Govt should get more aggressive about zero gas flaring –Expert

Having seen many deadlines to end gas flaring come and go without achieving the desired result, the CEO of Delphi Ventra Group USA and former Managing Director of Nigerian Petroleum Development Company (NPDC), Fisoye Delano has said that the Federal Government should be more aggressive about achieving zero-gas flaring.

He made the assertion while delivering a seminar titled “Developing Nigeria’s Local Gas Market” at the Special Seminar Series of the Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan last week.

To achieve zero-gas flaring, Delano, an adjunct professor at CPEEL, said having the economics of the industry in mind, government must introduce appropriate incentives to achieve the goal. “If that incentive is enough, the market will respond. If the market is not responding quickly enough, it means that the incentive is not working. If we are determined to end flaring, there are aggressive strategies we can take. There are strategies to apply when oil prices are low and another for when prices are high. Because whatever strategy you adopt, you want to protect your bottom-line. It must not be reckless. It is something that must be carefully calculated and timed, but opportunities abound to apply appropriate strategies to end gas flaring now.”

Furthermore, he said that the ultimate was to have an unregulated market “where there will be willing buyer and willing seller,” which will result in market efficiency.

“In the market space, whether for electricity or gas what the gas producer looks for is economic returns to his investment. So the pricing, when it is driven by supply and demand, gets very efficient. If we have a regulated price, the regulated price may not be responding quick enough to market signals. Situations can change that will enable the buyer or seller to want to vary, so within the supply contract there are clauses that will guide such changes in market,” the oil and gas consultant stated.

Director of CPEEL, Professor Adeola Adenikinju said the essence of the special seminar series was to bridge the gap between the society and scholarly works at the centre. “We want to expose to the public the research findings and academic work to provoke deeper reflections on Nigeria’s energy sector from the point of view of professionals and experts,” adding that “CPEEL was recognised as a centre of excellence in energy training and research in Africa.”

Speaking on the essence of the seminar topic, the twelfth in the series, Professor Adenkinju said the future of the energy sector is gas. “One of the challenges we have with the electricity sector is gas supply.” He said it was therefore of essence to bring in an expert with vast experience within the country and outside to speak on the current opportunites and future options in order to develop the gas market.