New Frontiers #2: Energy Infrastructure

AGAs_LNG-terminal

This is the second in a short series of posts about new sites of contestation that are emerging outside of the city – the usual focus for Dublin-based activists and social movements. While these sites of contestation are outside of the city, this doesn’t meant that they aren’t intimately connected with the city. Just think about where we get our food, our electricity, our water, or our clothes. The possibility of urban life has always relied on the transformation of extra-urban life (transformations in ‘rural’ life through intensive production, manufacturing, extraction, and distribution). This is intensifying today even within the island of Ireland. There are two main aspects to this:

First, we are seeing the opening up (and consolidating) of new frontiers for the extraction and processing of water, energy, waste, and food, which are often connected to particular models of FDI-led economic growth (e.g. energy for data servers) and big commercial interests (e.g. beef and dairy industry). While opposition campaigns tend to focus on local environmental and social impacts the consequences of such developments are more wide-ranging.

Second, they involve new relationships between financial institutions and investors, global corporations, and national and European governments, that are often opaque, highly technical, and thus removed from any meaningful public debate or democratic process. The combination of planning laws, financial instruments, large-scale engineering, and European environmental regulation, renders decision-making in these areas not just highly uneven but often times arbitrary, with private investors and commercial interests usually benefitting from this murkiness. One key area in this regard is energy infrastructure – the power plants, gas pipes, shipping terminals, electricity grids, etc. that extract, transport, process and distribute energy to satisfy the needs of the economy, all of which demands new flows of finance capital, begging the basic questions: who/what is shaping these developments, and who is benefitting?

We recently did an online course with the ‘Debt Observatory in Globalization’ (ODG) called ‘Energy for the EU: Challenging Cross Border Cooperation‘. The short course covered the recent trend towards financialization of energy infrastructure, and the generation of illegitimate debt – basically the growing role of financial institutions (banks, investment funds) and global fossil fuel corporations in shaping the direction of our energy futures (not away from fossil fuels towards more democratically managed energy systems, but on the basis of short-term, high risk investments and profit-maximization).

As part of the course we had to do an assignment based on a new energy infrastructure project in our country (there were students from two dozen countries in the EU takin part). We had never heard of the Shannon Liquefied Natural Gas Terminal (most people probably haven’t) but after a small amount of research we soon learnt about its place in a wider, European strategy for energy (gas) security, how this functions to channel (public) money from the European Investment Bank into a high-risk, private-public partnership, and the almost complete lack of public knowledge and debate about the consequences of such developments. We also learnt about local opposition to the development and how this ties into similar resistance across Europe to new energy infrastructures – from gas terminals to vast networks of gas pipes. Read more about it below.

What is the Shannon LNG Terminal?

The Shannon Liquefied Natural Gas (LNG) Terminal is the first LNG terminal to be developed in Ireland. Liquefied natural gas is natural gas that has been turned into a liquid form for ease of transport – mainly for transport over sea in the absence of overland gas pipelines. LNG Terminals are a vital point in this process as they receive natural gas in liquid form, turn it back into gas, and then introduce it to a gas pipe network. This has all became possible in Ireland with the building of a natural gas pipeline connecting the West of Ireland with the East of Ireland (and ultimately the UK) in 2002. The pipeline crosses the Shannon River 25 km from the site of the proposed terminal.

Site-location

The Shannon LNG Terminal was first proposed in 2006 by Shannon LNG Ltd., a company that was originally owned by Hess LNG, a subsidiary of the US multinational Hess Corporation, one of the world’s leading fossil fuel companies. Hess was granted planning permission for the terminal in 2006 – the first project to be “fast tracked” under the 2006 Strategic Infrastructure Act. The terminal was to be constructed on 281 acres of 600 acres of Shannon Development owned land between Tarbert and Ballylongford, Co Kerry, in the South West of Ireland.

