AFTER decades of apathy that allowed defiant oil companies to get away with massive environmental degradation through rampant gas flaring, the Federal Government now appears to be taking some interest in stricter regulation of oil extraction activities in the Niger Delta. A recent gazette spells out new stringent regulatory measures that will apply in oil production, especially as it concerns the flaring of gas associated with oil production.
Among new measures taken by the government to curb incessant and indiscriminate gas flaring is the imposition of higher fines, which many believe, is not only long overdue, but will discourage the wasteful act and its deleterious impact on humans and the environment. From the previous fine of N10 for every 1,000 standard cubic feet of gas flared, which many saw as a slap on the wrist, a stiffer penalty of $2 payable for every 1,000 scf of gas flared has been imposed.
At the current exchange rate of about N306 to a dollar, the fine now stands at over N600 per 1,000 scf of gas. Details of the new measures contained in the gazette, “Gas Flare (Prevention of Waste Pollution) Regulation 2018”, indicate that declaration of false data would attract a fine of N50,000 or six months jail term or both. Aside from the fines imposed for false data declaration, a fine of $2.50 will also be paid “for failure to produce adequate flare data; failure to provide access to flares or flare site; failure to sign a connection agreement,” among other measures.
This is indeed a new era of getting the oil companies to behave more responsibly, transparently and in accordance with international best practices. Although the $2 fine is targeted at companies producing more than 10,000 barrels of oil per day, those producing less are not off the hook; they are required to part with $0.5 per 1,000 scf of gas flared in the process of oil production. Yet, there are still those who believe the fines should have been stiffer.
Gas flaring has persisted in the country despite many timelines set by the government to end it. Efforts to end flaring date back to the enactment of the Associated Gas Reinjection Act of 1979, which set a deadline of 1984 to end gas flaring. Unfortunately, the companies have continually maintained that it is uneconomical to embark on gas reinjection as an alternative to flaring; and since the penalty was a paltry N10 per 1,000 scf of gas flared, it was convenient for them to pay up.
No measures can be considered too tough to stop gas flaring. It is a practice that has a lot of harmful effects on both the environment and the human beings. Flaring releases very dangerous chemicals into the atmosphere, which are considered to be carcinogenic and could also cause respiratory problems. The greenhouse emissions are part of the causes of global warming, resulting in climate change. The World Bank says about 300 million tons of carbon dioxide is released into the atmosphere as a result of 140 billion cubic metres of natural gas burnt annually around the world.
In many Niger Delta communities where gas has been flared for the past 60 years since oil was discovered, acid rain has been reported, which is said to cause corrosion of roofs of buildings within the area. If iron sheets could be corroded by acid rain, then the impact on humans could only be imagined. This is why the government has to stand firm on whatever deadline it fixes.
Aside from the environmental impact, there is also the economic impact of gas flaring. The global financial agency, which is working in partnership with oil companies and countries around the world to end the menace, describes the practice as a waste “of valuable energy resource that could be used to advance the sustainable development of producing countries.” Although Nigeria is recognised as an oil producing country, her gas deposits of 187 trillion scf far outstrip those of oil. Also, the World Energy Council is disappointed that the country is not maximising the opportunity provided by gas for economic diversification. What should be a source of revenue and a cheap source of clean energy is being blatantly wasted.
This is why Nigeria has to take serious steps to stop gas flaring. Although believed to have keyed into the World Bank’s “Zero Routine Flaring by 2030” Initiative, Nigeria has also set a new personal deadline of 2019 to end gas flaring. The Minister of State for Petroleum Resources, Ibe Kachikwu, said that companies that could not stop gas flaring by 2019 should stop producing.
In the United Kingdom, the policy is to maximise economic benefit of natural gas to the UK, while taking into account the environmental impact and sustainable supplies to the UK market. The result, according to reports, was a consistent reduction in flaring, while the volume of associated gas production increased tenfold between 1984 and 2005.
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