicate that most politicians in the area, regardless of their political affiliations, believe in our motion. It is their view that not alone should a task force be set up but that the Government should establish an enterprise fund. In the course of that article it was made clear that while a task force would create employment opportunities, unless they were given monetary assistance it would be like a guard dog without teeth. The article,  under the heading, “Arigna Task Forces brief slammed as fantasy”, stated:
But last night (Tuesday), both SligoLeitrim T.D. John Ellis and the Cathaoirleach of the Seanad, Senator Séan Doherty, expressed their deep dissatisfaction with the Task Force's brief, considering the urgency of the Arigna situation.
Mr. G. Reynolds: If I have caused any consternation in the House I apologise. I shall refer to my colleague, Deputy Ellis, from Leitrim, who is aware of the position and trust I will not cause any disruption of the proceedings of the House. In the course of that article Deputy Ellis hit out strongly at the idea of setting up a task force. He said, according to it:
“Other Task Forces have been set up and what have they achieved out of the ordinary — nothing. As far as I am concerned its just further bureaucracy being added that isn't, going to do anything”, declared Deputy Ellis.
Mr. G. Reynolds: I do not disagree with the sentiments expressed by Deputy Ellis and it is important to stress that all politicians in the area agree that, unless we receive adequate monetary assistance, we will not get any tangible results.
The catchment area of Arigna is quite expansive in that it includes places like Drumshanbo, Drumkeerin, Ballinamore and extends as far as Dowra in County Cavan and westward to southern Sligo and north Roscommon where Arigna is located. This then is a serious issue concerning the retention of jobs in those already deprived areas. There will be big losses for the mine workers who have to bear the worry, fear and concern about their prospects without any jobs in sight.
If the study which the Minister commissioned with regard to the availability of suitable coal for future use indicates that there is a sufficient quantity there to keep the existing power station in operation, then he should keep it open. If that quantity is adequate to provide a 45 MW power station, a second station, then that development should proceed. Failing that, the Minister, and the Government, should accept that any person who has had to forego his job involuntarily should be able to get an alternative job in another enterprise with an opportunity to earn the equivalent amount of disposable income. This calls for the filling of the vacant advance factories in towns like Drumshanbo, Carrick-on-Shannon and Ballinamore. Those factories have been vacant for some time. The IDA should establish manufacturing industry in the  area to absorb some of the unemployment being created. They should do everything possible to ensure that workers, their wives and families maintain the lifestyles to which they have become accustomed. That can be done if alternative enterprises suitable to their needs and aspirations are established.
In this case the ESB should not be let off the hook. They will have savings arising from the closure of the Arigna power station and the Minister ought to direct them to set up an enterprise fund for the area to finance projects which will create jobs over the next five to ten years. The Minister should direct them to put back into the community something approaching what they are now taking away. I would like to see action in regard to the development of other industries, particularly in relation to the creation of jobs in farming, alternative farming enterprises, tourism enterprises and other developments that would be beneficial to the area. The House recently debated a site for a wood processing industry and the north-west was suggested.The Government should give a commitment to establish this industry in the north-west and, bearing in mind the problems being experienced in Arigna, a good case can be made for siting it there.
The Minister should return to the EC to pressurise them into applying the RECHAR Programme to Arigna. It is invidious that an area so deprived by the loss of the jobs does not fulfil the requirements of the EC which are that job losses must exceed 1,000 or more. Obviously, the EC are thinking bigger than it is possible to do with regard to mining here and there should be persistent pressure on the Commission to support any area that has been deprived. The Government, in allowing the EC adopt such policies, did not take into consideration the problems faced by areas like Arigna.
There are solid social and economic reasons for not proceeding with the closure of the power station and the mines. There are good grounds for calling on  the Government to take urgent action to prevent further emigration and unemployment there. There is a dependence, and this will continue, on imported fuel. The business picture for the communities I have mentioned is disastrous. It is imperative, therefore, that the Arigna mines and the power station be allowed continue operating until such time as alternative employment is provided. I accept that the task force have directed their attention to those issues but, unless there is a solid commitment from the Government, and the ESB, to put back into the community what has been taken from it, the population of Arigna, and its hinterland, will disappear. For as long as I am a public representative for the area I will use every option open to me to try to prevent that happening.
Mr. Nealon: It is ironic that Dáil Éireann is today discussing the deliberate killing off of coalmining in Arigna and the resultant social and economic devastation of the area while tomorrow the House will be discussing the very positive move for County Leitrim of the reopening of the Ballinamore and Ballyconnell Canal.
Mr. Nealon: The House will be interested to know that coalmining and the canal were linked together in parliamentary debates in the House of Commons some 150 years ago. Arigna coal mining, and the distribution of the coal, was an important consideration in authorising the Commissioners of Public Works to build the BallinamoreBallyconnell Canal linking the Shannon and Erne waterways. Of course, mining in Arigna goes back much further than that. The iron deposits in Sliabh an Iarainn were mined as early as the 15th century.
