By Ikenna Omeje
Despite its effort to curtail gas flaring, Nigeria flared 6,947.02 Billion Cubic Feet (BCF) of gas between April 2020 and April 2021, according to data obtained by Majorwaves from the Nigerian National Petroleum Corporation (NNPC) Monthly Financial and Operations Reports.
Early in May, the World Bank listed Russia, Iraq, Iran, the United States, Algeria, Venezuela and Nigeria, as the top seven gas flaring countries in the last nine years.
Similarly, the Bretton Woods institution said the seven countries produce 40 per cent of the world’s oil each year but account for nearly two-thirds, representing 65 per cent of global gas flaring.
The continuous flaring of gas in the country may not be unconnected with lack of political will on the part of successive government; unavailability of the infrastructure required to control gas flaring; unavailability of market for domestic gas products; and the low price of gas in the country.
Unlike in most gas producing countries where the forces of demand and supply determine prices, Nigerian government regulates domestic gas prices, which makes gas a bit unprofitable for oil exploration and production companies.
In July, Minister of State for Petroleum Resources, Timipre Sylva, while speaking at the opening of the 2021 Gas Sector Stakeholders’ Forum for optimisation of the 614-kilometre $2.6 billion Ajaokuta-Kaduna-Kano (AKK) gas pipeline in Kano, announced immediate reduction in domestic base price of natural gas to power plant producers from $2.50 cent to $2.18 cent per standard cubic feet (scuf).
Efforts to curtail flaring
In 1979, the country came up with its first regulatory framework aimed at promoting anti-gas flaring policies, known as the Associated Gas Reinjection Act, 1979. Under the Act, oil and gas producing companies in the country were required to submit to the minister for petroleum, detailed programmes in relation to the re-injection of produced associated gas or programmes for the use of produced associated gas. The Act also provided for the deadline for gas flaring in the country as stipulated by the Federal Government to be 31 December 1974. Till date, this deadline is yet to be met despite several extensions through a succession of bills and amendments of laws.
Another effort was the launching of the Nigerian Gas Flare Commercialisation Programme (NGFCP) in December 2016. This was in recognition that flared gas could be harnessed to stimulate economic growth, drive investments and provide jobs in oil producing communities and indeed for Nigerians through the utilization of widely available innovative technologies.
Now nearing five years since it was launched by the Federal Government, the implementation of NGFCP has suffered delays and bureaucratic challenges, making the programme another good initiative about to die because of delays in implementation.
“The NGFCP is designed as the strategy to implement the policy objectives of the FGN (Federal Government of Nigeria) for the elimination of gas flares with potentially enormous multiplier and development outcomes for Nigeria. The objective of the NGFCP is to eliminate gas flaring through technically and commercially sustainable gas utilization projects developed by competent third party investors who will be invited to participate in a competitive and transparent bid process. The commercialisation approach has been considered from legal, technical, economic, commercial and developmental standpoints. It is a unique and historic opportunity to attract major investment in economically viable gas flare capture projects whilst permanently addressing a 60 year environmental problem in Nigeria,” NGFCP stated on its website.
“The NGFCP will offer flare gas for sale by the Federal Government of Nigeria through a transparent and competitive bidding process. A structure has been devised to provide project bankability for the Flare Gas Buyers, which is essential to the success of the Programme.”
Nigeria is signatory to the Paris Climate Change Agreement, and on paper adheres to the Global Gas Flaring Partnership (GGFR) principles for global flare-out by 2030. But with the current development, there is no doubt that the country is far from realizing the target.
Gas flare rate from April 2020 to April 2021
In April 2020, out of the 226.51 BCF of gas supplied, a total of 136.44 BCF of gas was commercialized consisting of 36.99 BCF and 99.45 BCF for the domestic and export market respectively. This translates to a total supply of 1,233.01 Million Standard Cubic Feet of gas per day (mmscfd) to the domestic market and 3,425.98 mmscfd of gas supplied to the export market for the month. This implies that 59.86 percent of the average daily gas produced was commercialized while the balance of 40.14 percent was re-injected, used as upstream fuel gas or flared. Gas flare rate was 7.93 percent for the month (i.e. 617.32 mmscfd) compared with average gas flare rate of 8.30 percent (i.e. 652.48 mmscfd) for the period April 2019 to April 2020.
“Total gas supply for the period April 2019 to April 2020 stood at 3,070.28 BCF out of which 453.71 BCF and 1,351.79 BCF were commercialized for the domestic and export market respectively. Gas re–injected, Fuel gas and gas flared stood at 1,264.78 BCF,” NNPC April 2020 report stated.
