Nigeria’s zero gas flaring policy remains largely unenforced despite decades of unprecedented human and material losses. But with oil now selling at historic lowest price, President Muhammadu Buhari’s administration is under pressure to end flaring in the country, reports Olisemeka Obeche
The Muhammadu Buhari administration has come under pressure to urgently end flaring of Nigeria’s gas resources as the dwindling oil revenue continues to take its toll on the economy. Among the high profile figures who recently raised alarm over the country’s costly gas flaring quagmire was the Senate President, Senator Abubakar Bukola Saraki.
Worried by the losses recorded by the country in terms of revenue and the environmental risk it poses for the oil producing areas, Saraki urged the management of the Nigeria Liquefied Natural Gas (NLNG) to intensify efforts to ensure that the flared gas is put to productive use. “Up till today, the area of concern is still the issue of gas flaring. What can we do by way of laws to try and see how we can completely eliminate gas flaring and provide more opportunities for more investors in that sector so that they can convert gas into something more productive,” he queried.
The Minister of Women Affairs and Social Development, Senator Aisha Alhassan, also lend her voice to the demand for quick measures to stop gas flaring. She argued that if gas was conserved for domestic use, it would save the lives of most women and children. Alhassan who spoke at a consultative forum on “Gender issues on renewable energy management and options,” disclosed that about 95,300 women die from gas-flaring pollution alone, while others suffer health complications.
Discontent over gas flaring
The discontent over flaring of high volume of the country’s Associated Gas (AG) follows a growing public awareness of the economic waste that has trailed the practice which dates back to the 1950s. Apart from Russia, Nigeria flares more gas than any other country in the world.
According to a recent statistics from the Nigeria National Petroleum Corporation (NNPC), a total of 271.38 billion standard cubic feet of gas, valued at $518.33 million, (which is about N103.6billion based on an exchange rate of N200 to a dollar) was flared in 2015 from the over 257 flow stations in the Niger Delta, despite official zero gas flaring policy. NNPC also disclosed that Nigeria lost a whooping $868.8 million, about N173.76 billion to gas flaring in 2014.
Ubani Nkaginieme, CEO of Total Support Energy Group, believes that the actual cost implication of gas flaring to the country is worse than what statistics show. “Even if we go by what the study said, that is a lot of wasted resource by any measure. If we convert just half of this wasted resource into usable energy, it will translate to over 5000MW of power and fuel for over 1million commercial vehicles every day,” he said.
Equally thought-provoking is the fact that barely one percent of the total monetary value of the gas flared in the country can be recovered through penalties as current sanction for gas flaring in Nigeria is $3.50 per 1000 standard cubic feet. According to Central Bank of Nigeria (CBN) Quarterly Statistical Bulletin, oil firms paid N670 million as penalties for gas flaring in the first quarter of 2015, while N790 million and N350 million were paid as penalty in the second and third quarters respectively.
Although the shrinking of the country’s major revenue source has forced the Presidency to begin to look for alternative streams of income, not much attention has been paid to the multi-billion Naira gas resources being flared quarterly across the over 257 flow stations in the Niger Delta region.
Those thinking that Federal Government’s lip service to its zero gas flaring policy could end under the Buhari administration were obviously taken aback when top officials of the Nigerian Petroleum Investment and Management Services, (NAPIMS) and the National Petroleum Development Corporation (NPDC) disclosed at a budget defence in February that the administration is now working towards ending gas flaring in the country by 2020.
To most observers, it was shocking that the fund-starved Buhari government was not in a hurry to take decisive action on a notorious business practice that had not only cost the nation trillions of dollars development funds, but inflicted pollution on environment with negative impacts on health and socio-economic lives of the people. “We have waited for too long for this to happen and now that the country needs such money most, Buhari should summon the political courage to take decisive action on this savage destruction of our gas resources,” Prisca Ugwu, an energy expert says.
However, Comrade Abiodun Aremu, General Secretary of the Joint Action Front (JAF), a trade union group, insists the Buhari government is also prevaricating on enforcing the zero gas flaring policy because of the country’s dependency on the capitalist west who owns the powerful firms that are involved in the gas flaring activities. According to Aremu, the global politics of energy and environment management is skewed in favour of the capitalist exploitation for profits for big businesses. “Beyond the lip service commitment to addressing such glaring environmental hazards, successive regimes, including the Buhari government cannot confront these hazards so long as the country depends on the multinational and big businesses to determine the cash inflow and capital flight in the running and draining of the Nigerian economy,” Aremu said.
True to Aremu’s claims, NNPC’s 2014 Annual Statistical Bulletin (ASB) listed Joint Venture companies comprising the multinational oil companies as the worst offenders in terms of quantity of gas flared. For instance, Chevron Nigeria Limited (CNL) was listed as the worst gas-flaring offender among companies with 53.6 billion SCF burnt in 2014. Following in the order was the Shell Petroleum Development Company (51.92 billion SCF); Mobil Producing Nigeria (42.86 billion SCF) and the Nigeria Agip Oil Company and Addax Petroleum Company (35.79 billion SCF and 35.6 billion SCF respectively).