Natural Resources

The Elephant in the Room

The following is an extract from The Guardian on 30^th November 2010.

“Shell, like most non-state controlled international oil companies, is finding it increasingly hard to access new reserves. More of the world's oil is now controlled by state-owned companies. In December 2006 Shell was forced to halve its controlling stake in the huge Sakhalin II project in Russia's far east and hand control to Gazprom

following intense pressure from the Kremlin.”

Now, it may well be true to say that the guys from the Kremlin are more scary than the gang from

Merrion Square

or, as is more likely the case, the Russians know what serves their national interest.

They also understand that the Oil and Gas companies can withstand the odd setback.  The Norwegians also understand this.  Norway demands – and gets – huge royalties from any Oil and Gas deemed as their natural resources.  Has this driven the exploration companies away?  Of course it hasn’t.  Naturally they don’t earn the millions they might from an Irish government, but they continue to have healthy balance sheets.

And here’s the thing.  Banks get into trouble and we nationalise them.  Its costs us billions.  The net effect is that the weakest in society suffer the heaviest burden.  Our children – and their children – will be paying for this for decades.

Yet, we have an estimated 400 billion plus of reserves in Irish national waters and we can’t nationalise it.  No, we can’t even re-negotiate the sweetheart deal that the likes Ray Burke and Bertie Ahern, gave to them.  Why?  Because Ireland’s credibility as an international negotiator would be in question!

So, in the coming weeks and months as the quality of life ebbs away from all but the wealthy, as the very poorest in our society carry the heaviest load, just ask the question.  What about the 400 billion?  Ask the politicians who will come knocking at your door in the new year as an election draws nearer.  Ask the economists who tell us there is no other way.  Ask the media to ask the questions that, with very few exceptions, they seem not to want to ask.

Like the elephant in the room, would be crazy to ignore it.