Routine gas
flaring is illegal in most countries and Nigeria’s score card in this regard
should be examined separately from other member countries of APPA. Gas flaring
refers to the burning of natural gas associated with pumping crude oil out of
oil wells. By the early 1970s, crude oil production level had reached over two
million barrels per day, that is more or
less today’s production level. Nigeria is the seventh largest OPEC crude oil producer,
very far behind the leading producer, Saudi Arabia, that can pump out 10
million barrels per day. However, by flaring 40 per cent of her natural gas
output (it is largely associated gas). Nigeria by 2008 had become the world’s
biggest gas flarer: she flared four times the volume of natural gas burnt by
Saudi Arabia and, according to the World Bank, accounts for 12.5 per cent of
total flared natural gas in the world. The fact that Nigeria’s oil fields have
rich deposits of gas does not excuse the disproportionately high flaring rate.
The
international oil companies (IOCs) operating in the country do not indulge in
routine gas flaring in their home countries. With a little additional
investment, the associated gas can be reinjected into the ground or the
requisite infrastructure for utilising the associated gas can be put in place.
As far back as 1969, the Federal Government directed oil companies to end gas
flaring within five years of business by taking steps to utilise the gas. But
continued gas flaring led to the enactment of the Associated Gas Reinjection Act (1979).
Despite
fixing year-end 1984 as the gas flare-out deadline, government betrayed
readiness to look the other way by adding the option of a fine for
non-compliance. The IOCs chose to pay fines. Nonetheless, by creating the NNPC
in the second half of the 1970s and by vesting some 60 per cent equity stake of
the joint-venture operators in the corporation, the latter bears the ultimate
responsibility for the former’s compliance with any oil and gas mining
regulations, including ending gas flaring.
In that
light should be viewed the following pertinent issues. Firstly, a Federal High
Court ruled in 2005 that gas flaring is a great violation of the human rights
of residents in the neighbouring communities. What action has NNPC, nay, the
Federal Government taken since then? What course of action is open to residents
in oil producing communities, who have been abandoned to their fate and whose
human rights continue to be violated.
Secondly, in
2009, the Shell Petroleum Development Company reported that “More than $3
billion of additional investment is needed to reduce flaring as low as is
reasonably possible.” Suppose Shell gave a credible cost estimate. Meanwhile,
gas flaring has continued unabated. Also, the NNPC has, over the years, chalked
up arrears in joint venture cash call payments. Is NNPC’s indebtedness the
cause of the continued gas flaring since 2009?
Thirdly, the
Petroleum Industry Bill, which was first presented to the Sixth National Assembly,
fixed December 2012 as the deadline for an end to gas flaring. We have the
Eighth National Assembly, but the PIB has yet to be enacted into law. Some
legislators from non-oil producing states objected to the provision requiring
host communities to own 10 per cent stake in relevant operations in the
petroleum sector. Is the 10 per cent stake really enough to address the
problems that crude oil production has brought about?
The
devastating effects of gas flaring and oil spills have been fully documented
for the Federal Government through commissioned studies, and by experts. Oil
producing communities suffer severe environmental degradation with high carbon
emissions, which endanger man, animals and plants, as well as, wreak colossal
economic losses. The harvest of afflictions include contaminated water sources,
poisoned fishing ponds, reduced soil fertility resulting in dropping crop
yields, acid rain, chronic health problems leading to premature deaths,
biodiversity loss and building decay within short periods. These afflictions
may be easily reversed by investing a small fraction of revenue realised from
the recovered crude oil for the conversion of the gas being flared to liquefied
petroleum gas for cooking and industrial use, generation of electricity and for
export. The country’s power plants contend with crippling inadequate supply of
natural gas, which the govt should stop blaming, self-indicting, on pipeline
vandalisation.
Curiously,
in his statement read to APPA, Buhari canvassed gas utilisation partnerships to
help meet future energy needs of African countries. A convincing message for
the occasion should have been to relate steps being taken on the home front to
install the infrastructure for utilising the natural gas being flared in the
Niger Delta. But as if to consign the oil host communities to perpetual
damnation, the Minister of State for Petroleum Resources cited funding as the
major challenge to utilising the gas. That is completely baseless. The Minister
of State is an advocate of contracting foreign loans to finance joint-venture
operations. It is an option that will perpetuate foreign control of the oil and
gas sector and continued trampling of host communities underfoot, contrary to
the intendment of the Nigerian Content Act. Since he took office, Buhari has
been amply shown the wrongful fiscal and monetary policies which his
predecessors dictated and which have kept the economy in limbo.
Additionally,
the President has been apprised of Nigeria’s capability of independently
financing the petroleum and other sectors of the economy. The prospects are
such that Nigeria could decide at will to scale down the stake of IOCs in the
country’s oil operations simply by properly managing the available resources.
For example, the financial sector currently has some N70 trillion idle lending
capacity which could be accessed for public-private partnership undertakings in
the various sectors of the economy. The Federal Government should, therefore,
stop carrying on in the oil producing areas like a plundering colonial outfit.
In a true fiscal federalism, the oil producing states would respect the human
rights of the residents therein and guarantee them a good standard of living.
In the light
of the foregoing and considering that the Federal Government’s mismanagement of
the oil resources over the past half a century has despoiled the oil producing
communities in the Niger Delta area, Buhari should publicly declare a firm
national natural gas flare-out target within his current term. It is
technically feasible. In order to free and garner funds for the actualisation
of the plan, Buhari should direct the adoption of proper fiscal and monetary
policy measures forthwith. A delay or lack of earnestness in executing the
plan, could exacerbate the restiveness in the area, should residents in oil
producing communities exercise their human rights to self-preservation by
taking steps to have oil operators shut in all further crude oil recoveries.
The non-escape of natural gas from the shut oil wells will knock out the
poisonous flares. It will also bring to an end the death sentence by
installment imposed on residents of oil-producing communities by uncontrolled
associated gas flaring. (Guardian)
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