Gas As The Future Of Nigeria's Economy

  

Niger Delta is among most polluted regions on earth

For more than 50 years, after the discovery of crude oil in commercial quantity in 1956 at Oloibiri , Bayelsa State , Nigeria  fed fat from huge oil revenue, especially in parts of  1980, 2008 and 2011, when oil was sold at over one hundred dollars per barrel.

Forest destroyed by flared gas

But the inability of past governments to hold oil companies accountable to the environment has left the oil rich Niger Delta region as the one of the most polluted places on earth, according to analysts.

The flaring of Gas to the atmosphere by oil companies is said to be the leading cause of environmental degradation in the Niger Delta region.

Because oil companies did not consider gas economically viable enough, gas found in oil wells were fared, a practice which is reported to have not only drastically reduced air quality and exposing people to many diseases, such as lung damage, skin problems and deformities in children, but also destroyed forests and wild lives, as attested to by a Journalist, Olusola Bello, who has investigated the region for over two decades.

 “If you go to Niger Delta region, you see forest becoming very white. Thick forest that if you strike a matches, it will go up in flames.Those places, pollution has destroyed the forest. Aquatic lives are being destroyed. Wild lives are destroyed”.

Some analysts interviewed alleged that, if the volume of gas flared since oil production began was avoided, the revenue from it could have been so huge that the country would live by it for over fifty years.

In a paper entitled, “Negative Effects of Gas Flaring: The Nigerian Experience”, which was revised in 2013, Anslem  Ajugwo of  Department of Haematology and Blood Transfusion, Madonna University Elele, said Nigeria flares 17.2 billion m3 of natural gas at huge economic and health implications to the country.

“Nigeria flares 17.2 billion m3 of natural gas per year in conjunction with the exploration of crude oil in the Niger Delta. This high level of gas flaring is equal to approximately one quarter of the current power consumption of the African continent. Even though we have grown to be fairly dependent on oil and it has become the center of current industrial development and economic activities, we rarely consider how oil exploration and exploitation processes create environmental, health, and social problems in local communities near oil producing fields”.

Even in 2014 when Federal Government already had policies placing sanctions on oil companies that flare gas, the NNPC reported that oil and gas firms in the country flared 289.6 billion standard cubic feet of gas that year, representing the loss up to 174 billion Naira.

Gas holds the future of Nigeria economy

However with the usefulness of gas increasing by the day, in the wake of fallen oil price, experts say it is another opportunity for Nigeria to become rich again.

Most importantly, the country would be able to meet its age long ambition of ensuring regular power supply, since most of the power plants are powered by gas.

A gas and oil expert,  Mr. Yomi Fawehinmi said the close relationship between the Ministry of Petroleum and that of Power, Works and Housing will help the Federal government to speedily actualize the country’s ambition of providing regular power to Nigerians, as well as end gas flaring.


One of the things I thought this government would do differently was that the minister of petroleum would be the minister of power. If you have a minister of petroleum who focuses on gas and then you have the minister of power that is providing electricity, which means that power minister is redundant. We don’t generate electricity from Kainji Dam as we used to. So the man that is minister of Power should also be the minister of petroleum. It connects directly”. 

In addition, Mr. Fawehhinmi said the country should go beyond imposing fines  on oil companies that flared gas, by coming up with an appropriate  gas policy that among other things gives incentives to oil companies  to properly channel gas from oil wells to gas reservoirs.

“Companies respond speedily to incentives than fines. Is it the oil companies that should convert that gas to electricity? No. It is not the penalty that is the issue. It is the granting of the necessary incentives. The question to ask is, what would be done to make sure that there is symbiotic relationship between oil companies and the government?”.

Gas reserve to last 200 years

Recent estimates suggested that Nigeria has proven gas reserve of 187 trillion cubic feet, about the 7^th in the World.

Analysts say, based on annual production of 21 billion cubic meters and the possibility of more prospects, the country’s gas could last over 200 years.

 The use of gas for power generation led to the installation of about 10 gas plants with a total capacity of over 8,800 megawatt, while new power plants were announced.

Independent power plants were billed to generate about 3000 megawatts by 2007, thus helping to realize government plan to increase power generation from 4,000 to 10,000 by 2010.

But all of these have failed to yield the desired result with power generation allegedly falling to zero in the first quarter of this year, while  it was reported to be 2,524MW  a few days back.

Fawehinmi said, the steady investment in construction and maintenance of gas facilities would solve Nigeria’s power problem with time.

“If we say that Nigeria is making money from oil, we are just scratching the surface. Because Nigeria is not an oil country. Nigeria is a gas country. And the diesel from gas is more expensive than the one from oil. If we have a major capital project in this gas sector, and we do it consistently for 20 years, we will achieve great economic progress”.

 In addition to power generation, the accelerated increase in the use of gas for cooking by Nigerians is seen as a big market for the country’s vast gas reserve.

Some Lagos residents said the high cost of kerosene which sells at about 250 per liter in filling stations and over 300 naira at parallel markets in some parts of the state, has forced many, even makers of bean cake popularly called “akara” to switch over to gas.

Again Bello advised that since the future lies with gas, it was time the country vigorously pursued its national gas policy aimed at increasing gas use instead of wasting it by flaring.

“There was national policy on gas which recommended the setting up of 3 central processing gas facilities, where it would be gathered and treated, and then transported to other parts of the country”.

Read also:Read more at: http://www.vanguardngr.com/2015/11/gas-policy-can-end-flaring-in-nigeria-nnpc/ 

Nigeria is said to rank the highest in gas flaring with 40 percent of production flared.

Some said, the figure would be much higher if there was a good data collection system in the country.

Nigeria’s gas which companies still flare is said to be among the best, as it contains no sulphur while diesel from it is more expensive than the one from oil.

 Innocent Onoh reporting from Lagos