From: Adeyemi Adeleye
To: Special Adviser on Power and Energy
Subject: Natural gas: From GHG to Power Generation
Date: May 20, 2010
Dear Special Adviser,
Natural gas occurs together with crude oil in most Nigerian oil reserves. Oil and Gas Journal (OGJ) estimates that Nigeria had 184 trillion cubic feet (Tcf) of proven natural gas reserves as of January 2009 which could total 300 trillion cubic feet, making Nigeria the seventh largest natural gas reserve holder in the world and the largest in Africa. Nigeria faces a number of difficulties in harnessing its abundant gas reserves mainly because it lacks the necessary infrastructure. When most of its oil facilities were built in the 1960s and 1970s, at a time when gas was not a popular energy source in the world, little thought was given to gas collection facilities. Because many of Nigeria’s oil fields lack the infrastructure to produce and market associated natural gas, it is often flared. According to the National Oceanic and Atmospheric Administration (NOAA), Nigeria flared 593 Bcf of natural gas in 2007, which, according to Nigerian National Petroleum Corporation, cost the country US$ 1.46 billion in lost revenue. Every day in southern Nigeria, almost 2 million cubic feet of natural gas is burnt during crude oil production, more than is flared anywhere else in the world and according to the World Bank, gas flared in Nigeria is equivalent to total annual power generation in sub-Saharan Africa. Gas flaring not only wastes a valuable resource for the past 40 years, but is also a major cause of environmental pollution in the Niger River Delta, where most of Nigeria's oil output is produced. There is growing anger among local inhabitants at the damage caused to their health and ecosystem by oil production activities, especially gas flaring and crude oil spillage. Moreover, flaring is a global source of greenhouse gas emissions, contributing immensely to global warming. The World Bank estimates that gas flaring in the Niger Delta releases some 35 million tonnes of carbon dioxide. If pursued vigorously via international bilateral agreements, this massive gas flaring in Nigeria can qualify the country to participate in the Clean Development Mechanism (CDM) with one of the European Union Greenhouse Gas Emission Trading System (EU ETS) countries, while financial and technical assistance can be received in exchange for utilizing this large-scale resource, especially in the generation of cleaner power which the country is in dire need of.
At present only 10% of rural households and 40% of the country’s total population have access to electricity from the national grid. And in the urban and semi-urban areas, three out of every five household relies on electric generators for powering their homes and businesses. This has continually led to an upsurge in the use of gasoline and diesel engines which are also major sources of VOCs, carbon monoxide and of global concern, carbon dioxide. Nigeria has 5900 MW of installed generating capacity; however, the country is only able to generate 1600 MW because most facilities have been poorly maintained and more importantly, old. Since the current government has a plan to increase access to electricity throughout the country to 85% by 2020, it will be necessary to consider the most cost-effective and least impactful way to go about it.
The contribution of Nigeria to global warming through petroleum exploration and use by industry, automobiles, electricity generation (both local and industrial) and gas flare definitely makes the country one of the highest carbon contributor in Africa. If the country thus decides to participate in a global carbon cap-and-trade scheme it will be given a considerably high cap based on historical emission. But since the country may not be technically ready for that right now, the CDM option could be pursued as it is a gain to the country on all sides- mitigation, power and revenue. The worst case scenario might be for the government to seek foreign investment for the natural gas capture and power generation. This will be a good policy approach to mitigate the nation’s emission which is increasing on an annual basis, reduce wastage from flaring, and increase power generation, albeit, cleaner power compared to coal and fuel-powered plants present today. In a national energy demand projection simulated that for 13% GDP growth rate by 2030, the demand projections rose from 5,746MW in the base year of 2005 to 297,900MW in the year 2030 which translates to construction of 11,686MW every year to meet the demand. The corresponding cumulative investment (investment & operations) cost for the 25-year period is US$ 484.62 billion, which means investing US$ 80.77 billion every five years within the period. Financial returns from the CDM and export of power and natural gas can definitely surpass this estimated cost. The expected life-span for the nation’s natural gas is about 88 years, which gives the country ample time to develop much cleaner alternative energy on a national scale while completely phasing out fossil fuel power production.
Thank you.
Adeyemi Adeleye
2 comments:
That was a lovely and timely write up Yemi. In one of my pollution control module class, my lecturer brought out the dailies (the UK SUN, I think) that showed on its headline GAS Flaring in NigerDelta region of Nigeria. the headline described some of the things you talked about most especially the prospect of generating energy from the gases (resources) that are been wasted. We hope there would be changes!
The issue has been lingering since forever. If we had excess money we can waste things; but not in a country where more than half of the population is living from hand to mouth. It's like pouring garri away when you've not made eba for tonight and even tomorrow.
NLNG, wake up! Legislator, start thinking!
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