Gas Flaring: When Will Nigeria Decarbonise Its Oil and Gas Industry

Abstract

Gas flaring and venting are a safe methods of disposing unwanted gas during emergencies and equipment failures, or where the gas cannot be captured, stored or used economically. In whichever circumstance the flaring and venting occur, they both present an environmental and a resource management challenge. In Nigeria, gas flaring and venting began ever since the start of oil production in 1956. Gas flaring and venting have a number of negative consequences on the environment, human health, and the economy of the Nigerian state. Studies have put the revenue lost to flaring by Nigeria at around US$2.5billion annually. This study reviews the various measures put in place by the government and the oil companies in form of laws, policies, regulations, programmes, and penalties with a view to discouraging flaring and encouraging gas utilisation. However, these measures have not been able to phase-out flaring in the country. Gas flaring elimination deadlines have repeatedly been shifted with the most recent one being December 2012. It was found that economic and fiscal considerations on the part of the oil companies and lack of strict enforcement of gas flaring reduction regulations on the part of the government, couple with ageing infrastructure to develop and utilise the gas resource, poor access to local and international energy markets, and lack of political will to see to the end of gas flaring are the main reasons for continued flaring in Nigeria. Policy makers in the country need to strategise and come up with effective gas utilisation programs. They need to reform and develop the gas industry to effectively support gas gathering; marketing and distribution, and on the part of the government, strengthen its legal and regulatory frameworks related to gas flaring and venting. Incentives should be granted for gas flaring reduction projects and penalties should realistically reflect the prevailing economic value of flaring. If these are not done analysts would continue to question when Nigeria is actually ready to decarbonise its oil and gas industry by eliminating the flaring and venting of associated gas into the atmosphere.