Initially, the Shannon LNG Terminal was a private development backed by the local authorities and the national government keen to secure energy supplies (Ireland is dependent on the UK for natural gas) and to provide jobs in a relatively marginalized part of the country: Shannon LDG claimed it would create around 650 jobs in construction and about 100 full-time positions when operational. Unsurprisingly, politicians from across the political spectrum emphasized the need for jobs and attracting FDI, criticizing the ‘unnecessary’ bureaucratic hurdles that stood in the way of the ‘win-win’ development (Irish Examiner)

Despite being granted permission for the development, Shannon LNG was not required to establish an emergency plan for the proposed development and no marine risk assessment was completed. In January 2010, the European Commission also declared that the rezoning of the land for the proposed LNG terminal from ‘Rural General’ and ‘Secondary Special Amenity’ should have been subjected to a Strategic Environmental Assessment (SEA) as per European legislation (Irish Times). This all reflects a now familiar story of local and national authorities combining to attract foreign direct investment despite ‘pesky’ contraventions in planning and environmental law.

Shannon LDG spent more than €67m trying to progress the project but never made it to the point of construction. It was not, however, the slow process of legal obligation that strangled the project but an unintended consequence of the development on national energy prices. On November 29, 2011 the Irish Energy Minister, Pat Rabbitte, announced in Parliament that if the Shannon LNG Terminal came on line gas prices would actually rise, not fall. This was because the Shannon LNG Terminal would result in the interconnector gas pipeline with the UK becoming redundant (a ‘stranded asset’). The interconnector is owned by Ervia (formerly Bord Gais), a state-owned utility, meaning that the costs of maintaining it would continue to be borne by Irish customers. For this reason, Ireland’s Commissioner for Energy Regulation (CER) told Shannon LNG it would have to pay a €10m tariff per year towards the operation and maintenance of gas interconnectors with Britain – this led to legal wrangling and ultimately delays to the project (Irish Examiner).

Opposition

The “Kilcolgan Residents Association”, representing nearby residents of the proposed LNG terminal and people with close family and economic ties to the area, was set up in 2006 in response to the proposed development. Local residents in Kilcolgan, the area where the terminal is slated to be built, were initially targeted by Shannon LNG and local politicians through a marketing campaign – something similar to what happened in Rossport with the building of the gas refinery. But fears about the safety of the gas terminal remained. The residents began to inform themselves about the development and concluded that the decision to pursue the terminal was being led by a large, private company (Shannon LNG) based on little more than the availability of land in the area and without the necessary strategic assessments (which is contrary to EU legislation). The “Kilcolgan Residents Association” thus submitted a recommendation calling for the rejection of the planning application by Shannon LNG due to, among other things, safety, environmental, economic and residential amenity grounds.

Shortly after this, the residents group expanded into ‘Safety Before LNG’, a campaign group representing people from both Kilcolgan and beyond. The group includes ‘Friends of the Irish Environment’ (a network of conservationists and environmentalists committed to protecting Ireland’s environment by lobbying for strict implementation of EU law in Ireland), individual politicians (such as MEP Kathy Sinnott), and even Pierce Brosnan, who along with his wife Keely is part of the California Coastal Protection Network (a non-profit environmental advocacy organisation based in the United States, which undertook the successful campaign to stop the largest mining company in the world, BHP Billiton, from building a massive offshore LNG import terminal off the California Coast). ‘Safety Before LNG’ advocated responsible strategic siting of LNG terminals in areas which do not put people’s health and safety in danger – in that sense it focused on local environmental and social impacts. In response to Pat Rabbitte’s admission that the Shannon LNG Terminal would result in increased prices for Irish citizens, the group said: “Shannon LNG is hoping to make millions of euro profits every year with state support at the consumers’ expense at time of increasing fuel poverty. From every angle looked at, be it environmental, safety, strategic planning or economic, the Shannon LNG project defies logic and is the wrong project in the wrong place and is against the strategic national interest.” (Irish Examiner).

