Economic report urges ‘precautionary principle’ to be applied to fracking

Following on from the preliminary EPA report on fracking last week, a research group which has members from Leitrim have taken an alternative look at the impact of fracking from an economic point of view. The report which looks primarily at the agriculture, food, drink and tourism industries concluded that there is optimism for long-term sustainable growth in Ireland’s Agriculture and Food Industry, but that this is dependent on preserving Ireland’s reputation as a green, clean environment.

Following on from the preliminary EPA report on fracking last week, a research group which has members from Leitrim have taken an alternative look at the impact of fracking from an economic point of view.

The report which looks primarily at the agriculture, food, drink and tourism industries concluded that there is optimism for long-term sustainable growth in Ireland’s Agriculture and Food Industry, but that this is dependent on preserving Ireland’s reputation as a green, clean environment.

According to the study “There is at present insufficient independent scientific data available anywhere to make a decision on shale gas. In the meantime, the Precautionary Principle must apply. The gas will still be there in 20 years time.” It says “In the light of the temporary and relatively minor shale gas benefits, we might more sensibly use our huge potential for food export growth to pay for imported energy, along with our planned energy alternatives.” The report states that “Shale gas will be openly sold at market prices, and therefore will not, in an economic sense, substitute for energy imports.”

The report which uses secondary figures available to the public shows that the Food and Drinks Industry is Ireland’s most important indigenous industry with a turnover of €24 billion. Almost 50,000 are directly employed, with a further 60,000 employed indirectly in all regions of the country. The industry also uses 90% of the output of Ireland’s 120,000 farmers.

“The relative importance of this sector to Ireland is greater than almost all of the other EU countries. The value of exports in 2011 was €8.9 billion.”

It quotes Junior Agriculture Minister Shane McEntee who said last July “There is an increasing recognition that our economic recovery will be export-led and, in that regard, agriculture and the agrifood sector has a particularly important part to play. “When one considers that approximately 85% of Irish dairy produce is exported, an increasing proportion to emerging markets in the Middle East and Far East, one can see the enormous contribution that the Irish dairy sector can make through a significant increase in exports.

“Similarly, the Food Harvest 2020 strategy targeted an increase in the output value of Irish beef of 40% by the end of the decade. Given the sector’s strong export focus, with approximately 98% of Irish beef exports going to high-value EU markets, and the fact that it is employment intensive, that is vitally important in terms of economic recovery, job retention and creation. “This country, rightly, has an international reputation as a clean, green, high quality, innovative producer of excellent food and drink.”

The reports says it is estimated Ireland can feed 36 million people with the food it produces annually. By 2020 it is hoped this figure will have reached 50 million.

Ireland’s dairy sector, with around 18,000 producers, is a strategically important part of our national economy, with exports of €2.66 billion (2011). Ireland’s grass-based milk production is the lowest cost and the greenest producer of dairy products in the EU.

Anticipating the EU milk quota being lifted from 2015 the report quotes Cork-based dairy farmer Michael Murphy who said Ireland has the potential to quadruple it’s dairy herd, with potentially 45,000 new jobs, over the next 25 years.

Ireland’s Infant Milk Formula industry is expected to supply 20% of the world market by the end of this year, and already supplies 40% of the EU market. Three of the world’s top five formula producers, Abbott, Pfizer and Danone have their biggest manufacturing facilities in Ireland. The sector globally is growing by about 15% per annum, and this provides a strong platform for future dairy industry growth.

According to Michael Cantwell of Enterprise Ireland, the formula sector is strategically very important to the dairy sector and to the wider economy. “We are exporting close to €700m of product per annum, and using large volumes of raw materials.”

The study refers to the reports in America of adverse human and animal health effects from around the country from different shale gas plays. It questions the trust that can be placed on American water and waste reports. A vital necessity for Agriculture, and other industries including Pharmaceuticals, in Ireland is a predictable long-term supply of clean safe water. “In addition to the danger of methane migration into water supplies, many of the problems in North America have occurred due to surface spillage of waste-fluids on-site, in storage and in transport, and there is no basis for asserting that there will be no road accidents,” The Impact Research Group said. It also notes that flow back fluid could be a risk.

The writers said that effects such as noise and air pollution on farm stock must be evaluated, “it must be questioned if this is conducive to clean/green farming or the reputation of the industry nationally.”

Tamboran’s desk-top study suggests their operations might give the Republic (the equivalent of) 12 years of current gas consumption, 600 local jobs by 2025, and potential tax revenues up to €4.9bn, over a 35 year period.

Up to €4.9bn equals an average of up to €140m per annum over 35 years – this must be evaluated against the cost of adequate regulation, inspection, and the current earnings of the food, drink and tourism industries.

Employment in Tourism in the North West & Borders region alone shows over 15,000 employed, and nationally around 178,000 are employed.

The report questions whether more jobs can be gained through fracking than the expansion of the trusted Irish agricultural industry.

The report has been sent to every member of the Joint Oireachtas Committee on Communications, Energy and Natural Resources.