by Conor McCabe
The price of the licence was highlighted by Dr Seán O’Connell, a lecturer in Edinburgh University, at a public lecture in Monaghan in April 1974:
It is maddening to see Britain selling off oil-blocks for exploration at figures of £1¼ million plus while one oil company held more than 100 such blocks belonging to Ireland. And it was almost ridiculous for a company which had got oil concessions from the Irish government to sell them to other companies.
He told the audience that ‘The concessions given to the Marathon Oil Company were being constantly referred to in trade and scientific magazines as amazing, exceptional, and so on’.88 In 2008, when Marathon Oil was sold to the Star Energy Group for $180 million, it had 100 per cent control of the Kinsale Head, South West Kinsale and the Ballycotton gas fields; 86.5 per cent interest in the Seven Heads field; and a 100 per cent interest in the company’s gas-storage business. Net production from these fields was approximately 36 million cubic feet of natural gas per day. The total net proven reserves of gas was 62 billion cubic feet.89 It had sixty-one employees and paid no royalties. Those employees paid more tax in Ireland than Marathon.
In 1977, Una Claffey of the Resources Protection Group pointed out in an opinion piece for The Irish Times that the terms and conditions of the non-exclusive licences saw some Irish businessmen ‘set up front companies to give the impression of Irish involvement. [Then] without risking capital or having to prove technological expertise they carved a niche for themselves so that when it came time to allocate [exclusive] licences they were there to the fore.’90 This approach was a variation on the property speculation of the 1960s and ’70s: the purchase of large tracts of farmland surrounding Dublin and other cities which were then parked until government developmental policies regarding housing took effect and land ownership transformed into significant payouts. Speculation on land, oil, gas and mineral rights, rather than investment in actual economic activity, was one strand of the modus operandi of the modern Irish businessman – at least, those businessmen who had the ear of government policy makers. The position of the Irish businessman as an interface between foreign capital and the Irish State was the other. In 1967 it was announced that Gulf Oil Terminal (Ireland) Ltd were to build an oil terminal at Whiddy Island in Bantry Bay, County Cork. The story of that terminal, the relationship between its owners, the government and the local population, in many ways came to typify the dynamics of the Whitaker revolution and the relentless pursuit of exporters over exports.
‘GOD GAVE US BANTRY AND WE GAVE IT TO GULF OIL’91
On 6 May 1969, the Taoiseach Jack Lynch unveiled a statue of St Brendan the Navigator, ‘frozen forever in beaten and brazed copper’, in Wolf Tone Square, Bantry, County Cork, as part of the official opening of the Gulf Oil terminal at Whiddy Island. ‘Now that the profitability and feasibility of such projects as this has been so satisfactorily demonstrated by Gulf,’ said Lynch, ‘it is the government’s hope that this will encourage others to look at the natural advantages available for bulk trans-shipment not only at Bantry, but at other locations around our coast.’92 The Taoiseach said that the government ‘would be very pleased to assist industrialists concerned with industries such as petro-chemicals and refining and those who may be interested in the well-endowed facilities and advantages which such places as Bantry and Shannon Estuary have to offer, to make a full assessment of these facilities.’ The P&Q liner Orsova later brought guests on a short trip around the coast. The journalist Karl Jones was on board. He observed a Gulf Oil executive leaning over the ship’s rails and heard him say, ‘Heck, why do some people think there’s a company plot to turn this into a sludge tank. It is the loveliest bay in the world, and we aim to keep it that way.’
