Ireland should tax oil to fund renewable energy, says an ex-Shell boss
Nato advisor Hans van der Loo claims the tariff could help us fund more-sustainable options.
IRELAND SHOULD PUT a tax on imported oil to help fund the development of renewable energy, according to a former executive at oil giant Shell.
Dutch resource security expert Hans van der Loo, who serves as an advisor to organisations such as Nato and the European Commission, said that the government should take advantage of low oil prices to increase its tax take.
Speaking to Fora ahead of the Engineers Ireland Annual Conference this Friday, van der Loo, who spent eight years working as the European vice president for Shell, said the tariff could work by maintaining petrol prices for both consumers and importers.
If there is any fall in crude oil prices, he added that the savings in cost should go towards the renewable energy fund instead of a lower price at petrol pumps.
Fixed price
“(If there is a) 20 cent fall in price that fall should go to the government, not the oil companies. Citizens won’t really notice anything and it has no detrimental effect on the economy as we all keep paying the same price,” he said.
“The idea is that the price is fixed, actual cost goes down and the government creates a space to take more money which would then be spent on renewables.”
Hans van der Loo
When asked if he thought that oil companies would likely resist such a move he said, “Why would they resist? They keep the same margin.”
“If the government says crude oil has dropped again and is 10 cent cheaper, say to the operators to charge the same price as they did but pay us 10 cent more.
“It doesn’t cost (operators) anything, we are not talking about an operational drop in profits. When prices drop we could calculate how much more profit is made and guarantee oil companies the same profits as before.
“And if the prices go up, do we maintain the tariff? No, it would be unfair to the operator.”
Ireland has invested heavily in wind energy
Renewable targets
Ireland currently lags its European neighbours in the amount of power it produces from renewables. According to the most recent figures available, in 2013 about 8% of the country’s energy demands were met by renewable forms of energy, the fifth-lowest in the EU.
Share of renewables in gross energy consumption, 2013 and 2020
Ireland agreed under the European Union’s 2020 rules that 16% of its total energy needs would come from renewable sources, however several industry groups such as the National Offshore Wind Association of Ireland have claimed that Ireland could miss that target.
Van der Loo said that the tariff could stimulate investment in renewables, but said he was unsure of how much extra revenue it would bring in.
“If the government had done this while oil prices were high it would have been better. I’m not saying it would fund all of the renewable projects in Ireland, but it would have an impact.”
He said it may be possible to introduce the tariff in the future if there was a sharp rise in oil prices, or by gradually lifting the price at the pump every quarter in the hope that oil prices still remained relatively low for consumers.
However, he admitted that such a move would be unlikely to be popular with the public, saying: “I can see that, the punter always likes money in the pocket, but I think that whoever is in government could argue to sell it.
“The message is that Ireland should exploit its bio-capacity potential, it could have a much higher number of renewables than it does now.”
