Nigeria: Group urges Govt to recover US$4.1 billion penalty for gas flaring

Aug 17, 2015 12:00 AM

With global environmental concerns mounting in the Niger Delta region over oil pollution, a new study has called for the recovery of the $4.1billion gas flare outstanding penalty from oil firms, identified by the Nuhu Ribadu led Petroleum Revenue Special Task Force.

In the study by Centre for Social Justice (CSJ), the special task force had noted that "Nigeria flares about 1.2billion cubic feet (bcf/d) of gas a day, which could fuel about; 7000MW of efficient thermal electric power, over 1,400 agro processing facilities, 350 textile plants, 70 fertilizer plants with opportunities for creating over one million jobs. This amount of gas flare represents 12.5per cent of all globally flared gas, which is 68 percent of the associated gas produced or 51 per cent of the total gas production.

According to the document - Issues in Implementing the Nigerian Gas Master plan authored by CSJ Lead Director, Eze Onyekepere and Ikenna Ofoegbu, supported by Heinrich Böll Stiftung, Nigeria lost about $1billion in 2014 as oil companies operating in the country flared a large proportion of the gas produced within the period. According to data from the NNPC, about 295 billion standard cubic feet of natural gas was flared in the nine-month period. International oil companies and indigenous players burnt a total of 43.7billion scf in January, 50.1 billion scf in February and 38.3 billion scf in March.

"The operators have continued to flare gas at the rate of N10 per scf and records at the DPR reveal that none of the companies paid any gas penalty fee in 2012 and the DPR chose to look away. Thus, what would have been a source of revenue to Government for continued gas flaring has not been realised."

The Federal Ministry of Environment had warned that oil and gas companies are pumping nearly 17million tonnes of carbon dioxide (CO2) emissions into the atmosphere yearly, which endanger human health and environment.

"Every year, around 140 billion cubic meters of natural gas produced together with oil is wastefully burnt or flared at thousands of oil fields around the world. This results in more than 300 million tons of carbon dioxide being emitted into the atmosphere - equivalent to emissions from approximately 77 million cars."

Environmental hazards associated with gas flaring include; increased environmental temperature, heat wave and global warming. These environmentally degrading conditions dehydrate surroundings, habitats, eco-system, food chains, nitrogen cycle, oxygen cycle, flora and fauna, animals and vegetations and thereby cause their actual deaths or poor yields of environmental resources.

Gaseous acids like cadmium, benzene and calcium also pollutes streams, natural water ways like swamps, creeks, ponds, including arable farm lands, rivers, soil nutrients and thereby kill fishes, aquatic animals and plants and starve human beings of sources of clean water.

Considering the abundant renewable energy resources available in the country, the study recommended that the Federal government should plan and implement an energy policy that targets a renewable energy contribution of not less than 20 per cent in the next ten years.

Government should also consider incentives benchmarked with the incentives offered by other African Gas Producing Nations to encourage investments in gas exploration to increase reserves.

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