The crude oil terminal was situated on 350 acres which were purchased from local people on the island at a cost of £120,000, or just over £342 per acre.93 There was no harbour authority for Bantry Bay and the county council’s jurisdiction ended at the quays of Bantry itself. This meant that Gulf Oil did not have to pay any harbour or tonnage duties (which were estimated at £250,000 a year, had they been in place), nor was it answerable to any local authority.94 The company planned to construct six tankers of 300,000 tons each – at that time the largest ships in the world. The move towards supertankers was to cut back on transport costs. However, these vessels were too big for European ports. Gulf Oil needed a storage facility which could accommodate the larger tankers, and from which smaller tankers could then transport the crude oil to the company’s refineries in Europe. Hence the need for Bantry Bay and Whiddy Island. It was a short-term solution to Gulf Oil’s transportation problems; Whiddy Island was viable until such time as European ports were able to accommodate the new supertankers, or an alternative arrangement was met. ‘When Gulf identified Bantry as the ideal location in Europe for a depot it was, for many observers and critics of the oil industry, a cynical short-term route to higher profits,’ wrote Robert Allen and Tara Jones in 1990. ‘The Whiddy Island terminal would be expendable; therefore it would have to pay for itself as quickly as possible.’95
The main suppliers of crude oil to the terminal were Kuwait and Nigeria. The senior vice-president of Gulf Oil, Dr Jerry McAfee, said at a press conference in Dublin in April 1966 that the company had set three criteria in its search for a suitable site for its new terminal. It ‘had to be built alongside very deep water offering a draft of more than 80 feet. It had to be fairly near the company’s European refineries and had to be suitable for operation seven days a week and 365 days a year.’96 Bantry Bay and Whiddy Island met all these requirements. Not only that, as the Minister for Transport and Power, Erskine Childers, pointed out, Whiddy Island was ‘virtually the only location near the company’s European oil refinery in a sheltered bay with sufficient draft of water to ensure all-the-year-round operation of the huge tankers which will bring the oil 11,000 miles around the Cape of Good Hope from Kuwait’.97 And at £350 an acre, no harbour fees, and no interference from local authorities, it represented an unbelievable bargain. With Bantry Bay the Irish government held all the cards, and it had folded.
From the outset there were concerns about the environmental impact and safety of the terminal. These were brought into focus when, in March 1967, a supertanker off the coast of Britain, the Torrey Canyon, went aground on Seven Stones Rocks, 8 miles north of the Scilly Isles, just south of Cornwall. It was carrying around 117,000 tons of Kuwaiti crude oil, the bulk of which spilt into the sea, damaging nearly 200 miles of the coastlines of Britain and France. The clean-up operation was a disaster in itself, due to the type of chemicals used and counter-productive procedures such as burying the oil under beach sand and bombing the wreck from the air. The total cost of the damage caused by the spill was put at £2.9 million.98 In April 1967, at the unveiling of the plans for the Whiddy Island terminal, Minister Childers said that ‘The Torrey Canyon episode had been a timely reminder of the ever-growing need for greater vigilance’.99 However, as the Irish State had given Gulf Oil effective control of Whiddy Island and Bantry Bay, the need for vigilance had no statutory backing. Gulf Oil could do as it pleased and, not surprisingly, that is what it did.
In February 1968, a deputation from Cork County Council met with the Minister for Transport and Power, Mr Patrick Lalor, in an attempt to have the government set up a port authority for Bantry Bay. They voiced their concerns that Gulf Oil had a ‘virtual monopoly’ which ‘might tend to dissuade other companies who might otherwise investigate the possibilities of using the bay’. The deputation cited the examples of Rotterdam Europort and Milford Haven, which were able to develop off-shoot industries on the back of their respective terminals such as oil refining, petro-chemicals, plastics and fertilizers. ‘A Harbour authority was needed to promote such a development as it could sell Bantry Bay to world industry,’ they said.100 The Minister, in turn, politely received and quietly dismissed the concerns of the councillors. Within seven months the first tankers arrived at the terminal, which provided direct emplo
yment for around eighty-six men. ‘When the Whiddy Terminal is fully operational,’ wrote The Irish Times, ‘it will be run by three teams of twelve experienced oilmen and a group of twelve men will be employed on maintenance. A further twenty-four men will be employed on tugs, fourteen will be on standby.’101 It was reckoned that around twenty men would be employed in ancillary industry. With just over a hundred jobs as a result of the terminal, and with no actual revenue from the terminal itself, the boon to Bantry came first of all through the construction of the terminal, and there afterwards from the wages of the employees.
