Last week, Goodluck
Jonathan signed what has been described as binding memoranda of
understanding (MoUs) with petrochemical companies from Saudi Arabia and
India as well as with Chevron, AGIP, and Oando. According to the
president, this step signalled the start of a Gas Revolution in Nigeria.
Coming a week
before general elections, we cannot fail to note the political
undertones in the timing of the launch. Past governments have made
pronouncements on their determination to halt the heinous acts of gas
flaring over the past decades. These have amounted to nothing but hot
air.
Administrative
measures to curb the menace started in 1969. Ten years after the
initial moves, the 1979 Gas Reinjection decree set 1984 as the
essential date when gas flaring became outlawed in Nigeria. However,
the penalty for flouting the law was a slap on the wrist to the oil
companies so that they continued flaring, poisoning the environment and
maiming the people.
The last set dates
for ending gas flaring were given by the late Yar’Adua in December
2008. Towards that deadline, Odein Ajumogobia, at that time the
minister of state for petroleum, announced that a new flare out formula
was being worked out to end gas flaring without hurting government
revenue.
When an earlier
target date of December 2007 was getting close, the same minister
announced that zero gas flare was a moving target.
The gas revolution
announced by Mr. Jonathan is replete with figures on how much money
would be spent on the various projects, but as far as news reports go,
we have seen very little of the volumes of associated gas currently
being flared that the projects would take up.
The drums are very
loud that foreign direct investments will bring in $10 billion and an
aggregate investment of $25 billion over the next three years, with
activities in fertilizer production, petrochemicals, and methanol
manufacturing.
All these will add
up to create about half a million jobs directly and indirectly. But
statistics can be colourful, especially when they are of the Nigerian
variety.
Except for Chevron,
which says it would start by delivering 175 million cubic feet of gas a
day “once the pipelines and infrastructure are in place”, we don’t see
concrete gas utilisation figures associated with this revolution.
Undoubtedly,
efforts have been made in the past by some oil companies to reduce the
amount of gas flared. For example, the Nigerian National Petroleum
Corporation (NNPC) and Mobil’s East Area Natural Gas-to-Liquid (NGL II)
project initiated in 2006 was completed ahead of schedule in 2008 and
was designed to utilise 950 million standard cubic feet of gas daily.
Chevron also
announced that the West African Gas Pipeline project (WAGP) would
significantly dent the amount of gas being flared in the oil fields.
It turned out that
this was not the case because, according to some estimates, less than
20 per cent of the gas on this pipeline is associated with crude oil
production. The bulk of the gas comes from gas fields, rather than oil
fields.
As for the oil
company AGIP, their notoriety in the area of gas flaring is marked by
their seeking to claim carbon credits for utilising some of the gas
they have been flaring at Kwale in the face of the fact that the
activity has not ceased to be illegal in Nigeria.
The same can be
said of Chevron and their claims of the WAGP as well as of other
companies such as Pan Ocean, which is making strides towards obtaining
carbon credits through this route dotted with ethical and moral
questions.
Nigeria’s huge gas
reserves, easily accessible in new gas fields, have made the stoppage
of gas flaring unattractive to an industry that has admittedly taken
the act as a routine matter since the 1950s, despite public outcry.
Nigeria is said to have proven gas reserves of about 187 trillion cubic
feet.
The 2005 estimates
by the World Bank indicated that Nigeria flares about 812 billion cubic
feet of gas daily. We can argue all we want on whether this figure has
increased or reduced with the passage of time.
Oil companies
sometimes make curious claims about how much reduction they have
achieved in their flaring binge. Some have claimed up to 30 per cent
reduction, but the reality on the ground has not backed up such claims.
The gas revolution
also has an anchor on the stomach, as marked by the proposed fertiliser
plants. Obviously, the existing fertiliser plant in Nigeria has not
made a significant dent on supply of the product in the country and
this has left the field open for above and below board games.
While launching the
gas revolution project, the president declared, “We can only be
successful if our actions impact on the common man in Nigeria. The
agricultural revolution arising from the fertilizer and blending plants
will create affordable food for Nigerians and a lot more for export.
The LPG agenda will touch the lives of many households, as cheaper and
cleaner LPG displaces kerosene. The disposable income that arises from
the savings will result in the purchase of more goods and services,
boosting GDP.”
Good lecture, Mr.
President. However, when it comes to wholesome food provision for the
present and in the future, it has been shown that this will come
through farmers who cultivate using agro-ecological methods, and will
not be dependent on the use of artificial fertilisers that are climate
changers and ultimately harm soils and water bodies.
Let the Gas
Revolution roll, but let it begin by the release of the figures of
associated gas to be used in the project, as well as the schedule for
the environmental and other impact assessments for the project.
And, of course, the
question remains, Mr. President: when will gas flares be quenched? Do
we take that the revolution will begin to snuff some flares out in
three years and continue over indeterminate years into the future?