In May 2020, gas flare rate was 6.50 percent (i.e. 486.19 mmscfd) compared with average gas flare rate of 8.05 percent (i.e. 626.24 mmscfd) for the period May 2019 to May 2020.
The report showed that the total gas supply for the period May 2019 to May 2020 stood at 3,050.15 BCF out of which 459.22 BCF and 1,344.00 BCF were commercialized for the domestic and export market respectively, adding that gas re–injected, fuel gas and gas flared stood at 1,246.93 BCF.
It also showed that out of the 231.66 BCF of gas supplied in May 2020, a total of 143.57 BCF of gas was commercialized; consisting of 40.40 BCF and 103.17 BCF for the domestic and export market respectively. This translates to a total supply of 1,303.09 mmscfd of gas to the domestic market and 3,328.31 mmscfd of gas supplied to the export market for the month.
This implies that 61.97 percent of the average daily gas produced was commercialized while the balance of 38.03 percent was re-injected, used as upstream fuel gas or flared.
For the month of June 2020, the report revealed that the gas flare rate was 6.11 percent (i.e. 472.94 mmscfd) compared with average gas flare rate of 7.84 percent (i.e. 611.73 mmscfd) for the period June 2019 to June 2020.
It said, “Out of the 232.03 BCF of gas supplied in June 2020, a total of 148.66 BCF of gas was commercialized; consisting of 34.64 BCF and 114.01 BCF for the domestic and export market respectively.”
This translates to a total supply of 1,154.78 mmscfd of gas to the domestic market and 3,800.45 mmscfd of gas supplied to the export market for the month.”
This implies that 64.07 percent of the average daily gas produced was commercialized while the balance of 35.93 percent was re-injected, used as upstream fuel gas or flared.
It puts the total gas supply for the period June 2019 to June 2020 at 3,060.98 BCF out of which 457.61 BCF and 1,369.97 BCF were commercialized for the domestic and export market respectively. It said that gas re–injected, fuel gas and gas flared stood at 1,233.39 BCF.
In July 2020, out of the 235.72 BCF of gas supplied, a total of 150.97 BCF of gas was commercialized; consisting of 35.26 BCF and 115.71 BCF for the domestic and export market respectively, which translates to a total supply of 1,175.27 mmscfd of gas to the domestic market and 3,722.60 mmscfd of gas supplied to the export market for the month.
This implies that 64.05 percent of the average daily gas produced was commercialized while the balance of 35.95 percent was re-injected, used as upstream fuel gas or flared. Gas flare rate was 5.99 percent for the month of July (i.e. 456.35 mmscfd) compared with average gas flare rate of 7.69 percent (i.e. 600.38 mmscfd) for the period July 2019 to July 2020.
“Total gas supply for the period July 2019 to July 2020 stood at 3,074.65 BCF out of which 457.18 BCF and 1,393.96 BCF were commercialized for the domestic and export market respectively. Gas re–injected, Fuel gas and Gas flared stood at 1,223.52 BCF,” the report noted.
Similarly, out of the 233.64 BCF of gas supplied in August 2020, a total of 147.71 BCF of gas was commercialized; consisting of 37.51 BCF and 110.21 BCF for the domestic and export market respectively, which translates to a total supply of 1,250.30 mmscfd of gas to the domestic market and 3,506.22 mmscfd of gas supplied to the export market for the month.
“This implies that 63.22 percent of the average daily gas produced was commercialized while the balance of 36.78 percent was re-injected, used as upstream fuel gas or flared. Gas flare rate was 5.83 percent for the month under review i.e. 439.30 mmscfd compared with average gas flare rate of 7.52 percent i.e. 583.40 mmscfd for the period August 2019 to August 2020,” the report for August stated.
It noted that total gas supply for the period August 2019 to August 2020 stood at 3,058.90 BCF out of which 460.23 BCF and 1,392.69 BCF were commercialized for the domestic and export market respectively. While gas re–injected, fuel gas and gas flared stood at 1,205.98 BCF.
In September 2020, gas flare rate in the country according to NNPC report, was 6.66 percent for the month (i.e. 492.93 mmscfd) compared with average gas flare rate of 5.84 percent (i.e. 439.90 mmscfd) for the period September 2019 to September 2020.
The report noted that out of the 221.91 BCF of gas supplied during the month, a total of 140.45 BCF of gas was commercialized; consisting of 36.37 BCF and 104.08 BCF for the domestic and export market respectively, which translates to a total supply of 1,212.17 mmscfd of gas to the domestic market and 3,469.45 mmscfd of gas supplied to the export market for the month.
