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The year began with a disaster on the south-west coast. Shortly before 1 a.m. on 8 January, the French tanker Betelgeuse exploded while discharging crude oil at the Gulf Oil terminal off Whiddy Island in Bantry Bay. The vessel broke apart and burned; emergency crews faced an immense fire at the offshore jetty, while families living on the island were evacuated. Fifty people died in the explosion and its immediate aftermath, among them French, Irish and British workers; a Dutch diver later died during the salvage operation.
Lynch remained Taoiseach throughout 1978, leading the Fifteenth Government and working with George Colley as Tánaiste and Minister for Finance. Fianna Fáil had entered office after its emphatic 1977 election victory, with enough Dáil seats to govern alone. That strength allowed it to act on conspicuous election commitments, but it also made its judgement highly visible. From 1 January, the old office of parliamentary secretary was replaced by that of minister of state, a small but meaningful reorganisation of the machinery of government.