Senate C’tee: Nigeria Loses $2.5bn Annually to Gas Flaring

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Damilola Oyedele in Abuja

The Senate Committee on Gas has decried the loss of over $2.5 billion to gas flaring annually from an estimated two billion standard cubic feet of flared gas, which accounts for about 19 percent of total gas, flared globally.

The statistics are the highest for any member nation of the Organisation of Petroleum Exporting Countries (OPEC), the committee lamented.

Chairman of the Committee, Senator Bassey Akpan (Akwa Ibom North East) speaking at the opening of the public hearing on the Gas Flaring (Prohibition) Bill, recently, added the lack of reliable data has made it difficult to gauge the magnitude of the damaging practice.

He however noted that there is a better understanding of the barriers that must be overcome to reduce flaring. These, he said include the establishment of not only effective regulations, but also clear policies with the right incentives for operating companies, to ensure necessary infrastructure was put in place for better domestic utilisation.

Akpan noted that Nigeria’s estimated 188 billion cubic feet of proven natural gas reserve, makes it the ninth largest concentration in the world.
“Due to unsustainable exploration practices coupled with the lack of gas utilisation infrastructure, we flare more than 75 percent of the gas produced and re-inject only 12percent to enhance oil recovery,” he said.

The consequences of gas flaring are however much more than just the financial aspect, the Senator said, adding that the practice contributes to air pollution, heat, rain forest damage and climate change.

Akpan added: “The 2008 National Gas Supply and Pricing Regulations which stipulate a penalty of $3.50 per 1000scf is yet to be enforced by the regulatory agency, since according to the operators, the inability to meet the Domestic Supply Obligation cannot be enforced as gas flaring penalty; hence the continuous application of the N10/scf till date.”

“This incentivises gas flaring since it’s rather cheaper to flare than create the necessary infrastructure to make this wasted natural resource available for domestic usage for which the regulation was intended.”

Declaring the hearing open, Senate President Bukola Saraki said gas flaring remains a matter of great national embarrassment to the country.

Saraki, who was represented by Deputy Senate Leader, Senator Ibn Bala Na’Allah, stated that there is no reason why the country continues to flare gas, in this age and time, when considering its short and long term consequences.

“It is not an inevitability. Whilst statistics may not be accurate, the quantity of gas flared in Nigeria exceeds over 40% of the gas flared annually across Africa which amounts to about $7billion in waste. Apart from economic waste being a consequence of gas flaring, flared gas is also known to contain toxic substances which cause respiratory diseases and air pollution, leading to depletion of the ozone layer, ultimately having an adverse effect on weather and climate,” Saraki said.

The proposed bill is intended to prohibit the development of oil and gas fields without plan for utilisation of associated gas, address the inadequacies and shortcomings of the 1985 Gas Re-Injection Act, and bring gas flare penalties in line with current economic realities.

The bill would also ensure the achievement of International Flares-out Target of January 1, 2030, and ensure timely review of gas flaring regulations and deployment of an online real time monitoring mechanisms.