Fine Gael, in tabling this motion, are seeking to avoid the end of that activity, the end of a way of life, the break-up of the mining-based community and the very survival of the area. To put it in that way is not an exaggeration. If the ESB  power station at Arigna is permitted to close, as planned, and with it the mines, without first putting in place alternative industries with equal employment, then we are talking about cutting a broad swathe of destruction through six parishes, Ballinaglera, Drumkeerin, Drumshanbo, Geevagh, Kilronan and northern Ardcarne. That area has, unfortunately, been devastated by unemployment and successive waves of emigration. In the study carried out by Deputy Garret FitzGerald of the pattern of emigration and depopulation in the fifties, based on an electoral division, the area I have referred to emerged as one of the worst hit in the country. Another area highlighted was my native parish of Kilmactague, Tubbercurry, Gurteen and Ballymote.
If we allow the power station and the mines to go without creating alternative jobs, then the damage done to the community may be irreversible. Certainly, it will take at least half a century to repair. That is an idea of the extent of the problem we have to deal with and of the size of the challenge facing the Government. We are not just talking about people employed in the mines and the power stations because everybody in that area is involved in one way or another. Certainly, they will be if the closures, without alternative employment, come about, as the Government seem to be willing to tolerate.
Arigna ESB power station was set up by the Government of the day in the fifties for social reasons. Equally strong, if not even more compelling, social reasons exist today for keeping it open. Will our present Government close it without any definite, concrete plans for job replacement? Is that a measure of their conscience? Is that a measure of the advances we have made since the fifties? Already 28 per cent of the people in the area generally are affected or draw social welfare of one kind or another. Will we now deliberately put another 250 people on the dole or — more precisely — a proportion of the 250 or 300 people who will remain at home?
 They do not want the dole or to go to the departure lounge at Knock or Sligo Airports. They want work and their leaders in that area — as Deputy Leyden, the Minister of State, knows — have not been sitting around waiting for it all to happen for them. They have drawn up some very imaginative development plans but they cannot do it on their own and time is of the essence.
It was never considered that the ESB power station would be financially viable. As I said, it was set up for social reasons but since it was commissioned in 1958 it performed at a very high level of efficiency. It was the fifth most efficient power station in the ESB network last year. Moneypoint, with all their modern developments, only came eighth. Last year — this is very important — it was just as efficient and the coal available to it was just as good as that available to it over the years in operation. The cost of the total operation at Arigna, including the fuel, was £4.9 million or 1.4 per cent of the total ESB operation. The total ESB fuel bill was £225 million which puts the £3.8 million for Arigna in context. It is of enormous importance to the six parishes from which the employees come, to the north-west region and County Leitrim in particular. We are not asking for major sacrifices from anyone but for justice for that area.
In the average year 45,000 tonnes of coal are delivered. Leydon's Arigna Colliers supply 30,000 tonnes on contract. The rest come from Flynn and Lehany and from Wynne's without contract. The top priority now is to get recognition for the small suppliers Flynn and Lehany, P. J. Wynne and Greene's, who have been seeking to supply the station for a number of years. It is imperative that these suppliers are given a contract now as a first step in the overall plan in maintaining the power station over the required period needed to get the alternatives in place. Indeed, alternatives can be found if the political will is there. The Minister will tell us that he has set up a task force; this is an impressive body doing good work and I am sure it will be helpful but it is not an alternative to Government action.
 I am delighted the Minister for Energy will reply to this motion. What is he doing about deciding that a new pulpwood industry, which the country will certainly get within the next three to five years, will be located there? If there had never been a crisis in Arigna this is the kind of area where the industry should be located because there are forests and the requirements of a modern pulpwood plant are 150,000 to 200,000 cubic metres a year. Counties Leitrim, Sligo, Roscommon, Mayo and Donegal have raw materials well in excess of that from thinnings and clear fallings. Indeed, because of the young age structure of the forests in that area, up to 30 per cent. of the raw material available nationally is located in this region and the supply will have doubled by 1997. The Minister is aware of these figures. The Leitrim area also has fresh water in the huge volume required for such an enterprise. It also has the required strength of kilowatt power lines coming as far as Carrick-on-Shannon.It would not be an impossible task to bring them further up, especially because of the obligations — moral and otherwise — which the ESB have to the Arigna area.
At present we appear to lack a coherent national strategy for forestry and the timber industry and an essential part of any strategy must be the location of the planned pulpwood mill. The obvious location is as a replacement industry for Arigna. However, I am not too confident that this is in the Government's plan. I will be very interested to hear the Minister's comments in this regard.
