Emerald Oil: Will it make us rich again?
Until recently, critics of Irish oil exploration complained that it produced a lot of guff but very little gush. But now healthy scepticism about the industry is giving way to optimism that an energy boom can play a role in our economic revival.
The oil is beginning to flow off our shores. Inland, advocates of fracking – a highly controversial technique for extracting gas – believe that untapped reserves along the border in north Leitrim could supply much of our needs for a quarter of a century. But it has also heightened fears of water pollution.
Experienced analysts now believe the odds are stacking up in favour of a thriving oil and gas industry that could provide thousands of jobs and sorely needed tax revenues.
In this rosy scenario, either Cork or Galway could turn into mini-green versions of Dallas in an oil rush.
The oil magnates point to the example of Aberdeen in Scotland. Forty years ago it was a sleepy fishing port. By the 1980s, with the North Sea oil, it was a booming energy hub.
By the middle of the last decade an estimated 140,000 people in the Aberdeen area had jobs linked to the energy industry.
The sudden surge of interest in Ireland from the JR Ewings of this world has been prompted by last year's dramatic oil strike by Providence Resources in the Barryroe oil field off the coast of Cork.
Based on drilling from an exploratory rig, the company estimated the total amount of oil in place at up to 1.6 billion barrels.
Andrew Whittock, a London oil industry analyst with Liberum Capital, said: "We know that there is oil in Barryroe, and that it rises to the surface. There have been six wells drilled there, and oil has come out of six of them. We don't yet know exactly how much."
Oil firms spend between $100m (€75m) and $200m (€151m) on each of these exploration drilling wells.
"The oil companies are not just spending that kind of money for the fun of it," says Whittock.
Exploratory wells are being placed all around the Irish coast, including, most controversially, just 10km off the Dalkey coast in Dublin Bay.
"Ireland has already had a commercial gas field at Kinsale, the Corrib gas field will produce gas soon, and we now know more about oil at Barryroe," adds Whittock.
"In all likelihood there will be more discoveries, and if this reaches a critical mass you could see an offshore oil service industry starting in Ireland. This could create thousands of jobs."
The sudden interest in oil off our shores has been further awakened by the announcement by Petrel Resources that it had found a site off the west coast with a potential of one billion barrels of crude.
Petrel is chaired by the colourful whiskey tycoon John Teeling, a man who has seen some long-term bets turn into spectacular winners.
The businessman, who is still reported to play rugby at the age of 66, hit the headlines in 2011 when he sold his Cooley distillery for €72m to the US spirit company Beam.
Now his company is hunting for oil in the deep waters of the Porcupine Basin, far off the west coast.
The snag for Petrel is that any oil is 200km from the coast and lies beneath 1,000 metres of water and under deep beds of rock.
But there is growing interest in potential far out in the Atlantic as new techniques and high prices allow companies to extract oil from areas that were once believed to be too difficult to drill. David Horgan, the managing director of Petrel Resources, told the Weekend Review: "The initial exploration used the sonar technology that was originally used by the British to find U-boats during the Second World War. This has been developed to study rock and discover oil and gas."
Horgan says old information has now been analysed using modern computer programs that are much better at detecting whether there are significant oil deposits.
"Ultimately the only lie detector in oil exploration is to drill a hole. We have known that there is oil and gas off the Irish coast for decades. It is all about finding it in commercial quantities.
"There have been wells drilled and oil has been found but this vast area has been lightly explored."
So what will the benefits be to the country if these recent finds are transformed into commercial fields?
Critics of recent government policy have warned that the potential benefits have already been frittered away, because the tax on oil finds is set too low at 25pc.
A recent report by SIPTU showed that this is one of the lowest tax takes for oil in the world, but others argue that attractive terms were necessary in order to excite the interest of oil companies.
"Even five years ago Ireland was considered an unattractive place to look for oil," says energy analyst Whittock. "If there are more discoveries Ireland can bring in more big tax revenues.
"The tax rates are not set in stone. In the future they could be increased."
It is far too early to tell whether our oil reserves could ever match those off the Scottish coast. But the North Sea example shows how an economy can be transformed.
By 2008, oil and gas production was still contributing €16bn a year to the British government in corporate taxes. That was 28pc of the corporate tax take.
This oil bonanza was credited with rescuing the British economy from the doldrums in the 1980s, and ensuring the survival of Margaret Thatcher as prime minister for over a decade.
Nobody can say with any certainty whether the oil will gush in similar fashion off our coasts, but if it does it has the potential to create huge employment.
Horgan says: "If there are just a few wells being drilled, the equipment will be brought in from abroad – from Rotterdam or Aberdeen.
"But if you have wells being put in every month it makes sense to service them locally. Then we could have our own service industry and build up our own skills."
According to Horgan, the example of Aberdeen shows how there can be new jobs in all sorts of areas – from catering for the oil rigs to hotels, shipping, construction, and health and safety training.
The local universities in Aberdeen offer specialist energy-related courses and attract students from around the world.
"If the oil industry does take off along the west coast I could see Galway becoming a major hub, because it has a good port and other decent facilities," says Horgan.
The delays to the Corrib gas field, and the high-profile campaign against drilling off the south Dublin coast, show that environmentalists are prepared to put up a fight against the oil industry.
The Dublin opponents, including Ali Hewson, fear that the bay near Dalkey will be destroyed and birds and porpoises endangered.
The protests over oil and gas exploration have been vocal. But there is likely to be a much more vigorous environmental battle if the Government gives the go-ahead to Tamboran Resources to extract shale gas along the Border through fracking.
The process of hydraulic fracturing involves the injection of highly pressurised fluids into rocks, creating cracks which increase the amount of gas extracted.
Tamboran's Irish director, Tony Bazley, told the Weekend Review that the find could provide a secure supply of energy to the country for several decades.
Supporters of fracking in the United States say it has led to plummeting gas prices, and it has raised hopes that the country will be almost self-sufficient in energy by 2035.
Bazley estimates that the Irish gas find could lead to the creation of 600 jobs and there would be 2,500 further jobs in support services.
Environmentalists fear that fracking would pose a threat to ground water, and hope that an upcoming report by the Environmental Protection Agency (EPA) will find that potential for damage is too great.
A preliminary report by the EPA found that there is a low and probably manageable risk to ground water from fracking. It said the potential impact of methane emissions and the increased risks of earthquakes were unknown.
When it comes to oil and gas exploration, government leaders will be fearful of a political backlash (the proposed Dalkey rig will have the most profound impact in Tanaiste Eamon Gilmore's constituency).
But with the potential for increased tax revenues, reduced reliance on fuel imports, and new jobs, the benefits of a new energy industry may prove too tempting to resist.