Right-sizing Nigeria’s Gas Plans For Non-power Uses
With about half of Nigeria’s estimated 200 million population lacking access to energy, the government is adopting an ambitious gas expansion plans to address energy insecurity which is one of the biggest challenge in the country. Within this broad plan, this article highlights the need to meticulously right-size gas plans for non-power uses specifically. Juliet Ukanwosu writes on the need to take into consideration how factors like energy transition, funding, infrastructural needs and Nigeria’s vast gas reserves could impact a successful implementation
Need for improved energy access in Nigeria
Various reports and audits has revealed a severe energy deficit in Nigeria, with estimates suggesting that about half of Nigeria’s 200 million population lack access to energy. Thus, making energy security one of the country’s biggest challenge. This has not only impacted the socio-economic lives of citizens, but is limiting the country’s industrialization drive and revenue expansion efforts.
According to the United Nations Conference on Trade and Development (UNCTAD), access to a reliable and quality energy supply is vital to the economic development of any country, as it drives industrialization, boosts productivity and economic growth, spurs human development, and is crucial to achieve almost all of the UN’s Sustainable Development Goals (SDGs).
To address energy deficit in Nigeria, the government proposes an ambitious gas expansion plans, which includes taking concrete measures to increase gas production, local utilization and export, with the objective of supporting industrialization, boosting domestic energy supply (for power, cooking and transport), and ultimately increasing government revenues.
The Decade of Gas Policy
The Decade of Gas Policy is a major vehicle through which government intends to achieve the objective. The Policy which is an ambitious programme of the Federal Government launched in 2021 by former President Muhammadu Buhari, is intended to help Nigeria achieve industrialisation, economic prosperity and tackle energy poverty by using gas as an enabler.
For many reasons, the plan is adjudged by experts as well thought out. The current administration of President Bola Tinubu has demonstrated the will to progress with implementation of the Policy by reenergizing the Decade of Gas Secretariat. Recently, a dedicated Decade of Gas Website was launched in what industry watchers described as a step in the right direction. Although there are concerns about the specifics of information provided on the website.
In an open letter to the Secretariat, a coalition of civil society organisations led by the Natural Resource Governance Institute (NRGI), under the aegis of Expert Group on Gas, which includes the Centre for Transparency Advocacy (CTA), Women in Extractives, African Initiative for Transparency, Accountability and Responsible Leadership (AFRITAL), BudgIT Foundation, Policy Alert, among others, called for a comprehensive action plan, and clarity on a financing pathway for necessary investments needed in the initiative.
Nigeria is currently driving policies aimed at ending flaring and monetizing gas resources
key opportunities
Nigeria’s gas reserves: Nigeria currently has about 209 trillion cubic feet (tcf) of natural gas reserve and ranks as the world’s 9th largest gas nation by reserve. Harnessing this vast potential is significant for Nigeria’s economic reality and in closing the energy access gap.
Available market: Nigeria has an estimated population of 200 million people with about half lacking access to energy. This implies a huge domestic market, plus available share of export market if timely investments are made.
Policy combination: In developing the Decade of Gas plan, the government reviewed several existing policies which were previously developed to stimulate growth in gas sector. They include the 2008 Gas Master Plan; 2017 National Gas Policy; and the Petroleum Industry Act (PIA 2021). Key elements were extracted from these critical documents and fused into the Decade of Gas policy to develop a robust document capable of addressing modern reality. The policy further forecasted the four pillars of demand, supply, infrastructure and commercials between 2030-2050. The market forecast is instrumental to a successful implementation.
Energy transition: Nigeria is committed to net zero by 2060 and the country is adopting gas as transition fuel. Consequently, as Nigeria gradually phase down on use of crude, demand for gas will soar resulting in increased investment in gas production and utilisation.
These opportunities notwithstanding, on the flip side lie challenges that threaten the actualisation of the decade of gas policy. To successfully achieve its broad plan, the federal government must work collaboratively with diverse stakeholders to put measures in place to surmount these hurdles to deliver on its promise to citizens.
The hurdles
Funding: Top on the list of challenges is the issue of funding; Nigeria needs to commit about $2 billion annually to support the project. This is a huge challenge considering that fossil fuel projects are currently being defunded globally.
Time factor: The Decade of Gas policy is designed as a 10years strategic plan. Since its launch in 2021, Nigeria has already lost three years out of the 10 years’ plan. The programme now has about seven years left in the window. With the clock counting down on countries’ net zero targets, the market window is fast closing in on Nigeria. Other countries, such as Qatar, are rapidly maximizing the potentials of their gas resources while the market exist. The country is presently targeting LNG export of 126 million tonnes per annum (mtpa) up from 77mtpa, while Nigeria, through the NLNG, is trying to achieve 30mtpa. The longer Nigeria delays, the more market opportunity it losses.
