Good Morning and firstly thanks for the opportunity to address you. ( I hope you won't regret it!)
The International Energy Agency, which had been telling us there wasn't a problem with global oil capacity has u-turned. The IEA now tells us that we need to harvest six new Saudi Arabia's over the next 20 years to meet energy demand especially from Non OECD countries, 80 percent of the worlds population.
We already had a sniff of what's to come when oil raced towards $150 a barrel before prices collapsed in 2008 during the great economic contraction. But the most recent report, the UK Industry Taskforce headed by Richard Branson foresees a doubling of oil prices again as early as 2014. The price is already back over 80 dollars a barrell.
So what? All modern global recessions bar one was preceded by a spike in energy costs. At the peak of the credit bubble just about everyone was borrowing like a baron on a crusade to free Jerusalem for the Pope. Money was dirt cheap until rising oil prices, the final straw caused US inflation and borrowing rates to rise in 2006 triggering the collapse of the most sensitive part of the bubble, subprime, thereafter.
I don't know if we'll avoid a second leg down, (over $1 trillion of deeply discounted interest only US mortgages reset upwards over the next 30 months to include capital repayments) but I do know with absolute certainty, that thereafter the biggest question facing us is how to build competitive advantage in a world characterised by very high energy costs.
That's why NewEra so important (and why I'm not a Croke Park with my kids). Ireland is still one of the most oil and gas import-dependent countries on the planet. Ask yourself how we could keep FDI like Intel with brown outs and black outs common? More fundamentally in the event of an extreme emergency how do we feed a population with just four days food supply in the shops?
On the other hand if Ireland formulates a credible strategy that secures our energy supply, guarantees far less volatility in prices compared to our competitors and maximises our capacity to bring on alternatives, consider the impact as Ireland becomes an FDI lighthouse during a global energy crunch likely to last 10 to 20 years?
But strip away the rhetoric and ideology and how prepared are we really?
- We've decided to push 40% wind on to the grid. But you can't do so without lashing up prices as gas burners come on at short notice. On the coldest days this winter, wind produced little or no electricity.
- We're keen to export excess capacity, but just one overseas interconnector being built. We need several including to France to import nuclear energy and complete a North West European grid.
- The ESB facilitates homeowners adding electricity to the grid but the numbers don't add up because they've been engineered not to.
- But the biggest farce is; we have no grid. What we have is a distribution network made up mostly of 110 KV lines that lose huge amounts of power. We've just two electricity motorways, 400 KV lines running from Moneypoint in Clare to Dublin. That's it. Visualise trying to run a transport economy with just two pieces of motorway and the rest, bicycle tracks, for the next 8 years, because that's where we are with the electricity grid. There's fat chance of exporting or importing electricity until then.
- We were supposed to have made the grid independent. But EIRGRID, set up four years ago, can't raise a bean in capital. Guess why? The poxy grid is still on the balance sheet of the ESB because the ESB unions, management and its ESOP are still running the gaffe.
- Every painful step runs through An Bord Pleannala and local planners but there is no workable national strategic guidelines. The reference point is overwhelmingly local planning issues. We're simply not moving fast enough.
Firstly a replacement of apathy with a clear-headed understanding of what's to come. That this isn't just a green issue but a centrepiece in all our lives.
- Secondly new planning templates and timelines that fast track the use of the Strategic Infrastructure Act and builds a grid that matches our ambition.
- Thirdly an envelope of proper incentives, reliefs and banking finance that encourages rapid semi-state and private capital penetration into Ireland's energy markets.
So you can see why the shape and strength of the next Government is so crucial since it is upon its doorstep the energy crunch will arrive. Sure you're on track to form the next Government but is that enough? Has Fine Gael really connected or is it just a case of lousy play by the opposition with the ball? My guess is that you haven't connected, you're not convincing the most important audience, those who've continuously voted against you.
Fine Gael can't change Ireland, only the Irish people can do that. Still people are hungry for a leadership in which they can believe, for transparency, accountability and high standards of governance but feel nothing they can do will change things.
Similarly we know intuitively that requires a lot of us to take responsibility for voting in successive administrations despite evidence of corruption, bribery, tax evasion, dishonesty, clientelism, cronyism, and perjury.
Then why offer people who feel this way a tweedle dum tweedle dee coalition that will limp along before the next Fianna Fail cycle? Why not ask for a commitment to support you for fifteen years of transformation for three administrations?. Give people a long term credible contract in which we can believe.
That means asking for as close to single party Government as you can get and promise to deal with leadership succession naturally and in due course. Be clear ,put up posters of Haughey, Burke, Lawlor, Pee Flynn, Ahern and you know the rest. Do you want more of the same tribe? Or transform Ireland in just five seconds?
That's all it takes, five seconds..................................................................
Five seconds of epiphany when you stand alone in the voting booth facing a list of photographs. In those five seconds with a drop of ink, a pen and a promise we can leave the broken model behind and with it the tribe that took over Fianna Fail and led us to the doorstep of the international debtors prison.
I'm convinced that this is a time of remaking, of taking down and rebuilding. I'm convinced that if you can capture that essence of those five seconds, you can lead the transformation of Ireland over several governments and that a stronger, wiser and finally grown up Ireland will emerge long before the centenary of the Civil War.
Eddie Hobbs Fine Gael Ard Fheis Killarney March 20th 2010