Can gas flaring end in Nigeria?

gas flaring

By Lakinbofa Goodluck

Nigeria seems to have forgotten about the impact of gas flaring on the environment and the Nigerian society in its entirety. Gas flaring is the burning of natural gas that accompanies crude oil when it is pumped up from the ground. The beginning of gas flaring in the country is as old as the start of oil exploration activities in the country. The government was obviously unbothered about gas at the early stage of oil exploration in the country as revealed in the first Petroleum Act of 1969. There have been many legislative efforts to force the end to gas flaring in the country to no avail. Fines have been instituted for oil companies as a form of deterrence for flaring but not much has changed since.

The health and economic risks of gas flaring are enormously detrimental to our nation yet it is amazing that it still goes on unabated in the country. Studies have shown that gas flaring leads to the emission of substance that can cause diseases such as cancer, pneumonia and disability. The oil companies have often put up a disposition of helplessness as if they cannot help but flare the gas. Theirreasons are often tied to the weak or complete absence of alternatives to flaring, and an economicallydefective framework.Flaring gas is more economically beneficial than storing it. Some commentators have even concluded that oil companies would rather flare and pay the associated fine than store up the gas in the well because the fines are often inconsequential compared to the cost of storing it. Besides the current penalties for gas flaring in Nigeria officially stand at $3.50 per 1000 standard cubic feet, which is inconsequential for the oil companies.

The first legislation on gas flaring prohibition was passed in 1984; it attempted to curb gas flaring in but did not provide stiff sanctions for offenders. Subsequent legislations and policies have been promulgated to address this issue and put a stop to it but the more the oil and gas industry grows in Nigeria the more gas flaring the Niger Delta region experiences. In 2001, the World Health Organisation (WHO) rated Nigeria has the 2nd country in the world notorious for gas flaring. The available estimates from NOSDRA corroborate this stance. Data from the agency shows that Nigeria burns about 3.7billion of gas daily, which can be convertedinto enough power for millions of people. In the same way the country loses about N3.4billion on a daily basis that is not being paid as fine.

To compound the matter the penalty imposed on operators is insignificant. This is heightened by the shortcoming of the regulators that do not have a concrete system to verify the incidence of gas flaring; ratherthey rely on data supplied by the operators. Some reportshave affirmed that many of the oil companies provide untrue or distorted figures to NOSDRA. This is obviously unacceptable, and a complete indictment on the functionality of government agencies. If an agency that is responsible for enforcing environmental laws and policies lacks the capacity to discharge their responsibility, the Nigerian people can only hope for the best in such circumstance.

The impact of the continued gas flaring cannot be overemphasised. A report by the Environmental Rights Action (ERA) shows that gas flaring produces “nitrogen oxides and other substances such as benzene, toluene [and] xylene … which are known to cause cancers.” Inhabitants of the affected communities have often complained of skin rashes, respiratory challenges and other ailments. The agricultural impact cannot be quantified. Many crops are being affected by the substances released from the flare which havenearly destroyed the agricultural business in the region. Oil companies have pledged repeatedly to end gas flaring but not much has happened yet they claim progress in their annual reports.

Earlier in 2017 the Nigerian National Petroleum Corporation released a statement that gas flaring in Nigeria has been reduced by 25% between 2006 and 2016. The statement noted that the country was flaring 2.5 billion standard cubic feet (scf) in 2006, while we only consumed 300mscf of gas per day.In other words we flare more than we consume or sell. However, through the Gas Master Plan of the government, which is meant to address four key critical issues of gas availability, infrastructure, commercialization framework and gas affordability, the government has been able to record some progress.It is clear that one of the enablers of gas flaring is the absence of a well implemented gas master plan. Withoutundermining the National Gas Policy that seeks to end gas flaring by year 2020, it is not clear that there is a plan in place to aggressively discourage flaring through proper commoditisation and commercialisation. The NNPC spokesperson stated that the policy has been distributed to all operators in order to get them to buy into the plan.

Nevertheless, part of the problem has been the manner the government formulates policies without taking into consideration the reservations and worries of the operators. The underlying problems associated with the preference for gas flaring have not been sufficiently addressed. And considering that gas CO2 always comes with every production and exploration of oil, gas will always been in abundance. In this regard, if there is no clearly defined and economically viable option for the operators, flaring gas will still remain the enticing option since it is cost efficient. In any case, the primary intent of every business concern is profit maximisation. Therefore a display of seriousness on the part of the government will require a properly articulated strategy that ensures economic benefits for the operators. Such strategy cannot be singlehandedly drafted by the government; it must be a collaborative effort between the government and other relevant stakeholders.

It has been acknowledged that the gas that is flared from Nigeria is sufficient to serve the power needs of 1/3 of Africa and meet the cooking needs of over 320million population. Yet, many Nigerians still prefer stoves and fire wood especially in the rural areas to using gas cooker for their cooking needs.Many families have developed a dislike for gas because of their exposure to the burning furnace from gas flaring. Unconsciously, these people have grown to believe that gas is a dangerous substance and must not be stored in a home for any reason whatsoever. Such people will never consider gas as an affordable means of cooking until there is a major mental shift. It is evident that the government needs aggressive sensitisation to change this prevailing disposition of Nigerians in the rural areas. Similarly, it is very interesting that a country like Nigeria with an embarrassing power shortage has abundance of gas that is being flared daily yet the country sleeps in darkness. The power roadmap launched by Goodluck Jonathan was meant to harness the abundance of gas to power the gas turbines and generate electricity for the country. However, it is obvious that the economies of scale for the ideas and the roadmap have not been encouraging to investors, hence the failure of the gas turbines which the government is now considering selling. Although selling off the assets will not necessarily translate to efficiency so long as the country still operates within the undefined and economically unenticing gas framework.Certainly, the solution is for the government and all stakeholders to conceive a gas plan that provides economic benefits for the operators, with commercial benefits to the general populace. Currently the gas pricing in the country encourages flaring; it does not encourage business. This will not be an easy task for policy makers since the operators want higher pricing to ensure profitability. And on the other hand the pricing has to be affordable to ensure commercial success.

Ultimately, it is important for the nation to take into consideration its allegiance to the inhabitants of the region who are affected by the gas flaring. If the government must fine operatorsas deterrence then the fine has to be truly deterring, unlike the current regime that encourages flaring. It should not be so difficult to put an end to gas flaring in Nigeria. What is urgently required is the political will to address the issue. The target of 2020 to end gas flaring in the country seems to be more of another unrealisable Vision 2020 because of the inconsistencies in the policy.With the current situation the Vision 2020 plan will be up for another review when we miss the target again. Our leaders must learn to mean what they say and say what they mean; it is the hallmark of leadership and a true test of integrity. 

Copyright 2017 Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.