June 15, 2009

New US energy policy would harm Nigeria – FG

By Oscarline Onwuemenyi
ABUJA – THE Federal    Government has said the country would need to sharpen its energy framework in the light of the new energy policy of the United States Government under President Barack Obama.

The Special Adviser to the President on Petroleum Matters, Dr. Emmanuel Egbogah, said this on Thursday at the Nigerian-American Roundtable, organised by the government to discuss the trade relations in the petroleum sector.
He stressed government’s determination to deliver on the reforms in the power and petroleum industries and the new Gas Master Plan, since they form the bedrock for the achievement of the National Development Plan and government’s seven-point agenda.

Egbogah who presented a paper entitled: Impact of the new US Energy Policy on Nigeria, said the new policy on energy economy, which is geared towards significant reduction in America’s dependency on foreign oil and gas, was “a rather disturbing situation considering the role petroleum plays in Nigeria’s economy and the extent of petroleum trade relations with the United States.”

According to him, the fact that the United States imports over 40 per cent of Nigeria ’s crude oil, which is the main revenue provider for government, was “single most important reason why Nigeria is very alert to any changes to the US Energy Policy.”

He noted, however, that Nigeria was very much in support of every effort by the Obama administration to reduce carbon dioxide emissions, especially in the face of global warming.

He further noted that the upheavals in the global financial and energy sectors in the past year, which resulted in meltdown and declining energy demand globally makes the “dialogue between a significant supplier and a significant consumer apt.”

He said, “Although recessions are not new, never before have we had a crisis hitting all three most important global markets – economic, financial and oil – at the same time, worldwide.

The synchronized impact of crisis in these markets resulted in sharp contraction in aggregate output and employment especially in developed nations.”

Egbogah, therefore, called for continual engagement and dialogue towards deepening understanding and sharpening both nations’ energy frameworks.

Also speaking at the event, the Group Managing Director of the Nigerian National Petroleum Commission, Dr. Mohammed Barkindo, said a significant policy shift on energy by the Obama administration would have significant consequences on already established trading relations between the US and Nigeria.

According to him, the meeting was initiated  to hear first-hand what is the substance and content of the renewable energy and climate change initiatives of the US administration.

He explained that the key actors in the industry are to discuss with the United States experts on the possible consequences of the policy on the Nigerian economy.

“They are also to explore policy options on how to minimize the negative impacts that the US policy would have on Nigeria. Nigeria would continue to rely on the proceeds from the export of oil and gas for a very long time despite efforts at diversification of the economy.

Barkindo added that the oil and gas reform agenda in Nigeria would face challenges internationally and domestically but said Nigeria and the United States remain committed to the growth and development of the sector in the country.
The NNPC GMD said government was also aware of the strong resistance in the country by a cartel in the oil and gas sector which has a vested interest in the status quo, adding that the cartel with its collaborators would fiercely resist the reforms.

He said, “The NNPC would do everything to march on with the reform because we have no option. We challenge critics and the cartel to come up with a superior option to the reform agenda. We would count on the US to support Nigeria in the reforms.”