European Energy Policy and the Future of Shannon LNG

In early 2016, Hess sold its share of Shannon LNG at a time when it was experiencing sharp declines in revenue and share price due to the falling cost of oil (Irish Independent). A new owner has come forward but their identity is unknown and their plans for the long-delayed development are not yet clear. Shannon LNG’s assets include options to develop land owned by the Shannon Group (formerly Shannon Development) and planning permission for the terminal.

Recent changes in Europe’s energy policy, however, look set to resuscitate the stalled project. In late 2015, the proposed Shannon LNG terminal was included on the European Commission’s ‘Projects of Common Interest’ (PCI), following lobbying by Shannon LNG. This list of over 200 energy infrastructure projects around Europe identifies those developments considered to be of strategic interest for the EU – in terms of increasing energy security. This is largely the result of continuing uncertainty surrounding gas supplies from Russia and the Ukraine. Without steady supply of natural gas flowing from East to West through pipelines, the EU is turning towards other sources of natural gas which will require costly infrastructures. The Shannon LNG has been identified as a strategic hub for Europe due to its location on the western Atlantic seaboard – receiving liquid natural gas from America, via container ship, processing it, and then distributing it across Ireland, the UK, and ultimately into Europe through a network of new and existing pipelines. Placing the Shannon LNG terminal in the context of the EU’s overall energy strategy now changes the entire character of the project (and the likelihood of it being completed) as the reasons for its development are no longer just about regional/national development, but European energy supply and security.

Gas_pipelines_that_supply_Europe_en

Concretely, being placed on the list of PCI means that the Shannon LNG Terminal is now eligible for EU funds totaling €5.35bn and accelerated planning and permit granting. According to Irish MEP Sean Kelly: “The Shannon LNG project was cited by the European Commission as a future strategic hub for Europe’s gas supply in recent months. That means it is now eligible for low cost financing from the European Investment Bank (EIB). The Commission is focused on supporting gas hubs such as this one which, when combined with a fully interconnected and well-functioning European market, can increase supply security across the Union and allow Shannon to become a key gas import point for the EU.” (Limerick Leader).

What is wrong with the Shannon LNG?

What these developments illustrate is that projects like the Shannon LNG terminal do not just have implications for local residents and communities. European energy policy and financial institutions (the EIB) are re-shaping our collective energy futures and this convergence materializes in energy infrastructures like the Shannon LNG Terminal – which is what makes them so significant. Across Europe, other LNG terminals and vast networks of gas pipelines are being developed in similar fashion. It is important to pinpoint the longer term systemic problems they represent.

First, investing in costly gas energy infrastructure effectively locks us in to the use of natural gas for the coming decades. Thus, besides the immediate, local environmental impacts and risks, the consequences in terms of the continuing extraction and burning of fossil fuels (natural gas) are much more extensive: as soon as gas infrastructures are build, they stimulate the continuous exploration and drilling of natural gas (both conventional and unconventional). A secondary consequence of this is that an energy system set up for gas will undermine the potential for clean energy investment and development (wind, tidal, biomass) which requires entirely different forms of infrastructure.

Second, the financing of these infrastructure projects involves risky public-private partnerships in which most of the risk is carried by us, the European public. The financial difficulties of Hess and their decision to pull out of the project illustrates just how risky such projects are. It now looks likely that instead of allowing a private company to carry the burden of that risk, the EIB and Irish government is going to step in to carry that risk. The new owners of Shannon LNG will only be too happy to receive low-interest loans and direct investment from the EIB to develop a strategic gas terminal in Ireland. More than likely the company will be one of the big fossil fuel players keen to diversify into natural gas with the prices of coal and oil so low. And if the project proves a failure? The private company can walk away with minimal losses and the cost in financial, social and environmental terms is left to the public – whether in Kerry, Ireland or Europe more generally. In the case of the Shannon LNG Terminal, the development will also lead to increases in gas prices for Irish citizens. The likely outcome of this will be the further undermining of the state gas utility (Ervia), strengthening already existing calls for its privatization. Crucially, all of this is being worked out without very much public knowledge or scrutiny. In fact, the identification of the Shannon LNG Terminal as a ‘Project of Common Interest’ not only opens up flows of public money into the project but also enables the development to benefit from ‘fast-tracked’ planning and permits.

