A recent report from the Energy Institute’s 72nd edition of the ‘Statistical Review of World Energy 2023′ has disclosed that the Nigerian Federal Government suffered a staggering estimated loss of $16 trillion due to natural gas flaring over the past decade, spanning from 2012 to 2022.
The statistical breakdown within the report indicates that upstream and downstream oil and gas companies operating in Nigeria flared substantial amounts of natural gas during this period. In 2012 alone, an estimated 12.9 billion cubic meters of natural gas were flared, followed by 9.2 billion cubic meters in 2013, 8.3 billion in 2014, and 7.5 billion cubic meters in 2015. While the numbers fluctuated over the years, the overall trend showcased a gradual decline, reaching 5.3 billion cubic meters in 2022.
According to the Hebrew Energy, each billion cubic meters of natural gas holds a value of approximately $183 million. Consequently, the cumulative gas flaring over the reviewed decade accounted for a staggering 86.5 billion cubic meters, translating to the colossal financial loss of $16 trillion.
This revelation comes at a time when the Nigerian government has committed to the United Nations’ 2050 zero gas emission agenda, with former President Muhammadu Buhari pledging to cease gas emissions by 2060. In October of the current year, the Nigerian Upstream Petroleum Regulatory Commission announced that 42 firms were granted gas flaring licenses as part of the 2022 Nigerian Gas Flare Commercialization Programme auction process. Of these, 38 companies received licenses for 40 flare sites for standalone development, while four firms were awarded nine sites to be developed as clusters.
In an effort to deter gas flaring, the National Oil Spill Detection and Response Agency (NOSDRA) disclosed that oil companies faced penalties amounting to $25.3 million in July. This figure, equivalent to N19.4 billion based on the Central Bank of Nigeria’s current exchange rate of N768.77/$, underscores the government’s commitment to addressing the environmental and economic consequences of natural gas flaring.
Engr Gbenga Komolafe, Chief Executive of the Nigerian Upstream Regulatory Petroleum Commission, emphasized the significance of curbing gas wastage. He stated, “The wasteful disposal of natural gas is not only fraught with deleterious health/environmental consequences but also a major source of resource waste and value erosion to the country.” Komolafe expressed optimism that the Nigerian Gas Flare Commercialization Programme would attract investments and establish a transparent market mechanism to allocate gas flares through a competitive procurement process to competent third-party investors utilizing proven technologies on a global scale.