WHEN Nigeria’s Federal Executive Council (FEC) approved the Nigerian Gas Flare Commercialisation Program (NGFCP) in 2016, optimism heralded the development, a market-based mechanism to eliminate gas flaring in the Niger Delta region. Gas flaring by oil companies in the region has for years devastated the environment and livelihoods of local populations.
The programme presents a dual-pronged opportunity to eliminate routine gas flares—flares will be taken by the government and sold to firms who passed through the competitive bidding process—and drive positive social, environmental and economic impacts in the Niger Delta.
Nigeria had set a national target to eliminate gas flaring in 2020, 10 years earlier than the 2030 global flare out deadline. The target is now missed, prolonging the devastation occasioned to the environment and livelihoods, and blocking the opportunity to generate more electricity.
By attracting investments and developing a transparent market mechanism through a competitive procurement process for allocating gas flares, it presents an opportunity for the transition to clean energy—clean cookstoves—and could employ at least a few of the over 27 million Nigerians the National Bureau of Statistics (NBS) said are currently unemployed in the country.
This could still benefit the over 75 million Nigerians who are not connected to the national grid to get connected and help small businesses that run expensive smoke-belching petrol- or diesel-powered generators to save some money.
Why flare gas
The gas flare which takes place in Nigeria is mostly of the Associated Gas (AG) — the gas which comes alongside drilled crude oil. The flaring started when drilling successfully started in Nigeria in 1959 in Oloibiri.
AG, which is inextricably lifted with crude, must either be harvested or disposed of onsite as an unwanted by-product of oil. As of then, there were rarely facilities that could harvest it. So, disposing of it became the major option.
As more development came, harvesting became possible but disposing was the cheaper option and the easier path would always be followed. And it went on so much so that there are now more than 170 flare sites which collectively flare about 330 bscf of gas produced per year, according to the Department of Petroleum Resources (DPR) — the government agency that regulates it. About 65 per cent of them are onshore.
Various regulations like the Associated Gas Re-Injection Amendment Decree 99 of 1979, was introduced and was amended to provide a stiffer penalty of 2kobo per Mscf of gas flared in 1985 and then to 50kobo by 1990 and N10 in 1998. Progress has been made because gas utilisation had improved and flaring reduced but the progress was not enough as the burned gas still threatened the environment and lives.
So, when the commercialisation programme was initiated with its great potential, the cheers were understandable, even though there was scepticism around it, given Nigeria’s records on the issue.
But the ambitious target the programme set to end gas flaring in 2020, a decade ahead of the global ‘Zero Routine Flaring by 2030’ initiative was not met.
Abandoned bids damaging Nigeria’s reputation After the programme’s launch, the DPR put out a call for bidders. The call for the Statement of Qualification came. Before the initial deadline expired, it extended the deadline to the end of February 2019. Specifically, it reiterated the timeline for the remaining events that’d lead to the final selection of bidders: a shortlist of qualified applicants would take place in the second quarter of 2019, issue of request for proposal would also be in the same quarter while submission of proposals would be in the third quarter. The selection of preferred bidders would then be in the fourth quarter of the year.
But the timeline has been truncated. Although 203 names out of the entire firms which participated in the statement of qualification process were later released as successful firms, nothing much has been heard of the programme of late. The bids have been received after several extensions, which the DPR said, was due to the impacts of the COVID-19 induced lockdown, yet no firm has been announced as the successful ones and no licence released about 15 months outside the working timeline and nine months after the extended final deadline for bids submission.
This holds a lot of significance for Nigeria’s reputation and how seriously it would be taken on issues like this and others.
This may be an indicator to the international community of Nigeria’s inability to keep to commitments. And will send the wrong message given that the country had ratified the Paris Climate Change Agreement, and is a signatory to the Global Gas Flaring Partnership (GGFR) principles for global flare-out by 2030. These commitments were, no doubt, hinged on the NGFCP’s plan and the opportunity it would provide.
