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Sunday, January 25, 2015
- Nigeria's gas flare-out date has once again been extended – this time to 2011. The decision follows 25 years of political procrastination by the federal government and illegal behaviour on the part of major oil multinationals engaged in flaring associated gas (AG), the byproduct of oil production in the Niger Delta. Nigeria is famous for its trademark low-sulphur crudes such as Bonny Light; the delta's oil is the source of 80 percent of the federal budget and 95 percent of export earnings. In 2008, Nigeria, the world's eighth largest oil exporter, produced an average of 2.1 million barrels of oil per day.
Forty-four percent of this output was exported to the United States; other importers include Europe (25 percent of Nigeria's output), India (11 percent), Brazil (7 percent), and South Africa (4 percent).
Apart from its status as a seemingly bottomless barrel of oil, Nigeria also has the world's seventh largest reserves of natural gas, possessing proven reserves of 184 trillion cubic feet and estimates suggest the country could possess as much as 600 trillion cubic feet.
Oil has generated billions of dollars in profits, making Nigeria one of Africa's leading economies, but there have been few benefits for the 30 million people who live in the oil-rich Niger Delta.
They lack adequate basic infrastructure like schools, clinics and potable water, and many of the better-paying jobs in the industry are held by foreigners or Nigerians from elsewhere in the country.
Resistance to the government has continued, now led by armed groups like the Movement for the Emancipation for the Niger Delta, which carried out an attack on an oil installation in Nigeria's economic capital Lagos on Jul. 12, the first to take place outside the oil-producing region.
Africa's lame giant
Despite its rank as one of Africa's economic powerhouses, the country's electricity capacity stands at 3000 megawatts (MW), generating on average just 1000 MW. The lack of electricity has undermined the domestic economy, forcing local businesses to resort to costly diesel generators, and rural peoples to candlelight and kerosene lamps for light, and cooking with firewood or charcoal.
Paradoxically, the country continues to flare between 40 and 60 percent of associated gas: 23 billion cubic meters each year, economically valued at $2.5 billion per annum.
It is a practice that began half a century ago with the discovery of oil in Nigeria, and one that has burned over $70 billion worth of AG since 1970. After Russia, Nigeria is the world's leading culprit, flaring 13 percent of a total 168 billion cubic meters annually from over 100 flare sites.
Flaring pumps over 400 million tons of carbon into the atmosphere each year, amongst other greenhouse gases such as methane.
Vertical and horizontal flare sites releasing over 250 toxins into the air are often located close to or within communities, who are subjected to the heat, noise, pollution and the constant disorienting glare of flames.
"Various administrative directives and laws enacted by the federal government of Nigeria to end gas flaring in the Niger Delta region have never been enforced," said Nnimmo Bassey, environmental and human rights advocate with non-governmental group Environmental Rights Action. ERA is the Nigerian affiliate of international environmental campaign group Friends of the Earth International.
"Gas flaring causes acid rain which acidifies the lakes and streams and damages crops and vegetation. It reduces farm yields and harms human health, lives and livelihoods; increases the risk of respiratory illnesses, asthma and cancer and often causes chronic bronchitis, decreased lung function, blindness, impotency, miscarriages and premature deaths," he said.
Routine flaring was first outlawed in 1984, pursuant to section three of Nigeria's Associated Gas Reinjection Act (1979). Under this section, flaring is only allowed if corporations have field-specific ministerial certificates; the ACT further states that AG must be re-injected or utilised.
But the punishment – in the form of fines and expediently shifted goal posts – has yet to fit the crime. According to a 2004 report by the World Bank, multinationals were fined "a total of between US$150,000-370,000 annually."
This may be because 95 percent of the oil industry is controlled by joint ventures between the Nigerian National Petroleum Corporation and the "big five", Shell, Mobil, Chevron, Agip and Elf. As a result, fines are split 60-40 between the oil multinationals and the government's oil company, rendering high penalties inconvenient for Nigeria's notoriously corrupt political elite.
A habit too expensive to break
In 2007, Shell (SPDC) Nigeria's largest oil producer revealed that 64 percent of associated gas was flared, while just 22 percent was sold to the Nigeria Liquefied Natural Gas plant. States Shell, "In 2000, we set a target to eliminate continuous faring at our Nigerian operations by the end of 2008. Since 2000, we have invested some $3 billion dollars in these gas-gathering projects."
Yet according to a 2004 article in the New York Times, "A high-level (Shell) review in December found that many oil field projects did not include plans to gather natural gas.
The company further admitted in a document on their website that the decrease in gas flaring was also due to the "impact of recent production losses due to security concerns."
Chevron's Scott Walker told IPS, "Chevron remains committed to the Nigerian government’s goal of eliminating routine flaring. We have a program to reduce routine flaring that includes three major capital projects that are currently in progress.
"However," he continued, "there are many complex challenges to overcome before Nigeria can achieve its routine flare reduction goal."
Speaking on behalf of the oil industry at a public hearing on flaring in 2007, Chevron official Charles Adeniyi emphasised that ending flaring in 2008 was impractical as it would "defer income from 480 million barrels of oil between 2009 and 2012."
Corporations claim that at present there is no market for liquefied natural gas. A project designed to reduce flaring by liquefying associated gas and shipping it elsewhere in the region for electricity generation is the World Bank-backed West African Gas Pipeline, completed in 2008.
But the project's impact on gas flaring was later revealed by the World Bank's Inspection Panel as "modest", with pipelines principally used to transport cheap, non-AG, to industrial clients in Ghana, Togo and Benin.
According to Muna Lakhani of the Institute for Zero Waste in Africa, the flaring and wasting of an energy source, is a crime. "The practice stems mostly from the disinterest of transnational corporations like Shell. The lack of any minimum international standards, allows for these practices to continue unabated.
"Regardless of the fact that fossil fuel should be left in the ground, currently extracted resources must be used for the benefit of those who have yet to benefit from such resources," he said.
The solutions: sanctions on multinationals that refuse to comply with "zero flares", political representation of Delta communities complete with multi-stakeholder processes, financial compensation for environmental degradation, disclosure, and transparent monitoring of revenues, is unlikely to be seriously entertained by the political elite given the prevalent level of corruption.
"The current government stand is that gas flares will end in 2011. The corporations insist that the deadline should be 2013," Bassey stated. "There is no seriousness on either side."