Nigeria loses $2.5 billion daily to gas flaring
By Mohammed Shosanya (Lagos), Daily Trust, 25 December 2008
The much awaited December 31, 2008 for the elimination of gas flaring in the country is almost here.
Today, it is few days for Nigeria to bid good bye to routine gas flaring believed to have severe consequence to the environment.
There has been apprehension in some quarters in recent time as to the suitability of the date, even as observers say there have been frosty ties between stakeholders in the gas sector and the Federal government.
In other words, observers believe that what would happen by December 31 is already foreclosed and serious effort should be geared towards ensuring that gas flaring is eliminated in no distant future.
Nigeria is one of the countries with high incidence of gas flaring, with attendant revenue loss of $2.5 billion per day.
It is estimated also that the country flares about 2.5 billion cubic feet.
Government efforts to curb the phenomenon was said to have begun as far back as 1969, when oil companies were given five years to phase out gas flaring.
The deadline has however proved elastic as government since then has continued to extend it at the request of the oil companies, which regularly cite absence of projects that can make use of gas as one main reason for not meeting the deadline.
Although, investigation by Daily Trust revealed that in recent time, the flare out has reduced to about 1.7 billion cubic feet per day, but oil companies have been at sea over how to achieve zero-some gas flare in line with the campaign of the Federal government.
The last administration, for instance made sure that the 2008 deadline was not negotiable, and threatened through the Department of Petroleum Resources to shut down oil installation of companies that fail to live by the directive.
But as the deadline draws closer, it becomes crystal clear to the operators that the 2008 is not feasible as they needed more time to tidy up their gas projects in order to clear up the flares.
According to Charles Adeniji, the Executive Director Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry, the challenges militating against the 2008 terminal date include security issue in the Niger Delta, insufficient funds and capable local fabricator, slow approval process of projects, lack of guarantee of payment for gas supplied and removal of tax holidays.
He said: “The tax holiday extended to us in the past has been removed and there is nothing in place to guarantee that you will be paid”.
Besides, experts are of the opinion that it takes two to tango on the issue of putting an end to gas flaring, saying the government has not demonstrate genuine will to the project of gas fare out.
Diran Fawibe, an energy expert said the Federal government is just whipping unnecessary emotions into the flare out without putting a comprehensive agenda on it.
He said: “I have always felt that the oil companies, NNPC, DPR in particular should be able to sit down and look at every gas field, every shore of gas flaring, so that we will now put a programme that will ensure zero flaring, a situation where if you haven’t known then you are still not doing the right thing.”.
Daily Trust however gathered that several issues that would assist government meet the December 31 deadline like funding of gas projects, lack of infrastructures, pricing and the Niger Delta issue is still hanging on the neck of the Federal government like an albatross.
Besides, the current global financial meltdown, industry source said would have a severe impact on the government abilities and capabilities to fund gas projects and other energy programme.
Apart from the financial crisis, another issue, which observers fear might thwart the deadline is the Gas Master Plan which is currently at its embryonic stage.
Posts
No comments:
Post a Comment