The Nigerian economy lost a whopping N233 billion to gas flaring in 2018.
This, represented 3.8 per cent of the total global flare same year, a report by PwC Nigeria, one of the leading professional services companies has revealed.
The report launched in Lagos recently, with the titled, “Assessing the Impact of Gas Flaring on the Nigerian Economy: Part 1,” showed that the amount was also equivalent to $761.6 million.
According to the World Bank, gas flaring cost the global economy $20 billion in 2018.
The report indicated that 240 million standard cubic feet (mscf) of gas valued at $839.9 million was flared onshore in the year under review.
It added that the amount of natural gas flared onshore in 2018 would have attracted payable penalty of $479 million, adding that the flared gas had 24,000 gigawatts per hour of power generation potential.
The PwC report equally showed an offshore flaring of 232.4 million scf, valued at $813.6 million; with payable penalty of $464.9 million as well as 24,200 gigawatts per hour of power generation potential in the same period.
It, however, stated that while the total economic cost of the flaring in 2018 stood at N233 billion, and total cost of the environmental effect was N28.76 billion.
The report further revealed that the N233 billion lost could have been used to finance some priority developmental projects in the country, such as healthcare capital expenditure, housing, electricity, roads, rehabilitation of airports and aerodrome, among others.
Nigeria has the largest proven gas reserves in Africa and ninth largest in the world with 200.41 trillion cubic feet (TCF) of natural gas as at 2018.
In 2018, Nigeria produced 1.7 trillion cubic feet of natural gas. However, daily gas production remains low, despite the large proven and unproven gas reserves the country holds.
Also, the PwC report noted that the percentage of gas flared in Nigeria has been reducing since 2002, standing at 10 per cent in 2018.
According to the report, “the country still ranks in the top 10 gas flaring countries in the world, with 7.4 billion cubic feet in 2018. Total gas flared in Nigeria accounted for 6.9 per cent of the top 10 gas flaring countries in 2018.”
Although, Nigeria has set 2020 as a deadline to achieve zero gas flaring, the report, however, highlighted some challenges in meeting deadline.
It listed delay in passing other components of the Petroleum Industry Bill (PIB); Absence of infrastructural support; and below optimal punitive measures, as some of those challenges.
To this end, PwC suggested that to reduce gas flaring, Nigeria needs to plant 7.5 million hectares of trees; which will absorb 638 million cubic tons of carbon from flaring and other sources of carbon emission.
It also warned that this would cost the country $94 million annually, which is equivalent to N28,764,000,000 times two.