Some communities in the Niger Delta region and others have been forced to live with the tumultuous effects of gas flaring on their health and environment. Recently, hope beckoned with the disclosure by Minister of state for Petroleum, Mr. Timipre Sylva, that Nigeria will join the global community in achieving complete elimination of gas flaring by 2025.
In some Niger Delta communities, they often don’t know the difference between day and night because of the flares from gas, which releases black soots into the sky. Over the years, the affected host communities have decried the effect of such gas flares on their environment and health.
Their fears are legitimate as constant exposure to air pollutants released by gas flaring have been linked to cancer and lung damage, as well as neurological (central and peripheral nervous system) and reproductive problems.
Effects on Environment, Humans
Given that gas flaring occurs when crude oil is extracted from underground and natural gas is brought to the surface, it emits powerful climate forcers and dangerous air pollutants like black carbon, methane, and volatile organic compounds, which is dangerous to health.
These gas flares are killing crops, polluting water and damaging human health, just as it makes the weather perpetually hot for host communities.
Projections for Nigeria
Given the harm gas flaring portends, Minister of state for Petroleum, Mr. Timipre Sylva, vowed that Nigeria will join the global community in achieving complete elimination of gas flaring by 2025.
Sylva made the disclosure at a public hearing on ‘Need to End Gas Flaring in Nigeria and Harness Associated Gas in Nigeria’ organised by the House of Representatives Joint Committee on Gas Resources, Environment and Climate Change.
Speaking at the hearing, the minister said the issue of gas flaring is something that the ministry takes very seriously, noting that Nigeria has however reduced gas flaring to eight per cent.
“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.
Corroborating Sylva’s statement, the Group Managing Director (GMD) of NNPC, Mr Mele Kyari, in his presentation, revealed that the corporation is executing a number of projects to make sure that gas flare is taken out completely, adding that increasing the flaring penalty is not the solution, given that it is better to create commercial tanks that will enable companies invest in the flare which can be converted into money.
“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.
“Just to put it in perspective, 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.
The Chairman, Joint Committee of the House on Gas Resources, Environment and Climate Change, Hon. Mutu Nicholas, stated that Nigeria loses over $750 million in annual revenue from flared gas.
Nicholas explained that the gas that is being flared is feedstock for other industries, which if properly harnessed would stimulate economic growth, create jobs, and provide income for midstream companies and earn revenue for government through taxes.
The lawmaker lamented that efforts by Nigerian government to stop gas flaring have been inadequate and ineffective since 1979 when Nigeria made the first legislative attempt to address the problem of gas flare.
He said: “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-fiare 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 (MMSCF) 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.”
Commitment to Change the Narrative
Expressing commitment to change the narrative given the many unfruitful conversations in the past, the Speaker of the House, Hon. Femi Gbajabiamila, affirmed the 9th House’s dedication to the cause through legislative action such as bills and oversight functions.
He said: “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 9th House of Representatives, we intend to do everything we can to change this narrative.”
The President of host communities, Chief Benjamin Tamaranebi, in his presentation, lamented that they are suffering from the emission of poisonous substances into their environment, by oil and gas industry. He further appealed to all stakeholders to be partners in progress, so as to create a win-win situation for the oil companies, government and host communities.
Flaring Reduction Project
The policy position of the FG is that gas flaring is unacceptable, thus, it has initiated a number of actions to reaffirm its commitment to ending the practice of gas flaring. Specifically, the FG has ratified the Paris Climate Change Agreement, and is a signatory to the Global Gas Flaring Partnership (GGFR) principles for global flare-out by 2030 whilst committing to a national flare-out target by year 2020.
But one project that will aid the eradication of gas flaring is the Ajaokuta-Kaduna-Kano Gas Pipeline Project. The $2.8 billion gas pipeline project of President Muhammadu Buhari, it is believed will aid the ending of gas flare. The 614km Ajaokuta-Kaduna-Kano project is expected to add 3,600MW of electricity to the grid when completed and also supply industrial clusters with constant power.
At a technical workshop last year, with the theme: “Gas Utilisation in Nigeria: Challenges, Opportunity and Outlook,” organised by Society of Petroleum Engineers (SPE), Lagos Branch, the Director of the Department of Petroleum Resources (DPR), Mr. Ladan Mordecai Lawan revealed that Nigeria had 200.79 trillion cubic feet of gas reserves. This quantity places Nigeria as a gas-producing nation because of its potential gas reserves which were more than its crude oil reserves.
Represented by the Deputy Manager, Gas Division of DPR, Mr Olawale Ogunsola, he said national gas reserves rose to 200.79 trillion cubic feet as of January 1, 2019. Giving a breakdown, he revealed that 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 being flared.
“From this, it is obvious that the country has a gas resource 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 said.
According to reports, the Ajaokuta-Kaduna-Kano natural gas pipeline is also designed to pave the way for the development of three-based Independent Power Plants (IPPs) in Abuja (1350MW), Kaduna (900MW) and Kano (1350MW) respectively.
AKK Pipeline will transport up to 3.5 billion cubic feet of natural gas a day from various gas gathering sites in Southern Nigeria and process at Ajaokuta will produce Liquefied Petroleum Gas (LPG) used largely for domestic cooking, while the remaining dry gas will be transported to supply feedstock for new power plants and petrochemical plants at Abuja, Kaduna and Kano.
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 and can transport about 2.2 billion cubic feet of gas daily.
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.
Oil and gas experts have identified reduction of flared gas, monetisation of the abundant gas resources locked up due to infrastructure deficit and increase in the use of domestic gas as some of the impacts of the project when completed.
The Department of Petroleum Resources (DPR)’s statistics shows that Nigeria has over 200 trillion standard cubic feet (Tscf) of gas reserves. This figure was as of January 2020. Sadly, in 2018, the country flared no less than 324 billion standard cubic feet of gas, which can generate 2,500 megawatts (Mw) of power. Aside this, it can attract $3.5 billion investments in the country, according to the DPR. With the coming on stream of the AKK, these benefits can be reaped.
The project, which is a 40-inch by 614km pipeline, has capacity to transport 2.2Bcf/ of natural gas per day and will unlock the domestic market. Aside from this, it will supply gas to generate 3,600Mw of power to the national grid. It is also said to be capable of helping to revitalise over 232 industries.
In the area of job creation, the government said over one million jobs would be created; 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.
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 $1billion 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, according to government.
The project will supply gas to three Independent Power Plants (IPPs) in Abuja with combined output of 1350Mw, Kaduna (900Mw) and Kano (1350Mw). 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.
When completed in two years as planned, the country will also earn more foreign exchange given the fact that 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.
At the inauguration of the AKK project, Buhari urged the private sector to champion the efforts for optimal use of the nation’s gas resources, insisting that the private sector has what is required to create a petrochemical hub aimed at resurrecting the manufacturing industry and putting the country on the path of increased self-sufficiency.
According to the Independent Petroleum Marketers’ Association of Nigeria (IPMAN ) National Vice-President, Alhaji Abubakar Maigandi, 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.