Evaluating the Gas Flaring Commercialisation Policy in Nigeria: An Agenda for Mitigating Gas Flaring

Abstract

Nigeria is an oil and gas producing country but sadly its gas sector had suffered serious setback in terms of development and utilisation.  Although, the crude oil sector is nearing maturity, the gas sector is still in its infancy due to some past regulatory mistakes. As a result of low gas utilization and past development policies, gas flaring became the bane of the petroleum industry in Nigeria for over five decades and this is with no end in sight. Amidst, the abundant natural gas reserves, the country was considered one of the worst gas flaring nations after Russia. Past policies and legal regimes to reduce gas flaring were rather episodic and unrealistic due to several reasons notably: policy instability, lack of cooperation by the International Oil Corporations (IOCs) and the lack of political will by the Federal Government. Gas flaring in Nigeria contributes to both economic waste as well as a huge environmental challenge in the oil and gas producing communities. It was against this background that the Federal Government recently announced measures for the utilisation of flared gas from the Niger Delta region. The objective is to make hitherto gas flared to be commercially utilised thereby reducing their environmental footprint.  The significance of this paper is to examine the efficacy of these inchoate   government policies and their fit for purpose. The paper found that any such measure must be backed up with enforcement mechanism with attractive terms for new entrants into the gas sector development in Nigeria.

Keywords: Gas Sector, Gas Development, Utilisation, Flaring, and Nigeria.

DOI: 10.7176/JLPG/96-15

Publication date: April 30^th 2020