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President Muhammadu Buhari has told oil and gas industry stakeholders that Nigeria is not worried about the trending energy transition and decarbonisation drive globally, which is promoting renewables over the traditional fossil fuels.
In his address at the opening ceremony of the 5th edition of the Nigeria International Energy Summit at the State House, Aso Rock Abuja, Monday, President Buhari said the Federal Government is not unaware of the implications of dependence on carbon-emitting energies. He said: “We are fully aware that energy transition raises the bar in terms of environmental, social and governance demands.
“We do not have to panic. We are already building blocks and bricks that will ensure seamless energy transition as the country joins in the race for net zero carbon emission.
President Buhari had to make the explanation because he listed the award of marginal oil fields as one of the major achievements of his government in 2021 despite the increasing unattractiveness of fossil fuels to investors and financial institutions.
He said: “The year 2021 was a milestone for the Nigeria’s energy sector as it witnessed a number of record-breaking activities. Three of these activities stand out – First, the successful conclusion of the Marginal Fields Bid Round; Second, the Petroleum Industry Act(PIA) seeing the light of the day, and the third is the Decade of Gas initiative.
“Both the marginal fields bid round and the Petroleum Industry Act surmounted over two-decade challenges in the doldrums before they saw the light of the day. For the Decade of Gas initiative, it holds a promise of a prosperous Nigeria for Nigerians.”
To him, awarding the marginal fields gives Nigeria the opportunity to speed up its fossil fuel exploitation and make good use of the resources for the betterment of the country rather than abandon the huge oil and gas reserves in the ground.
“With the Petroleum Industry Act (PIA) in place, there should be no excuses. The enabling investment environment which has been the bane of the industry has been taken care of by provisions in the PIA. There is now a level of certainty for the regulatory, administrative and fiscal framework and the legitimate grievances of host communities most impacted by activities of the industry has been addressed by the Act
“For the Decade of Gas initiative, our major objective remains the transformation of Nigeria into a gas-based industrialised nation through enhanced and accelerated gas revolution. We will ensure further optimal exploitation and utilization of the country’s vast natural gas resources. Given the country’s potential of about 600 trillion cubic feet, natural gas has the enormous potential to diversify and grow Nigeria’s economy.
“That is why this administration declared natural gas as the transition fuel for Nigeria. Without doubt, natural gas ticks all the boxes. We are prepared to face the challenge of the rising global demand for cleaner energy sources.”
Also in his address, the Minister of State, Petroleum Resources, Timipre Sylva, explained the government changed the name of this event last year from Nigeria International Petroleum Summit (NIPS) to Nigerian International Energy Summit (NIES) so it will be in tandem with the global energy transition and the need to ensure Nigeria remains relevant in the Energy value chain.
He praised President Buhari for the urgency with which he treats matters relating to the energy sector especially ensuring realization of the Petroleum Industry Act (PIA).He thanked the leadership of the National Assembly (House of Representatives and the Senate) for expeditiously treating the Petroleum Industry Bill which is now law.
Sylva added that PIA has indeed given the industry more clarity and certainty and it is poised to attract huge investment needed to reposition the sector.
He said: “While we bask in the euphoria of the PIA, let us not lose sight of the Decade of Gas initiative. Rightly, the Federal Government has declared natural gas as the transition fuel for the country. Thus, the Decade of Gas initiative provides us the linkage with the energy transition. While we will not wish away our vast hydrocarbon resources, let us remind ourselves that the energy transition is real. That is the direction the industry is moving globally and Nigeria cannot afford to be left behind.
“The theme of this year`s NIES “Revitalizing the Industry: Future Fuels and Energy transition,” is apt for the moment. Climate Change has also brought the discuss on energy transition to the front burner, which is to reduce carbon footprints to ensure global temperature are within allowable limits of 1.5oC.
“The African continent is bedeviled with energy poverty, which is a critical enabler to achieving the seventeen (17) United Nations Sustainable Development Goals (SDGs). The goals set out in the 2030 Agenda for Sustainable Development and the 2015 Paris Agreement on climate change together provides an integrated pathway towards a more prosperous, equitable and sustainable future – a future enabled by a just and inclusive transition to clean and modern energy.
“In adopting global future fuels, energy-poverty and climate change nexus have to be both addressed simultaneously. It must be geared towards clean and sustainable sources.
“For countries such as Nigeria, that is rich in natural resources but still energy poor, the transition must not come at the expense of affordable and reliable energy for people, cities, and industry. On the contrary, it must be inclusive, equitable, and just—which means preserving the right to sustainable development and poverty eradication as enshrined in global treaties such as the Paris accord. It is evident that what makes the most sense from the point of view of “balancing energy security with environmental sustainability is the use of gas as a transition fuel.”
“At the heart of this administration is the vision to drive infrastructure and industrial development of the country in order to prosper her citizens and make life more meaningful to all. Natural gas ticks all the boxes as the vehicle to help government achieve the aspiration and that is why we embraced the resource to help turn around the economy by declaring year 2021-2030 as Nigeria’s decade of gas.
“To demonstrate that we are indeed committed to our vision, the Decade of Gas has now become an integral part of the Federal Government’s oil and gas road map.
“We have embarked on a critical pathway to ensuring that the over 200 Trillion Standard Cubic Feet (TSCF) proven reserves of Natural gas in Nigeria is marshalled to engender domestic economic growth and development beyond 2030. Thus, we are driving to make natural gas our dominant primary energy source for use in the medium to Long term. Thankfully, our reliable partner, the Nigeria LNG Limited is not backing out. They are fully backing this initiative all the way.
“In this regard, the Ministry has launched the National Gas Expansion Programme (NGEP) to expand Nigeria’s Domestic utilization as part of the National Gas Policy; the National Gas Flare Commercialization Programme; as well as specific provisions in the new Petroleum Industry Act (PIA) 2021 that elevates LPG as the fuel of choice compared to other competing fuels.
“With this programme, we have established a 20 million Cylinder Injection Scheme; 5-10 million of these are to be introduced in pilot states this year. We have also established an LPG Energy Fund in the order of $50 million, in its first phase, in partnership with Afreximbank,”
“Liquefied Petroleum Gas (LPG) is set to be part of the destination as it is being used as a precursor for green hydrogen with zero emission. An eventual move to bio-LPG will allow countries like Nigeria to keep existing infrastructure in place, capitalize on already existing supply and distribution chains and reach net-zero at far lower cost. This, no doubt will help overcome the concern of stranded assets and Consumers will not have to re-invest in expensive electrical solutions if their gas appliances can be re- purposed for zero carbon LPG.”
