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Nigeria loses $22.9bn to gas flaring in 9yrs

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By Abraham Adejare Adekunle

RMAFC to collaborate with agencies to implement management strategies.

According to the World Bank, gas flaring is the burning of the natural gas associated with crude oil extraction. Amidst the heightened awareness and activism against carbon emissions, fracking, or the standard process of refining crude oil, has contributed significantly to environmental degradation and global warming. In addition to the oil spills happening mostly in the Niger Delta region, fracking pollutes the atmosphere, releasing pollutants like carbon monoxide, carbon dioxide, sulfur dioxide, polycyclic aromatic hydrocarbons, and soot, while oil spillages contaminate farmlands and water bodies. As a result, residents of such communities are rendered jobless as they cannot farm or fish.

Now, in a period of nine years, Nigeria has lost $22.9 billion to the activity. The country has flared over 4.2 billion standard cubic feet of gas, which has resulted in a revenue loss of more than $14.6 billion from 2012 to 2021. In addition, the country has incurred a penalty of $8.3 billion for this wastage. In total, the loss amounted to $22.9 billion. The World Bank states that the practice has persisted since the beginning of oil production over 160 years ago.

Wasted resources could be reused productively.

Oil refiners and extractors engage in the activity due to a range of issues, ranging from market and economic restraints, to a lack of appropriate regulation and political will. Flaring wastes valuable natural resources that should be used productively, such as for generating power. For instance, the amount of gas currently flared each year all over the world was estimated to be about 140 billion cubic meters. This could power the whole of sub-Saharan Africa, which is currently struggling with power failure.

To address this huge financial loss, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) intends to collaborate with the Nigeria Upstream Regulatory Commission (NUPRC) and the Nigerian Oil Spill Detection and Response Agency (NOSDRA) to enhance revenue generation by implementing effective gas flaring management strategies. These disclosures were made during an interactive forum between delegations from RMAFC, NUPRC, and NOSDRA recently in Abuja. Director of ICT at NOSDRA, Margaret Adeshida, highlighted the need for proper monitoring of the activity in Nigeria.

The country is doing well with managing the activity.

Also speaking at the event, Babajide Fashino, the Director of Economic Regulation and Strategic Planning at NUPRC, painted a rosy picture of Nigeria gas flaring practices. He said that Nigeria is currently doing well by managing it in accordance with global best practices for achieving economic growth and sustainability. The agency was able to achieve this through the implementation of a metering system accompanied by thorough calibration procedures for the meticulous monitoring and recording of all gas management activities.

As a result, the director noted that the activity has remarkably reduced from an alarming 40 percent to an impressive seven percent. In his remark, the RMAFC Chairman, Mohammed Bello Shehu, emphasized the importance of prioritizing the gas sector in the nation’s drive to boost revenue generation. He highlighted the need for regulatory bodies such as NUPRC and NOSDRA to play a significant role in assessing the quality and quantity of gas production, as well as ensuring strict adherence to environmental standards for the benefit of host communities.

Shehu urged stakeholders to collaborate to develop strategies.

In light of this, Mohammed Shehu urged all stakeholders involved in the gas economy management, including the revenue-monitoring committee of the current administration, to join forces and develop effective strategies. According to him, the goal is to transform flared gas into valuable economic resources, resulting in increased revenue generation that will contribute to the growth of the Federation Account. He said that this collaborative effort will play a crucial role in salvaging the country and maximizing the economic potential of gas flaring.


Related Link

World Bank: Website

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AN-Toni
AN-Toni
18 days ago

Nigeria loses $22.9bn to gas flaring in 9yrs. RMAFC to collaborate with agencies to implement management strategies.Express your point of view.

SarahDiv
SarahDiv
18 days ago

According to the World Bank, gas flaring is the burning of the natural gas associated with crude oil extraction. Amidst the heightened awareness and activism against carbon emissions, fracking, or the standard process of refining crude oil, has contributed significantly to environmental degradation and global warming. This as led to huge and painful losses amounting in billions of dollars. In a period of nine years, Nigeria has lost $22.9 billion to the gas flaring activity. Which in turn could have led to more generation of capital in the economy.
To address this huge financial loss, the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) intends to collaborate with the Nigeria Upstream Regulatory Commission (NUPRC) and the Nigerian Oil Spill Detection and Response Agency (NOSDRA) to enhance revenue generation by implementing effective gas flaring management strategies. And there’s need for the revenue-monitoring committee of the current administration, to join forces and develop effective strategies.

Taiwoo
Taiwoo
17 days ago

This massive loss will cost billions of dollars.A great way to stop it is to implement management techniques. Nigeria has lost $22.9 billion over the nine years prior as a result of the flaring of gas actions. To stop this massive financial loss, we must act.

Adeolastan
Adeolastan
17 days ago

That’s certainly a matter of concern, my friend. The loss of $22.9 billion to gas flaring over a span of nine years is a significant economic and environmental challenge for Nigeria. It’s crucial for the relevant agencies, including the Revenue Mobilization, Allocation, and Fiscal Commission (RMAFC), to collaborate and implement effective management strategies to address this issue.
Gas flaring not only leads to substantial financial losses but also has detrimental effects on the environment and public health. The release of harmful gases into the atmosphere contributes to air pollution, exacerbates climate change, and poses risks to nearby communities. It’s imperative that we take concrete steps to mitigate these negative impacts.
Collaboration among agencies is essential to tackle this multifaceted problem. The RMAFC, in partnership with other relevant bodies, should work towards implementing comprehensive management strategies. This could include incentivizing companies to invest in gas utilization technologies, promoting stricter regulations and enforcement, and exploring alternative energy sources.
By reducing gas flaring, Nigeria can unlock economic potential, create new job opportunities, and improve the overall well-being of its citizens. It’s important to view this issue not only as a financial loss but also as an opportunity for sustainable development. By harnessing and utilizing gas resources effectively, Nigeria can contribute to its energy needs, reduce greenhouse gas emissions, and foster a cleaner and healthier environment.
I commend the RMAFC for recognizing the urgency of addressing gas flaring and their commitment to collaborating with other agencies. It’s through such coordinated efforts that we can make meaningful progress towards reducing gas flaring and its associated losses. Let’s hope that these strategies are implemented effectively and lead to a more sustainable and prosperous future for Nigeria. 🌍🔥💼

Kazeem1
Kazeem1
17 days ago

Nigeria can unleash its economic potential, generate new employment opportunities, and enhance the general welfare of its people by decreasing gas flaring. It’s critical to see this problem as both a chance for sustainable development as well as a financial loss. Nigeria loses $22.9 billion to gas flaring in 9 years by efficiently exploiting and leveraging its gas resources.