8 Flaring gas: Profiting from illegalities in Nigeria

This article was written in April 2012 and a version of it appeared in MakingIt Magazine on 15 November 2012[1]

While the world dithers on actions to curb the release of more greenhouse gases into the atmosphere, oil companies in Nigeria are busy pumping the gases into the atmosphere through gas flaring and they are reaping huge profits as they do so.[2]

Gas flaring in Nigeria was confirmed as being unconstitutional and an abuse of human rights by a High Court in November 2005. These have been the complaints of communities living in the oil fields of Nigeria over the past five decades. Indeed, the act of routine gas flaring was outlawed in Nigeria in 1984 when a law on gas reinjection came into effect. From that date, oil companies were disallowed from engaging in routine gas flaring and could only flare on receipt of a permit from the responsible minister. They would also pay a fine. However, these have not proved a sufficient deterrent.

In 1984 the fine was a mere US$0.003 (0.3 cents) per million cubic feet. It increased in 1988 to US$0.07 per million cubic feet, and to US$3.50 for every 1,000 standard cubic feet of gas flared in January 2008.

Since the restoration of democratic politics in Nigeria in 1999 many terminal dates for the halting of gas flaring have been set by successive administrations with none being honoured. Unfulfilled deadlines include end of 2007, 2008 and 2010. The Nigerian National Assembly also attempted proposing a new deadline of 2012 when the Senate passed a bill that effectively criminalised and raised the levels of punishment and fines in an attempt to make the fine equal to the commercial value of the gas being flared. That bill could not see the light of the day due partly to heavy industry pressure according to observers.

Claims by oil companies that they are working to reduce gas flaring are best seen in the context of public relations. The reality is that these companies are busy raising hurdles on the path of halting the criminal activity. They have demonstrated this in two key ways.

Shell, ExxonMobil and Chevron are said to be deliberately frustrating government efforts to install real-time measurement equipment at 166 gas points to accurately meter the amount of gas being produced in the country. According to the Directorate of Petroleum Resources (DPR) only ten out of the 166 points have had the measuring equipment installed. This posture compounds the lack of transparency in the Nigerian oil; and gas sector, where the true amount of crude oil extracted in the oilfields remains a mystery. More power plants would have come on stream by now, but investors complain that the flaring oil majors have generally refused to cooperate with them and deny them access to the gas that is currently being flared. In fact, three years after thirteen companies prequalified by the Nigerian government to gain access to and harness gas from 180 identified onshore and offshore flare sites; the oil companies have not granted these companies the needed access.

Secondly they are vigorously resisting the moves by the government to bring in a Petroleum Industry Bill (PIB) that would demand more transparency as well as more socio-economic justice in oil and gas sector operations.

By the close of the legislative session that ended in May 2011 there were seven versions of the PIB in circulation to make the law pliable to the desires of the contending forces. In fact, there was only one mention of gas flaring in the version of the PIB that civil society groups believed was likely to be passed into law at that time. Shockingly, the single mention categorised gas flaring as one of the needed indices for a community to expect revenue aimed at community development. The draft PIB said nothing about stopping gas flaring.

The World Bank states that gas flaring decreased in 2009 in Nigeria from 21.3 billion cubic metres to 15.2 billion cubic metres.[3] However, one of the major offenders, the Shell Petroleum Development Company (Shell), admitted that their flares increased 33 per cent in 2010 over their 2009 figure. This clearly shows that whatever may have been the decrease in 2009 was not likely a result of the activities of the oil companies to curb the practice.

Oil companies in Nigeria claim that gas flaring became standard industry practice from the onset of oil exploitation in Nigeria because of a lack of market for the gas. There is a huge market now, but the companies are still lighting up new flares. For example, Shell lit a new one at Opolo-Epie in 2010 although it has been off for a few months now. They also lit another one at their Central Oil and Gas Processing Facility (CPF) at Gbaran-Ubie in the same year. Interestingly, an environmental study ordered by Shell gave an interesting verdict passing off gas flaring as having health and environmental benefits. One of the findings of the evaluation was that the incidence of malaria in the area reduced from 29.1 per cent to 26 per cent after their flare lit the sky.

