Gas flaring: Crafty operators, tax evasion endanger children, unborn babies

As Nigeria increases gas flare penalty to $2 in a bid to end the many years of environmental pollution of oil communities and meet up with the United Nations target on zero gas flare, the Nigeria National Petroleum Company Limited (NNPC), International Oil Companies and other operators are getting smarter under a weak regulator and revenue agencies as companies under-report gas flaring and evade fines. This development foists the reign of public health concerns, especially for infants and pregnant women, KINGSLEY JEREMIAH writes.

No End In Sight For Gas Flaring In Niger Delta
The quality of air that the people of the Niger Delta breathe is an issue of global concern. Every year, between 2018 and 2021, companies like the NNPC, Chevron, Total Energies, Shell and others sent nothing less than 115.3 million tonnes of carbon dioxide into the air in the form of gas flaring. Surviving this was a major challenge for Oga Ojochide, a National Youth Service Corps (NYSC), who had lived and schooled in Kogi State before being sent to Port Harcourt.

Ojochide is asthmatic, and surviving the worsening nasal complications was not only traumatic but was a development, which drastically reduced her productivity and increased her cost of living. She was left with no option than to visit the medical centre often and take medications. Ojochide spends more time outdoor and avoids any atmosphere that triggers her condition, but now she had to stay indoor because the air quality outdoor was unhealthy.

“This is the worst time for me. The black soot is real and I can feel the impact on my health,” Ojochide said. Her case is similar to that of Jeremiah Rueben, who left Ilorin for Bayelsa for his mandatory NYSC only to face a recurring stomach-ache that forces him to treat typhoid frequently.

“I have been worried and done about five abdominal scans since I got here. The scan results are negative but I still don’t feel normal and I have to treat typhoid and malaria frequently. The water here has been the problem. The more I try to stay safe, the more I get caught up,” Rueben said.

With Increasing Fines Come Sharp Practices
GAS flaring is the burning of natural gas associated with oil extraction which results in a range of pollutants being released into the atmosphere, including carbon dioxide, methane and black carbon.

Nigeria has the largest gas reserves in Africa, hovering around 208 trillion standard cubic feet. The ‘2022 Global Gas Flaring Tracker Report’ of the World Bank showed that Nigeria ranked seventh on the list of top 10 countries worldwide involved in gas flaring in 2021. Combined with the pollution from oil production, the World Bank estimated that around 2 million people in Nigeria live less than 4 km away from a flare site, a development which poses great dangers to their lives, especially those of children. Many attempts to bridge the gap in flaring over the years have been elusive as pronouncements by government officials and policy makers often end up in limbo.

At the 50th Offshore Technology Conference (OTC), in Houston, Texas, United States of America in 2018, like previous promises, Nigeria told the world that it would end gas flaring by 2020. The promise was made on the backdrop of the Gas master-plan as well as the re-invigoration of the flare penalty through the 2016 Nigeria Gas Flare Commercialisation Programme (NGFCP) and through legislation, that is, ban on gas flaring via the recent Flare Gas (Prevention of Waste and Pollution) regulations 2018. But the country still flares about 10 per cent gas across sites.

While the new regulations changed the penalty for gas flaring to $2 per 1,000 standard cubic feet of gas, discrepancies immediately surfaced between the official figure, which is self reporting and the figures coming from the World Bank-supported Gas Flare Tracker (GFT).

The World Bank satellite observations come from the Visible Infrared Imaging Radiometer Suite (VIIRS) Nightfire aboard the Suomi satellite and was launched in Nigeria in 2012. It was thereafter handed over to the National Oil Spill Detection and Response Agency and the Nigerian Ministry of Environment. The satellite-generated data is reportedly safe from manipulation as it collects information on gas flares in oil fields across Nigeria every 24 hours, and sums them up every month.

Before the fine was imposed, the figure from the self-reported data by oil companies was almost similar only for the discrepancies in the figure to consistently widen afterwards.

