Nigeria flared a total of 1.698 trillion cubic feet (Tcf) of gas between 2012 and 2016 according to figures published by the Nigerian Bureau of Statistics (NBS), compiled by BusinessDay.
With the international price of natural gas is currently hovering around $2.90 per 1,000 standard cubic feet (scf), the 1.698 Tcf of gas flared, translates to a loss of $4.9billion or N1.5trillion (using the official exchange rate of N305.75/dollar).
This is 20% of Nigeria’s 2017 budget, in gas quantity; it translates to 30 % of 5.58 Tcf of Associated Gas, the Nigerian Liquefied Natural Gas (NLNG) processed for exports as LNG and Natural Gas Liquids (NGLs) since inception.
In June, Maikanti Baru, group managing director of the NNPC said, “The NNPC supports the legislative intervention to prohibit gas flaring, in line with global best practices, considering its negative impact on the environment and the communities where the gas is flared.”
A bill for an Act to Prohibit Flaring of Natural Gas in Nigeria and Other Matters, 2017, sponsored by Albert Bassey, chairman, Senate Committee on Gas, has passed second reading at the Senate since March and is yet to be considered by the House of Representatives.
But this is not the first attempt to introduce legislation to abolish the practice. In 2009, the Senate passed the Gas Flaring (Prohibition and Punishment) Bill, after its third reading. It was sponsored by Senator Osita Izunaso, and sought to eradicate gas flare-out in Nigeria by 31 December 2010.
Experts say Nigeria has not demonstrated a keen resolve to stop the practice. “Gas flaring is a preferred option for the oil companies, as it is cheaper to pay fines than invest in the technology required to gather the gas,” said Toyese Adenipekun, Principal Partner at McCoy Barristers & Solicitors in an earlier comment on the issue.
The Nigerian Extractive Industries Transparency Initiative (NEITI) in its 2014 audit report, disclosed that in 2008, the Federal Government in its fiscal regime for the petroleum sector had set a penalty of $3.5 per 1,000 SCF of gas flared by the oil companies, but the companies have refused to comply with the directive. This translates to a loss of $14.298 billion to the economy.
Between 1983 and 2016 Nigeria has set seven deadlines for oil companies to end gas flaring but has continued to kick the can further down the road when the deadline is in sight.
The first deadline for oil and gas companies to stop gas flares was set for 1984 and the military regime of Muhammadu Buhari began dithering when deadline neared.
The present democratically elected Muhammadu Buhari government, last year, pushed further the deadline earlier agreed for year 2020 by indicating support for another agreement that will curb the practice in 2030.
According to a gas flaring study in the Niger Delta, by Eferiekose Ukala, published in the Washington and Lee Journal of energy, climate and the environment, in 1979 Nigeria set a January 1, 1984 deadline for stopping gas flaring.
The government also promulgated the Associated Gas Reinjection Act No. 99. to specifically address the issue of gas flaring. Through this Act, the government mandated that oil companies “re-inject gas into the earth‘s crust and/or submit detailed plans for gas utilisation.
Oil companies in Nigeria cited lack of resources to construct a gas-injection plants within the stipulated time, to push for an extension of the deadline. The government retraced its steps and set another deadline for January 1, 1985.
Another deadline was issued for April 2007 and was later pushed to December 2007. A few months later, the deadline was extended to January 1, 2008, and then again to January 6, 2008 but none of the deadlines were met by the oil and gas companies and the Nigerian government enforced fines for none compliance.
Penalties were increased from N10 to $3.50 per 1,000 standard cubic feet (scf) and the legislature hurried legislation a few months later, proposing to end gas flaring by December 2012. The current date to end gas flaring in Nigeria is now 2030.
ISAAC ANYAOGU
