Nigeria loses $2.5b yearly to gas flaring, says Senate

Gas flaring has remained a major economic and environmental challenge since the discovery of oil in the 50s. Successive governments had only mouthed their disgust but failed serially to decisively tackle the issue.

• Dealers threaten to cut supplies over N200b debt

The Senate yesterday declared that Nigeria is losing $2.5 billion yearly to gas flaring. This is just as it began moves to enact a legislation to outlaw gas flaring in the country.

At a public hearing on the Gas Flaring (Prohibition) Bill in the National Assembly, the Senate Committee on Gas Resources also lamented that gas flaring is creating so much health hazard.

Gas flaring has remained a major economic and environmental challenge since the discovery of oil in the 50s. Successive governments had only mouthed their disgust but failed serially to decisively tackle the issue. If the new initiative by the Senate is able to stop the practice, it will mark a paradigm shift in oil exploration and exploitation in the country.

Also, oil and gas producing communities have requested that money generated from gas flaring penalties be given to them to take care of the damage done. The representatives of the host communities led by Mike Emuh also want government to “determine the proportion of outstanding gas flaring penalty levies unpaid by the oil companies under the extant Act and pay same to the host communities.’’

The Chairman of the Committee, Bassey Akpan, noted that despite the huge concentration of gas reserves in Nigeria, issues of unsustainable exploration practices and the absence of gas utilisation infrastructure have promoted the dangerous practice of gas flaring in the country.

The Gas Prohibition Bill according to Akpan seeks to prohibit the development of oil and gas fields without a plan for the utilisation of Associated Gas (AG).
It also addresses the inadequacies of the 1985 Gas Reinjection Act while also bringing gas flare penalty in line with current economic realities.

The bill would ensure the achievement of the international flares-out target of January 1, 2030 as well as ensuring the timely review of gas flaring regulations and deployment of an online real time monitoring mechanisms.

Meanwhile, the same wasted gas forms a major factor in electricity generation. For instance, the Association of Power Generation Companies (APGC) has raised the alarm over the huge gap in power generation and distribution capacities to the end users to boost economic activities.

This is even as the Federal Government is yet to release any amount out of the N701 billion approved for Nigeria Bulk Electricity Trading Plc. (NBET), as power purchase guarantee fund for payment of power generated by GenCos and sold to NBET, three months after the announcement of the approved sum.

GenCos are being owed N600 billion while they owe gas companies about N200 billion, debts which are threating to stop gas supplies to the GenCos. The Executive Secretary of APGC, Dr. Joy Ogaji, who spoke to reporters on critical issues in the power sector, said the figure proves that there is a huge gap in delivering generation capacity and even a bigger gap in meeting the national grid demand as well as spare capacity three years after privatisation.

She declared that three years after privatisation, the 11 distribution companies have enjoyed the monopoly of bulk power purchase and are still unable to distribute and account properly for power purchased and distributed.

However, she said the GenCos are waiting desperately to sell more power to end users willing to buy more power for residential, commercial and industrial use.



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