June 19, 2024

EU’s mulled sanction on methane emissions increases pressure on Nigeria

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Ilenre Irele

It’s no news that for over 70 years Nigeria has suffered environmental degradation from operations in its oil and gas industry which started when Shell first found oil in commercial amounts in present-day Bayelsa State.

A new law by the European Union emplacing a methane emissions limits on all fossil fuel imports from 2030 has upped pressure on Nigeria to do more to check gas emissions, recorded in the country principally through gas flaring.

Nigeria’s oil industry, which began when a British joint operation with the Dutch triggered the discovery, has since been marked by litigations and community protests, human rights abuses and twists and turns at the level of regulation.

Even with the Petroleum Industry Act stepping up sanctions for companies that flare gas beyond approved levels, gas flaring has not meaningfully diminished.

Nigeria’s push to monetise natural gas that is being wasted and burnt off in the course of extracting crude has not moved the needle either, over seven years after regulators introduced the Nigerian Gas Flare Commercialisation Programme.

In defence of the practice, energy firms say gas flaring and venting is done for safety and maintenance purposes. They say volatile pressure is often exerted during oil and gas extraction and processing, which can trigger an explosion. They argued that the gas saved from flaring is not really commercially significant, although findings are pointing to the contrary.

“With natural gas prices at historic highs, gas flaring is an extraordinary waste of money in addition to its negative impacts on climate change and human health,” states the International Energy Agency (IEA) on its website.

Nigeria and resource waste
The World Bank estimates that the gas flared by Nigeria reduced by 45 per cent over 10 years, from a peak of 9.6 billion cubic metres in 2012 to 5.3 billion cubic metres in 2022. Viewed more closely, that is an illusion of progress.

Considering that the country’s oil output shrank by half within the period, “the volume of gas flared declined broadly in proportion to oil production,” the World Bank admitted, suggesting that the decrease is not a marker of deliberate gas-flaring reduction efforts after all.

Moreso, gas-flaring intensity, which weighs the volume of flared gas over a period in proportion to the volume of oil produced using certain base measurement units of each of the two, was near its highest in 2022, the same year within that timeframe when the flaring volume was at its lowest.

The 5.3 billion cubic metres of natural gas oil companies flared in Nigeria in 2022 can fill 177 million units of 12.5 kg cylinders. If Nigerians were grouped into a family of four, that volume could provide each family with three cylinders of cooking gas.

Methane, the colourless, odourless gas that is the chief component of natural gas, is the second biggest contributor to global warming after carbon dioxide and has been responsible for a third of net warming since the Industrial Revolution. Oil and gas account for a quarter of all emissions.

Methane is over 80 times more damaging in the near term (20 years) than carbon dioxide when discharged into the atmosphere because of its vast heat-trapping potential, studies say.
Methane normally accounts for between 80-90 per cent of all the components of natural gas, with hydrocarbons such as butane, ethane and propane making up the rest.

Taming the monster
Grave health conditions like cancer, asphyxiation and diverse cardiovascular, neurological and respiratory complications have similarly been linked to methane emissions, which have been largely ignored for long across the world.

Gas flared by oil companies “affects even conception. We’ve seen very high prevalence of infertility among couples that reside in Port Harcourt, a study conducted in 2018 stated. We have seen birth defects, babies being born with abnormalities,” Bieye Briggs, a public health physician and environmental rights activist said recently.

“We have seen unexplained miscarriages. We have seen cardiovascular diseases on the increase. We have seen kidney failures that require kidney transplants. We have seen sudden cardiac arrests,” he added.

Those downsides have bred a global urgency driving environmentalists and climate action advocates to demand more focused efforts towards methane control, recently compelling some governments to resort to stringent measures to tame the monster.

Legislators at the European Union approved a law last month placing a methane emissions limit on all fossil fuels entering member countries from abroad onwards from 2030.

Additionally, the regulation is asking operators to hand in their plans for methane leak detection and repair to appropriate national authorities within nine months after the new law takes effect.

A first leak detection and repair survey of already-operating sites must also be conducted within 12 months.

“Reducing methane emissions is not only climate action but also improving air quality and increasing energy sovereignty in the EU. Extending the rules to include imports will have an impact worldwide,” said Jutta Paulus, the co-lead negotiator for the EU Parliament.

Pascal Canfin, her fellow negotiator, said: “This is the first EU law aiming to reduce methane emissions. Until now, methane was a blind spot in our climate policies. Now we are not only tackling domestic methane emissions but also those from our fossil fuels imports!”

The law builds on an earlier Global Methane Pledge, a deal reached in 2021 by participant countries to voluntarily take steps aimed at a joint effort to pare down methane emissions by a global minimum of 30 per cent from 2020 levels by 2030. More than 155 countries have since signed up to the campaign.

