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Senate considers stiffer penalties as Nigeria loses N271 billion to gas flaring


The Senate is considering stiffer penalties for individuals and corporate entities engaged gas flaring in with effect from January 1, 2021.The Gas Flaring (Prohibition and Punishment) Bill, 2020, which was sponsored by Senator Albert Bassey Akpan (Akwa-Ibom North East), scaled second reading during plenary yesterday

Clause 11(a) of the bill provides that, “Any person who flares gas after December 31, 2020 contrary to Section 4 of this Act, commits an offence under this Act, and shall be liable on conviction to pay a fine which shall not be less than the cost of gas at the international market.”Akpan, in his lead debate, recalled that though the piece of legislation was passed by the eighth Senate in 2018, it, however, failed to receive concurrence of the House of Representatives due to time constraints.

He said the bill’s introduction by the ninth assembly, which promises guaranteed rapid infrastructure development of the oil and gas sector, would enhance revenue accruable to government and ensure environmental improvement for the people of the Niger Delta.

“The flaring of natural gas produce in association with crude oil is one of the most dangerous environmental and energy waste practices in the Nigerian petroleum industry,” he said.The sponsor observed that gas flaring affects the environment and human health, resulting in economic loss, deprivation of government of associated tax revenues and trade opportunities.

Explaining further, Akpan said the ugly scenario also deprives consumers of a clean and cheaper energy source and environment.According to him, available data from the Nigerian National Petroleum Corporation (NNPC) showed that in 2018, Nigeria lost over N217 billion in revenue as oil and gas companies flared a total of 244.84 billion standard cubic feet (scf) of natural gas within the period.

He added that with the average price of natural gas put at $2.90 per 1,000 scf as of February 16, 2017, the 244.84 billion scf flared translated to a loss of $710 million or N217 billion – using the official exchange rate of N305.25/ dollar.

“The volume of flared gas according to analysis, is sufficient to feed three LNG trains or generate 3.5GW of electricity,” he clarified. The lawmaker explained that the bill, when passed into law, would address the shortcomings of the 1979 Act; bring gas flare penalty in line with current economic realities as well as ensure the achievement of the national flare-out target of January 1, 2030.

He lamented that the current gas flare penalty of N10 per 1,000 scf was too low, thus the continuity of the economic sabotage.President of the Senate, Ahmad Lawan, referred the piece of legislation to the Senate Committee on Gas for further legislative work.


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