The global fight against climate change demands decisive plans from respective stakeholders and affected countries. OPEOLUWANI AKINTAYO writes on the Federal Government’s road to achieving the goal of reaching net-zero by 2060 and its ups and downs
The Federal Government is presently making great advances in favour of the global fight against climate change in the overall Energy Transition Plan by looking for investments of $1.9tn, about N834tn.
The Federal Government stated that net-zero energy would be achieved by 2060.
According to a document on the Energy Transition Plan obtained by The PUNCH, FG said apart from the required $1.9tn, funding would also include $410bn above projected usual spending, which translates to about $10bn or N4trn to be spent annually over the coming decades.
To kick start the implementation of the ETP, the Federal Government said Nigeria will raise an initial $10bn support package ahead of the COP27 held in Egypt in November, adding that a $23bn investment opportunity has also been identified based on current in-country programmes and projects that are directly related to just the energy transition.
According to the document, there will be incremental investments from 2021 through 2060 to achieve the plan.
A breakdown of the required spending by sector showed that $135bn will be spent in the infrastructure sector, $150bn in the power sector, $12bn in the oil and gas sector, $21bn in industry, $79bn in the cooking sector and $12bn in the transport sector. According to the Federal Government, these are the key sectors with the highest emissions (65%) and the greatest need for reduction.
Most of the effort will be needed in the power sector, where extra CAPEX is needed to finance the power sector’s generation capacity, which is projected to cost $270bn, and the transmission and distribution infrastructure, which is expected to require $135bn in investment, including gas T&D infrastructure and electric chargers.
According to the document, significant savings in terms of fuel costs for power considering the switch to 90 per cent renewables will cost $121bn to compensate for some of the CAPEX increases.
FG said the net-zero pathway will result in significant net job creation, with up to 340, 000 jobs created by 2030 and up to 840, 000 jobs created by 2060, driven mainly by the power, cooking, and transportation sectors.
It also said gas will play a critical role as a transition fuel in Nigeria’s net-zero pathway, particularly in the power and cooking sectors.
At the COP26 meeting, the President, Major General Muhammadu Buhari (retd.), announced Nigeria’s commitment to carbon neutrality by 2060.
Nigeria’s ETP was unveiled shortly after, highlighting the scale of effort required to achieve the 2060 net-zero target while also meeting the nation’s energy needs.
Since the announcement, the Climate Change Act of 2021 has been passed, the ETP has been fully approved by the Federal Government, and an Energy Transition Implementation Working Group, chaired by Vice President Yemi Osinbajo, SAN, comprising several key ministers and supported by an Energy Transition Office, has been established.
Attaining net-zero means Nigeria would need to end gas flaring.
An independent report by The PUNCH back in August chronicled how Nigeria’s revenue loss as a result of gas flaring rose to N1tn in 18 months.
According to gas flaring statistics gathered by an arm of the Nigerian Oil Spill Detection and Response Agency, the Nigerian Oil Spill Monitor, the country lost a total of N707bn in 2021 and N184bn in the first half of 2022.
A breakdown showed that oil and gas companies operating in the country flared a total of 126 billion standard cubic feet, SCF of gas in the first half of 2022, leading to a loss of $441.2m, or about N183.54bn in the six months.
On the other hand, in 2021, 23,862.271 barrels of oil (3,770,238.864 litres) were spilled, which is around 119 oil tanker trucks full, costing $1.7m on an estimated average of $71 per barrel, bringing the total revenue loss to $1.7m, about N707bn.
The volume of gas flared in the six months was equivalent to carbon dioxide, CO2 emission of 6.7 million tonnes in the oil-producing areas, which was 4.56 per cent higher than the 120.5 billion SCF of gas flared in the second half of 2021 and capable of generating 12,600-gigawatt hours of electricity.
The quantity of gas flared in the first six months of 2021 was capable of generating 14,000 gigawatt-hours of electricity and was equivalent to 7.4 million tonnes of CO2 emissions.
