By Obi Nwakanma

It’s been long in the making, but it does seem finally that the future has arrived for oil. Crude oil as the world’s most important source of energy is on the decline. Last Wednesday, the US president, Barack Obama, declared oil so last century that it’s future as a source of energy is now a matter of time ticking: tick-tock, tick-tock, tick-tock.

At a Daimler plant in Mount Holly, North Carolina, this past Wednesday, the American president declared, “oil is the fuel of the past.” Of course, there’s bound to be disagreement on this matter. One particularly of note is registered by Mr. Jack Gerard, President of the American Petroleum Institute which only highlights the political nature of the president’s call.

What nevertheless seems clear in reading the US president’s lips is a message that the United States, largest buyer of Nigerian crude, is thinking ahead of the day when it would no longer depend on Nigeria or oil import from any other foreign supplier, for its energy needs. It’s called energy independence.

President Obama’s statement was made in the background of rising pump price for fuel in US gas stations; and there is no doubt that it is part of the political mind game in this season of electioneering campaigns, and directed possibly against a political baying-for-blood on the other side of aisle.

But Obama is promoting a US energy policy that is here and now; it is no longer the future; it is with us, this dawn of a new thinking away from fossil fuel. In his speech the US president said, “We need to invest in technology that will help us use less oil in our cars and trucks, and our buildings, and our factories.”

He has proposed to the US Congress, a $1billion grant to communities to transition towards more fuel efficient vehicles and utilities.”

And indeed, such a day is coming very close, and perhaps indeed closer than Nigerian energy policy makers seem to grasp. But even more significantly is that today, the US is at the verge of energy self-sufficiency, given the quantum of its own increased local production.

For one, according Daniel Yergin in his book, The Quest: Energy, Security and the Re-making of the Modern World, large shale gas deposits in the US, and new, albeit controversial ways of prospecting for oil like the now (in)famous method of hydraulic fracturing is revolutionizing the industry in America and for the first time making the prospect of American energy independence a reality.

According to Yergin, in a recent NPR (“morning Edition”) interview, “It has become increasingly interconnected.
If you wind the clock back to 2008, the United States was going to be a huge importer of liquefied natural gas from the Middle East, from countries like Trinidad, from Angola, from Nigeria and maybe from Russia.

That’s all off the table because we’re now self-sufficient in terms of natural gas, and suddenly that gas that was going to come in cargoes and ships to the United States has to find other destinations.” I point to all these because two questions pop out of it for me, and I hope for Nigerians who are thoughtful of the consequences of these developments.

First question is, what will Nigeria do with all that oil on which it now depends for its economic life? Two, what are the practical political implications for Nigeria, in its current situation, with potentially diminished prospects of playing the global oil politics?

The priority of oil as a global source of energy gives a certain kind of political leverage to major producers. But let us face one fact: the central problem in Nigeria has remained what scholars of that condition have since called the “oil curse” which was particularly virulent in Nigeria.

“Oil curse” is, to put it simply, the manifestation of frenzy and gluttony in a national political leadership following its loss of a mental balance as a result of the excess of black money from black gold. The discovery of oil in Nigeria led to war, led to the serious fracture of Nigeria’s moral cohesion, and let to the desiccation of its other potentially more sustainable means of economic production.

Cynical Nigerians, of course, would say, let the oil dry up, so that Nigeria would have its own real “shock therapy.” Afterall, many would indeed argue, oil wealth has never really trickled down to the “ordinary Nigerian.”

Which would be all well and good theoretically, except that for a country that depends so heavily on its receipts from oil, the loss of a major buyer like the US, and the decline of oil as a means of revenue might drive the prospects for serious economic troubles, particularly reminiscent of the oil glut of the 1980s.

It might certainly settle the question of Nigeria’s internal political rifts arising from the desire to control the central government of Nigeria and the oil resources of the states, but the deep economic fissures might lead to a different kind of pressure and crisis.

There are many implications for this scenario, and it is about time for Nigerian energy policy makers to begin to design a practical response to the possibility of that future that seems not too far from of us now: the future in which oil sales may no longer guarantee the wealth of Nigeria, or revenue to deal with the problems of a teeming population, especially in a nation that had wasted the years of advantage occasioned for it by providence.

The fear is simply that Nigeria is not prepared for that future without oil. National infrastructure is in decay; industry is in abeyance, and government merely levitates. Years ago, an oil-producing nation like Norway, anticipated this future: As the fifth largest oil producing country in the world, Norway pumps about three million barrels per day to the spot market.

But it also knew that this won’t last, so Norway established the Norwegian “Oil Fund” or “Pension Fund” managed by a special fund management arm of its Central Bank. That fund is today, the world’s largest pension fund with $573 billion. It’s to guarantee a life for a future Norwegian generation which may have to live without oil.

Nigeria has never made this gesture to protect the future. Given the massive ecological decay of the Niger delta which would need increasing attention to clean up the current levels of damage, such a guarantee ought to have been forethought. But Nigeria’s elite has somehow, thought about oil as if they are on a permanent and perpetual Caribbean cruise.

But news out of America, and coming from President Obama suggest that the holiday may sooner than later be over. Perhaps Nigeria may have new customers from the so-called BRIC nations – Brazil, Russia, India and China – for new consumptions levels; perhaps it may look for greater internal consumption, for indeed, a great aspect of that policy change must determine that Nigeria can energize its own comatose industry with its own oil and energy sources.

Part of the contradictions of its current oil policy is that Nigeria’s oil sells more her crude at the detriment of Nigeria’s own internal domestic need. Perhaps it’s indeed time to review this; to use the prospects of US energy independence to redesign Nigeria’s domestic energy policy, diversify quickly and urgently, and create new paradigms for domestic energy use.