Gas flaring costs Nigeria N891b, country owes N41.60tr debt.
By Jeph Ajobaju, Chief Copy Editor
Flaring of gas, a commodity highly sought after by foreign buyers with hard currency, cost Nigeria N891 billion in the 18 months between January 2021 and June 2022 – a period during which Abuja piled up debt to N41.60 trillion in Q1 2022.
Data from the Nigerian Oil Spill Monitor (NOSM), an arm of the Nigerian Oil Spill Detection and Response Agency (NOSDRA), shows N707 billion gas was burnt up in 2021 and N184 billion in the first half of 2022 (H1 2022). Totalling N891 billion.
Oil and gas companies flared 126 billion standard cubic feet (scf) of gas worth $441.2 million (N183.54 billion) in H1 2022.
About 23,862.271 barrels of oil (3,770,238.864 litres/119 tanker trucks) were spilled in 2021. Brent International sold for an average $71 per barrel (pb) in 2021, amounting to $1.7 million revenue loss through spillage alone.
NOSDRA said gas flared in H1 2022 was equivalent to carbon dioxide, CO2 emissions of 6.7 million tonnes in oil producing areas – 4.56 per cent higher than 120.5 billion scf flared in H1 2021 – which could generate 12,600 gigawatts (gw) hours of electricity.
Gas flared H1 2021 could generate 14,000 gw hours of electricity and an equivalent 7.4 million tonnes of CO2 emissions.
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Other highlights of the report
- Companies operating offshore flared 62.2 billion scf of gas, onshore 63.9 billion scf in H1 2020, valued at $223.6 million, via reporting by The PUNCH.
- There were around 382 publicly available oil spill records in 2021, out of which 33 sites were not visited by a joint investigation team, and 122 had no estimated quantity provided by operating companies.
- Two major oil spills were recorded in 2021, with over 250 barrels spilled into inland waters; and over 2,500 barrels on land, swamp, shoreline, and open sea.
- Seven medium oil spills occurred in 2021, with 25-250 barrels spilled into inland waters; and 250-2,500 barrels on land, swamp, shoreline, and open sea.
- About 239 minor spills took place and 25 barrels spilled into inland waters; and 250 barrels on land, swamp, shoreline, and open sea.
The report said gas is burnt off or flared as part of oil production process.
However, the government has in recent years led campaigns for gas monetisation as against flaring.
NOSDRA lamented that despite efforts to reduce gas flaring, it has gone on since the 1950s, releasing carbon dioxide and other gaseous substances into the atmosphere, creating environmental and health hazards in oil communities.
Penalty for gas flaring
Society of Petroleum Engineers (SPE) Nigeria Council Chairman Olalekan Olafuyi told The PUNCH the government would increase gas flaring penalties as Nigeria seeks to achieve the United Nations net zero goal by 2060.
“We are working closely with the Nigerian Upstream Petroleum Regulatory Commission [NUPRC), and I can categorically say that companies who flare gas will now pay more than those utilising it.
“So, it will be to their advantage to start thinking of ways to utilise their gas instead of flaring them,” he said.
Companies producing more than 10,000 barrels per day (bpd) currently pay a fine of $2 per 1,000 scf of gas flared. Companies producing less than 10,000 bpd pay $0.5 per 1,000 scf.
Natural gas valued at $1.24 billion was flared in 2020 alone.
President Muhammadu Buhari in June ordered full audit from inception of the accounts of Hydrocarbon Pollution Remediation Project (HYPREP) which cleans up oil spill in the Niger Delta.
He also approved the reorganisation of its operations.