‘$75 billion of oil firms’ earnings can address methane emissions’

Area Director, Nigeria, Ghana & Equatorial Guinea, Emerson Automation Solutions Ltd, Chukwuma Ossaiga (left); Business Development Manager, Mike Jewkes; Managing Director, Engineering Automation Technology Limited, Dr. Emmanuel Okon and Director, Energy and Transportation Systems for Emerson, Mouritz Jankowitz at the Nigerian Oil and Gas Energy Week in Abuja, recently.

The International Energy Agency (IEA) said oil companies in Nigeria and others across the world could address methane emissions if a fraction of their profits is committed to fighting the environmental pollution.

According to a new report by IEA, an investment of $75 billion, which is just a fraction of the oil and natural gas industry’s profits last year, is enough to reduce emissions of methane significantly.

Reportedly, methane emissions are a major contributor to the rising concentration of greenhouse gases in earth’s atmosphere, and are responsible for up to one-third of near-term global heating.

With Nigeria being notorious for gas flaring, a key contributor to methane emissions, around 140 bcm of natural gas is reportedly flared globally each year to the detriment of human health and the environment.

IEA noted that methane abatement in the oil and gas industry is one of the cheapest options to reduce GHG emissions anywhere in the economy.

According to the report, abatement measures would generate revenues of around $45 billion from the sale of captured methane.

This means the average cost of methane reductions up to 2030 is less than $5/tonne CO2-equivalent, the report noted, while adding that if there was no value to the captured gas, almost all available abatement measures would be cost effective in the presence of an emissions price of about $20/tonne CO2-equivalent.

Coming at a time that Nigeria’s many programmes towards ending gas flaring are ending up as white elephant projects, The Guardian reported that Nigerian National Petroleum Company Limited (NNPCL), Shell, ExxonMobil, Chevron, Total and other oil companies operating in the country flared about $3.9 billion (about N3 trillion) worth of gas in the last four years, despite growing environmental concerns and revenue leakages.

With many elusive targets to end gas flaring in the Niger Delta, statistics provided by the National Oil Spill Detection and Response Agency (NOSDRA) and the Gas Flaring Tracker satellite of the World Bank puts the volume of gas flared in 2022 at 224.9 billion standard cubic feet (SCF), which translates to $787.2 million. The gas flared in 2021 was 260.3 billion SCF, which translates to about $911 million. In 2020, 260 billion cubic feet of gas was flared, which was about $909 million. In 2019, 466 bscf of gas was flared, translating to about $1.7 billion.

The gas flared by the companies in four years is equivalent to about 128,500 gigawatts of electricity in a country that is struggling with gas to power about 80 per cent of electricity generation plants. In 2022, the worth of gas flared could generate 22,500 gigawatts hour of electricity (GWh).

Director of Health of Mother Earth Foundation (HOMEF), Nnimmo Bassey, described the continuous flaring of gas as irresponsible exploitation of natural resources with colonial roots.

“Is it surprising that the production cost of a barrel of oil in Nigeria is one of the highest in the world? The production costs go to the producers. The JVs share the profit. Gas flaring fines are paid by the JV partners. Do you see the perversity in the arrangement? The government can’t come down hard on the companies. They are inextricably connected in the business,” he said.