Oil companies to continue to flare gas beyond 2015
Oil firms in Nigeria, especially the international oil companies (IOCs), may continue to flare substantial amount of the gas resources in the country until 2020 which, according to them, is the feasible year for the flare out deadline, BusinessDay has learnt.
Energy experts say that the continued flaring of gas in the country, amidst gas supply shortfall in the domestic market, constitutes not only an environmental disaster, but also an economic tragedy.
They stressed the need for a legal framework and the political will to stop the massive flaring of natural gas in the country.
The Federal Government had been trying to end natural gas flaring over the years, but the flare out deadline has been repeatedly postponed with the most recent deadline being December 2012.
Eli Bala, director-general and chief executive officer, Energy Commission of Nigeria (ECN), speaking at the annual international conference of the Nigerian Association for Energy Economics (NAEE) on Tuesday, said: “Oil companies are still flaring a substantial amount of the natural gas in the country. According to the National Energy Policy (NEP), flaring was supposed to stop by 2008”.
Bala, who was represented by Joseph Olayande, director, energy planning and analysis department, ECN, said the NEP is currently being reviewed and they had considered that the next terminal date for gas flaring should be 2015. He added that consultation with oil companies and other stakeholders was ongoing, with the oil companies saying 2020 would be a more realistic deadline.
One of the objectives of the policy statements in the NEP, which was approved in 2003 and approved in 2005, was to eliminate the flaring of associated gas by 2008 by encouraging the oil producing companies to gather and utilise the gas and by imposing appropriate and effective penalties to discourage gas flaring.
Emeka Duruigbo, professor of law at Thurgood Marshall School of Law, Texas Southern University, United States, said it was pathetic and horrible the gas being flared in Nigeria. “The deadline keeps on shifting. Nigeria has tried to deal with this issue since at least since 1979, when they passed the Associated Gas, Re-injection Act and the regulations that follow and each time they imposed standards, fines, deadlines, nothing seems to come out of it.
“The argument of the IOCs is that it takes money to utilise this gas and the government needs to pay its own share of it. I think the argument has merit because they are in joint ventures with government. But I think we have to think beyond that. Gas flaring is something that bothers me. The technology exists to capture this gas, re-inject it and use it.
“It is not only a monumental environmental disaster in that we are just poisoning the environment of the host communities, it is also a large economic tragedy because we are wasting a lot of money. We have to address it. It takes a lot of political will.”
Nigeria is second to Russia in global gas flaring, according to World Bank. The country flared 536 billion standard cubic feet (scf) of natural gas in 2010, or about a third of the gross natural gas produced in 2010, according to the NNPC. In 2011, the NNPC claimed that flaring cost Nigeria $2.5 billion per year in lost revenue, according to the EIA.