By FELIX AYANROUH
Gas flaring which is the greatest environmental hazard in the Niger Delta is the burning of natural gas that is associated with crude oil when it is pumped up from the ground. This is the cheapest method of separating crude oil, from associated gas and has been proven to cause pollution damaging to human health.
While gas flaring has technically been illegal in Nigeria since 1984, the government sometimes grants exemptions to oil companies, and fines for flaring. These exemptions and fines are minimal or of no effect in encouraging investment in safe and environmental friendly technology in oil and gas exploration and development.
George Osahon, Director, Department of Petroleum Resources (DPR) during a business forum of Nigeria Gas Association (NGA) in Lagos, said, “Nigeria is losing over 4.9 million dollars (more than N735 million) daily to gas flaring.” According to him, “…an average of 4.9 million dollars worth of gas is being flared on daily basis which translates to about 1.4 billion cubic feet of gas flared daily by the international oil companies,”
Before now the government or the international oil companies have done little or nothing to remedy the devastating effects of gas flaring. Consequently, the PIB in response to this problem provides for extensive regulatory, preventive and remediation measures to redress this occurrence. The PIB if passed would put to an end the flaring or venting of natural gas after a date to be prescribed by the Minister (the flare-out date) on any production facility, block or field, onshore or offshore or processing plant, unless granted a permit.
The bill goes on to demand that oil and gas operators with flared gas resources shall within six months of the date the bill comes into force categorize all their flared gas resources. This data along with a gas utilization plan should be submitted to the Inspectorate, and should include the gas they intend to utilize before the flare out date. Thereafter, the Inspectorate must approve these categorizations and plans and make them available to the general public on the Inspector
Also, the PIB mandates the Minister to grant exemptions with a permit to flare “not more than 100 days”, or a much longer period in such cases as “start up, equipment failure, shut down, safety flaring or due to inability of Gas customers to take off gas.” Additionally, the bill states that anybody flaring gas without such a permit shall pay a fine, not less than the value of the gas flared. This provision is a vast improvement of what was obtainable under current laws. Furthermore, the bill provides that the license will not be granted either on or offshore, if there is no plan to utilize or re-inject the gas produced.
In an attempt to know the extent of gas flaring, the bill provides for the metering of flared gas. This metering process must be implemented by the Inspectorate by installing metering equipment on every facility that flares or vents gas within three months of the effective date.
The inspectorate is mandated to make public those flaring along with the volumes and the penalties within 60 days of occurrence. Falsification of a flare report or neglect to submit such a report is punishable with three months imprisonment, or the option of a fine of not less than the value of 50% of volume of gas flared or vented. Also, in an attempt for a robust and transparent regulation the bill stipulates that the Inspectorate shall ensure that gas flared or vented be fully documented with information on its website, including the longitude, latitude, local government area and ward, daily volume and gas reserves within 90 days of the effective date.
No doubt that the PIB per se will not solve all the environmental problems noted above as there are with any law or new government initiative, and in this case, we have the added complication and serious concern about the current structure for oversight of the oil and gas industry. For example, the nature of the relationship between the DPR and the oil companies has been alleged to be one of partnership, which fundamentally conflicts with the concept of an independent body regulating the industry.
In most part the PIB is a sound legislation, including its environmental protection provisions. However, it is imperative that the PIB (including the government) commission an Inspectorate that is independent in its oversight of the petroleum industry. The Bill should make clear that operating companies are mandated to carry out extensive social and environmental impact assessments, prior to the commencement of any major operation, including exploration, and to revise such assessments over time, in line with international good practice.
Notwithstanding the PIB’s strong provision on operators responsibility on negative impacts on oil spills, the bill should recognize the ‘polluter pays’ principle and require that negative impacts are reported to the inspectorate, addressed in a timely manner, in line with international best practice. On the issue of pipeline safety and integrity, the bill should establish a standard pursuant to the American Petroleum Institute (API) standards of relevance to pipeline integrity and management.
This involves operator’s regular conduct and disclosure of Asset Integrity Reviews, and to have in place standards that requires operators act to prevent sabotage and illegal activities. All operators should be required to take specific steps, in line with international best practice, to make their infrastructure and operations as safe as practicable from sabotage.
The PIB should stipulate that oil and gas operators incorporate Best Available Technology (BAT) into all oil field operations – exploration, production, transportation, and storage, including pipelines and vessels hauling petroleum and petroleum products. This would include resistant tamper equipment – warranting all new installations are made tamper-proof in line with best available technology.
Finally, upstream operators should be mandated to install surveillance systems to prevent sabotage and illegal activity. Such systems should be in compliance with the rights of individuals and communities, including their right to privacy.