Nigeria loses $1.150 billion of potential gas income to flaring in 2016 as the practice persists since it was outlawed in 1984
Despite federal government resolve to end gas flaring in Nigeria, the practice is still persisting. In 2016 alone, Nigeria lost about $1.150 billion potential gas revenue to flaring of gas. In the year under review, more than 275 billion cubic feet, BCF, of natural gas were flared from oil fields in the Niger Delta region.
The Nigerian Gas Flare Commercialisation Programme, NGFCP, in its latest report said that in addition to revenue lost, the flared gas could have generated 3000 megawatts of electricity for Nigeria, but could not. NGFCP is responsible for designing the programme to commercialise the volume of gas flared in country.
According to the NGFCP, the monies lost by Nigeria to flared gas were in two forms – $800 million in revenue and $350 million that could have been earned in emission credit. Gbite Adeniji, chairman, NGFCP Steering Committee, said the NGFCP had identified 179 gas flare sites spread across on-shore, swamp, shallow offshore and deep offshore areas of the Niger Delta region.
Adeniji, in the report presented to Bello Gusau, executive secretary, Petroleum Technology Development Fund, PTDF, stated that these sites were burning an approximate volume of about 750 million standard cubic feet per day (mmscf/d) of gas. According to him, in 2016 alone, about 275BCF of gas was flared, which he noted could have generated about 3000MW of electricity; generated about $800 million in revenue and earned about $350 million emission credit value.
He equally indicated that recent data obtained by the programme placed the figure of flared gas volume at about 1BCF per day, suggesting an increase from the 2016 figures. He listed the intentions of the programme to include reduction of gas flaring in the Niger Delta; as well as initiation of a market-driven solution for the flares to benefit the communities and Nigeria’s economy.
He said that President Muhammadu Buhari has approved a regulations developed by the NGFCP to legally back its operations which would include harnessing all flared gas free of cost at the flare sites without payment of royalty; subjecting the flare sites to competitive bidding; issuance of permit to access flared gas to third party investors; increasing the flare penalty payment to the government; mandate flare gas data measurement through metering; and mandating the Department of Petroleum Resources, DPR to publish annual data on flared gas.
Adeniji sought the involvement of PTDF in the NGFCP especially in cases of partnership to develop and implement strategies towards building human and institutional capacity to support the flare-out programme. He also informed that he wanted the PTDF to assist in developing strategies to support the NGFCP with training in matters connected with the gas value chain, as well as the development of indigenous manpower and technology acquisition on gas flare reduction projects.
Responding, Bello Gusau, executive secretary, PTDF, said the commission would be ready to partner with the NGFCP, especially in the areas of capacity development to ensure the country’s efforts at reducing gas flaring through harnessing of flared volumes would be realised.
Nigeria has repeatedly pledged to drastically cut down the flaring of gas at her oil fields in the Niger Delta. According to an online gas tracking tool – the Nigerian Gas Flare Tracker – an initiative commissioned by the Nigerian ministry of environment and managed by the National Oil Spill Detection and response Agency, NOSDRA, gas flare happens when crude oil which are extracted from onshore and offshore oil wells come with raw natural gas to the surface, and which are burned off or flared as a waste product because there are no natural gas transportation, pipelines and infrastructure to take them up for productive uses.
Flaring the gas, the tracker indicated thus becomes the cheapest option, particularly when gas prices are low and fines for flaring are either cheap or altogether not collected by regulatory bodies saddled with such tasks. The online tracker further explained that hazardous air pollutants emitted from gas flaring have been shown to impact human health, and these include oxides of nitrogen, carbon and sulphur, as well as particulate matter, hydrocarbons and ash, photochemical oxidants, and hydrogen sulphide.
These pollutants it added are associated with a variety of adverse health problems such as cancer, neurological, reproductive and developmental defects. It noted that reported deformities in children, lung damage and skin problems have also been linked with the practice of gas flaring, adding, however, that sadly, since the 1950s, Nigeria has released vast quantities of liquid pollutants into the Niger Delta environment thus damaging the region’s ecosystem.
But while there had been various legislative measures to curb gas flaring in Nigeria since 1969, and especially from 1984 when it became illegal to flare gas in the country without the written permission of the minister of petroleum resources, the practice has never really ended. It has rather been buoyed by a very cheap financial penalty of $3.50 per every 1000 standard cubic feet of gas flared.
– Sept. 21, 2018 @ 14:12 GMT |