Oil Refineries: Nigeria Ignores The Green Energy Transition At Its Peril

 By Olu Fasan

Last  week, I wrote about the dire economic consequences for Nigeria as a petrostate almost solely reliant on oil and gas exports. This week, I want to address another aspect of that intervention: the climate impacts of Nigeria’s deepening commitment to burning fossil fuels.

Nothing demonstrates this commitment more than the excitement over the Dangote Refinery and the government’s determination to license more private oil refineries while pursuing new hydrocarbon exploration. The economic and climate impacts of Nigeria’s fossil-fuel dependency pose existential threats to the country’s future stability. Yet, Nigeria is entrenching itself as a hydrocarbon country while paying lip service to energy transition.

To be sure, Nigeria cannot suddenly, overnight, end fossil fuel use. That, pragmatically, is not possible. But is Nigeria serious about transitioning from hydrocarbon dependency to renewable energy generation? 

Sadly, the answer is no. Last year, at the United Nations climate summit, COP28, held in Dubai, Nigeria was among the 200 countries that agreed to transition away from fossil fuel energy systems by 2050 and to triple renewable energy capacity and double energy efficiency by 2030. But, alas, the UN climate pact is more honoured in the breach than in the observance. Nigeria continues to indulge in what the Economist magazine called “both-wayism” by holding two contradictory positions: claiming to be committed to tackling climate change but perpetuating everything that causes it. 

Yet, few countries are more exposed to the devastating effects of climate change than Nigeria. At COP 26 in 2021, then President Buhari said: “Desertification in the North, floods in the centre, pollution and erosion on the coast are enough evidence.” 

He added: “For Nigeria, climate change is not about the perils of tomorrow, but what is happening today.” For recent evidence, consider this month’s massive flood in Maiduguri, capital of Borno State, which damaged thousands of buildings, destroyed critical infrastructure and displaced nearly 400,000 people. Of course, some of the blame lies with Nigeria’s utterly appalling disaster preparedness and management system. But it’s hard to avoid the fact that floods, drought, heatwaves, etc, are products of extreme weather conditions, caused by climate change. 

In his characteristic double-speak, President Bola Tinubu said during his visit to Maiduguri in the aftermath of the flood: “I have been reflecting on how to tackle this kind of disaster and the effects of climate change.” But here was the same Tinubu who, when campaigning for the presidency in 2023, described climate change as a “poisoned holy communion”, saying “it is a question of how you prevent a church rat from eating poisoned holy communion.” 

But the poisoned holy communion is killing the church rat. If, as president, Tinubu has had a Damascene conversion, there’s little proof of it. For despite his new rhetoric about tackling climate change, Tinubu has done nothing beyond empty symbolisms, such as establishing the so-called “Presidential Committee on Climate Action and Green Economic Solutions” and appointing his then spokesman, Ajuri Ngelale, as “Special Presidential Envoy on Climate Action”. None of which could move the dial on climate mitigation and adaptation in Nigeria.

Surely, you can’t claim to be fighting climate change while also burning fossil fuels and pursuing new hydrocarbon exploration. Yet, that’s what Nigeria is doing. It’s not only wedded to burning fossil fuels, but also committed to further exploration. For instance, the Petroleum Industry Act, PIA, 2018 mandates NNPC to use 30 per cent of its profits for further oil exploration. 

But who doesn’t know that carbon dioxide and methane emissions from the burning and use of coal, oil and gas are the main causes of climate change? Given that more than one fifth of carbon emissions are caused by fossil fuel vehicles, can any country tackle climate change with millions of petrol- and diesel-powered cars and trucks on its roads? Of course not. But Nigeria has estimated 11.8 million petrol-powered vehicles on its roads, while many countries are switching to battery-powered electric vehicles.

Of course, it is precisely because Nigeria is unwilling to wean itself off refined petroleum products that some hailed the Dangote Refinery as a game-changer. If Nigeria were genuinely moving towards renewable energy, if Nigeria were seriously determined to replace vehicles with internal combustion engines with battery-powered ones, no one would be celebrating oil refineries, which are associated with pollution. 

Brazil is the world’s eighth largest oil producer, but it generated 89 per cent of its electricity from renewables in 2023. Thus, Brazil doesn’t use its crude but sells it to the dwindling number of countries that still buy crude, while using the proceeds to fund its energy transition. By contrast, Nigeria exports crude and voraciously consumes refined petrol, turning its back on energy transition.

But while Nigeria is celebrating the Dangote Refinery and licensing other refineries, many developed countries are closing their refineries. For instance, the UK is closing its oldest refinery, Grangemouth oil refinery in Scotland, and turning the site into a green energy hub. 

Next year, Germany’s Wesseling oil refinery, which uses Nigeria’s crude, will close, and begin to make fuel out of green alternatives. Put simply, the developed countries are shutting down their oil refineries as electric vehicles replace petrol ones. The economist Ed Conway says in his fascinating book, Material World: “The conventional wisdom is that the refineries will become ‘stranded assets’ – left behind when the world moves on.”

Well, is Nigeria prepared for when the world moves on? Throughout history, there have been five energy transitions. First, power was generated from wood (charcoal), then coal, then oil, then gas – well, now increasingly renewables: hydroelectricity, solar power, wind power, nuclear and other low-carbon sources. Although some countries still use coal, oil and gas, the global consensus is shifting away from hydrocarbons to renewables. Thus, the future does not belong to petrostates, countries producing fossil fuels; it belongs to electro-states, countries producing critical materials, such as copper, nickel, lithium, cobalt and manganese, required to build green technologies. The future belongs to green energy!

Sadly, Nigeria is not prepared for that transition. But it faces two fundamental perils. First, a bleak economic future as global consumption of crude drastically falls in response to the shift to cleaner energy. Second, the developed countries won’t invest in Nigeria’s fossil fuels projects. 

Furthermore, as they increasingly put additional levies on imports from countries that are not tackling carbon emissions, Nigeria’s non-oil exports, minuscule as they are, would face greater obstacles in Western markets. But if the global pressure to tackle climate change pushes Nigeria towards energy transition, a big if, what’s the future of Dangote Refinery? Perhaps, it could turn to making fuel from green sources. Not a bad thing!

*Dr. Fasan is a commentator on public issues