Group managing director of Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, has announced a three-point strategy to contain the gas flaring menace in 2020.
The Guardian reported that many experts are questioning government’s optimism, which envisages ending gas flaring within a two-year period. Read more: Nigeria targets to end gas flare over next two years
They are saying setting a two-year deadline is a mere political statement and should not have come from a personality who understands how the industry and Nigeria’s political landscape operate.
The strategies announced by Baru, include:
- Non-submission of Field Development Plans (FDPs) to the industry regulator, the Department of Petroleum Resources (DPR), without a viable and executable gas utilisation plan;
- Steady reduction of existing flares through a combination of targeted policy interventions in the Gas Master-plan;
- Re-invigoration of the flare penalty through the 2016 Nigeria Gas Flare Commercialisation Programme (NGFCP), and through legislation, that is, place ban on gas flaring via the recent Flare Gas (Prevention of Waste and Pollution) Regulations 2018.
Lack of incentives to ending gas flaring
President of the Nigerian Association for Energy Economics, Prof. Wumi Iledare, said there are no incentives currently, legislative backing as well as infrastructure for ending gas flaring.
Iledare said: “We have the policy; we have the commercial entities that have bought into it, and we have the National Assembly that is trying to pass a law to make sure that there are investments to harness gas for economic growth and development. But it is not possible in two years.
“If it takes years to get the bill together before they can even begin to prepare for the implementation, I think 2020 is just not realistic. Passing the bill that will make the incentives backed by the law may not come before the end of the year. How can you put together, the equipment and the projects that will bring an end to gas flare within one year? The incentives have not started to work and there is no law backing the incentives. So, there must be an act before you can set policies in terms of taxes and royalties.”
Gas flaring penalties
According to the Guardian, former President, Nigeria Association of Petroleum Explorationists, and Chief Executive Officer, Degeconek (Nigeria) Limited, Abiodun Adesanya, corroborated Iledare’s view points, adding that fines attached to gas flaring were not enough deterrent, thereby making it attractive to flare than harness.
It is reported that flared gas recently rose from 244.84 billion Standard Cubic Feet (SCF) in 2016, to 287.59 billion SCF in 2017, while gas flare penalty stands at N10/Mscf (equivalent to $0.03).
Adesanya urged government to outsource monitoring of the excess to local communities in the Niger Delta as a way of empowering the region, and getting the people involved and educated on why strict monitoring is necessary.
If gas flaring must stop, Adesanya said: “Government has to be serious; agencies of government have to be committed and other stakeholders in the oil industry must be sincere.”