By Tope Adeboboye
It is a phenomenon that has, for decades, wreaked monumental havoc on the Niger Delta.
Each day, hundreds of blinking flares dot the skyline above many communities in Nigeria’s oil-producing region, causing pollution and environmental degradation. From hour to hour, large, terrifying flames ascend into the sky, as gas flares inflict massive devastation on the land and water bodies in the area, endangering the people’s health.
In spite of repeated promises by past and present administrations, gas flaring has remained a seemingly untameable scourge, perpetually spreading distress, diseases and death to dwellers of Niger Delta communities. Besides its danger to human lives and the environment, gas flaring, experts have said, is a direct destruction of the nation’s wealth.
Last week, the House of Representatives made yet another attempt to seek an end to gas flaring in the Niger Delta. Its Joint Committee on Gas Resources, Environment and Climate Change organised a public hearing with the theme: “Need to End Gas Flaring in Nigeria and Harness Associated Gas in Nigeria.”
At the event, chairman of the joint committee, Mutu Nicholas, noted that Nigeria loses over $750 million in annual revenue from flared gas.
Also speaking at the public hearing, Minister of State for Petroleum, Mr. Timipre Sylva, stated that Nigeria would achieve complete elimination of gas flaring by 2025.
Nicholas, in his speech, explained that the gas being freely flared would be useful to other industries. He explained that, if properly harnessed, the gas would stimulate economic growth, create jobs, provide income for midstream companies and earn revenue for government through taxes.
He regretted that efforts by Nigerian government to stop gas flaring have been largely ineffective since 1979 when Nigeria made the first legislative attempt to tackle gas flaring.
His words: “Gas flare is a malady that we must work together to eliminate at the shortest time possible because of its all-round adverse effects on the environment and socio-economic well-being of the people of Niger Delta region, as well as on the fiscal measures of the Federal Government. At current estimates by PricewaterhouseCoopers (PwC), Nigeria loses over $750 million in annual revenue from flared gas.
“Zero flare gas deadlines have routinely shifted to future dates. We thus commend government for the 2018 Gas Flare Regulation, which imposes the penalty of $2.00 per million standard cubic feet (MSCF) of gas flared. Still, we would like to stress the need for compliance with the provisions of the penalty regime. Since the gas flare regulation was released in 2018, this committee has received reports on flare volume discrepancies.”
Speaker of the House, Femi Gbajabiamila, asserted that the ninth Assembly, under his watch, was committed to ending gas flaring using effective legislative action, including bills and oversight functions.
“The conversation about gas flaring in Nigeria has been going on for a long time. Unfortunately, those conversations have not yielded the desired results. We have not managed to end the environmental damage that results from gas flaring, and we are still deprived of the economic benefits of full utilisation of gas resources in our country. In this ninth House of Representatives, we intend to do everything we can to change this narrative,” he said.
The president of host communities, Chief Benjamin Tamaranebi, in his presentation, lamented that communities in the region were suffering from the emission of poisonous substances into their environment. He charged all stakeholders to be partners in progress to create a win-win situation for the oil companies, government and host communities.
However, at the hearing, Sylva said Nigeria has reduced gas flaring to 8 per cent. He declared that his ministry was addressing the issue of gas flaring with all the seriousness it deserved.
“We believe, with all the programmes lined up, that we are on course to achieve complete elimination of gas flaring by 2025. We take the issue of gas flaring in the ministry very seriously,” Sylva said.
In his presentation, the group managing director (GMD) of Nigeria National Petroleum Corporation (NNPC), Mr. Mele Kyari, said the company was currently executing a number of projects to ensure the total eradication of gas flaring.
Kyari opined that increasing the flaring penalty would not address the issue. He argued that creating commercial tanks that would enable companies invest in the flare, which could be converted into money, was a better option.
He noted that “Two things must happen: one is to put the enabling infrastructure, which we are doing immensely. We are building major trunk lines that will receive the flared gas that you are seeing today. We are connecting most parts of this country to the gas network so that people can convert this gas to power industries and they are all within sight. By the end of March, we have what we will call the quarry cluster for flared gas. It makes about 200 million cups of gas. By the end of March, this will vanish because once we end connecting all the lines, automatically, it goes away.
“No matter how much penalty you put, if the cost of penalty is cheaper than developing, people will continue to flare and pay the penalty. You can raise the penalty to any number and what it does is that it will completely make the people not to invest in anything,” Kyari said.
Stakeholders have noted that one project that would aid the eradication of gas flaring is the Ajaokuta-Kaduna-Kano gas pipeline project. The $2.8 billion, 614km Ajaokuta-Kaduna-Kano project, experts say, will add 3,600 megawatts of electricity to the grid when completed and also supply industrial clusters with constant power.