“Rapid cuts in methane emissions from fossil fuels could avoid up to 0.1 °C in global temperature rise by mid-century – greater than the emissions impact of immediately taking all cars and trucks in the world off the road,” the IEA says.

Nigeria, Africa’s largest oil producer, ranks ninth among the top 10 methane-emitting countries in the world, with leakage and flaring as the chief sources of emissions.

In terms of the top countries with a bad name for energy-related emissions, Nigeria takes the seventh spot.
The energy sector contributes half of Nigeria’s total methane emissions, according to IEA data, while agriculture, waste and other sources contribute 31.5 per cent, 13.5 per cent and 5.5 per cent respectively. It implies that, apart from methane emissions from the energy industry, those from agriculture are another big monster that regulators must tame for the country to achieve its climate ambitions.

EU’s new rule and Nigeria’s gas supply plans
The tall order by the EU on methane limits on fossil fuel imports suggests that Nigeria needs to make swift concerted efforts to cut down on its energy-related methane emissions for its oil and gas to be accepted by EU countries from 2030, lest it attracts heavy penalties.

As of 2022, Nigeria accounted for 14 per cent of the EU’s gas imports, with a total LNG exports of 9.4 billion cubic metres that year.

As of last November, Nigeria’s oil exports to the EU had risen to 730,000 barrels per day.

The EU’s move can undermine Nigeria’s recent efforts to strengthen trade relations with the economic bloc by scaling up its gas supply. Such actions include laying a gas pipeline from Nigeria to Europe, through North Africa.

The Trans-Saharan gas pipeline project, a joint venture between Niger, Nigeria and Algeria, planned to run from Nigeria to Algeria as a way of diversifying gas supplies to the EU, has hit balustrade on the way. The planned 4,128-kilometre gas pipeline has been in the works for over 20 years. Nigeria committed more than $1 billion on its section, but the project now faces a bleak future.

Following the latest coup in Niger, the West African country formed the “Alliance of Sahel States” with Burkina Faso and Mali,” which in January pulled out of the Economic Community of West African States.

That rupture in diplomatic relations between Nigeria and Niger stands in the way of the Trans-Sharan gas pipeline project.

Last October, the EU announced a plan to buck up its LNG exports from Nigeria between 2023 and 2037, underscoring the role it expects Nigeria to play in its energy transition plans as it looks away from Russia, its previous major supplier now at war with Ukraine.

This means that as the EU’s new rule enters into force in 2030, the last seven years of that gas supply plan will be executed under a stringent regime that could force Nigeria to take methane emissions control more seriously.

Nigeria’s quest to expand its market share of the EU gas market and even sustain the current level must have compliance with the union’s methane emission limits as a cornerstone for that ambition to fly.

A bigger gas pipeline project, the 5,600-kilometre Trans-Africa pipeline, has also been proposed and would run across 13 West African countries from Nigeria to Morocco but the execution is still far away.

The $13 billion project is expected to serve as an alternative to the stalled Trans-Saharan gas pipeline project, while also helping plug the supply gap that the EU’s shift from Russian gas has created.

However, Nigeria’s push to cut methane emissions to meet the EU’s new stringent rule and further its ambition of continuing gas supply to the bloc in 2030 and beyond will come at an elevated cost.

The IEA has estimated that Nigeria needs $1.5 billion to reduce methane emissions in its oil and gas industry between 2023 and 2030. It expects oil and gas companies to contribute $300 million, the national oil company (NNPCL) $700 million and other investors $500 million during the period.

The new rule requires operators to detect and fix new leaks, hand in a methane leak detection and repair programme to the relevant national authorities nine months from the date the regulation takes effect, and also execute a first leak detection and repair survey of existing sites within 12 months.

Mr Briggs has joined in calling on the likes of ExxonMobil and Shell to clean up the mess that has turned the Niger Delta into one of the worst places to live on earth before actualising their plan to exit onshore operations and shift their investment to deep water.

He said the corporations must be made to decommission their old assets appropriately and pay compensation to the host communities before they quit.

“Of course, the government is aware that gas flaring is highly toxic to the health of the people. But they care less,” Mr Briggs said.

“They will look the other way because they want to make money off the oil companies. It’s a bad business. It’s bad politics from government and the regulators of the oil and gas industry.”

Regulators keep mum
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the industry watchdog responsible for monitoring the environmental impact of companies’ activities in the midstream and downstream sectors, did not respond to EnergyDay’ inquiries.

Questions sent to the regulator on its plans to meet the new EU’s leak, detection and repair rule and hold erring energy companies accountable for misleading emissions data were unanswered for over two weeks.

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