Gas Flaring Soars, Depleting Nigeria’s Economy by N373 Billion in H1 2023
Gas flaring in Nigeria has seen a worrying 10 percent rise year-on-year, reaching 138.7 million metric standard cubic feet (MSCF) in the first half of 2023, compared to 126.1 MSCF during the same period in 2022.
The unsettling increase, despite the Federal Government’s pledge to achieve zero flaring by 2060, has resulted in flared gas worth a substantial $485.3 million, equivalent to N373 billion at the current exchange rate of N768.6 per United States dollar as determined by the Central Bank of Nigeria (CBN).
According to data released by the National Oil Spill Detection and Response Agency (NOSDRA), the oil-producing companies responsible for the flaring will face penalties amounting to $277.3 million (about N213 billion) for violating the gas flaring laws during this period.
However, history indicates that the companies may not pay the penalties promptly, as significant outstanding sums remain unpaid by various firms.
The gravity of the situation becomes evident when considering that the volume of gas flared during this period translates to a staggering 7.4 million tonnes of carbon dioxide emissions.
This amount of gas could have generated a substantial 13,900 gigawatts of electricity per hour if utilized properly.
Despite efforts to curb gas flaring, NOSDRA sadly admits that it has persisted in Nigeria since the 1950s, releasing harmful carbon dioxide and other gaseous substances into the atmosphere.
In response to the alarming figures, the House of Representatives has announced its intention to investigate the annual $2.5 billion loss attributed to gas flaring.
Speaker Tajudeen Abbas has inaugurated an Ad hoc Committee specifically to delve into the alleged 9.05 billion dollar-revenue loss resulting from gas flaring over the last decade in Nigeria.
The committee aims to identify the root causes of gas flaring and propose solutions to eradicate this detrimental practice, recognizing the urgent need to address its environmental, social, and economic consequences.
Speaker Abbas highlights the fact that flared gas represents revenue that could have been generated through its sale or utilization. Official records reveal that Nigeria loses about 2.5 billion dollars annually due to gas flaring.
Apart from the financial implications, gas flaring contributes significantly to climate change and environmental degradation, directly impacting soil, water, and wildlife.
To address this pressing issue, Gbenga Komolafe, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), emphasizes that the Petroleum Industry Act (PIA) contains adequate provisions to halt flaring.
According to him: “The PIA has explicitly banned gas flaring and imposes significant penalties for non-compliance, and the Nigerian Gas Flare Commercialisation Programme (NGFCP) is committed to putting an end to gas flaring.”
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While the rise in gas flaring is undoubtedly concerning, the government’s actions, coupled with the House of Representatives’ investigation, may lead to a more determined effort in realizing the goal of zero flaring in Nigeria.
The need to protect the environment, optimize energy resources, and reduce harmful emissions remains a collective responsibility that demands immediate attention and action.