Misalignment with Energy Transition: New investments in gas require long maturity time before projects maturity stage and returns realized. If countries’ commitments to combat climate change hold, there will likely be an oversupply of products and little or no demand, thereby resulting in stranded investment. The window of opportunity for Nigeria to maximize its gas potential may be lost if delay is prolonged.
Increased emissions: There are concerns that increase in gas production and use will result in increase in methane emissions from flaring, venting and fugitive emissions. This will further impact the health of communities and the environment.
Speaking recently at a stakeholder’s dialogue with the theme “Nigeria’s National Gas Plans for Non-Power Uses,” organsised by Centre for Transparency Advocacy (CTA) in collaboration with the Natural Resource Governance Institute, Executive Director of CTA, Faith Nwadishi, emphasized the need to mitigate methane emissions and its impact on the environment and citizens.
She added that the viability and sustainability of using gas in non-power applications remain areas of significant concern and interest, stressing the need to critically examine the technical and commercial viability, risks and emissions implications particularly methane emissions associated with gas production and use.
Women and children are most impacted by emissions
Gas for Non-power uses
Within the broad context of Nigeria’s gas expansion ambition, gas driven investments and plans such as the Presidential CNG initiative and the National Cooking Policy using liquified petroleum gas (LPG) are part of governments initiatives to expand domestic use of gas.
However, as laudable as the initiative seem, government must take further steps to address observed gaps and concerns for it to deliver intended objectives. These includes the need to ensure clarity of strategy, infrastructure development, reliable data among others.
- Clarity of strategy: There is insufficient information and a clear road map. This can impede effective planning and implementation and creates uncertainty among stakeholders. Clarity of strategy with defined roles for all stakeholders eliminates unnecessary bureaucracy and duplication of roles. This sends positive signals to investor community, significantly increasing the chances of a successful implementation.
- Infrastructure Deficiencies: The significant gap in required infrastructure particularly the absence of CNG filling stations, buses and conversion centres across the country is a major concern. The government must create a conducive investment atmosphere for private sector partnership to ramp up availability of needed infrastructure as well as design a mechanism to encourage increased use of gas for cooking and transport.
- Pricing/ Supply Concerns: Affordability and availability of cooking gas across the country, remains a major concern, calling into question the feasibility of Nigeria’s clean cooking target. Similarly, the conversion cost to CNG remain beyond the reach of the average Nigerian motorist. The government must consider cost cutting measures to incentivize adoption by citizens.
- Data Reliability: Comprehensive data and strategy is needed to facilitate a successful transition to a gas economy. Knowledge-sharing and learning from past experiences in shaping effective policies and strategies, is critical.
- Health Issues: Women and children’s health are more impacted by gas related production. There must be well thought out mitigation strategies on the health impacts of gas utilisation in communities.
- Public Awareness and Safety Measures: Without proper education and safety measures, the transition to a gas economy poses risks to users. A significant gap in public awareness regarding the benefits and safety measures associated with using natural gas exist among citizens. Relevant government agencies, the media and civil society must collaborate to amplify safe gas use awareness.
Nigeria targets clean cooking for households using LPG
Call to action!
For Nigeria to achieve a successful and sustainable gas expansion plan that translates to a robust domestic utilization and revenue generation, stakeholders such as media practitioners, civil society actors and the private sector must play crucial role in supporting the government.
These roles range from citizen sensitization, agenda setting oversight functions and making the right investments. It is the duty of media practitioners to tailor information in a manner that resonates with citizens, bearing in mind the various audience categories.
Furthermore, CSOs and the media have a duty of continuous agenda setting and oversight functions to expose corrupt practices, track energy transition and gas expansion financing, as well as amplify the voices of marginalized groups with emphasis on historical and emerging challenges in host communities.
Working collaboratively, advocacy actors can support each other with credible information with an objective of ensuring that Nigeria’s gas expansion ambitions is not a destination, but a transition journey that aligns with global commitments to reduce fossil fuel investments, national net zero target, subnational development goals and importantly, close inequality gap
Conclusively, media practitioners and CSOs can play a critical role in supporting government to right size gas plans particularly, for non-power uses, by not only promoting the socio-economic benefits of the plans, but also acting in public interest and forestalling negative impact on citizens by calling attention to gaps in the policy implementation.
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