In 2012, the official figure was around 480 billion standard cubic feet of gas while the GFT was 490 bscf. It was around 450 bscf in 2013; it was slightly down to around 400 bscf in 2014. In 2015, the official figure was around 350 bscf while the GFT figure was about 390 bscf. In 2016, while the figure for the GFT hovered around 385 bscf, that of self reporting dropped below 300 bscf. In 2017, the gap widened further as GFT reported 400 bscf while official reporting stood at 325 bscf. In 2018, when the fine was created, the figure from the GFT stood around 500 bscf while the self or official reporting settled around 280 bscf.

From indications, official estimates usually published through NNPC monthly financial operation reports became over 30 per cent lower than the satellite estimates. For instance, the NNPC’s data in 2018 showed that Nigeria flared 282 billion standard cubic feet (scf) of gas, a 10 percent of the total gas produced in the country within the period under review, but GFT reported 470.4bscf of gas for the same year.

Similarly, while the NNPC figure showed 244 bscf of associated gas in 2019, representing 11 percent of gas produced in the country, GFT recorded 466 bscf as gas flared for the same year.

In 2020, it was 193 bscf against 353 bscf respectively and 138 bscf against 260 bscf respectively. These brought the figures of dateline reporting through the GFT 1.5 trillion standard cubic feet of gas in four years while self reporting of flared gas stood at 857 bscf.

Oil Majors Evade $1.384 Billion In Gas Penalties
The 692 billion standard cubic feet of gas not reported by the oil companies amounted to $1,384,000,000 in penalty. Recall that the current gas flare penalty stands at about $2 for every 1,000 cubic feet of gas flared. A simple division of 692 billion standard cubic feet of gas by 1,000 equals 693 million standard cubic feet. When multiplied by $2 penalty, it totalled $1.384 billion.

While Nigeria is struggling to finance its yearly budget and is wallowing in debt that’s almost hitting N50 trillion as revenue from oil plummets midst net-zero targets, the $1.384 billion tax evaded by the oil companies is enough to settle oil communities for about three years as envisaged under the host community component of the Petroleum Industry Act (PIA).

Under the PIA, host communities are meant to get three per cent of oil sector operating expenses. “We spent about $16 billion in fiscal 2020 in our operating expenses across the industry. So, when you take three per cent of that number, it comes to $500 million,” Group Chief Executive of NNPC, Mele Kyari said. Similarly, the $1.384 billion is only about $150 million less than the $1.5 billion being borrowed by the NNPC to rehabilitate the Port-Harcourt refineries.

Gas Flare Penalty Pushes Nigeria Closer To Clean Energy
WITH increased gas flare penalty, oil companies and the Federal Government, which has a stake in most oil fields, have now intensified the need to build facilities to pipe gas and move the country towards a gas oriented economy.

About 20 gas-related projects are currently ongoing in Nigeria, including the Ajaokuta-Kaduna-Kano pipeline and the trans-Sahara gas export pipeline. In Imo, Shell is working on the Assa North-Ohaji South project (ANOH), which is regarded as one of the largest greenfield gas condensate development Onshore gas field projects. The production capacity stands at about 600 million standard cubic feet per day. While the train 7 project of the Nigeria LNG project has also started, UTM Offshore Limited is also being supported by African Export-Import Bank (Afreximbank) to finance Nigeria’s Floating Liquefied Natural Gas (FNLG) project. The project is expected to turn out gas around 1.2 million metric tons per annum and a storage capacity of 200,000 cubic meters. Its ancillary facilities will be located 60km from the shore of Akwa Ibom State.

A 300 MMscfd Capacity Kwale Gas Gathering (KGG) and injection facility located in the Umusam Community, near Kwale in Delta State is expected to come on stream next year.

About 5,000 vehicles have been converted to run on Compressed Natural Gas (CNG) following the auto-gas initiative launched in December 2020 by President Muhammadu Buhari to ensure that vehicles plying the country’s roads run on Compressed Natural Gas (CNG).

