Burning billions in the name of gas flaring




Despite the fact that the federal government has vowed to end gas flaring in the Niger Delta region, not much seems to have changed as oil companies have continued to flare gas unabated; BENJAMIN UMUTEME writes.

Gas flaring is the burning of natural gas that is associated with crude oil when it is pumped up from the ground. In petroleum-producing areas where insufficient was made in to utilise natural gas, flaring is employed to dispose of this associated gas.

It has over the years been a source of concern to inhabitants of the region who have had their livelihood not only wiped out, but also their health has deteriorated. The implication is the increase in terminal related illnesses in the region.  

However, the commencement of production at the Nigeria LNG plant brought about a major leap in gas flare reductions in Nigeria. Since 1999, a variety of gas utilisation schemes and regulatory interventions forced gas flaring down to the current position of 11.4 per cent.

Niger Delta’s bear the brunt  

Gas flaring is one of the most challenging energy and global environmental problems facing the world today.

The flaring involves the controlled burning of natural gas associated with crude oil in the course of routine oil and gas production operations from gas fields.  

The process is a multi-billion dollar waste, a local environmental catastrophe and a global energy and environmental problem which has persisted for decades, particularly in theNiger-Delta region of Nigeria. Gas flaring has negative effects on the immediate environment, particularly on the diversity of plants and wildlife fauna.

Environmental pollution arising from gas flaring has impacted the biodiversity ofNiger Delta. The main stresses relative to oil and gas operations arise from gas flaring, leakages of crude oil, and other chemicals used in production processes.

The extinction of biodiversity, destruction and contamination of soil, and atmospheric pollutionassociated with gas flaring have not only deteriorated the environment, but also brought social impacts to the inhabitants of the region.

Health hazards

Gas flaring has impoverished the communities where it is practiced, with attendant environmental, economic and health challenges.

These difficulties faced by local communities and loss/threat to biodiversity from gas flares aresufficient justification for ending gas flaring practice.

Experts say the region has come to live with nitrogen dioxide, sulphur dioxide, volatile organic compounds, like benzene, toluene, xylene and hydrogen sulphide, as well as carcinogens, like benzapyrene and dioxin, and 755 million SCF of gas that are flared daily.  

The above chemicals are by-products of flaring. The irony is that the flared gas is situated within residential areas, thus making them prone to sicknesses such as leukemia and other dangerous blood-connected diseases.

Wasting natural resources

Residents of Niger Delta witnessed, in 2010 alone, how over 3.5 billion cubic feet (100,000,000 m³) of related gas produced in the Niger Delta, 2.5 billion cubic feet (70,000,000 m³), or approximately 70 per cent were flared in the atmosphere per annum.

This was affirmed by the authorities recently when they said, “While statistics may not be accurate, the quantity of gas flared in Nigeria exceeds over 40 per cent of the gas flared annually across Africa, which amounts to about $7 billion in waste, apart from economic waste being a consequence of gas flaring.”

Available data showed that about 282.05 billion standard cubic feet of oil and gas worth N302.076 billion was flared in 2018. Put this with 287.59 billion scf of gas worth N308.01 billion flared in 2017 and gas worth N217 billion flared in 2016, one will begin to understand the quantum of waste the country engages in.

At a public hearing on gas flaring by the Senate in 2017, the immediate past President of the Senate, Dr Bukola Saraki, lamented the economic waste the country was engaged in with continuous flaring of gas.

Saraki noted that 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, and ultimately having an adverse effect on weather and climate.”

He said, “The issue of gas-flaring in Nigeria is a matter of great national embarrassment. We have no reason to continue to flare this precious resource God has endowed us with. This bill, therefore, seeks to make provisions for the prohibition of the flaring and venting of natural gas in any oil and gas production operation in Nigeria and for other matters connected therewith.