When I mentioned this possible development at the Arigna protest meeting in Drumshanbo, a very distinguished Member of the Upper House holding a high position, from County Roscommon, tried to say that my whole idea was rubbish on the grounds that it would not be a major employer and would create a problem in regard to pollution. As I understand it, he was wrong on both counts. The Minister may have something to say about that but it indicates a very negative approach by Fianna Fáil. I hope the Progressive Democrats Minister  who has expressed positive signals about locating it in County Leitrim will confirm this during the course of the debate.
Arigna people are not just sitting around waiting for something to happen. They have produced their plans; they want to keep Arigna power station and mines in the region open for a ten year period to allow for the possibility of creating alternative employment. They want to re-examine the possibility of building a crow coal power station, to encourage the production of smokeless fuel and other coal-based products for the domestic market, to co-operate with the IDA in finding reliable industries for the empty factory on the Dowra Road and mart units in Drumshanbo and to seek a major tourism plan for the Lough Allen region, including the reopening of the Lough Allen Canal. I am glad to announce that Fine Gael will be tabling an amendment tomorrow to the Shannon Navigation Bill with a view to having the Lough Allen Canal reopened. People in the area have proposals for structures and funding, all soundly based, very well researched and worked out.
We are seeking to avert a tragedy for six parishes. Oddly enough, those six parishes spread into four counties and three dioceses. I am sure that in the final analysis Deputies on all sides of the House will agree with the general objective. The motion in the name of our spokesman, Deputy Richard Bruton, outlines the necessity for a enterprise fund and for extra time. We await to hear from the Minister that he will accept our motion or, if not, that he will outline a better way forward for Arigna.
“welcomes the steps which the Minister for Energy is taking to examine whether there is a valid possibility for the continuation of employment in coal mining and power generation at Arigna, and the other measures being taken by him  to provide alternative employment opportunities in the region.”
I am conscious that there is very strong support for the mining tradition in the Arigna area. People are obviously very concerned that closure of the ESB power station will devastate the economy of the region. Before turning to recent developments I think it is important to establish the background to this whole issue.
Mining started in the Arigna area in the 1800s. The coal was originally used for iron production. Subsequently it was used in steam trains and by the sugar company. Demand for Arigna coal was probably at its peak during the war years when other imported fuels were in short supply.
After the Second World War demand for Arigna coal declined and the Government of the day decided that the best way to protect employment in the mines and to maintain a viable local community was for the ESB to construct a power station. The Arigna power station was commissioned in 1958. Even at that stage it was clear that the project would not produce competitively priced electricity — its main purpose was a social one. Indeed, it was probably the only prospect for substantial employment in the area. The fact that it provided an opportunity to use another native fuel must also have been a factor as well as it represented about a 2 per cent increase in the ESB's overall generating capacity. The power station has now been operating for about 32 years during which time it has made a major contribution to the local economy.
In their 1989 accounts the ESB show that the cost of electricity from Arigna was 9.32 pence per unit — in other words  it is being sold at a loss even before you take account of transmission and distribution costs. For comparison, the cost of power from Moneypoint was about 1.5 pence and the most expensive milled peat power station produced power at 5.7 pence per unit.
The total cost of the diseconomy in 1989 amounted to about £2.8 million or almost £12,000 per annum for each job in the mine and power station. This is paid for by the electricity consumer at a time when everyone is anxious for the ESB to keep their prices as low as possible in an effort to assist with industrial competitiveness and the general strengthening of the economy. Originally the ESB proposed to close the station in 1985 so it has, in fact, had a six year extension already.
Since 1958 the ESB's generating capacity has grown by over 3200 MW from about 700 MW to 3900 MW. As a result the Arigna power station now accounts for less than half of one per cent of the ESB's capacity.
Technically the power station was designed to burn what is known as main seam coal. Most coal fired power stations are designed to burn coal which matches a fairly narrow specification. I do not mean to infer that all of the coal being burned in the world is the same — far from it. It is possible to design boilers for many different types of coal. Once design decisions have been made, however, the type of coal fed into the boiler must be regulated carefully, otherwise there is always a risk of serious accidents.
In recent years, the ESB have been experiencing continuous difficulty in getting coal of the quality which is the minimum acceptable to them. This is consistent with the situation when the best seams have been mined and less useful seams are being resorted to. The tests carried out by the ESB on coal deliveries show a consistent tendency towards just hitting the minimum percentage required, and indeed falling below this, that is in the range of 68 per cent to 70 per cent coal in the sample, with the slate, stone and excessive ash content contingent on a situation of this kind.  This seriously affects the economics of working and the practical and technical aspects of burning this coal, as well as environmental aspects in the huge ash deposits to be removed and stacked.
I mention these things in passing because I believe it is vitally important that everyone realises the enormous contribution which has already been made in support of the Arigna area over the last 32 years.