During the eighteen months of its construction, the Whiddy Island project employed nearly 1,000 people, and contributed an average of £30,000 a week to Bantry’s economy, making the town for that period one of the most prosperous of its size in Ireland. ‘Unemployment has virtually ceased to be a problem,’ wrote the journalist Dick Walsh, ‘emigration has been cut, emigrants who had been away for years have come home; shops, pubs and hotels have been opened or restored.’102 However, the locals were a lot less sanguine about the prospects offered by the terminal. ‘There’ll be a lot of unemployment when the construction is finished,’ said one of the locals to Walsh. ‘People here are keeping their fingers crossed that something else will come about.’
A pattern was forming, one that would repeat itself over the next forty years. The initial boom in construction and ancillary services caused by the arrival of Gulf Oil was followed by relatively low levels of direct and indirect employment, with equally low rates of taxation and local rate payments due from the company, which left wages, rather than secondary industry, the main contributor to the local economy. At the same time the social, economic and environmental impact of such an industrial policy helped to undermine efforts to develop indigenous industry based on the resources of the State. With regard to Whiddy Island, this was seen in the treatment of the local fishermen by Gulf Oil, and the numerous setbacks to the attempts to expand Bantry Bay’s shellfish and herring industry – one that, at its height, employed more men than the terminal.
From 1968 to 1979 there were thirty-three oil spills recorded at Bantry. On 21 October 1974 over 650,000 gallons of oil were pumped into the bay after a 16-inch valve was left open for thirty minutes by a seaman on the tanker Universe Leader, which was loading a cargo of Persian oil for a refinery in Spain. It was, up to then, the largest ever spillage recorded by Gulf Oil, and the company waited eight days until making the story public. The terminal’s stock of 20,000 gallons of dispersant was used up after four days, and one week after the spill the company said that an estimated 325,000 gallons of oil remained in the bay. The disaster led to an immediate review of procedure and thirteen new precautions were put in place to ensure that this type of accident would not happen again. ‘We are going through all other procedures asking ourselves is there some way some particularly incompetent or malicious person could circumvent something or cause something to happen,’ said Mr Herbert J. Goodman, chairman of Gulf Oil’s trading company. ‘We are going to revise our system to make that impossible.’103 The company had announced in 1972 that in the absence of a harbour authority it was required by law to ensure safety and pollution control in the bay. It had done so in order to curtail the fishing rights of local trawlermen, but when faced with the damage of the Leader spillage, it found itself amenable to outside agencies. ‘We will welcome any help from a government authority to help us to do our job better,’ said Goodman, ‘and to look over our shoulders to ensure that we are doing what we are supposed to do.’104
On 10 January 1975, two months after the Universe Leader incident, a tugboat collided with the 210,000 ton Afran Zodiac while the tanker was being prepared for open sea. One of the Afran’s side plates was fractured, releasing 115,230 gallons of heavy fuel oil into the bay. The Minister for Transport and Power, Peter Barry, immediately announced his intention to press ahead ‘with all speed to form a harbour authority or conservancy board for Bantry Bay’.105 It was finally established in October 1976. Just over two years later, on the morning of 8 January 1979, the terminal suffered its greatest disaster when the oil tanker Betelgeuse caught fire and exploded, with the loss of fifty lives. The salvage operation was delayed due to the toxic fumes which surrounded the wreckage. Over one million gallons of oil was subsequently released into the bay.
