By Damilola Oyedele in Abuja
The Senate has commenced legislative processes aimed at prohibiting gas flaring and imposing stiffer penalties on defaulting oil and gas firms, as proposed by the Gas Flaring (Prohibition and Punishment) Bill 2017.
The bill is intended to address the inadequacies and shortcomings of the Associated Gas Re-Injection Act of 1979, provide stiffer penalties in line with current economic realities, and ensure the achievement of the National Flares-out Target of January 1, 2030.
The bill, which recently passed through second reading, also makes it mandatory for operators to submit gas utilisation plan within 90 days of the commencement of the Act for effective monitoring.
The sponsor of the bill, Senator Bassey Albert Akpan, (Akwa Ibom North East), speaking on the bill, said that gas flaring remains one of the most dangerous environmental and energy waste practices in the oil industry.
He added that the continuous practice has disastrous consequences on human and environmental health and causes loss of revenue by depriving the government of tax and trade opportunities.
Bassey, who is also the Chairman of the Senate Committee on Gas, stated that the emphasis on creation of infrastructure for gas utilisation should be a condition for grant of licenses, as being done in countries like the United States.
“The Bill also makes specific provisions for the installation of requisite gas flare meters equipped with facilities that enable real time, online data retrieval for independent reporting and monitoring by the industry regulator,” he said.
“The current gas flare penalty of N10 per 1,000scf is too low, and not in line with current economic realities and encourages continuous gas flaring by operators with its attendant negative effect on our environment instead of encouraging investment in infrastructure by the operators to make gas available for our domestic use,” he added.
Furthermore, he said that there is a need to increase the gas flaring penalty to an appropriate and commensurate level sufficient to de-incentivise the practice of gas flaring, and introduce other market measures to encourage efficient gas utilisation.
The committee would commence public hearing for the review of the bill next week, which would be declared open by the Senate President, Dr. Bukola Saraki.
Officials from the Ministries of Petroleum Resources and Environment, Nigeria National Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR), Niger Delta Development Commission (NDDC), Nigerian Liquified Natural Gas (NLNG), National Oil Spill Detection Response Agency (NOSDRA), Nigerian Extractive Industry and Transparency Initiative (NEITI) and National Environmental Standard and Regulations Enforcement Agency (NESREA) are expected to be in attendance.
Also expected to attend the hearing are international oil companies, local oil companies and representatives of host communities.