Let me now turn to the present situation.Back in 1983 in their strategic plan the ESB proposed to close the Arigna power station in 1985. Later on, in revised proposals accepted by the Government in May 1984, the ESB decided to keep the station operating until suitable local coal supplies were exhausted. At that time this was expected to happen by 1986 or 1987. In October last year the ESB announced that they proposed to operate the station for about two more years and that they would stop taking coal deliveries in April of this year. The power stations would be needed for the remaining time to burn off the large stock of coal which had accumulated there. The decision to stop taking coal was reached between the ESB and Arigna Collieries who were the main suppliers of coal, and representated a mutually satisfactory arrangement in the context in which the main coal seam was virtually exhausted and the cost of extracting the remaining coal would rise sharply.
Indeed, it is clear that this is a situation which was recognised by the employers, the mining companies themselves. It was because their situation was foreseen that extensive studies were undertaken and consideration given to the possibility of using fluidised bed burner technology and a totally new station, expected at that time to cost close on £100 million was considered by various Ministers for Energy and their advisers in 1980 and thereabouts. That, of course, was against an expected rising oil price scenario and the possibility of a continued squeeze on oil supplies, both of which did not, happily, materialize.
The motion proposed by Fine Gael  in my opinion, is a meaningless gesture put before this House for blatant political, opportunistic reasons. Its intention is to convey a message of the need for this action as the saviour of the community affected by the decisions to close the mine by a mine owner and consequent inevitable closure of the power station by the ESB due to the non-availability of coal following the closure of the mine. The reality, however, is that an enterprise fund is not needed because the Government have indicated quite clearly on a number of occasions — I have done so in the other House and here — that we will be most generous in supporting any identified viable proposal to supply alternative employment in this region.
The second part of this motion proposes that the ESB continue to purchase coal. How can they do that if the mine is closed? Mine owners say there is no coal there. I heard Mr. Leyden say recently on television that the Minister was wasting money in having carried out the study I will refer to later, that he knew the mine better than anybody else.
If, as Minister for Energy, I was to do only what is suggested by Fine Gael in this motion I would, in my opinion, be making a pathetic response to a major crisis for the people of Leitrim, north Roscommon and south Sligo. I know these areas. I have travelled them. I have been in the people's homes and in the power station there. I am as conscious as anybody in this House that closure of the mines and the power station would mean the end of the long mining tradition in Arigna and would cause hardship to very many people. For that reason I have taken a much more positive and worthwhile step than the one urged by Fine Gael in this motion.
I announced last February in the Seanad that a task force had been established under the chairmanship of the Roscommon County Manager to facilitate the identification of suitable alternative employment in order to explore to the utmost any possibility of mining and generation on any even half reasonable basis. I also asked the Geological Survey  office to undertake further work to ascertain the quality and quantities of reserves of coal that might be available in other seams. I did that against the advice that was available to me from the mine owners and from previous surveys which showed that there were no such coal reserves there. I still insisted, as I announced in the Seanad, that an extensive, comprehensive survey would be carried out to determine and settle this matter once and for all. At that time, at my request, the ESB agreed to continue to take coal until the end of this month, July, to give the task force time to complete their work. I have now received the Geological Survey office's report. I expect to receive the task force report before the end of July.
From the preliminary findings of the Geological Survey Office it has now been established that there are substantial additional reserves of coal in the Arigna area. However, the important matter to be determined is the suitability of the coal for use in the Arigna power station. I have, therefore, asked the ESB and the Geological Survey Office to advise me on the feasibility and cost of mining and using these substantial additional reserves. I expect to have that report within a month. I must warn, however, that as things stand now, first indications from tests carried out on samples of the coal from the sources now believed to exist in reasonable quantity, are that this coal will be at a low quality level and this is not an encouraging sign. It could, on the other hand, simply mean a continuation, and at even increased cost and with the certainty of the need for quite extensive capital costs by the ESB, of the totally unsatisfactory situation that has persisted there since the early eighties.
It is clear that the drift of the motion put down by the Opposition implicitly recognises this and that the preferable course, unless we receive far more fortunate indications than are now thought probable, is to look for viable alternatives of good, durable employment and to extricate ourselves from this heavy loss situation which, as the earlier figure shows,  means a cost to the economy of around £2 million to £3 million a year for a continuation of this electricity generation.
I am, however, anxious to take decisions in the light of all known facts and it is for this reason that I have ordered the studies to which I have adverted, and it is for this reason that I wish to wait until the full results of the analysis and advice are available to me. I will then make recommendations to the Government.While I will keep an open mind on the matter until I receive the final report, it would be wrong of me to hold out false hopes of continued mine operations given the diseconomies which surround the present operation and indications that things may get substantially worse.