AGIP, the Italian oil giant, however, commenced flaring at their location at Ondewari by mid 2011. Like Shell’s flares at Oben and elsewhere, this flare is aligned horizontally at ground level, at Ossiama Creek in Bayelsa State, Nigeria. The company works under heavy guard mounted by the Nigerian Joint Military Taskforce (JTF) and community people passing by in canoes or boats are forced to keep their hands in the air whenever they are close to the location. The poor people are humiliated so that the oil companies and the Nigerian government may continue to reap profits from the unabated assault on the environment and on the people.

Some gas flares have gone off due to the coming on stream of power plants in the Niger Delta. Even where flares have gone out, like at Shell’s facilities at Imiringi (Kolo Creek), Etelebou and JK4, these are still like drops in the bucket when taken with the overall prodigious flaring in the region.

Another reason why flaring drags on is the fact that the United Nations Framework Convention on Climate Change (UNFCCC) accepts gas-flare-to-power plants as Clean Development Mechanism (CDM) projects. Projects so far accepted as CDM projects include one by AGIP at Kwale and another by Pan Ocean at the Ovade-Ogharefe oil fields in Delta State.[4]

Analysts believe that the carbon reduction claims of the oil companies are grossly exaggerated and that the power projects are aiming to utilise more of gas from purely gas fields rather than gas associated with crude oil extraction. The reason for this is that associated gas is more expensive to harness than non-associated gas.

The World Bank has backed other projects that ride on false claims such as this. An example is the West African Gas Pipeline project that was hyped as key to halting or at least massively reducing gas flaring in the Niger Delta.It is now believed that only twenty per cent of the gas conveyed by the pipeline is associated gas.[5]

While the gas-to-power plants are essential in an electricity-poor nation like Nigeria, we believe it is immoral, unethical and illegal for the UNFCCC to accord these projects a CDM registration when all they do is partially halting an already illegal activity— with no additionality whatsoever. The additionality requirement for CDM projects demands that such projects preform functions that would otherwise not have been carried out if the project had not been executed. Certainly the World Bank and the various arms of the United Nations, including the UNFCCC must be aware of the illegality of gas flaring.

It is reasonable to assume that even drunks have moments of sobriety. At such times they are able to act without the influence of alcohol. The world has been drunk on crude oil, but considering the sheer harm done to people living in the backwaters of the oil fields and the general harm to the planet, the time is ripe for the world to step back, reflect and halt the harmful practice of gas flaring.

  1. See at http://www.makingitmagazine.net/?p=5890 (accessed 29 May 2017)
  2. The flaring of natural gas associated with crude oil extraction has been illegal in Nigeria since 1984. The obnoxious act continues unabated. In fact, Nigeria is second only to Russia in gas flaring with more than 70 percent of such gas going up in toxic smoke continuously. Businesses seeking to utilise a bit of the flared gas are now lining up to be listed as CDM projects and thus eligible to reap profits from carbon credits.
  3. Statistics on gas flaring in Nigeria are notoriously unreliable. Sometimes the ratio of gas flared is computed without taking into account that the complaint is about gas associated with crude oil extraction and not necessarily from purely gas fields. With more gas from gas fields being utilised for power generation and other uses one could get the impression that gas flaring had reduced whereas that may not be the case. The best overall measure of gas being flared in Nigeria can be seen at the Gas Flare tracker site, http://gasflaretracker.ng (accessed 7 June 2016)
  4. See list of registered CDM projects in Nigeria at http://climatechange.gov.ng/division/mitigation/cdm/registered-cdm-projects-in-nigeria/ (accessed 29 May 2016)
  5. Before completion of the pipeline it was projected that 60 percent of the gas it would convey would be associated gas. See for example http://www.energytribune.com/591/west-africa-gas-pipeline#sthash.NslQyyt9.dpbs accessed 29 May 2016


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