After dithering for years, Nigeria recently indicated its preparedness to end gas flaring, an exercise that represents waste and environmental degradation reports Chineme Okafor
Nigeria has repeatedly pledged to drastically cut down the flaring of gas at her oil fields in the Niger Delta.
In fact, since the 1950s when Nigeria started oil production, gas has been flared indiscriminately from the oil-bearing region, and this is despite what the flared gas can truly and really do to help the country overcome its acute energy poverty.
Presently, records indicate that close to 80 million of Nigeria’s population do not have access to electricity of any form.
This number of people live mostly in rural communities even in the Niger Delta, yet legal efforts to reduce gas flaring and convert the gas resources into productive use have never really come through, thus sustaining the vicious practice which also reportedly cause major human and environmental health issues 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 it 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 impacts, including cancer, neurological, reproductive and developmental effects.
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.
According to tracker which uses primary data to locate and quantify gas flares from a Visible Infrared Imaging Radiometer Suite (VIIRS) on board the Suomi National Polar-orbiting Partnership (S-NPP) satellite, a report by a 2012 Petroleum Revenue Special Task Force set up by the federal government, oil companies often do not comply in paying these fines and when they do, they pay an old penalty of N10 per 1000 standard cubic feet flared.
Furthermore, the taskforce found that the Department of Petroleum Resources (DPR) had been unable to independently track and measure gas volumes produced and flared in the Niger Delta, and frequently depended only on information provided by the operators.
Also, the November 2017 Monthly Financial and Operations Report of the Nigeria National Petroleum Corporation (NNPC) indicated that oil companies flared a total of 301.69 billion standard cubic feet (bcf) of gas within one year – between November 2016 and November 2017, thus suggesting Nigeria not only lose her environment and people to gas flaring but also scarce financial resources that could have come from converting the gas to monies.
Now, to put paid to the practice, the government recently renewed its commitment to end the practice and, in this regard, launched a new framework – the Nigerian Gas Flare Commercialisation Programme (NGFCP) – to tackle the longstanding issue.
In setting up the NGFCP, the government perhaps considered various reports especially that of the World Bank Global Gas Flaring Reduction Partnership which placed Nigeria as the seventh highest gas flaring country in the world.
It also considered in initiating the NGFCP, that previous efforts such as the Associated Gas Reinjection Act (AGRA) had done very little if not nothing to end the practice.
And so, President Muhammadu Buhari, reportedly approved a new regulation – the Flare Gas (Prevention of Waste and Pollution) Regulations 2018, to be used for the implementation of the NGFCP.
Disclosing the recent development to THISDAY, the NGFCP Programme Manager, Justice Derefaka, who once said the country losses approximately $1 billion of revenue to gas flaring because it does not have the capacity to capture and commercialise flared gas in the country, informed that the NGFCP would now go on to roll out its plans in the scheme to end gas flaring.
“We are pleased to inform you that His Excellency, Muhammadu Buhari, the President of the Federal Republic of Nigeria has approved the “Flare Gas (Prevention of Waste and Pollution) Regulations 2018” as the regulatory instrument that will underpin the implementation of the NGFCP,” Derefaka said in an email to THISDAY.
He further explained, “We are also pleased to mention that we have completed the design of the key programme transactional, commercial framework and documentation. We therefore expect to announce the first bid round for the flare gas to the public within Quarter (Q) 3, 2018.”
In April, Derefaka reportedly stated at the Nigerian Norwegian Chamber of Commerce (NNCC) Q1 2018 Business Roundtable Seminar held in Lagos, that if flared gas was properly exploited, it could create 300,000 jobs, produce 600,000 metric tonnes of Liquefied Petroleum Gas (LPG) per annum, as well as generate up to 2500 megawatts (MW) of electricity from new and existing power stations.
He explained then that approximately 700mmscf/d of gas was flared at 178 flare sites in the country, while circa $3.5 billion worth of inward investments was required to accomplish the country’s flare gas commercialisation targets by 2020.
Following the president’s approval of the guideline, Derefaka, indicated the NGFCP would roll out its programme with the expectation that investors would key into it.
He explained that the NGFCP by its design would be a market-driven mechanism to attract competent third party investors from across the world to commercialise the country’s flared gas.
The flare gas would reportedly be available at a price the successful investors bid, for use as fuel and or feedstock in proven gas utilisation technologies. The bidding process, he added will be carried out using a two-stage procurement process.
Further, under the NGFCP, the government will expectedly exercise its ownership rights of all gas flared in Nigeria, and grant licences to third parties to access and collect such gas on its behalf from the flare points of oil producing companies.
Continuing, the licencees as they should be, would then be required to use technologies to set up facilities for collection and delivery of gas from flare points to processing points for economic use eventually.
This would also mean that all identified gas flare points would be part of the programme and compliance with it could be a condition for award of operational licence or renewal of oil leases in the country.
Accordingly, the NGFCP strategy has been underpinned with Nigeria’s outlook for her energy sector and the need to move further to clean energy sources just in line with the direction of the rest of the world. However, energy business analysts who spoke to THISDAY on it explained the details of the regulation were still not in the open for informed comment on its strategy.
THISDAY also could not get the new regulation from the webpage of the NGFCP despite a link provided for it. But the analyst who spoke off record explained that the success of the programme will depend largely on its commercials.
“It’s all about the details. We need to see the details first. We need to see the regulations and the guidelines around the bid process for the commercialisation program. If it makes sense, then it can be successful. If the commercials do not make sense, then it will be dead on arrival,” said the expert.