Can international oil companies tackle energy poverty in Nigeria?
What should international oil and gas companies be doing to help Nigeria out of its energy crisis?
Sixty per cent of Nigerians have no access to electricity. In 2008, Nigeria exported more than 86% of its 2.17 million bbl/day oil production, leaving less than 14% for domestic use. Forty per cent of annual gas production is flared, causing damage to health and livelihoods in the Niger Delta. Meanwhile, Nigeria’s vast renewable energy potential (including solar, wind, hydro- and bio-resources) remains largely untapped.
There is a growing awareness of the business case for multinational corporations to engage with development issues in the regions where they operate. This includes the need to mitigate political risks, avoid conflict, recruit and retain reliable local staff, and secure future investment deals with host governments.
Our recent report urges oil and gas companies to explore approaches such as diverting gas for local needs rather than flaring it; directing community investment funds towards developing renewable energy projects with local partners; and engaging in policy dialogue to promote decentralisation of sustainable power generation to the community level.
The joint ventures of Agip, Chevron, Shell and Total have funded a number of independent power projects in partnership with local state governments (see for example Total’s Egi Electrification Programme).
The Bonny Utility Company (Bonny Island, the Niger Delta) is a collaboration between IOCs (including Shell, Total, Eni and Mobil), the Nigerian National Petroleum Company, local government and the community. Power is generated for the community from a turbine using gas from Nigeria LNG's liquefied natural gas facility.
The SUNGAS project is an EU-funded partnership between the Living Earth Nigeria Foundation, the Niger Delta Wetlands Centre, local advocacy NGO Social Action, and the International Institute for Environment and Development (IIED). The project seeks to catalyse the development of local markets for associated gas and renewable energy through policy reform and demonstration. This includes establishing a partnership with an IOC to utilise associated gas to generate electricity for local communities; and promoting the adoption of renewable energy at the community level.
International oil companies have yet to fully appreciate the opportunities for tackling energy poverty in Nigeria. Other players, too, have important roles to play, and collaboration between government, industry, smaller-scale enterprise and communities will be essential in the future.
The challenge now is to ensure that promising pilot initiatives are supported and taken to scale. This involves systematic lesson learning, and committed support from government and business. It also entails a change of mindset from everyone to secure the acceptance of new technologies and approaches.
Emma Wilson is a senior researcher at the International Institute for Environment and Development (IIED) (http://www.iied.org) Contact: emma.wilson@iied.org
Brian Shaad is a freelance consultant with Value Development Initiatives (http://www.vdigroup.org)
To download Shaad and Wilson’s report Access to Sustainable Energy: What Role for International Oil and Gas Companies? Focus on Nigeria (IIED 2009) and for more information on the SUNGAS project, go to: http://www.iied.org/energy
Sixty per cent of Nigerians have no access to electricity. In 2008, Nigeria exported more than 86% of its 2.17 million bbl/day oil production, leaving less than 14% for domestic use. Forty per cent of annual gas production is flared, causing damage to health and livelihoods in the Niger Delta. Meanwhile, Nigeria’s vast renewable energy potential (including solar, wind, hydro- and bio-resources) remains largely untapped.
There is a growing awareness of the business case for multinational corporations to engage with development issues in the regions where they operate. This includes the need to mitigate political risks, avoid conflict, recruit and retain reliable local staff, and secure future investment deals with host governments.
Our recent report urges oil and gas companies to explore approaches such as diverting gas for local needs rather than flaring it; directing community investment funds towards developing renewable energy projects with local partners; and engaging in policy dialogue to promote decentralisation of sustainable power generation to the community level.
The joint ventures of Agip, Chevron, Shell and Total have funded a number of independent power projects in partnership with local state governments (see for example Total’s Egi Electrification Programme).
The Bonny Utility Company (Bonny Island, the Niger Delta) is a collaboration between IOCs (including Shell, Total, Eni and Mobil), the Nigerian National Petroleum Company, local government and the community. Power is generated for the community from a turbine using gas from Nigeria LNG's liquefied natural gas facility.
The SUNGAS project is an EU-funded partnership between the Living Earth Nigeria Foundation, the Niger Delta Wetlands Centre, local advocacy NGO Social Action, and the International Institute for Environment and Development (IIED). The project seeks to catalyse the development of local markets for associated gas and renewable energy through policy reform and demonstration. This includes establishing a partnership with an IOC to utilise associated gas to generate electricity for local communities; and promoting the adoption of renewable energy at the community level.
International oil companies have yet to fully appreciate the opportunities for tackling energy poverty in Nigeria. Other players, too, have important roles to play, and collaboration between government, industry, smaller-scale enterprise and communities will be essential in the future.
The challenge now is to ensure that promising pilot initiatives are supported and taken to scale. This involves systematic lesson learning, and committed support from government and business. It also entails a change of mindset from everyone to secure the acceptance of new technologies and approaches.
Emma Wilson is a senior researcher at the International Institute for Environment and Development (IIED) (http://www.iied.org) Contact: emma.wilson@iied.org
Brian Shaad is a freelance consultant with Value Development Initiatives (http://www.vdigroup.org)
To download Shaad and Wilson’s report Access to Sustainable Energy: What Role for International Oil and Gas Companies? Focus on Nigeria (IIED 2009) and for more information on the SUNGAS project, go to: http://www.iied.org/energy
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