I appreciate that closure of the mines and power station will disrupt the lives of everybody closely involved. The main unemployment impact will fall on about 130 mine workers in the 20-40 year age bracket. However, I do not think if that situation were to come about that the prospects are nearly as bleak as they were in the 1950s. The whole approach to job creation has changed. There is much greater awareness of the important contribution which is made by thousands of very small businesses. There is also a greatly more sophisticated economy and infrastructure to support regional and local development. The achievements of the IDA over many years in attracting high-tech industry to Ireland have created many opportunities for supporting industries.They have also created awareness among both customers in Ireland and abroad and among people creating new businesses of the existence of a much wider range of business opportunities.
The Arigna Task Force which I set up have been considering a number of initiatives which might provide alternative employment opportunities. They have consulted a subsidiary of the British Steel Corporation, which have extensive experience of helping areas to adjust after the closure of steel making plants in the UK.
Because the people directly affected in the first instance, would be mineworkers, the task force arranged with  FÁS and the Irish Productivity Centre to conduct a skills audit and counselling service among the workforce in the mines to establish their skills, ambitions and aptitudes for alternative employment. I understand that there was an excellent response to this initiative.
The IDA have prepared a brochure specifically aimed at promoting industrial development in the area. There is already an IDA advance factory in Drumshanbo and the IDA are hoping to have an industry established there shortly.
It would be hard to find a better example to illustrate the wide range of opportunities which should be considered than a boat building project which is already under way with financial assistance from the ESB and the IDA. Kennedy boats will be constructing steel hulled cruisers from the Shannon with a view to supplying a more durable product than the glass fibre hulled boats which are currently in use.
Other possible developments which the task force are aware of include precision engineering, mushroom growing, coal briquetting and tyre remoulding. It is also planned to establish enterprise centres at Arigna, Drumshanbo, Drumkeerin and Ballinamore to facillitate small business development in these areas.
Deputy Nealon referred to the wood pulp project which is under consideration now. It would seem at this stage that such an industry, wherever located — and it is the Government's preference that it would be located in the north-western region — would require a marine outfall because of the type of polluting effluent which will be discharged from such a plant even with modern day treatment. I just want to correct some of the things the Deputy said in support of the difficulties mentioned by the other spokesperson, Deputy Jim Mitchell, at some other meeting.
The ESB are, naturally very conscious of their social responsibilities arising from the closure of the mines and power station.They have been contributing to the cost of these initiatives and also plan to  contribute to the establishment of projects under the auspices of the Leitrim and Sligo enterprise funds which have been established by the International Fund for Ireland.
The general feeling among the task force is that there are good prospects for establishing many new employment opportunities in the area. Because these will involve many diverse businesses the area will no longer be so critically dependent on the success of any one of them. In addition, because these businesses will be trading on a normal commercial basis, the general prospects for long-term prosperity in the region will be much enhanced compared to the present situation when everything depends on the subsidy implicitly provided by the ESB's customers.
To sum up, what I am saying is that the surveys I have undertaken are not completed and when I have all the facts I will bring the matter to Government for decision. I hope to do that in about four weeks' time.
Mr. Ellis: This is probably a very emotional debate for many of us who are directly involved in the area. The situation is uncertain with regard to the possibility of continued mining. At this stage I compliment the Minister for Energy and the Government on their decision to undertake a full survey against the advice of many senior civil servants and people in the area who tried to say that the coal seams were totally exhausted, with the exception of crow coal. The report to the Minister shows that there are reasonable reserves of coal, as we said on numerous occasions. It has been pointed out that the reserves of coal in the Arigna area are much higher than was thought by the Department of Energy and the ESB. We have to wait to see the quality of the coal but it is obvious from the Minister's statement that the coal found is not crow coal. I hope that the seams which have been found will be found to be economical and that the future of the area will be looked after by the mining industry and the power station.
 We must consider the social problems that will be caused by an overnight close down of the entire operations. We are all aware that redundancy notices have been issued by one firm. In view of what has come to light here, that might be reconsidered and perhaps the mine owners should be asked to continue until we get the result of the tests being carried out on the recent deposits. The ESB have a social commitment in this area and have intimated to us that they are prepared to make a considerable contribution towards the development of industry in the area. Only this week the chief executive of the ESB outlined in a letter to me that they are prepared to make substantive contributions under a number of headings and that they have already started to make contributions in the area.
We must look at both sides of this coin. We must look at coal and hope that mining can continue and we must look at the possibility of introducing alternative industry to the region. This is probably the only region of the country that has had such a decline in population. The population of Leitrim is now in the region of 24,000, a drop of 4,000 in the last three to four years. The same drop in population has been experienced in the North Roscommon area and in South Sligo where they join Arigna.
