The report by the Nigerian Oil Spill Detection and Response Agency, stating that Nigeria recorded a loss of over $22.9 billion to gas flaring between 2011 and 2021 should worry the relevant authorities. President Bola Tinubu, who has retained the Petroleum Resources Ministry portfolio, should implement policies to ensure that the country fully harnesses its gas potential to improve revenue earnings, stimulate productive activities and employment.
The Director of ICT at NOSDRA, Margaret Adesida, who disclosed the figure, underscored the need for proper monetisation of gas flaring in Nigeria at a recent public event. She lamented that the country flared 4.2 billion standard cubic feet of gas from 2012 to 2021, representing a loss of over $14.6 billion.
She added, “This is in addition to $8.3 billion loss in penalty for the wastage totalling $22.9 billion loss within the same period.”
Corroborating the country’s losses, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission, Mohammed Shehu, stated that the gas sector was recognised as a critical economic sector that should be developed to help improve public revenue.
To maximise the potential, Tinubu should lead the way, mobilising all relevant stakeholders, especially the organised private sector, to strategise, invest, and convert gas flare to economic use.
Nigeria should join the global gas revolution. It has 209.5 trillion cubic feet of gas reserves, according to official figures.
Nigeria is a major hydrocarbon producer. Oil and natural gas revenue is its primary source of foreign exchange, and major funder of the national budget. Price volatility in the international crude oil market adversely however affects the country. This necessitates maximising benefits from other natural endowments such as gas.
The United States Energy Information Administration’s March 2023 report stated that Nigeria has the largest natural gas reserves in Africa. The June 2022 Statistical Review of World Energy report ranked her sixth globally among exporters of liquefied natural gas in 2021.
Although a March 2023 report by the Global Gas Flaring Tracker Report revealed that global gas flaring decreased by 3.0 per cent in 2022, Nigeria still flares the highest quantum of gas in Africa.
Three countries, Nigeria, Mexico, and the United States, accounted for most of the decline in global gas flaring in 2022. Two other countries —Kazakhstan and Colombia— stand out for consistently reducing flaring volumes in the last seven years, according to the World Bank.
The top nine flaring countries continue to be responsible for most flaring. Russia, Iraq, Iran, Algeria, Venezuela, the United States, Mexico, Libya, and Nigeria account for nearly three-quarters of flare volumes, and just under half of global oil production.
Experts say this wasted gas could displace dirtier energy sources, increase energy access in some of the world’s poorest countries, and provide many countries with much-needed energy security. If put to productive purposes, the amount of gas flared in 2022 could generate as much electricity as sub-Saharan Africa currently produces in a year, they added.
Nigeria must change its economic governance template to a more economically sound one and harness all available resources by creating a favourable liberalising and regulatory environment for foreign and domestic investment to maximise its gas potential.