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| Credit – www.guardian.ng |
Nigeria is one of Africa’s top oil
producers and largest holder of natural gas reserves with about 187 Trillion
Cubic Feet (TCF) of proven gas reserves and 600 TCf of unproven gas
reserves[1]. This translates to the fact that Nigeria possesses huge resources,
sufficient to cover both domestic and international demand alike. However
Nigeria’s potential and ability to harness and exploit the use of gas in its
energy sector is crippled many factors including (and not surprisingly)
political bureaucracy.[2]
producers and largest holder of natural gas reserves with about 187 Trillion
Cubic Feet (TCF) of proven gas reserves and 600 TCf of unproven gas
reserves[1]. This translates to the fact that Nigeria possesses huge resources,
sufficient to cover both domestic and international demand alike. However
Nigeria’s potential and ability to harness and exploit the use of gas in its
energy sector is crippled many factors including (and not surprisingly)
political bureaucracy.[2]
Gas flaring is the burning of natural
gas produced in the process of exploration and extraction of crude oil from the
ground for the purpose of disposal of gases that are not useful (waste gas) or
because it is difficult and uneconomical to store and/or transport.
Unfortunately however, Nigeria flares 17.2 billion m3 of natural useful and
waste gas alike per year which is equivalent to approximately one quarter of
the current power consumption of the African continent.[3]
gas produced in the process of exploration and extraction of crude oil from the
ground for the purpose of disposal of gases that are not useful (waste gas) or
because it is difficult and uneconomical to store and/or transport.
Unfortunately however, Nigeria flares 17.2 billion m3 of natural useful and
waste gas alike per year which is equivalent to approximately one quarter of
the current power consumption of the African continent.[3]
Factors responsible for gas flaring
include among others:
include among others:
1. Fiscal uncertainties
2. Poor Energy market
3. Lack of
infrastructure
infrastructure
4. Unenforceable Anti
flaring laws and regulations
flaring laws and regulations
EFFECTS OF GAS FLARING
Gas flaring has been established as the
number one culprit for global warming according to the Intergovernmental Panel
on Climate Change (IPCC)[4]. Climate change also exposes us to various
health hazards ranging from cancer, respiratory problems, food poisoning to
mental disorders caused either directly or and indirectly arising from living
close to gas flaring sites. Gas flaring has also been proved to be directly
connected to the death of the agricultural sector due to chronic
atmospheric contaminants which acidify the soil and atmosphere. The impact of
pollution caused by gas flaring has spiralled into a vicious and poisonous
cycle which has a catastrophic ripple effect on the economy including loss of
funds and poor quality of life.[5]
number one culprit for global warming according to the Intergovernmental Panel
on Climate Change (IPCC)[4]. Climate change also exposes us to various
health hazards ranging from cancer, respiratory problems, food poisoning to
mental disorders caused either directly or and indirectly arising from living
close to gas flaring sites. Gas flaring has also been proved to be directly
connected to the death of the agricultural sector due to chronic
atmospheric contaminants which acidify the soil and atmosphere. The impact of
pollution caused by gas flaring has spiralled into a vicious and poisonous
cycle which has a catastrophic ripple effect on the economy including loss of
funds and poor quality of life.[5]
PUTTING AN END TO GAS FLARING IN
NIGERIA.
NIGERIA.
Besides the visible decay on the
atmosphere and agriculture in the oil and gas rich regions and on a
national level, the issue of the obvious and avoidable large scale wastage must
also be tackled.
atmosphere and agriculture in the oil and gas rich regions and on a
national level, the issue of the obvious and avoidable large scale wastage must
also be tackled.