Something as seemingly banal and ‘technical’ as a Liquefied Natural Gas Terminal can help us to trace the ways in which European energy policies and flows of finance capital our shaping our energy futures so dramatically – the seemingly ‘technical’ nature of the infrastructure is precisely what obscures the political, economic and energetic relationships that are emerging and congealing without us even knowing about them. So what can social movements do?

Across Europe opposition groups like ‘Safety before LNG’ are emerging to block and oppose similar kinds of energy infrastructure projects. Many of these begin with local campaigns but are quickly able to draw on wider resources, tactics and experiences, that have been hard won from previous and ongoing struggles and movements. Ireland is a good example, where the long, drawn out struggle in Rossport over the gas refinery has not only raised awareness amongst activists and communities about infrastructure and energy, but also produced knowledge to be shared and developed – about the workings of environmental law, the tactics of fossil fuel companies, the response of the state, the value of direct action, organizing alliances, and so on.

At the same time, the circulation of knowledge and struggles does not happen automatically. Making connections and alliances involves work and imagination. The aim is not just to increase numbers but to help campaigns escape their familiar identification as merely ‘environmental’ or ‘local’ – a strong tendency in the media, and one that is not always helped by campaigns that place an emphasis on technical disputes over environmental assessments or aesthetic concerns (as seen in opposition to fish farming developments).  Efforts to open up new fracking frontiers in Leitrim and Cavan, for example, can be connected to EU energy policy and investments in gas supply infrastructures, such as the Shannon LNG Terminal. Energy is always part of a wider network that connects geographies, finance, state and private interests. Opposition must also operate on this basis: not just focusing on the point of extraction, but on the wider political and economic relationships that enable certain forms of energy to dominate. Similarly, those who campaign for clean energy (wind, biomass, tidal), including larger environmental NGOs who benefit from funding, need to recognize that investments in gas energy infrastructure directly undermine the possibility of these cleaner energy systems coming into being. If the Shannon LNG is built, sinking millions of EU public money into a future locked in to natural gas, the potential to foster alternative energy futures that are not only environmentally sustainable but also democratically owned and managed, becomes instantly reduced.

 

 

 

 

 

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4 comments

  1. Very interesting stuff.
    Seems like the citizen always pays the bill-while the entrepreneur gambles on energy security issues between nations who frequently fall out with each other.

  2. Good report re natural gas and the role of international finance and centralised opaque decsison-making — but you have blind spot. Wind energy development (and soon solar) is subject to the same anti-democratic processes and natural asset grabbing imperative. The NREAP which put industrial wind energy at the centre of Irish policy was written by a private company, Mainstream Energy, as boasted by its CEO Eddie O’Connor. Irish RE policy and fiscal and other supports foster large scale renewables owned by mainly foreign elites that feed electricity into a managed transmission grid part of a wider EU mega grid. Consumers pay for this obsolete technology and soon to be stranded asset and the Co2 reductions bought by 20% wind penetrations are risable. Distributed, democratically owned, wind, solar, AD and pyrolysis plants feeding electricity and heat and gas into local distributed smart grids (with top up and spin only to residual transmission grid) would ensure a cheaper, more resilient and more equitable model for transition to low carbon world. Local opposition to wind farms is characterised by the unquestioning media, and many environmental academics and activists sadly, as small minded NIMBY ism. You are too fond of the truth surely to accept that spin.

    1. Hi Emer. Thanks for the comment. Your point is well-taken but the blog post was specifically about the Shannon LNG terminal. Energy infrastructure encompasses many forms of energy – far too many to cover in a short blog. We are intending to write another one about wind energy – which poses some similar, and some different questions. Have you much involvement either with community groups opposing wind turbines, or those advocating a greater community stake in our future energy systems? If so we’d be interested to hear more.

  3. […] and the theory and politics of the commons. He is also part of the Provisional University, where a first version of this blog post […]

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