“This implies that 63.29 percent of the average daily gas produced was commercialized while the balance of 36.71 percent was re-injected, used as upstream fuel gas or flared,” the September report stated. “Total gas supply for the period September 2019 to September 2020 stood at 3,029.83 BCF out of which 460.33 BCF and 1,381.69 BCF were commercialized for the domestic and export market respectively. Gas re–injected, Fuel gas and Gas flared stood at 1,187.69 BCF.”
In October 2020, the report showed that gas flare rate surged higher, rising to 7.23 percent for the month (i.e. 450.98 mmscfd) compared with average gas flare rate of 6.66 percent (i.e. 492.93 mmscfd) for the period September 2019 to September 2020.
Out of the 208.96 BCF of gas supplied in October 2020, a total of 118.40 BCF of gas was commercialized; consisting of 38.07 BCF and 88.90 BCF for the domestic and export market respectively. This translates to a total supply of 1,269.03 mmscfd of gas to the domestic market and 2,870.57 mmscfd of gas supplied to the export market for the month. This implies that 60.77 percent of the average daily gas produced was commercialized while the balance of 39.23 percent was re-injected, used as upstream fuel gas or flared.
“Total gas supply for the period October 2019 to October 2020 stood at 3,003.67 BCF out of which 466.15 BCF and 1,367.34 BCF were commercialized for the domestic and export market respectively. Gas re–injected, Fuel gas and Gas flared stood at 1,170.18 BCF, “ the October report stated.
In the same vein, the report for November 2020 puts gas flare rate at 7.89 percent for the month (i.e. 577.39 mmscfd) compared with average gas flare rate of 7.26 percent i.e. 552.06 mmscfd for the period November 2019 to November 2020.
The report showed that out of the 219.67 BCF of gas supplied in November 2020, a total of 137.41 BCF of gas was commercialized; consisting of 39.99 BCF and 97.42 BCF for the domestic and export market respectively, which translates to a total supply of 1,332.82 mmscfd of gas to the domestic market and 3,247.44 mmscfd of gas supplied to the export market for the month.
“This implies that 62.55 percent of the average daily gas produced was commercialized while the balance of 37.45 percent was re-injected, used as upstream fuel gas or flared,” the report noted.
“Total gas supply for the period November 2019 to November 2020 stood at 2,987.51 BCF out of which 474.77 BCF and 1,361.17 BCF were commercialized for the domestic and export market respectively. Gas re–injected, Fuel gas and Gas flared stood at 1,151.58 BCF,” the report added.
In December 2020, the report showed that gas flare rate dropped to 6.80 percent for the month (i.e. 457.25 mmscfd) compared with average Gas flare rate of 7.15 percent (i.e. 538.59 mmscfd) for the period December 2019 to December 2020.
According to the report, out of the 208.61 BCF of gas supplied in the month, a total of 146.72 BCF of gas was commercialized; consisting of 42.90 BCF and 103.82 BCF for the domestic and export market respectively. This translates to a total supply of 1,383.93 mmscfd of gas to the domestic market and 3,349.00 mmscfd of gas supplied to the export market for the month, which implies that 70.33 percent of the average daily gas produced was commercialized while the balance of 29.67 percent was re-injected, used as upstream fuel gas or flared.
“Total gas supply for the period December 2019 to December 2020 stood at 2,967.40 BCF out of which 482.38 BCF and 1,363.26 BCF were commercialized for the domestic and export market respectively. Gas re–injected, fuel gas and gas flared stood at 1,121.77 BCF,” the report showed.
In the first four months of 2021, gas flare maintained a single digit rate. The rate was 7.73 percent for the month of January, 7.67 percent for the month of February, 9.50 percent for the month of March, and 9.74 percent for the month of April.
According to the January 2021 report, 554.01 mmscfd was flared compared with average gas flare rate of 7.19 percent (i.e. 539.69 mmscfd) for the period January 2020 to January 2021.
The report also showed that out of the 222.24 BCF of gas supplied in January 2021, a total of 149.24 BCF of gas was commercialized; consisting of 44.29 BCF and 104.95 BCF for the domestic and export market respectively, which translates to a total supply of 1,428.65mmscfd of gas to the domestic market and 3,385.57 mmscfd of gas supplied to the export market for the month. This implies that 67.15 percent of the average daily gas produced was commercialized while the balance of 32.85 percent was re-injected, used as upstream fuel gas or flared.
“Total gas supply for the period January 2020 to January 2021 stood at 3,189.64 BCF out of which 526.67 BCF and 1,468.21 BCF were commercialized for the domestic and export market respectively. Gas re–injected, Fuel gas and Gas flared stood at 1,194.76 BCF,” the report revealed.
In February 2021, 565.52mmscfd was flared compared with average gas flare rate of 7.12 percent (i.e. 529.20mmscfd) for the period of February 2020 to February 2021.