Of particular interest are the Paris Agreement and the climate change mitigation drive. The initiative would hasten the country’s drive for clean cook stoves by reducing logging for open cook stoves and enhance the quality of air around the homes by making cooking gas more available and cheaper. But this delay means steps away from keeping to the agreement and many steps towards the continuous exposure of many women whose lives are endangered due to open firewood cooking.
The delay has far-reaching implications for the country, said Sadiq Rijiya, an oil and gas expert. “Not only is Nigeria the giant of Africa but a major player in the global oil and gas industry”, he said.
“This (delay) sends a wrong message to the international community on Nigeria’s commitment and level of seriousness in agreements it is signatory to. It will affect its reputation in the international community and among investors.”
Timelines attached to projects like this are really important as they are part of what investors look at when making investment decisions, Rijiya said. And if Nigeria wants foreign investors to take it seriously, it must keep to them and avoid uncertainties as much as possible.
Beyond the reputation issue is the continued damage to the environment. One of the major drivers of the programme is to remedy the environment which has been devastated for decades. With the delay, the havoc would still continue and sadly, the environment would continue to get wrecked. What this means is that more lives would be lost.
The impacts of gas flare on humans have been well documented, especially in the Niger Delta.
In 2014—just a few months after an MIT study found that air pollution could actually lead to death—Edinburgh Napier University’s Chiemezie Nwakire researched the quality of air in communities with gas flaring sites and found that there was a high value of sulphur dioxide (SO2), Nitrogen dioxide (NO2) and Carbon monoxide (CO) in the air.
Atmospheric Sulphur, Nitrogen and Carbon combine with elemental Oxygen forming acidic oxides which dissolve in rainwater to produce dilute Sulphuric, Nitrous/Nitric and Carbonic acids, the research discovered.
With its effects on respiratory functions of the residents in communities with flaring sites and the increased risk of premature birth it poses to pregnant women; Nigerians are paying huge prices for the inefficiency of the DPR to commence.
Nigeria is a ‘gas nation’. It has the highest proven gas reserve in Africa and has just moved from 9th to 8th, globally, overtaking Venezuela in 2020, yet more than 75 million Nigerians are not connected to the national grid. Those that are connected, endure blighting cuts. While South Africa—with less than a third of Nigeria’s population—provides grid electricity to 91 per cent of its less than 60 million population and has a rarely known gas reserve.
Part of the root causes of Nigeria’s power supply woes is inadequate gas supply to power stations. Most of the stations fluctuate from performing at fully installed capacity to performing at mostly less than 50 per cent capacity. Not only does this lead to poor supply, but it does also cut deep into the purse of Nigerians who would then rely on self generation mostly from smoke-belching diesel or petrol-powered generators.
Adequate gas supply could help mitigate this. The flared gas, which the NGFCP seeks to harness, could help generate 2.5GW of power from new and existing IPPs spluttered around the country, a former programme manager of NGFCP said in a report. What this means is that there’s a chance to improve power generation, which would trickle down to Nigerians but the delay in the full implementation of the NGFCP is subtly blowing it up.
Rijiya has another perspective — the delay could be subtly spiking poverty and unemployment. Here’s how: power supply is the bedrock of any meaningful economic development and its absence could lead to a high mortality rate of young businesses.
“It is very hard to survive in a country without adequate power supply because it will lead to unemployment which would lead to a high level of poverty and then lead to insecurity,” he said.
This means the programme which has been projected to create about 300,000 jobs is somewhat doing the opposite through DPR’s delay in announcing successful firms and awarding them the licence to harness the flare gas which would enhance power supply and eventually decrease the mortality rate of young businesses.
When Nigerian Tribune reached out to Mr Paul Usoh, the DPR spokespersons for comments on the issue, he did not respond.
This story was produced under the NAREP Oil and Gas 2021 fellowship of the Premium Times Centre for Investigative Journalism.