Meanwhile, In Mayo

at

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A still from gas flaring at at Shell E&P Ireland’s Corrib gas plant in Co Mayo last New Year’s Eve

Yesterday.

At Dublin District Court.

Shell E&P Ireland Ltd pleaded guilty to breaching two counts of the Environmental Agency Protection Act during “flaring” tests last New Year’s Eve.

It was fined €1,000.

Further to this.

Shell to Sea writes:

Yesterday, at Dublin District Court, Shell were fined €1,000 after pleading guilty to causing light and noise pollution from gas flaring at Bellanaboy refinery last New Years Eve. The prosecution was brought by the Environmental Protection Agency (EPA) following complaints from people living around the Bellanaboy refinery.

The €1,000 fine is estimated to be 65 seconds worth of current Corrib sales revenue after Vermilion, who have an 18.5% stake in Corrib gas, recently stated that Bellanaboy had reached “full plant capacity.

It is estimated that Corrib Gas sales revenues have totalled over €240 million so far this year, while no tax has been paid.

It is widely accepted that no or minimal tax will be paid by the developers of the Corrib Gas Project to the Irish State.

Former Managing Director of the Corrib Gas project, Brian O’Cathain previously stated in 2010 “That Corrib will never pay tax“. While a Vermilion investor profile estimated it would be seven years before any tax is paid.

Shell to Sea spokesperson Maura Harrington stated “We’ve seen again lately how subservient the State has become to powerful corporations. Despite making almost ¼ billion euros so far this year from our natural resources, Shell will have a 0.000% tax rate for many years to come.”

Anyone?

Shell fined for ‘noise and light pollution’ Bellanaboy (Connaught Tribune)

Related: Corrib will pay little or no tax: who is to blame? (William Hederman, Irish Oil and Gas, March 8, 2013)

45 thoughts on “Meanwhile, In Mayo

  1. dav

    like he all ireland the people of mayo lost this one, which is a pity as the country would have been all the better for beating shell.

  2. Nigel

    ‘It is estimated that Corrib Gas sales revenues have totalled over €240 million so far this year, while no tax has been paid.’

    Welp.

      1. ahjayzis

        The plant that’s extracting our gas?

        I don’t know.

        But it’s still our gas. And we make not a fupping cent from it. Not even a paltry cut off the top.

        But yeah, poor Royal Dutch Shell.

  3. Fact Checker

    Its tax bill will be greatly reduced because it will be able to write off the exploration and terminal construction costs against tax.

    This is (conceptually) very similar to what most other businesses can do. Only for most businesses the gap between investment and payoff is much shorter.

    In the Corrib case the final cost was vastly in excess of what was anticipated at the outset of the project. If this (and <$50 oil) had been in the projections at the start it might never have been even started.

    Anyway, tax is liable on PROFIT, not turnover or assets or anything else. This is something a lot of people struggle to get to grips with.

        1. dav

          mind “explaining” how it works in nigeria?? Shell sure have done well there, with their “profit” for the deaths of natives.

    1. Joe Small

      It makes sense that a company not pay taxes on its losses but only its profits. I hope we find more gas off the Irish coast so we can stop the farce of burning turf for energy. It amazes me how few people object to that.

    2. ahjayzis

      “Anyway, tax is liable on PROFIT, not turnover or assets or anything else. This is something a lot of people struggle to get to grips with.”

      That’s kind of the problem.

      Here, have untrammelled access to our natural resources for free. Pay us a few cent when you make a profit.

      Because it’s very hard for massive, massive multinational corporations to evade registering their profits, right?

      It’s a completely supine attitude we have, and a million times more generous than other countries who demand a percentage of all sales.

  4. Kolmo

    The nexus of nonsense strikes again…
    We pay many taxes, directly and indirectly, we should be proud to pay taxes as it is a real indication of our participation in our nation/society as citizens, we should expect hugely profitable non-national corporations using our country to make profits to also contribute and in return the State to protect the interests of the citizen and aspire to provide civilised state services, it’s completely arseways. Hard not to be mad.

    1. Rob_G

      If it cost them three and a half billion in exploration costs (as claimed above), then they haven’t made any profits yet to be taxed on…

      1. Kolmo

        Are these exploration specialists with many years in the business drilling for oil on Mars, seems like a massively under-estimated risk…3 billion?

  5. Increasing Displacement

    Can we not tax them and let them make money back at the same time no?
    We know they’ll make a fortune in the end.