Attempts at curbing or/and putting a
final stop to gas flaring in Nigeria have been frustrated by the Oil Companies
who simply ignore the appeals of the federal government on the issue.[6] It is
therefore trite to say that the efforts of past government regimes in putting
an end to gas flaring has been dubbed futile. It is also evident that what is
needed is not a change in laws, or mere huffs and puffs, but a change in approach
and attitude of the Federal Government and oil companies in order to achieve
better results as follows:[7]
final stop to gas flaring in Nigeria have been frustrated by the Oil Companies
who simply ignore the appeals of the federal government on the issue.[6] It is
therefore trite to say that the efforts of past government regimes in putting
an end to gas flaring has been dubbed futile. It is also evident that what is
needed is not a change in laws, or mere huffs and puffs, but a change in approach
and attitude of the Federal Government and oil companies in order to achieve
better results as follows:[7]
1. Accountability: Oil
companies must be held accountable for the amount of gas flared. In order to
achieve this, a proposal has been made for the adoption of “a satellite based
tracking system” which will monitor the amount of flared gas to among other
things put a commensurate cost to the revenue loss arising from flared gas
and estimate fines due to be paid by operators. The tracking system is also supposed
to be able to calculate the amount of unpaid fines by facility owners[8].
companies must be held accountable for the amount of gas flared. In order to
achieve this, a proposal has been made for the adoption of “a satellite based
tracking system” which will monitor the amount of flared gas to among other
things put a commensurate cost to the revenue loss arising from flared gas
and estimate fines due to be paid by operators. The tracking system is also supposed
to be able to calculate the amount of unpaid fines by facility owners[8].
In addition, the Petroleum
Industry Bill (PIB)(2012), which has been in the works for a number of years,
seeks to address the issue of gas flaring. In particular, the Bill provides
for gas flaring measurement, as well as a specified number of days for
which a permit would be issued to an applicant company to flare gas, and the
requirement for a gas flaring plan to be submitted by all oil and gas operating
companies.
Industry Bill (PIB)(2012), which has been in the works for a number of years,
seeks to address the issue of gas flaring. In particular, the Bill provides
for gas flaring measurement, as well as a specified number of days for
which a permit would be issued to an applicant company to flare gas, and the
requirement for a gas flaring plan to be submitted by all oil and gas operating
companies.
On another note there is a
recommendation that every oil company must be required to identify and outline
the measures it has put in place to ensure that environmental damage from gas
flaring is minimal. Such policies have been adopted in the Netherlands and Norway
which have gas-flaring policies which force oil companies to cater for the
environment where they carry out exploration and exploitation of oil and gas.
Such policies will directly impact on the gas flaring by oil companies and
possibly put an end to gas flaring. [9]
recommendation that every oil company must be required to identify and outline
the measures it has put in place to ensure that environmental damage from gas
flaring is minimal. Such policies have been adopted in the Netherlands and Norway
which have gas-flaring policies which force oil companies to cater for the
environment where they carry out exploration and exploitation of oil and gas.
Such policies will directly impact on the gas flaring by oil companies and
possibly put an end to gas flaring. [9]
1. Passage and
enforcement of regulatory laws: The passage of the Petroleum Industry Bill
(PIB) has been pending for a long time. Although the PIB is far from being the
perfected to put an end to gas flaring in Nigeria, it is definitely a step in
the right direction.
enforcement of regulatory laws: The passage of the Petroleum Industry Bill
(PIB) has been pending for a long time. Although the PIB is far from being the
perfected to put an end to gas flaring in Nigeria, it is definitely a step in
the right direction.
The only exceptions to the gas flaring
rule as stated in the PIB that may be granted by the Minister of Petroleum
Resources for a period not longer than 100 days include cases of start-up
operations in an oil field, equipment failure, shut down, safety flaring or due
to inability of gas customer to off-take[10]
rule as stated in the PIB that may be granted by the Minister of Petroleum
Resources for a period not longer than 100 days include cases of start-up
operations in an oil field, equipment failure, shut down, safety flaring or due
to inability of gas customer to off-take[10]
Although the PIB permits gas flaring in
the limited circumstances as stated above, the PIB will discourage gas flaring
by imposing stiffer penalties, and encouraging investments for utilising or
re-injecting gas. The PIB will also put into effect modern petroleum
legal framework and align operation of the Nigerian gas sector to international
best practices and also enhance transparency in the sector.[11] The PIB is also
focused on putting in place effective measures to ensure that the laws on gas
flaring are properly implemented such that the law will not simply ignored with
impunity.[12]
the limited circumstances as stated above, the PIB will discourage gas flaring
by imposing stiffer penalties, and encouraging investments for utilising or
re-injecting gas. The PIB will also put into effect modern petroleum
legal framework and align operation of the Nigerian gas sector to international
best practices and also enhance transparency in the sector.[11] The PIB is also
focused on putting in place effective measures to ensure that the laws on gas
flaring are properly implemented such that the law will not simply ignored with
impunity.[12]
CONCLUSION.