Giving a breakdown of the gas flared in the country in the first six months of 2022, the agency disclosed that while companies operating in the offshore oilfields flared 62.2 billion SCF of gas, companies operating onshore flared 63.9 billion SCF of gas, valued at $223.6 million.
In 2021, there were around 382 publicly available oil spill records. A total of 33 of these oil spill sites were not visited by a joint investigation team, and 122 of these had no estimated quantity of oil spilled provided by the company.
Two major oil spills were recorded in 2021, with over 250 barrels spilled into inland waters and over 2,500 barrels spilled on land, swamps, shorelines, and the open sea.
A total of seven medium oil spill incidents were recorded in 2021, with 25–250 barrels spilled into inland waters and 250–2,500 barrels spilled on land, swamps, shorelines, and the open sea.
In terms of minor oil spills, about 239 cases were recorded—up to 25 barrels spilled into inland waters, or 250 barrels spilled on land, swamps, shorelines, and the open sea.
About 174 of the spills were under 10 barrels in size, while 128 oil spills could not be categorised, according to the report.
According to the NOSDRA report, gas is burnt off, or flared, as part of the oil production process. However, the Federal Government has, in recent years, led campaigns for gas monetisation as opposed to flaring.
NOSDRA lamented that despite efforts to reduce it, gas has been flared in Nigeria since the 1950s, releasing carbon dioxide and other gaseous substances into the atmosphere, which has continuously led to environmental and health challenges in oil-producing areas.
Chairman of the Society of Petroleum Engineers, SPE Nigeria Council, Prof. Olalekan Olafuyi, told The PUNCH in an interview that the Federal Government would increase gas flaring penalties as Nigeria races towards achieving its commitment to the United Nations net-zero goal by 2060.
Companies that produce more than 10,000 bpd are currently fined $2 per 1000 standard scf of gas flared. Companies that produce less than 10,000 bpd pay $0.5 per 1000 bpd and $0.5 per 1000 scf of gas flared.
Sheriffdeen Tella, a Nigerian academic economist and professor of economics at Olabisi Onabanjo University, praised the Federal Government’s plan to achieve net zero emissions by 2060.
“It’s good to work towards zero gas emissions. The given figure is an estimate over time and must have been based on expert advice,” he told The PUNCH over the phone.
As part of the transition plan, FG said gas would be its transitional fuel and that it would require about N4tn to drive its expansion plan in 10 years.
According to a document titled “Nigeria’s Cretaceous Basins: The Potentials for Gas” by the Nigeria Upstream Petroleum Regulatory Commission, the sum would be needed for incremental investments from 2021–2030 to reach net zero by 2060.
The plan would require $6bn (about N2.7tn) as an additional cost that would be incurred for the application of what it termed “carbon capture and storage” in refining and then $4bn (about N1.9tn) for gas expansion.
The document further said that to achieve the plan, there would be minimal capital expenditure beyond the usual spending due to the oil sector’s decline despite gas increases.
FG, however, said operational expenditure savings are expected due to efficiency improvements as part of the transition plan.
According to the plan, the net-zero pathway will result in significant net job creation, with up to 340, 000 jobs created by 2030 and up to 840, 000 jobs created by 2060, driven mainly by the power, cooking, and transportation sectors.
Also, as part of the gas expansion plan, the NUPRC said it had identified 213 gas blocks, which it said were open for investments.
According to the document, 69 of the blocks were discovered in the Niger Delta basin, 12 in Anambra, 41 in the Benue Trough, 17 in Bida, 40 in Chad, 6 in Dahomey, and 28 in Sokoto.
Already, the country has 60 gas basins under oil prospecting licenses: 44 in the Niger Delta, five in Anambra, two in the Benue Trough, six in Chad, and three in Dahomey.
There are also 115 gas wells already allocated under Oil Mining License OML-112 in the Niger Delta, two in Anambra, and one in Dahomey.
“That is a tall one. Where will the money come from? That target is ambitious and aspirational but again, because we are looking at a long-term thing, we cannot totally dismiss it. With what is happening around the world, it is clear that the rate of decarbonisation has slowed.