The ESB, who are prepared to make a contribution according to the figures before us, are losing approximately £2.8 million per annum at Arigna or almost £12,000 for each job in the mine and power station. They should declare publicly that they are prepared to make available a sizeable contribution to develop industries in this area. We are all aware that brochures which promote this area as a suitable location are being prepared and I am strongly of the view that these brochures should state that the ESB are prepared to pay extra grants and take equity in companies which establish in the area.
The ESB have stated that if there is a major breakdown at the power station at Arigna it may not be possible to have it repaired but I do not believe this. If it is  properly maintained there is little or no chance of a major breakdown in the near future. It seems the aim of the ESB in floating this idea is the closure of the power station.
Reference has been made to the wood processing industry. We are all aware that the Government are committed to locating such an industry in the north west. Even my colleagues on the opposite benches would welcome the setting up of an industry anywhere in that region which, as the Minister has stated, is Government policy. Timber is being produced in this area where much marginal agricultural land has been lost because of increased investment in timber production by private planters, multinationals or lending institutions, with the result that many people have been forced out of farming.
We must also bear in mind the inconvenience that would be caused to ESB workers who have set down roots in the area. Like the miners, they would face major problems if the power station were to close. The ESB should declare in public that they would be prepared to invest a specified sum of money in the area over a period of five years. They have stated to various deputations that they would be willing to do this and it is now time for them to declare publicly that they would be prepared to invest in that community the amount of money they would save, going by their own figures.
I do not think the figure quoted by the ESB — that the cost of electricity from Arigna was 9.32 pence per unit — is true. I believe the figure may be as low as 6 pence per unit. However, we have to accept this figure as we are not in a position to query it given that we do not have access to the information from which it is compiled. It was stated that the cost of power from the coal burning station at Moneypoint was 1.49 pence per unit but the fact is that the money spent on coal leaves the economy. At least in the case of Arigna we receive taxes. I do not think any of the people concerned wish to receive social welfare payments; rather they wish to see employment  maintained and that they be given the opportunity to continue to work in the area.
It has been said that I criticised the task force. I did nothing wrong in doing this. Indeed, as a result of being criticised they have become much more active and are now doing a much better job than they did during the first two to three months of their existence.
Mr. Ellis: They should be given access to money only once projects have been identified. Indeed, money is available. The ESB have invested in one project in Carrick-on-Shannon and have stated they are willing to pay the rent for another project in an IDA factory in Carrick-on-Shannon for two years. This should ensure employment is provided in an area which stretches from Ballinamore to Geevagh to Boyle and Drumkeeran on the northern side. It should be borne in mind that the miners and workers are not the only people dependent on the power station for their livelihoods. Traders and suppliers are also dependent upon it.
We should be realistic and should not set out to score political points because we are playing with people's livelihoods and future. We should reach a consensus on what should be done and should not come into the House to score political points. I have no intention of trying to score political points. I have no doubt that certain people on the Opposition benches have no intention of doing so either.
Mr. Ellis: Should the power station close because of the quality of the coal, it is important the ESB give the same commitment given by other companies who have moved out of other areas to reinvest in those areas in order to maintain employment. I have no doubt that the ESB and the Government will give such a commitment. The Government are also committed to ensuring that the  remaining resources at Arigna are exploited before the power station is closed.
The Minister has indicated that it will be another three to four weeks before the position becomes clear as regards the quality of the coal now available. It is a pity we will not be in a position to discuss the matter then when we will have a much better idea of what the future holds for the area. Regardless of the result, I have no doubt the Government's commitment to maintain employment in the area which is a black spot will be met. Should the mines and power station close, the problems encountered by the people concerned should be dealt with in a fair and objective manner.
That annual contracts be made by the ESB, with the small Arigna mine owners, to supply the power stations at Mount Allen with coal, pending the development of alternative sources of employment; that no decision about the future of the power station be taken until the findings of the GSI are published and the implications fully assessed and that all interested bodies, including the Lough Allen Community Development Association, the Arigna Miners, the Power Station Workers and task force, be fully consulted.
The amendment is self-explanatory. I would like to respond to a number of the points made by the Minister in his contribution this evening. Listening to him I could not help thinking he was making a very good case for keeping the power station open and was expressing a very optimistic view. I hope he will continue to approach the matter in that way. Rather than this being a coal problem it could be considered a coalition problem because a political decision will have to be made. The Minister and his colleagues will have to decide on what the future holds for this community.
I could not help but reflect on Arthur Scargill's battle during the famous coal strike in the UK. Many of the things  he had said and fought for during that campaign could be said about this problem.His main concern — it has now proved to be correct — was that what people were talking about was the killing off of a community. The question begs itself: what price does one put on a community?What is the value of the human resources involved? It is a good deal more than coal-mining, it is a question of the whole community in that area. From my experience of dealing indirectly with that subject, it is a scenario that has been sadly neglected over many years by successive Governments. I suppose the reason was that everybody was prepared to accept the fact that the main employer in the area was coalmining with all the downstream activities that flowed from it and the money it generated in the area.