    1. Fact Checker

      It depends.

      There may more or less gas there than anticipated. The wholesale price will fluctuate too over time.

      If they are profitable after all relevant deductions have been exhausted then they will pay corporation tax.

      1. AssPants

        I think the problem for many people is that the R&D can account for massive deductions; which leave little profit, if any, liable to Corporation Tax. Also note, the starting rate for CT is 12.5% as opposed to 20% for PAYE workers whom incur travel and similar expenditures to fulfill their occupation.

      2. ahjayzis

        If I build a factory and make my *OWN* product, paying for my raw materials and manufacturing – I pay corpo tax from day one.

        These guys move into the country, build a plant and sell OUR natural resources, and pay nothing until their costs are recouped? And that’s good business for the state?

        1. Fact Checker

          No you won’t.

          You’ll pay corporation tax when you make a profit.

          Many firms are born, live and die never paying any corporation tax because they only make losses.

  6. Daisy Chainsaw

    The fine was a grand? Sure that wouldn’t cover a round of drinks for their security staff from the local garda station!

  7. Allen

    So based on the comments here Businesses shouldn’t pay any tax until they recoup their entire investment. Interesting concept

    1. Cian

      I assume they do pay tax. Their payrole last year was €25m; so probably €6-8 million went on employer and employee taxes.

      1. Fact Checker

        VAT is also paid on all sorts of purchases, excise duty on fuel as well.

        I presume they pay business rates too which is essentially a tax.

        To argue that the firm does not pay any tax is absurd.

    2. Observer

      It is unusual for companies not to be able to write off capital expenditure against future earnings.

      Any other regime creates a massive disincentive to actually building anything.

      By the way, why hasn’t that huge oil or gas rig in Dalkey not happened yet?

  8. Peter Dempsey

    Anti-Shell sentiments are very popular on Rabble. Cian and Fact Checker would be savaged if they repeated their comments on Rabble. Actually I don’t think that Rabble really approve of business at all.

    1. ahjayzis

      I don’t think it’s anti-Shell to suggest we’ve struck a ridiculously bad deal that sees the Irish state earn nothing from Irish natural resources.

      1. Fact Checker

        What you are suggesting is a ROYALTY arrangement which is a tax on production (irrespective of profitability).

        There is also the whole security of supply thing.

        Until Corrib started flowing Ireland’s electricity supply was essentially at the end of a long line of pipes stretching to Russia. There are all sorts of things that can disrupt this.

        Now, in the event of some geopolitical or natural emergency we can keep the lights on in a way that peat bogs and wind turbines simply cannot.

        1. Maura Harrington

          No we can’t keep the lights on! WE no longer have anything to do with it because Ray Burke and Bertie Ahern handed over ownership and control of natural resources to private corporations – plus Europe has equal call on Corrib or any other reserves.
          Digest the following:
          (i) the terms and conditions for oil and gas exploration and development are fiscally set
          (ii) the Finance Act changes every year to lesser or greater degree
          (iii) our constitution precludes any constitutional challenge to any Finance Act
          (iv) the current terms derive mainly from the 1992 FA – Bertie Ahern copper-fastened Ray Burke’s Sept 1987 abolition of 50% state equity and 8-16% royalty payments and further reduced the Corporation Tax rate from 50 to 25%; he also introduced Frontier Licensing which allowed oil companies to effectively sit on acreage for up to 21 years with minimal actual exploration (any tweaking of terms since has been largely cosmetic); it is a fact that, prior to his unilateral dismantling of the Keating terms, Burke met with oil company people in the absence of any of his civil servants
          (v) the first licence applied for following the ’92 FA contained the blocks which yielded Corrib
          (vi) Burke was adjudged to have accepted brown envelopes to facilitate bad planning; Ahern trails a stream of question marks in his wake

  9. Bill

    Shell has spent a whole bunch of money on this, so much so that the Irish government owes them back for the massive 10 plus year delay in getting this project going. That is the reason they are paying no tax. Corrib is due to be empty by now it’s so overdue. Was supposed to start in 2005

    1. Maura Harrington

      Where can one possibly start in reply to a Bill comment! The Irish government owes THEM back for the delay (12 years actually, was scheduled to be in production end 2003) – a delay caused by THEIR bad planning and general fupp ups!!!

      I repeat, the reason Shell and all other oil companies will pay no or minimal tax is because, in September 1987, Ray Burke abolished the 50% state equity and the 8-16% royalty regime set in place by Justin Keating.

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