Gas Flaring Means Cash Burning

 By Ray Ekpu

Most literate Nigerians have heard or read about gas flaring but it may not mean much to them. Some of them may know that gas flaring is done in the oil producing states of the country but they may not know what it means to Nigeria or Nigerians who live in those areas.

Even though it is a very important subject in economic terms it is not a subject that most people talk or write about. But it is a subject that has featured in the lives of some Nigerians since oil was discovered in 1956 in Nigeria. That is because gas flaring brings a lot of misery to those who live where the gas is flared. We will come to this later.

It is estimated that about 145 billion cubic metres of gas per year are being flared in oil and gas operations around the world. In Nigeria, oil and gas companies flared about 92.3 million standard cubic feet mscf of gas between January and April this year. This amounted to an estimated N150 billion according to a report by the National Oil Spill Detection and Response Agency (NOSDRA).

For the four months mentioned above, the international oil companies and other companies responsible for the flaring are expected to pay penalties amounting to $184.6 million (or about N85.7 billion). For the same period the volume of gas flared is equivalent to 4.9 million tonnes of carbon dioxide emission and has a power generation potential of 9, 200 gigawatts of electricity per hour.

So, the question to ask is, why is this money called gas being burnt away for many years now? It is being burnt away because the Federal Government of Nigeria has been charging the defaulters peanuts as fines for several decades now. These fines represent a slap on the wrist of the oil companies or the equivalent of slapping them with loaves of bread.

The fines are not huge enough to hurt them into doing something urgent to stop gas flaring. Some of the oil companies are said not to pay the fines as and when due. That is because the Federal Government does not pay serious attention to the matter since it has other sources of revenue. However, now that the government’s revenue is drying up, I suspect that it will be compelled to pay close attention to the issue.

There is a framework in the Petroleum Industry Act 2021 for the regulation of the oil and gas industry in Nigeria. This bill was signed into law on August 16, 2021 by former President Muhammadu Buhari. The law provides the framework for regulation and the gradual elimination of gas flaring in the country. Section 104 of the Act criminalises the act of gas flaring by any licensee, lessee or marginal field operator except in three situations (a) an emergency (b) exemption from the Nigerian Upstream Petroleum Regulatory Commission and (c) when it is considered acceptable as a safety practice under established regulations.

There are about 10 countries that are guilty of the most flare: Iran, Iraq, United States, Russia, China, Libya, Nigeria, Algeria, Venezuela and Mexico. These 10 countries are said to jointly account for ¾ of the global flare. Nigeria has the 9th largest volume of gas, more gas reserves than crude oil reserves but that is not why the gas must be flared away recklessly.

In recent years, however, Nigeria has been listed among the countries with most of the decline in gas flaring. Other countries listed in this category are Mexico, United States, Colombia and Kazakhstan. Even though they are listed as having done much in the last seven years there is still a lot of room for improvement if they are to reach a zero flare situation in the near future.

According to experts, flaring can be reduced in three ways (a) by preventing waste gas production (b) if it cannot be prevented then waste gas recovery for sale can be a profitable option or (c) storing or re-injecting of gases in oil and gas reservoirs is also an alternative. So if there are three available options why is it a difficult task to tackle? I believe the oil companies prefer the path of least resistance by opting to pay fines rather than do the needful.

Since oil was discovered, the various oil companies in Nigeria have been given more than a dozen deadlines for them to achieve a zero-flare situation but they have always failed to reach the zero flare situation. And as they fail, the government merely imposes a little higher fine and the oil companies go back to bed as happy investors ready to pay the minimal fines. In 2022, the oil companies were fined $450 million for gas flaring, a sum that some experts believe is minimal when compared to the damage that gas flaring does to the economy and the community where the flaring takes place.

In fact, it is believed that some of the companies are owing gas flaring fines for the past 10 years or so. Except the present government shows more seriousness in the collection of these fines than has been shown hitherto, the fines may continue to accumulate. Now the Federal Government has shifted its zero flare deadline from 2020 to 2025. The new dateline is only two years away and those involved in the regulatory agency should ensure that each of the oil companies is seen to be doing something before the deadline is reached.

The world’s weather has changed considerably because gas flaring has led to global warming and environmental degradation. Even though we are in the rainy season now in Nigeria, the weather is at times very hot and humid due to global warming. And when the rain comes, it is huge, very huge, leading to flooding that kills people, pulls down people’s houses and destroys farmlands.

People living in host communities where gas flaring takes place do not know the difference between day and night because the gas flaring takes the darkness away at night. The roofs of their buildings are black like charcoal and they leak when rain falls. In these places there are all sorts of strange illnesses whose cure is unknown. There are other illnesses such as fever, diarrhoea and respiratory diseases that are resistant to the well-known drugs that normally cure such ailments.

Children who grow up in such areas experience stunted growth and underweight issues. Toxic pollutants damage the environment, killing plants and animals and also damaging the soil and water. Those who do farming in such areas experience a change in the vegetation, which harms their crops and renders their harvest poor. Those who live near the waterside discover that the streams are polluted, the fishes are dead or poisoned. They cannot drink the water from those streams without getting ill. The fishermen among them lose their source of livelihood.

Those who have not travelled to those areas may not know how treacherous the terrain in those places is. That is why such people argue against significant attention being paid by the government to those who live there. At some point, the Petroleum Industry Act will have to be looked at again with a view to improving what can be done for those who live in those landscapes. It is the poor quality of the terrain and the lack of attention to the inhabitants that led to the long agitation in the oil producing areas by the militants. These problems are still there and continue to haunt the inhabitants like ghosts.

It is a shame, a crying shame, that we have a lot of gas that is being burnt away every week, every day and every second that could have been put to better use. The National Bureau of Statistics (NBS) in a 2020 survey revealed that only 63.8% of Nigerian households have access to cooking gas.

What most Nigerians, especially in the rural areas use in cooking is firewood. Firewood has its own problems. It generates smoke that is unhealthy. It can burn people if they are not careful. Yet in the midst of plenty, a lot of our people are starving. With so much gas all over the place that ought to be better utilised our people are suffering. That is one of the ironies of Nigerian life. A lot of our people are starving in the midst of plenty.

The Bola Tinubu government must do something to stop gas flaring which is the equivalent of burning our naira. The oil companies must be told that the flaring must come to an end in 2025 so that we can utilise our resources better, save the lives of our citizens and raise the standard of living of our people. That is the challenge that President Tinubu must tackle without much loss of time.

*Ekpu, a veteran journalist, was the CEO of Newswatch Communications