Like all other closures we have heard about and dealt with over many years, and particularly in later years, it is so easy to make a professional judgment and to give professional reasons a business or an enterprise should be closed down. It is always much more difficult for us to advance positive reasons for keeping it open. There is no argument against the continuation, at least for a period, of this operation. It may take an Arthur Scargill to give it a push where it is needed because, as the Minister is aware, the deadline is fast approaching; the initial problem will commence on 20 July.
The ESB claim that the Arigna power station is not a financially sound business as determined by the best international commercial criteria. They claim they can produce electricity much cheaper if they close down Arigna and produce its quota of electricity at Moneypoint using coal imported from the USA. It is also claimed that local supplies of mainseam coal are running out, especially at Arigna Collieries developed by the Leydon family. Accordingly, it is proposed to close down the Arigna power station in about two-and-a-half years from now. It is reported that supplies of coal are to cease after the next six months but the power station has 90,000 tonnes of coal  in reserve to carry it over the next two years.
This approach by the ESB is a very simplistic one to the economics of the situation. There are external factors over which the ESB have no control. Some of the external factors are as follows: price of coal in US dollar terms, foreign exchange must be used and that involves drawing on the nation's foreign exchange reserves; exchange rates — Irish pound against US dollar — nobody can foretell the position of our pound against the US dollar on the exchange market: if our pound goes down or the dollar goes up in value the entire operation changes. There is also the question of our pound against various foreign currencies in relation to interest rates which must be taken into account for interest and loan repayment purposes on investments and materials; and interest rates fixed by international markets over which we have no control can be paralysing.
We in the Labour Party see the relevance of these points when we realise that the ESB's overall dependence on imported fuels, priced in US dollars, is projected to increase from 58 per cent in 1988 to 68 per cent in 1992. This situation will only worsen in future years. Our power supply then becomes very vulnerable to outside influences. This is apart altogether from the fact that a major political upheaval might make it practically impossible to get fuel supplies sufficient to meet our needs. It also looks like an attempt at national suicide. Furthermore, the level of ESB debt has increased steadily every year to the present level of £1,303 million. The total fuel cost for the ESB in 1988 was £225 million. Total fuel costs for the Arigna power station for 1988 were £3.6 million; thus the cost of buying Irish coal from Arigna Collieries was 2 per cent of the total fuel cost.
ESB operations for 1988 amounted to £354 million on generation; ESB operations for Arigna power station for 1988 amounted to £4.9 million — 1.4 per cent of total operations. This was made up as follows: payroll expenditure £1.1 million,  material and other expenditure £0.2 million, fuel £3.6 million, total expenditure at Arigna £4.9 million.
If one looks at the Arigna power station one will find that capital expenditure was nil, new borrowings were nil, outstanding borrowings were nil, in other words, total capital expenditure at Arigna power station was nil. Against that there were 27 other power stations where the capital expenditure was £74 million, net borrowings were £104 million, outstanding borrowings were £1,205 million — that was for Moneypoint — total cost £1,383 million.
The average price per unit produced in Arigna was 8.99p — works cost — in 1988. This compares very favourably with oil powered stations or peat powered stations. Moneypoint produces units at an average price of 1.473p, but this power station is on stream all the time: that is not comparing like with like. If the Arigna power station were to be closed down and its share of power were produced at Moneypoint, it would reduce the price per unit to the householder by less than a tenth of a penny. If this line of thinking were pursued to its logical conclusion, then all peat and oil powered stations would close as well because the price of electricity from them is almost the same as from Arigna. Then, of course, all power would depend on American coal and we would be at the mercy of forces outside the State. We would, in effect, have lost our independence for a tenth of a penny per unit. Is that all the country is worth? Is Arigna to be the next cog in the wheel?
The most important physical assets of the ESB are their power stations. The replacement cost of these assets is estimated to be in excess of £6,000 million. The ESB had total net assets of £1,596 million in 1988, funded by borrowings of £1,139 million. This gives a debt to net assets ratio of 71 per cent. Moneypoint alone costs over £1,000 million. It was built partly as an alternative to the promised crow coal powered station at Arigna. There is sufficient crow coal in Sliabh Iarainn and Arigna to keep a major power station in operation for well  into the 21st century. This would be home-produced and could be mechanically excavated because the seams are of a sufficient depth. This crow coal could have been excavated as cheaply as coal from the USA and would have led to upwards of 1,000 jobs in the region. Also there would be a major tax clawback to the State. Plans were at an advanced stage but were scrapped for political expediency. We were told it would be too costly, something in the region of £200 million. We were told that the process had not been perfected, that it was all just a window-dressing exercise in order to justify the switch.
