The Federal Government recently gave oil companies operating in the country 2019 deadline to end gas flaring or stop producing. The government also increased the penalty for gas flaring by over 600 percent. This is good news for the economy, the environment and the health of people living in the oil-bearing states.
But government must show its commitment by following through with the World Bank’s plans to end routine gas flaring globally by 2030. The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who announced the deadline at the 2018 Buyers’ Forum/ Stakeholders’ engagement in Abuja, said the Department of Petroleum Resources (DPR) would impose the maximum sanction on defaulting oil firms by preventing them from oil production, effective next year.
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Currently, Nigeria loses N139bn monthly to gas flaring. Nigeria is second on the log of gas flaring countries in the world and number one in Africa, with an estimated 22.3 billion standard cubic feet (scf) monthly. It is, therefore, necessary that this deadline be strictly enforced as previous deadlines were observed in the breach. Kachikwu also assured that this time “government wants to end gas flaring.” He expressed sadness that oil companies still give many reasons why gas flaring cannot stop, mainly because of cash call and monetary benefits.
Gas flaring should no longer be an option. It has become a compelling agenda that government cannot ignore its destructive effects on our population and the ecosystem. Many oil-producing nations no longer tolerate gas flaring and Nigeria should not be left out. We support the government’s decision to increase the gas flare penalty from N10 per thousand scf to N613 per thousand scf.
The increase applies to any oil firm that produces 10,000 barrels of oil or more per day and for those that produce less than 10,000 bpd, the penalty has been increased to N153.2 per thousand scf. Besides, a fine of N50,000 or six months jail term or both, await any oil company that failed to provide accurate flare data.
The new regulation has been gazetted in the Flare Gas (Prevention of Waste and Pollution) 2018. However, it states that an oil firm will not be liable “where the flaring was caused by an act of war, community disturbance, insurrection, storm, flood, earthquake, or other natural phenomenon, which is beyond the reasonable control of the producer.”
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But in the event of continued failure of the producer to comply with any of the requirements of the regulation, government may have no option but to suspend the operations or revoke the oil mining lease or marginal field awarded to the oil company. We think these measures are appropriate considering the socio-economic hazards of gas flaring.
Besides, it will be recalled that two years ago, President Muhammadu Buhari had in France, pledged Nigeria’s commitment to cutting gas emission by 20 per cent in the first phase of plans towards ending gas flaring, promoting the utilisation of solar energy and ensuring a cleaner environment. The second phase will involve cutting emission by 45 percent with the assistance of international climate finance. We doubt if the first phase of 20 per cent has been met due to continued gas flaring by oil companies.
We urge the International Oil Companies (IOCs) in Nigeria to stop gas flaring considering the debilitating consequences on the economy, human health and the environment. Statistics show that IOCs in Nigeria produce about 2.524 trillion scf of gas annually. But the estimated gas they utilise is about 2.235trn, with 289.6bn scf flared.
Government should ensure that it does not back down on the measures it has announced to end gas flaring by oil companies. Pronouncements are worthless if they are not enforced. The reality is that gas flaring that is not related to safety concerns is not only hazardous, it is unsustainable from both the resource management and environmental perspectives. Therefore, the call to end gas flaring is more urgent now than ever before. What is needed is the political will to make it a reality.