Final Investment Decision (FID) for Brass Fertilizer and Petrochemical Company Limited was taken last year for the construction of the first ever methanol plant in Nigeria at the cost of $3.6 billion. The integrated methanol and gas project in Brass Island, Bayelsa State, is expected to produce 10,000tons of methanol daily by 2024.

Nigeria’s Liquefied Petroleum Gas market has been judged the fastest on the continent by Nigeria LNG Limited after consumption rose by over 1000 per cent in the last 14 years.

According to the Managing Director and Chief Executive Officer, NLNG, Dr Philip Mshelbila, LPG grew from 60,000MT in 2007 to over 1.3million metric tons in 2021, a growth of over 1,000 per cent. The development is witnessing gradual reduction in the consumption pattern of non-environmental friendly fuels like biomass, premium motor spirit, diesel and kerosene.

Gas Flaring Vs Global Warming
Nigeria, especially the Niger Delta region is at the receiving end of global warming. Just recently, people across communities in Nigeria with parts of the Niger Delta states hovering around 1.4 million were displaced due to flood. Over 603 people were killed just as more than 2,400 persons were injured. About 82,035 houses were damaged, and 332,327 hectares of land had also been affected. The multiplier effects of the development have left cholera outbreak across communities in the region.

This development only triggered years of pollution and environmental degradation which has affected farmland, fishing activities and public health problems. It also compounded the realisation of the Sustainable Development Goals (SDGs) for the people in the region as they face poverty, poor infrastructure and quality health amidst the divestment from fossil fuels without strong decommissioning and abandonment.

The Environmental Law Research Institute insisted that gas flaring generates insidious environmental and energy consequences as heat-trapping gases, such as CO2, NO2 (Nitrogen dioxides) and SO2 (Sulphur dioxide), increase with gas flaring activities with its attendant effect to raise global warming and harmful potentials.

Between 2018 and 2021, the 1.5 trillion standard cubic feet of gas released into the air in the Niger Delta spells doom as it translates to the release of nothing less than 115 million tons of carbon dioxide into the air.

Gas Flaring Dangerous To Foetuses
There are indications that pollution like gas flaring affects vulnerable children and babies in the womb as scientists discovered carbon particles like those released from gas flaring could penetrate through the umbilical cord blood by crossing the placenta to damage organs of babies forming in their mother’s womb.

A research, titled ‘Exposure to Oil Pollution and Maternal Outcomes: The Niger Delta Perspective Cohort Study,’ and published on National Centre for Biotechnology Information (NCBI) shows that gas flaring impacts babies in the womb and their mothers.

The result of total of 1418 women sample showed high exposure areas had a higher incidence of premature rupture of membrane (PROM), caesarean section (CS) and postpartum haemorrhage (PPH) compared to women in areas with low exposure to gas pollution.

Researchers at the University of Southern California and University of California found that women living near gas flaring sites face about 50 per cent greater risk of premature birth.

An environmental health scientist at the Keck School of Medicine of USC, Jill Johnston said: “Our study finds that living near flaring is harmful to pregnant women and babies.”

The research had examined 23,487 live births to women living within the Eagle Ford region, where gas is flared like communities in Niger Delta between 2012 to 2015. The study found premature birth of 14 per cent.

While the development in the Niger Delta is new to Ojochide and Rueben, Johnson Emere Mba-Ngei, a youth leader in the Eleme Community in Port-Harcourt has had to live with the situation for over 37 years.

Mba-Ngei and other people who are parenting are usually in the primary healthcare centre due to recurring cough and nasal related issues their children develop frequently. He has been involved in advocacy, seeking a way to ensure that oil companies halt gas flaring and stop the release of carbon dioxide into the air but his advocacy has yielded little or no results.

I’m Not With My Wife For Now
“I have been advocating for the vulnerable children and families in the area for years. The issues include but are not limited to respiratory issues, organ failure, cancer, skin diseases, eyes related problems, typhoid, malaria and others. I’ve lived with some of these issues for over 20 years and have been demanding for a change of attitude since then,” Mba-Ngei said.

