- August 15, 2023
- Posted by: Precious David
- Category: Oil and Gas, Oil and Gas Laws
My duty here today is a simple but also a tricky one. It is to welcome our esteemed guests to this policy dialogue on Nigeria’s gas plans and set the tone for the dialogue. The simple task is to, on behalf of the Natural Resource Governance Institute (NRGI) and the West African Climate Foundation., I say nno, ekaabo, wabokhian, sannu_da_zuwa and welcome. The tricky one is, how do I set the tone without delving into the areas reserved for gas experts, the presenter, and the panelists that have been carefully selected to inform participants on the status of the Decade of Gas Action plans?
It is instructive to note that the pathways or models of managing the oil and gas sector since the discovery of crude oil in Nigeria, the eventual outcomes, which reflect in the socio-economic status of most of our citizens, is a comical bundle of contradiction. and a paradox of sorts. Comical because the country has behaved like the proverbial cooking oil producer with a fixed rent mindset of making money by selling all the jars of cooking oil produced without leaving a jot for household use. For this cooking oil producer, the two options available for having cooking oil in the house would be either traveling the distance to search for other sources to purchase cooking oil each time there is the need to cook with oil or to stay hungry with the family. Paradoxical because Nigeria is so rich in gas, but most of its citizens use firewood or coal for cooking with all its attendant health hazards.
Over the years, Nigeria has behaved like the prodigal son by exporting mineral resources to earn dollars for consumption without savings, reinvestment in revenue, and employment generation ventures. It is also delighted to exchange its raw materials for finished products. Yet, we expect different results regarding foreign reserves, development, and economic boom. This model has buried many industries in the economic graveyards, created employment overseas, and worsened unemployment and poverty in Nigeria. These analogies reflect the contradiction of being a rich but poor nation. Rich because Nigeria is vastly rich and blessed with abundant minerals and energy resources but so poor that most citizens do not have access to affordable electricity and other essential social and welfare benefits. This was aptly captured by the Nigerian Bureau of Statistics, which stated that 63% of Nigerians are multidimensionally poor.
It is a truism that for any country to attain a world-class status in development, most of its citizens, irrespective of socio-economic status, places of residence, that is, be it in the rural or urban areas, should have access to clean and modern energy sources, which would allow them to pursue individual or group economic interests to the fullest. Besides, citizens should be able to afford such available clean and modern energy to create millions of small scaled and medium enterprises; and ensure that access and affordability to sources of clean and contemporary energy are not temporary but on a sustainable basis.
It is in a bid to reverse the highlighted negative narrations, achieve energy accessibility, affordability, and sustainability as a country that the 2021-2030 government legislation tagged the “Decade of Gas Action Plan (DofG)” was enunciated. If the government’s intentions were effectively implemented, Nigeria is expected to witness a vast gas infrastructural development during the period. Part of the steppingstones towards achieving the goals of DofG is the construction of the 614km Ajaokuta-Kaduna-Kano gas pipeline (AKKP), which would transport about 2 billion cubic feet of natural gas per day from Ajaokuta to power plants in Abuja, Kaduna, Kano and other plants in the Northern axis of the country. The good news about AKKP is that the NNPC seems to be funding the project and has spent over $1 billion. This and other initiatives are also aimed at deepening the usage of LPG and CNG in the country and ultimately expanding the Autogas policy, which would reduce dependency on petrol as our mainstay for transportation in the long run.
Before the AKKP project, Nigeria conceptualized the Nigeria-Morocco Gas Pipeline as an extension of the West African Gas Pipeline, which would run through some African countries with a possible linkage to European markets. This project was conceptualized in 2016. Outside the NLNG project, the Nigeria-Morrocco Gas Pipeline project would meet the international focus even as the local expansion of the LPG and CNG are also being pursued. Let us hope that our leaders would cautiously navigate the rough edges of the coup in the Niger Republic to forestall the risks of sabotage of this project by international state and non-state actors.
Many countries are abandoning fossil fuels as a significant energy source. For Nigeria to make good on its promise to join the train, it would have to increase its crude oil production in the short run beyond the current level to have money to diversify and invest in other alternative sources. Even in the medium- and long-term periods, natural gas, which Nigeria has in abundance, which has been described as cleaner than coal or petroleum, is also within the fossil fuel family. This means that walking off fossil fuel for Nigeria is not immediately foreseeable. The question is, how does Nigeria maximize its hydrocarbon benefits with so much of its assets lost to vandalism, crude theft, and the massive depreciation of its currency?
Nigeria’s focus on using gas as a sustainable energy alternative is capital-intensive. It has been speculated that Nigeria would need over $1 trillion to achieve the 2060 zero-emission targets. With the dwindling international funding support and the expulsion of foreign interests from some parts of the continent, which is spreading to other countries in the sub-region, we, as citizens, must be worried about how to fund and birth the gas projects in a manner that would be cost-efficient, cost-effective, and less hazardous to our women, youths and the rest of our citizens. With the myriads of challenges facing the Federal government, especially with funding regimes and the bullish behavior of the USD against the Naira, what alternative right- sizing plans do the government have to ensure that the DofG action plan is not in jeopardy? We should also be worried and begin to ask how the government shall deal with the burning of our gas, also popularly known as “gas flair,” that the target dates for ending gas fairing have been shifted several times, forex issues, lack or limited access to funding by acreage holders and local investors, etcetera. AfriTAL is not oblivious to the Midstream and Downstream Gas Infrastructure Fund (MDGIF), which is supposed to reduce funding challenges and assist investors. Still, the question is, how is this fund being applied? These and many other questions would be the focus as government officials, gas experts, and panelists attempt to inform and proffer solutions that would assist Civil Society partners and the Media in their advocacy and interrogation of the government’s plans to achieve the objectives of the DofG action plan as we move into the next phase of this policy dialogue.