The Nigerian oil and gas are sufficient
to cover both domestic demand and exports. The optimum exploitation of every
last drop of oil and gas resources can be achieved although the process may be
slow, it is not impossible. The passage of the PIB will be a step in the right
direction on the journey to end gas flaring; not just for to curb economic
loss, but also to put an end to the massive destruction of the land and its
people.
to cover both domestic demand and exports. The optimum exploitation of every
last drop of oil and gas resources can be achieved although the process may be
slow, it is not impossible. The passage of the PIB will be a step in the right
direction on the journey to end gas flaring; not just for to curb economic
loss, but also to put an end to the massive destruction of the land and its
people.
The time to stop is long overdue.
However putting an end to gas flaring in Nigeria has proven to be more
difficult than anticipated by the Nigerian government. This difficulty can be
said to be prolonged by the lack of political will to put an end to gas
flaring. What is required is not the mere passage or upgrade in laws but a
change in focus and attitude of the upstream sector and the government.
However putting an end to gas flaring in Nigeria has proven to be more
difficult than anticipated by the Nigerian government. This difficulty can be
said to be prolonged by the lack of political will to put an end to gas
flaring. What is required is not the mere passage or upgrade in laws but a
change in focus and attitude of the upstream sector and the government.
By: Abimbola Laoye
Managing Partner, H.B Balogun & Co.,
References
[1] Femi Asu; Nigeria
loses N170bn to gas flaring;
http://www.punchng.com/business/business-economy/nigeria-loses-n170bn-to-gas-flaring/
loses N170bn to gas flaring;
http://www.punchng.com/business/business-economy/nigeria-loses-n170bn-to-gas-flaring/
[2] ibid
[3] GAS Flaring: The
Nigerian Experience;
http://www.nigerianobservernews.com/2015/01/10/gas-flaring-nigerian-experience/#sthash.jYIjCfU7.62dWfp3a.dpbs
Nigerian Experience;
http://www.nigerianobservernews.com/2015/01/10/gas-flaring-nigerian-experience/#sthash.jYIjCfU7.62dWfp3a.dpbs
[4]
ibid
ibid
[5]
ibid
ibid
[6] By Ifeanyi Izeze; New PIB’s Dec
2012 Deadline: Why Permit Gas Flaring At All?; http://saharareporters.com/2012/07/24/new-pib%E2%80%99s-dec-2012-deadline-why-permit-gas-flaring-all-ifeanyi-izeze
2012 Deadline: Why Permit Gas Flaring At All?; http://saharareporters.com/2012/07/24/new-pib%E2%80%99s-dec-2012-deadline-why-permit-gas-flaring-all-ifeanyi-izeze
[7] Olaseni Durojaiye; Changing
Approach to Campaign against Gas Flaring in Nigeria;
http://www.thisdaylive.com/articles/changing-approach-to-campaign-against-gas-flaring-in-nigeria/209502/
Approach to Campaign against Gas Flaring in Nigeria;
http://www.thisdaylive.com/articles/changing-approach-to-campaign-against-gas-flaring-in-nigeria/209502/
[8] ibid
[9] Aderonke Adejugbe and Bayo Onamade; Nigeria: Gas
Flaring In Nigeria: Challenges & Investment
Opportunities;http://www.mondaq.com/Nigeria/x/331578/Oil+Gas+Electricity/Gas+Flaring+In+Nigeria+Challenges+Investment+Opportunities
Flaring In Nigeria: Challenges & Investment
Opportunities;http://www.mondaq.com/Nigeria/x/331578/Oil+Gas+Electricity/Gas+Flaring+In+Nigeria+Challenges+Investment+Opportunities
[10] By Ifeanyi Izeze; op cit
[11] Emeka Ugwuanyi; op cit
[12] Aderonke Adejugbe and Bayo Onamade; op cit