Also, out of the 206.05 billion Cubic Feet (BCF) produced during the month, a total of 133.06BCF was commercialized consisting of 40.15 BCF and 92.91 BCF for the domestic and export market respectively, which translates to a total supply of 1,433.75Million Standard Cubic Feet Per Day (mmscfd) of gas to the domestic market and 3,318.25mmscfd of gas supplied to the export market for the month.
This implies that 64.48 percent of the average daily gas produced was commercialized while the balance of 35.52 percent was re-injected, used as upstream fuel gas or flared.
In March, 671.13 mmscfd was flared compared with average gas flare rate of 7.25 percent (i.e. 532.37 mmscfd) for the period March 2020 to March 2021.
According to the report, out of the 210.55 BCF of gas supplied in March 2021, a total of 138.38 BCF of gas was commercialized; consisting of 45.42 BCF and 92.96 BCF for the domestic and export market respectively. This translates to a total supply of 1,465.42 mmscfd of gas to the domestic market and 2,998.26 mmscfd of gas supplied to the export market for the month. This implies that 63.18 percent of the average daily gas produced was commercialized while the balance of 36.82 percent was re-injected, used as upstream fuel gas or flared.
“Total gas supply for the period March 2020 to March 2021 stood at 2,875.37 BCF out of which 505.42 BCF and 1,314.87BCF were commercialized for the domestic and export market respectively. Gas re–injected, fuel gas and gas flared stood at 1,055.07 BCF,” the report showed.
In April, gas flare rate was 9.74 (i.e. 670.19 mmscfd) compared with average gas flare rate of 7.42 percent (i.e. 542.22 mmscfd) for the period April 2020 to April 2021.
“Total gas supply for the period April 2020 to April 2021 stood at 3,081.77 BCF out of which 548.34 BCF and 1,398.78 BCF were commercialized for the domestic and export market respectively. Gas re–injected, guel gas and gas flared stood at 1,134.64 BCF,” the report showed.
Impacts of gas flare on oil-producing communities
Gas flare has been a continuous practice in Nigeria for over 50 years, and the oil-producing communities in the Niger Delta are the ones bearing the brunt. As a result of gas flare and oil spillage, there are now some manifestations of the climate change crisis in the area, in the form of the disappearance of wildlife, fish in rivers, creeks, and fresh waters of the Delta, excessive heat, shrinking vegetation, which has affected farming.
A report by the Amnesty International in 2009, which examined oil spills, gas flaring, waste dumping and other environmental impacts of the oil industry, called the situation in the Niger Delta a “human rights tragedy,” saying that the people of the region have seen their human rights abused by oil companies that their government cannot or will not hold to account.
As part of the renewed efforts to address gas flaring, the country’s new Petroleum Industry Act (PIA) mandates a licensee or lessee who engages in upstream and midstream petroleum operations to within one year of effective date, or six months after the grant of licence or lease to submit for approval an environmental management plan in respect of projects which require environmental impact assessment to the Commission (Nigerian Upstream Petroleum Regulatory Commission) or the Authority (Nigerian Midstream and Downstream Petroleum Regulatory Authority) as the case may be.
“As a condition for the grant of a licence or lease and prior to the approval of the environmental management plan by the Commission or Authority, a licensee or lease shall pay a prescribed financial contribution to environmental remediation fund established by the Commission or Authority, as the case may be, for rehabilitation or management of negative environmental impacts with respect to the licence or lease,” section 103 (1) of the Act states.
The Act also states that in determining the amount of the financial contribution, the Commission or Authority shall take into consideration the size of the operations and the level of environmental risk that may exist.
It further states that except in the case of an emergency, pursuant to an exception granted by the Commission, or as an acceptable safety practice under established regulations, a licensee, lessee or marginal field operator that flares or vents gas commits an offence under the Act and is liable to a fine.
Speaking with Majorwaves on the Act with regards to gas flaring, the Executive Director Civil Society Legislative Advocacy Centre (CISLAC), Auwal Ibrahim Musa (Rafsanjani), regretted that the configuration of the implementation steering committee of the Act, as recently constituted by the president, did not include Nigeria Extractive Industries Transparency Initiative (NEITI) and civil society organisations, to ensure transparency and accountability.
“In Nigeria, it is one thing to have committee, it is another thing to allow the committee to work, and also ensure the implementation and compliance of the committee’s work. We are only hoping that this is not just a statement, but it is something that will lead to dealing with gas flaring in Nigeria and waste; as well as protecting the environment and health well-being of the people,” Musa said.
It is yet to be seen how far the new act can help the country address gas flare, since its implementation has not kicked off properly. The Act was signed into law by President Muhammadu Buhari on Monday.