Contending with oil spills, well blow-outs, FSPO explosion amidst humongous oil and gas theft, Nigerian environmentalist Nnimmo Bassey recounts persistent flaring of gas in communities in the Niger Delta. “It is on record that the minister of petroleum has said nothing, done nothing, to halt the oil/gas well inferno that has been raging at Ororo-1 field off the coast of Ondo State, for over two and a half years now,” Bassey said.

The World Bank had reported in an investigation that there’s significant positive associations between flaring and community-wide rates of children having a cough, respiratory illness, and fever, along with the rates of stunting, wasting, and being underweight .

While the air quality coming from gas flare sites endangers lives, oil companies operating in the region are not only notorious to have flared 1.5 trillion standard cubic feet of gas in four years alone but are helping themselves by under reporting that they flared only 857 billion standard cubic feet of gas from 2018 to September of 2021.

With this, the oil companies explored the loopholes of the regulatory apparatus to shortchange these communities and evade paying fines on 692 billion standard cubic feet of gas thanks to a Gas Flaring Tracker introduced by the World Bank.

As this persists, scientists at University of Aberdeen and Hasselt University in Belgium are linking black particles from carbon dioxide organs of fetuses as they develop in the womb. These scientists submitted that such soot particles potentially damages development in pregnant women.

While gas flaring releases carbon monoxide, carbon dioxide, volatile organic compounds, sulphur dioxide, polycyclic aromatic hydrocarbons, and particulate matter in the form of soot, these scientists said such pollution inhaled by newly pregnant women could lead to “pre-term birth, low weight babies and disturbed brain development.”

This is similar to the initial research by the World Bank, which linked data on gas flaring locations and volumes from satellite observations with child health data from Demographic Health Surveys (DHS) to examine the impact of flaring.

At the University of Aberdeen and Hasselt University in Belgium, 60 mothers and their babies in Aberdeen and the Grampian region in Scotland with possible less pollution were tested. Tissue samples from 36 foetuses which had been aborted between seven and 20 weeks of gestation were analysed and soot particles were present in all mothers and newborns, particularly in the livers, lungs and brains of the aborted foetuses.

Stakeholders Condemn Tax Evasion, Under Reporting Of Gas Flare
An energy expert, Madaki Ameh, who said the development amounts to tax evasion by the IOCs, noted that the companies were deliberately adopting environmental standards different from what obtains in their countries, or elsewhere in the world where they operate. This, he said, was due to the country’s lax and compromised regulatory environment.

He insisted that losses by the government from the crime remain huge, adding that, “tax evasion has always been a crime. The Federal Inland Revenue Services (FIRS) must set up an oil and gas industry-specific crack team to monitor infractions and bring perpetrators to book in line with extant laws.”

While a series of report by Nigeria Extractive Industries Transparency Initiative (NEITI) had in the same vein alleged discrepancies in extracted crude oil, as well as revenue remittances by oil firms, a foremost environmental activist and Director of Health of Mother Earth Foundation, Nnimmo Bassey, insisted that the poor reporting of gas flare was more of an unwillingness to measure the amount of gas being flared, rather than an inability.

Bassey stressed that there were perverse factors inhibiting the measurement of the amount of oil and gas produced, and the amount of gas flared as well, adding that it was regrettable that the NNPC holds the biggest shares in the various JV agreements, yet the oil majors are the operators and they determine the production cost of oil in Nigeria.

“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 JV shares the profit. Gas flaring fines are paid by the JV partners. Do you see the perversity in the arrangement? It is impossible for the government to come down hard on the companies. They are inextricably connected in the business.

“That incestuous relationship has to be dissolved and reorganised through appropriate legislation. Making such a law has so far been impossible, possibly due to vested interests. The law must determine that the producer will pay such fines outside any regime that affects the revenue accruing to the other JV partners,” he said.
• This report was supported by AGFAN cluster with aid from the American People through Nigeria Strengthening Civic Advocacy and Local Engagement project.