“Gas-flaring is as old as the discovery of crude oil in Nigeria. While it remains a global environmental malaise with attendant environmental consequences, we must move with the rest of the world to seriously put an end to it. Gas flaring is not inevitability…”

Government’s commitment

Despite all the talk, many believe that it is the usual government talk wen no deyfull belle.

For economist, Friday Efih, the issue of stopping gas flaring is just more than making a statement. In a telephone conversation with Blueprint Weekend, he said, “It should be backed with action but unfortunately, Nigeria does not have the capacity to follow through its talk.

“Several times the government has shifted the goal post for oil companies to stop flaring gas. And rather than take drastic action the companies are expected to pay a fine of $3.50 per Mscf, which is like a slap on the wrist.” 

According to records, in 1985, companies were made to pay 2 Kobo per million thousand standard cubic feet (Mscf). This was prescribed by the Associated Gas Re-Injection Amendment Decree 7 of 1985, before it wasincreased to 50 kobo in 1990.

In 1998, it rose to N10 per Mscf, and later $3.50 perMscf in 2011.

Corroborating Efih’s stance, former chairman of Nigerian Electricity Regulatory Commission (NERC), Mr. Ransome Owan, insisted that the federal government is not committed to ending gas flaring in the country.

Speaking at a public forum, Owan noted that gas flare persists in Nigeria because presently there are no infrastructure to harvest gas in most of the oil fields in the country, a major factor, which according to him, was promoting gas flaring.

He said Nigeria has not been able to effectively utilise the West African Gas Pipeline to evacuate gas to Ghana and other countries along the pipeline, and that this may negatively affect the country’s quest to supply gas to Europe through the proposed Nigerian-Morocco gas pipeline project.

FG’s gas flare commercialisation programme

In a bid to drastically cut down gas flaring and convert flared gas to economic use, the federal government launched the Nigerian Gas Flare Commercialisation Programme (NGFCP).

Since the start of commercial oil production in the country, the flaring of associated gas has become commonplace in Nigeria.

This is because oil producers do not derive sufficient economic benefits from the utilisation or production of associated gas.

Despite recent efforts by the FGN to encourage the utilisation of natural gas for power generation and industrialisation, the World Bank’s Global Gas Flaring Reduction Partnership has reported that Nigeria is the 7th highest gas flaring country in the world.

About 800 million standard cubic feet (Mmscf) of gas is flared every day from approximately 144 gas flare points across Nigeria.

Furthermore, the Nigeria National Petroleum Corporation (NNPC) stated in its Monthly Financial and Operations Report for November 20171 that oil companies operating in the country flared a total of 301.69 billion standard cubic feet of gas between November 2016 and November 2017.

Using the exchange rate of N360 to a dollar and the Domestic Supply Obligation (DSO) price of $1.50 per 1,000 Standard Cubic Feet (SCF) of gas, this translates to a loss of N162.912 billion.

To stem the tide of significant economic losses arising from gas flaring and the attendant environmental damage, the FGN introduced the NGFCP.

Successful utilisation of flare gas could yield tremendous environmental and economic benefits for the host communities in the Niger Delta region. It will also save the government the billions of dollars lost annually through flare of gas that could be put to commercial use.

Last line

For Programme Manager, Nigerian Gas Flare Commercialisation Programme, Mr. Justice Derefaka, the country needs about $3.5 billion worth of investment to achieve the flared gas commercialisation targets of 2020.

According to him, the volume of gas flared in the country could be put to better use, if harnessed, to power two-to-three liquefied natural gas (LNG) trains and generate about 3,000 megawatts of electricity.

It is also estimated that if the flared gas is properly exploited, it has the potential to create 300,000 jobs and produce 600,000 metric tonnes of liquefied petroleum gas, LPG – popularly known as cooking gas – per year.

The ultimate goal of the government is to eliminate routine gas flaring by 2020, with unavoidable gas flaring limited to two per cent of total gas production.

2020 is just by the corner! 

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