The dropping of the crow coal power station constitutes a change of direction in ESB and State policy. Ireland's peat and native coal reserves were developed for strategic and social purposes to generate electricity for the nation. It resulted in a more diffused electricity generation pattern than would otherwise have been the case. The people of this region, and the nation in general, must now depend on outside goodwill and market forces and may suffer as a result. The dole or emigration will be the only alternatives open to them. We want to have our resources developed to create employment, allowing the people to live and work in the region.
The combustible quality of the coal being supplied, taken from a random sample during the months of September, October and December 1989 was as follows: Arigna Colleries — 64.0 combustibles; Flynn and Lehany — 66.1 combustibles and Wynne's — 69.1 combustibles.If we take an average combustibles content, taking into account that Arigna Collieries supply two-thirds of the coal, we find it is 65.8. The power station needs a combustibles return of 65 per cent to operate at maximum efficiency. The coal being supplied is sufficiently combustible to ensure that the ESB have verified that the Arigna power station is the fifth most efficient station of their 28 operating power plants. The coal being supplied to date is as good as the power station needs and is as good a quality as that station has ever used or  needed. These figures give no indication of a lessening of the quality of coal being supplied within the region. Also they give no indication that supplies of the local coal are at a crisis point.
Since the closure announcement on 31 October there was one statement on the part of the Government. When the Taoiseach was asked about the situation that had arisen he replied that the affair was entirely a matter for the ESB. We fail to understand how it could be so summarily dismissed in this region. We can point out very conclusively that it is very much a political matter and that the ultimate fate of the region will be determined by a political decision.
For social reasons the Government of the day directed the ESB to harness the nation's peat reserves. The resultant Bord na Móna operations did fulfil this social need very well indeed. The price of milled peat fired generation ranges from 50 per cent to 150 per cent above the cost of oil-fired generation and is even more substantially above the cost of coalfired generation. But nobody would doubt its value to the nation and to the regions in which these peat-powered generation stations are located. They will close only if supplies definitely run out. Even then there are elaborate plans afoot to replace them with equal, or near equal, employment opportunities.
The Arigna power station also was initiated by the Government of the day for social reasons. Now it is proposed to close down those mines without any concrete plans to replace them with near equal employment opportunities. We ask the Minister and the Government if they have forsaken the social policies and aims of the past. We call on them to address this issue urgently. I was glad to note from the Minister's remarks that it would appear he is heading in that direction. I hope it will not be too late. If they close the Arigna power station they must endeavour to provide the region with alternative employment for some 250 people. It is difficult to envisage how people — whose families and grandfathers — have spent their lives in these  mines could adapt so quickly to the electronic, engineering or plastic industries when one takes into account the level of training and retraining that would be required and the length of time involved.
This question will require much planning and effort on the part of the Government, the State and semi-State interests in the region. It is a great pity, when all of this was known, when the closure of the station had been on the cards for so long, that these plans were not put into operation many years ago. My union, the Irish Transport and General Workers Union, have represented the people of this area well over many years. On many occasions I remember reports emanating from local district officials about the difficulties these mines were encountering at that time, that is 15 years ago, since when many Governments have come and gone. Yet the position appears to remain almost the same as it was 15 years ago. Of course, the reason has been that, at the last minutes, some Minister came up with a political plan prior to whatever general or local election was pending, giving them another lease of life.
Mr. Bell: We are told we will not have a general election for another three and a half years, allowing us that time in which to prepare. Perhaps within those three and a half years this Minister and Government will undertake the task others have failed to do.
Mr. Bell: I hope they will succeed. I am sure all Members on both sides of the House, including the Minister, would be only too pleased to be able to report to this House and the constituencies involved in the area of these mines from the next political platform: I was the Minister, or we were the public representatives who saved the jobs of 250 people  in the Arigna mines thereby saving the overall community within that region. The Labour Party will give the Minister and Government every support in their efforts. In conjunction with the trade unions involved we wish them well. However, I might add that we will watch and question every development. We will want to know what alternatives will be provided and how they will be funded. We will argue consistenetly that this is a viable proposition taking into account the otherwise financial loss to the region, its effect on small farmers and business people, on downstream suppliers, people indirectly involved in employment in the region who depend on the moneys made from these mines to fund a whole community.
I will conclude by saying, in the words of Arthur Scargill, “how much is a community worth?” What value can be put on human resources? The ESB can put whatever value it wants on the cost of generating electricity, but what value does Dáil Éireann or the Minister or the Government of the day put on the people of that area, the people of Ireland who want to stay at home and work in those mines and in the small busnesses and farms in the area?
|Last Updated: 23/05/2011 10:42:44||Page of 165|