Oil Assets Still Fueling Gas-Fired Flames in Niger Delta
Sunday, August 30, 2009
EBOCHA, Nigeria -- Kingsley Okene is the chief here. But despite his authority, he says he has never managed to snuff the giant gas-fueled flames that have towered over his Niger Delta village for decades.
Neither has the government of Nigeria, though it has often vowed to do so.
The flames spout day and night from tall smokestacks, fired by the gas that is a byproduct of oil pumped here by the Italian company Agip. As many as 100 flares burn at petroleum companies' outposts across the oil-rich delta, belching harmful greenhouse gases and, human rights activists say, sickening residents.
The flames have become emblems of the inertia of the troubled region, where environmentalists, oil companies, politicians and militants argue about the wealth and wisdom of oil exploration. Some of the nation's poorest people, meanwhile, watch from the sidelines.
"The damage is done," said Okene, 69, sitting beneath an antelope-skin wall hanging in his modest home. "It's beyond my explanation."
But analysts say Nigeria may be embarking on its most serious effort to stop gas-flaring, which amounts to cash going up in smoke -- as much as $2.5 billion worth a year. The government, which missed its most recent "flare-out" deadline of Dec. 31, 2008, is working on a multibillion-dollar plan for three privately financed plants and pipelines to gather and process gas primarily for domestic power.
In a land of blackouts, generators and firewood, gas could "enable a potentially skyrocketing" economic growth rate, according to a 2004 World Bank report. Though there has been a slow reduction, Nigeria flared nearly eight times as much gas last year as it used for power -- more than any country except Russia, according to the World Bank.
"It's a waste of energy that could be used for power generation," said Bent Svensson, head of the World Bank's Global Gas Flaring Reduction Initiative. "And it has environmental impact, both locally and globally, to global warming."
When Nigeria began tapping its oil 50 years ago, the norm was to burn gas, not harness it. Oil companies and the government, which owns a majority stake in oil ventures, never built the infrastructure to capture or transport it. Many oil-producing countries eventually phased out flaring. Nigeria, home to Africa's largest natural gas reserves, banned the practice in 1984 but has repeatedly extended deadlines -- even after a court ruled in 2005 that it violated Niger Delta residents' human rights.
Though a power crisis has created a market for natural gas, experts say, the government has failed to raise its share of funds to support projects, while militancy in the Niger Delta has made those endeavors risky. Occasional government threats to shut oil production came to naught because "that would just mean a reduction in revenue for themselves," said Thomas Pearmain, an Africa energy analyst for IHS Global Insight.
But now, in addition to the new infrastructure plans, proposed legislation would impose stiffer fines on gas-flaring companies. The government has also offered amnesty to delta rebels in a long-shot bid to end the insurgency. And the World Bank has pledged to guarantee the public electricity company's payments for gas supplied to the domestic power market, just in case it defaults on bills.
Few observers think gas-flaring will be sharply reduced anytime soon. But even critics say momentum is building.