Home | Columnist | Gas Flaring Without End

Gas Flaring Without End

By newswatchngr.com 14/10/2011 05:16:00

Font size:

There is nothing to suggest that gas flaring in Nigeria will end next year as oil companies find it cheaper to pay stipulated fines than stop it

When President Goodluck Jonathan, unveiled the $10 billion gas revolution on Thursday, March 24, this year, it was intended to harness Nigeria’s vast gas reserves and develop a petrochemical and fertiliser industry. The plan was also to create more than 500,000 jobs, many of them in agriculture as well as help improve power supply to homes and industries. Ultimately, it was intended to stop gas flaring, which deadline was fixed for December 2012, after shifting it for more than three times. But the December 2012 deadline is also very doubtful.

Nigeria is still rated the second worst gas flaring nation in the world, after Russia. Also, Gazprom, the Russian gas giant, may have suspended the proposed N380 billion ($2.5 billion) investment in Nigeria. The Russian company said the envisaged suspension was due to the delay in the passage of the Petroleum Industry Bill, PIB. Gazprom had, in 2008, signed a memorandum of understanding with the Nigerian National Petroleum Company, NNPC, on joint venture projects, covering petroleum, gas exploration and power.

It was learnt that both parties were yet to reach an agreement on the actual take-off date of the proposed multi-billion-Naira business, scheduled to come on stream in 2015, thus fuelling the agitation that Gazprom may have suspended the project, due to unclear rules. Vladimir Ilyanin, chief executive officer of Gazprom’s Nigerian subsidiary, had earlier said any investment decision had to be after the last general elections and the passage of the PIB.

It had been planned that 90 percent of the project would be for developing the Nigerian domestic gas production, processing and transportation. Gazprom had envisaged that investing in Nigeria’s liquefied natural gas, LNG, made strategic sense as it was closer to its North American market than Russia. The pipelines Gazprom had planned to build in Nigeria could eventually be used to ship gas through the trans-Saharan Gas pipeline, a project aimed at sending Nigerian gas through Niger and Algeria to the Mediterranean.

Austen Oniwon, group managing director of NNPC, said the fastest way to stop gas flaring was increase in domestic and industrial gas utilisation. Oniwon also said that with Nigeria’s gas abundant deposits, the exploitation required huge investment and technical input which the federal government must collaborate with other stakeholders to tackle. According to the GMD, “Gas, unlike petroleum products, cannot be reserved and that is why previous milestones set on the stoppage of gas flaring in the country have not yielded results. For the current deadline to be achieved, there is need for an increase in both domestic and industrial gas consumption.”

It is estimated that about 40 percent of Nigeria’s gas production is flared, thus accounting for 12.5 percent of the flared gas in the world. Gas flaring represents Nigeria’s contribution to greenhouse gases. According to the Energy Information Administration, EIA, flares contribute about 35 million tonnes per annum of carbon dioxide, CO2, emission. Other sources of CO2 include petroleum products and coal. Gas flaring harms local health through emissions that have been linked to cancer, asthma, chronic bronchitis, blood disorders and other diseases. These human health problems affect the people of the communities where oil companies operate, such as the Niger Delta, where 20 million people live with little or no access to health.

Gas flaring causes acid rain, which impacts on soil fertility and is associated with reduced crop yields, causing hunger in the Niger Delta, where fish population has declined due to pollution by oil companies. Acid rain eats through villagers’ house roofs, who, impoverished, have little means to replace their damaged roofs regularly.

It was on the basis of such hazards that a Benin High Court issued a landmark ruling that opened the way for compensation claims against oil companies. According to Justice C.V. Okorie, flares that burn off natural gases, a by-product of oil extraction, contravened provisions of the Nigerian constitution guaranteeing citizens, the right to life and human dignity. Okorie ruled in a case brought against Anglo-Dutch Shell by the Iwerekan community in Delta State. The community said the flares, which have been burning since oil production began in the late 1950s, have seriously harmed their environment. The Iwerekan community was supported in its case by the Environmental Rights Action, Friends of the Earth Nigeria and the Climate Justice programme. “The giant flares that pump clouds of black smoke into the skies of the Niger Delta contribute more greenhouse gas emission than any other single source in sub-Saharan Africa,” stated Friends of the Earth.

The first deadline for gas flaring was issued in 1969 when Yakubu Gowon, then head of state, ordered that within five years of set-up, an operating company must cease flaring. The order was ignored and no punitive measure was taken. Through the Associated Gas Re-injection Act No. 99 of 1979, the Nigerian government required oil companies operating in the country to guarantee zero flares by January 1, 1984. Oil corporations have continued to flare gas, merely paying nominal fines for breaking the law.

The Act allowed some conditions for specific exemptions or the payment of $.003 (0.3 cents) per million cubic feet, which increased in 1988 to $0.07 per million cubic feet. In 2008, it was further raised to $3.50 for every 1000 standard cubic feet of gas flared. This meager amount has not deterred oil companies from flaring as they find it easier to pay than stop gas flaring. The deadline was further shifted to 2010. But in January 2010, the National Assembly proposed a new deadline of December 31, 2012. It remains to be seen if the deadline would be adhered to.