IN the past decade, a report obtained by NewsNow on Monday revealed that the Federal Government suffered an estimated $16tn loss due to natural gas flaring.
The Energy Institute’s 72nd edition of the ‘Statistical Review of World Energy 2023’ indicated that this staggering amount was lost between 2012 and 2022.
A detailed breakdown of the data revealed that oil and gas companies operating in the country flared approximately 12.9 billion cubic metres of natural gas in 2012, followed by 9.2 billion cubic metres in 2013, and 8.3 billion cubic metres in 2014. The figure continued to decrease over the following years, dropping to 7.5 billion cubic meters in 2015, and 7.2 billion cubic meters in 2016. However, there was a subsequent increase to 7.5 billion cubic meters in 2017, which then decreased to 7.3 billion in 2018, and rose again to 7.8 billion in 2019.
The amount of gas flared by the country saw a significant reduction to 7 billion cubic meters in 2020, followed by a further drop to 6.5 billion cubic meters in 2021, and finally reached 5.3 billion cubic meters in 2022.
The cumulative gas flaring over the 10-year period amounted to an estimated 86.5 billion cubic meters, with each billion cubic meters of natural gas valued at approximately $183 million, resulting in the staggering $16tn loss attributed to gas flaring during this period.
To address the issue, former President Muhammadu Buhari pledged support for the United Nations 2050 zero gas emission agenda in 2020, with Nigeria aiming to completely halt gas emissions by 2060.
In line with this commitment, the Nigerian Upstream Petroleum Regulatory Commission announced in October that the FG had awarded 42 firms gas flaring licenses through the 2022 Nigerian Gas Flare Commercialisation Programme auction process. The commission revealed that 38 companies were granted 40 flare sites for standalone single flare site development, while four were awarded nine sites to be developed as clusters.
As part of the penalties for gas flaring, the Nigerian Oil Spill Detection and Response Agency (NOSDRA) stated that oil companies were liable to fines totaling $25.3m in July, equivalent to N19.4bn based on the official exchange rate of N768.77/$ by the Central Bank of Nigeria.
Engr Gbenga Komolafe, the Chief Executive of the Nigerian Upstream Regulatory Petroleum Commission, emphasized that the wasteful disposal of natural gas not only poses health and environmental risks, but also results in significant resource wastage and value erosion for the country. He highlighted that the Nigerian Gas Flare Commercialisation Programme aims to attract investments and develop a transparent market mechanism through a competitive procurement process, allocating gas flares to competent third-party investors using proven commercial technologies globally.