It has been said that Nigeria has 200.79 trillion cubic feet of gas reserves, Director of the Department of Petroleum Resources (DPR), Mr. Ladan Mordecai Lawan, stated this at a technical workshop organised last year by the Lagos branch of the Society of Petroleum Engineers. The theme of the workshop was “Gas Utilisation in Nigeria: Challenges, Opportunity and Outlook.”
Lawan, who was represented by the deputy manager, gas division, DPR, Mr. Olawale Ogunsola, said national gas reserves rose to 200.79 trillion cubic feet as of January 1, 2019. He said Nigeria produces daily 1.2 billion standard cubic feet (scf) with 41 per cent of the daily production exported while 48 per cent went to the domestic market, and 11 per cent was flared.
“From this, it is obvious that the country has gas resources in abundance. In the global ranking, Nigeria is number nine in terms of reserves. But the country’s gas production and utilisation are still low,” he admitted.
The Ajaokuta-Kaduna-Kano natural gas pipeline is also designed to pave the way for the development of three gas-based independent power plants in Abuja (1,350MW), Kaduna (900MW) and Kano (1,350MW), respectively.
When completed, it was learnt, the AKK pipeline will transport up to 3.5 billion cubic feet of natural gas a day from various gas-gathering sites in southern Nigeria to Ajaokuta, where it will be processed into liquefied petroleum gas used largely for domestic cooking. The remaining dry gas will be transported to supply feedstock for new power plants and petrochemical plants in Abuja, Kaduna and Kano, it was further learnt.
“This project, which is a section of the Trans-Nigeria Gas Pipeline (TNGP), will enhance natural gas supply through pipe from the south to the north of the country. It will originate from Ajaokuta in Kogi State, traverse Abuja (FCT), Niger State, Kaduna State and terminate in Kano State.
“The project will be linked to the Escravos-Lagos Pipeline System II (ELPS II) and (OB3) gas pipeline currently under construction, thus, doubling the capacity to over three billion cubic feet of gas per day,” the NNPC has said.
Experts have noted that the project would have a number of positive impacts, including reduction of flared gas, monetisation of the abundant gas resources locked up due to infrastructure deficit and increase in the use of domestic gas.
It was discovered that, in 2018, Nigeria flared about 324 billion standard cubic feet of gas, which could generate 2,500 megawatts of power as well as attract $3.5 billion investments in the country. The AKK project will stop the wastages, it was gathered.
Besides its other benefits, the AKK project is capable of helping to revitalise over 232 industries. The government also said over one million jobs would be created, as fertiliser, methanol and other gas-based industries will generate employment and facilitate balanced economic growth. It is also expected that the project will revitalise the textile industry, which used to boast of over three million jobs in parts of the country.
The Federal Government further noted that: “Other moribund industries along transit towns in Kogi State, Abuja, Niger State, Kaduna State and Kano State are expected to come alive when the project is completed. Also, it will have significant job creation potential, foster the development and utilisation of local skills and manpower, technology transfer and promote local manufacturing.
“Using the current gross domestic product (GDP), approximately $1 billion per annum will be generated and, in the pipeline’s useful life of 30 years, a conservative cumulative gain to GDP of $30 billion is expected. The project will supply gas to three independent power plants in Abuja with combined output of 1,350 megawatts, Kaduna (900 megawatts) and Kano (1,350 megawatts). These benefits are huge by any standard. With improvement in power generation and distribution, businesses are expected to thrive and new ones are expected to come on board and take away from the pool of jobless Nigerians.”
National vice-president, Independent Petroleum Marketers’ Association of Nigeria (IPMAN), Alhaji Abubakar Maigandi, said well-meaning Nigerians have started taking advantage of the gas project.
“Now there are states such as Kaduna and Kano that have started constructing LPG filling stations. They are targeting the AKK plant as their source of energy. When the project gets to Kano and Kaduna, it will impact on other northern states. Normally, the transportation of gas increases the rate. When it is being pushed down, the cost will reduce and it will lead to gas availability,” he said.
Analysts have also said the project, upon completion, will earn the country more foreign exchange, as the AKK is a significant part of the ambitious pipeline project designed to supply gas to Europe through the proposed Trans-Sahara Gas Pipeline (TSGO) and the Nigeria-Morocco Gas Pipelines. By the time the project is integrated into these two other projects, Nigeria will earn more foreign exchange and shore up its foreign reserves, which has been depleted as a result of the sharp drop in the price of crude oil, analysts say.