It was soon revealed that the much-heralded Harbour Authority had no power to enforce safety regulation in the bay, as the necessary legislation was never fully put in place by the government, despite having been passed by the Dáil. ‘Only three sections of the [1976 Harbours Act] have been implemented,’ wrote Frank McDonald in The Irish Times. ‘These provisions named the members of the board, gave them power to borrow money and authority to appoint officers. But the other sections, giving the board power to charge rates for the use of the bay, enforce safety and develop the area were never implemented.’106 Gulf Oil had been allowed to continue its self-regulation with regard to Bantry Bay, despite the oil spillages and safety concerns; it had been allowed to continue to use the bay essentially for free, and it did had done so with the blessing of successive Irish governments who had used the parliamentary authority of the Dáil as cover. The subsequent tribunal into the disaster found the Betelgeuse’s owners, the French company Total SA, as mainly responsible for the explosion, as the ‘seriously weakened hull was the result of conscious and deliberate decisions taken at different times by the management of Total’.107 The terminal, which was seriously damaged in the explosion, was not repaired, and in 1986 it was taken over by the State.
In his seminal book on Bantry Bay and the Gulf Oil terminal, The Ruling Trinity: A Community Study of Church, State and Business in Ireland, the Australian anthropologist Chris Eipper found direct parallels between the societal power relations which surrounded the terminal and the way that Irish society itself functioned and operated. Speaking of Bantry in the 1960s and ’70s, he observed that:
In order to compete with other countries and other areas in Ireland [the local business and community leaders] had to ‘sell the area’ to industry in any way they could. It was better, they said, and to the benefit of the whole town, to have low wages than no wages. It would seem that to these people the future could not be compromised, the plight of West Cork justified their turning the whole community into a commodity to be purchased by incoming industrialists at their own price.
It becomes clear that among the business influentials, at least, the ideology of economic development was in practice motivated by a concern with creating a favourable climate than in providing local employment as such, with guaranteeing the profits of business more than the income, living standards or welfare of the community as a whole. This is not to imply that their concern for the good of the town, the jobless and the poor, was anything but genuine and deeply felt. In fact they believed that their way was the only way the community’s welfare could be guaranteed and jobs created. But however they may have construed their actions to themselves, and however much others may have benefited from what they did, Bantry’s capitalists badly needed to consolidate and augment the foundations of the local economy and the profit-making potential of their businesses. By successfully marshalling government, religious and popular support for their interests under the banner of development, they were able, in classic fashion, to present their specific interests as general ones.108
The Whiddy Island terminal is probably the most extreme example of a multinational which entered and exited Ireland with all but the tiniest of imprints on the wider economy. The motifs which were used across the State to justify tax incentives and capital expenditure on foreign investment, however, were all there: low wages are better than no wages; modest jobs are better than none; guarantee the profits and the benefits will trickle down; either way, there is no alternative. Indeed, successive Irish governments embraced each and every one of these assumptions about Irish economic life. Even when they were presented with alternative strategies and achievable goals, they
simply offered to believe there were none, finding comfort in the realities of their assumptions, rather than in the reality which embraced them.
THE TELESIS REPORT
‘It could be argued that our incentives are too generous.’109
In July 1980, the American consultancy firm Telesis Incorporated was commissioned by the National Economic and Social Council (NESC) to undertake a review of Ireland’s industrial strategy. The objective was ‘to ensure that the Irish government’s industrial policy is appropriate to the creation of an internationally competitive industrial base in Ireland which will support increased employment and higher living standards’.110 It was part of a four-stage review which was flagged by Taoiseach Charles Haughey at the Fianna Fáil Ard Fheis in February 1980. ‘While our economic circumstances and general economic environment have changed over the past twenty years,’ he told his party, ‘The basic elements of our industrial strategy have remained almost unchanged.’ He said that ‘present policies have served us well, but we clearly need a comprehensive review of them in the light of the circumstances today’.111 The chairman of the NESC, Dr Noel Whelan, told The Irish Times that the review ‘will be a fundamental, constructively critical review of existing policies’, and that the extent of foreign-owned industry would be among the major areas of examination.112
