There is still massive flaring of gas in the nation’s petroleum industry in spite of government’s serial promises to harness and market the nation’s gas resources to reduce the negative impact of gas flaring on human health, the environment and the economy. Nigeria remains the 7th highest gas-flaring nation in the world and the highest in Africa.
The stakes are bound to go higher if government remains uncommitted to ending gas flaring. For instance, data from the Department of Petroleum Resources (DPR) and the Nigerian National Petroleum Corporation (NNPC) show that government lost N523 billion to gas flaring between 2015 and 2016. While the figures from the DPR show a N306bn loss in 2015, NNPC’s latest report put the losses at N217bn. Statistics from the NNPC also indicate that International Oil Companies (IOCs) operating in Nigeria flared a combined total of 244.84 standard cubic feet (scf) of natural gas in 2016. Besides, the country reportedly lost $14.298bn between 2008 and October 2016, being penalties for gas flaring which oil majors in the country allegedly failed to pay. Also, within this period, 55 million Barrels of Oil Equivalent (BoE) was lost and 25 million tons of Carbon dioxide emitted.
With an estimated 22.3bn scf of gas flared monthly, experts have expressed concern that the protection of the environment should be a more important and urgent objective than oil and gas production. Yet, that is far from happening. Only recently, during the 10th Annual Sub-Saharan oil conference in Houston, Texas, USA, attention was drawn to the devastating effects of gas flaring in Africa, with Nigeria used as a focal point. It was disclosed that gas flaring has resulted in the loss of 3,500mw of electricity and about $400m carbon credit value.
Altogether, from whichever angle it is looked at, there is no denying the profound negative consequences of gas flaring. More disturbing, perhaps, is the lack of political and economic will to reduce the flaring. According to the Annual Statistical Bulletin of the NNPC, Nigeria lost N173.76bn in 2014, out of which N27.23bn was lost in August of that year alone. The figure was arrived at using the Nigerian Gas Company’s price of $3 per scf, at an exchange rate of N197/1$.
Furthermore, the data from the NNPC show that the economy, within a nine-month period in 2014/2015, lost N296bn scf of natural gas to flaring in the Niger Delta. The present situation is blamed partly on the inability of government to complete projects designed to reduce gas flaring. Two of the projects are the Brass and Olokola Liquefied Natural Gas companies, as well as the $2bn Trans-Saharan Gas Pipeline designed to run from Nigeria to Algeria, with the capacity to transport about 30 billion cubic metres of natural gas from Warri in Delta State through Niger Republic to Algeria.
It bears repeating that the harmful effect of climate change is not a hoax. We recall that early last year, President Muhammadu Buhari at a climate change conference in Paris, France, pledged Nigeria’s commitment to cutting emissions by 20 percent in the first phase of the effort to end gas flaring and promote the utilisation of solar energy.
If Nigeria is to stand any chance of meeting the global deadline of ending gas flaring by 2030, the time to start is now. Will that deadline be met? It is uncertain. Last year, government announced a first Quarter of 2017 date for the commercialisation of natural gas in the country and a total flare out by 2020. The Q1 of the year is gone, with no progress reports on that plan. Even the exploration and development of new gas sources from the inland and offshore basins, which the Minister of Petroleum Resources, Dr. Ibe Kachikwu, assured the nation of last year is still work-in-progress.
Nigeria will be better off if the draft National Gas Policy, which is meant to promote a competitive business environment, becomes reality. A vision remains paperwork until it comes into fruition. Attention should be focused on stopping gas flaring, appropriate gas pricing and meeting local gas demand. It is also necessary to develop a huge presence in the international market.
We, therefore, urge government to quicken measures that will end gas flaring. This should run side by side with supporting efforts by both private and public investors, with appropriate interventions that will make our environment safe from the socio-economic hazards of gas flaring. Government should fine-tune all institutional, legal, regulatory and fiscal policy frameworks that impede efforts to end gas flaring in the country. All IOCs should be made to adhere strictly to such laws and regulations.