03 February 2014, Accra – Oil companies burn off an increasing amount of associated natural gas into the atmosphere, a phenomenon known as gas flaring. Gas flaring is therefore freeing of the associated gas into the atmosphere by oil companies when the oil is being pumped up from the ground. Gas flaring is the most contentious environmental issue facing the oil and gas industry in recent times as it releases tonnes of carbon dioxide.
About 110 million metric tonnes of carbon dioxide is released into atmosphere yearly representing nearly 0.5% of the World’s Carbon dioxide emissions. According to World Bank’s estimates, the yearly volume of natural gas being flared and vented globally in 2011 is about 140 billion cubic metres. Gas flaring or venting is an important safety measure in the oil production processes. A situation where gas can not be stored or used commercially, it is imperative that a risk of fire and explosion is reduced by either flaring or venting.
However, the current level of this practice in both developing and developed countries is beyond sustainable and operational standards. Currently, some countries have been cited for flaring the highest amount of the natural gas in the world. After several years of strides to reduce the gas flaring, the oil and gas industry admits it has been backsliding from their flaring policies and needs to adopt innovative means of capturing more of the natural gas for both economic and environmental benefits. The reason for this is mostly due to lack of effective regulatory frameworks by respective oil producing countries. Other challenges include the cost of building pipelines to markets, the wide gap between oil and natural gas prices (lower gas prices), increasing drilling in remotest areas (deep waters) and the activities of politically powerful monopolists who limit competitors’ access to gas pipelines. Fundamentally, gas is flared or vented in oil and gas production operations for safety reasons.
However, there are enormous effects of the practice of gas flaring by oil exploration and production companies. It is a waste of valuable non-renewable source of clean energy causing the excess emissions of greenhouse gases into the atmosphere which is directly linked to global warming. Both carbon dioxide and methane are by-products of the gas flaring which cause the climate change. It can also affect wild life by attracting birds and insects to the flames and killing them in the process. Furthermore, it generates tremendous heat in the surrounding which do not support vegetation growth. For instance, gas flaring previously released an estimated 45.8 billion kilowatts of heat into the atmosphere around the Niger Delta area daily. This culminated into raising of the temperatures in the proximity, making large areas uninhabitable. Atmospheric contaminants such as particulate matter, hydrogen sulphide, carbon and sulphur acidify the soil thereby depleting soil nutrient. This naturally affects the livelihood of crop farmers in the catchment areas throwing them out of business. Therefore, gas flaring by the Jubilee Partners (if permitted) could greatly affect people in the districts that are closed to the oil production catchment areas such as Ellembelle, Jomoro, Nzema East and Ahanta West if not promptly harnessed.
Perhaps, the most grievous effect of flaring is the impact on the health of the people. Flaring has harmful effects on the health of the people of the communities in their vicinity as variety of poisonous chemicals are released into the atmosphere. The people who are exposed to these poisonous substances can suffer from variety of health problems such as cancer, leukaemia, anemia, asthma, breathing difficulties and chest pains as well as deformities including lung damage and skin problems among children. The health implications are more severe on those who live and work in proximity to the production process. The proximity has been defined as any distance between 0.2 to 35 km from the flare stack.
Also, gas flaring impacts grossly on the economics of a nation in terms of loss of funds and revenue. For example, Ghana is estimated to lose 1.2 million daily in revenue for either flaring the gas or delay in utilising the associated natural gas by the Ghana Gas Company. Conversely, according to the CEO of the Ghana Gas, Dr. Sipa Yankey, the country stands to save more than 500 million dollars per annum after the successful completion of the project. A sister country, Nigeria, is said to flare an estimated 2.5 billion cubic meters of gas every day occasioning the loss of 2.5 billion US dollars yearly to the gas flaring (Bureau of Public Enterprises of Nigeria). Subsequently, the burning off the natural gas has been outlawed in Nigeria since 1984 and several deadlines have been set up to end the practice but to no avail. However, in recent years due to the harnessing of the associated gas, Nigerian producers have started raking in additional revenue from local electricity generation companies and the sale of the associated gas to the West African Gas Pipeline which takes its feed from Ikoki Natural Gas Export Terminal in Nigeria.The three countries that rely on this gas for fuel gains through the pipeline are Benin, Togo and Ghana. But the company’s initial plan to carry a volume of 170MMscfd and the highest volume of 460MMscfd to the countries over a period of time have not been materialised due to multiple of factors such as force majeure, regulatory framework, economic viability concerns and technical challenges.
Despite the wide range of effects of the gas flaring and venting, many oil producing countries still engage in this unsustainable practice. Countries with highest level of flaring and venting records in the world are Russia, Nigeria and the United States of America with 37.4 bcm, 14.6 bcm and 7.1 bcm respectively. Libya, however, flares 21% of her associated gas, Saudi Arabia flares 20% and Canada flares only 8%. For instance, Saudi Aramco completed a multiple-mega project in 2009 aims at significantly increasing of the gas production and processing capacities. More so, the Dolphin Gas Project was established in 2006 to provide the lean gas to the Taweelah power Stations for electricity generation in the United Arab Emirates. Likewise, Ghana has huge potential for both associated and unassociated gas which must be harnessed for the purposes of electricity generation and domestic usages. As it is now, only 30% of this gas at the Jubilee fields is re-injected into the wells to boost their recovery rates. The rest of 70% of the natural gas from the Jubilee oil fields should not therefore, be allowed to flare as a matter of strict and conscious policy by the government.
Thus, many countries have employed a number of penalties and policies in order to reduce the oil producing companies from flaring and venting of the gas. These penalties take the form of a fine imposed on a unit of gas flared or vented. It is worth mentioning that oil companies in Nigeria were recently charged a maximum amount of 50 million naira yearly for flaring offences. To this end, most countries and oil companies alike have agreed that gas flaring is unsustainable and should be reduced significantly. That is why I consider the establishment of the Ghana National Gas Company to harness the associated gas from the jubilee oil fields as timely. However, the current request by the Jubilee Partners for approval from the Environmental Protection Agency to allow them to flare some of the associated gas on the grounds of safety concerns leaves much to be desired. If this request is granted, it could affect the operational capacity of the gas company and subsequently imposes severe impacts on the environment. Considering its economic and environmental consequences, proactive measures for the early completion of the gas infrastructure project are needed to prevent the gas flaring. Harnessing of the associated gas has become necessary in Ghana due to it’s potential usage in the electricity generation and awareness of huge environmental, economic and health effects.
At the time of the soaring electricity tariffs in Ghana, the least we could do to ameliorate its impact on Ghanaians is to waste this precious but non renewable resources. Lean gas has a potential of making electricity generation in Ghana affordable. The huge savings alluded to from the utilisation of the lean gas in electricity generation by Volta River Authority would be a mirage if the gas is flared. Ghanaians are upbeat about the early completion of the gas infrastructure project due to its capacity to drive down the electricity bills. Gas flaring should not particularly be an option in Ghana where the fuel electricity generation at Aboadze remains capital intensive. Due to the enormous benefits from harvesting the gas for the country, i implore his Excellency, President John Dramani Mahama and the Minister of Energy and Petroleum to leave no stone unturned to ensuring the early and successful completion of the project.
But it needs to be put on record that harnessing the associated gas is only a half way through the full story. Marketing has been a major problem in the gas industry. The locations of the natural gas are normally far from the market centres. Until now where it is commercially viable, it was regarded dangerous to handle and difficult to get to the markets. Piping the gas a long distance to the point of consumption is a preferred mode of reaching the market. However, the refreshing news is that the demand of gas in Ghana abound in the areas of the electricity generation, transportation sector and domestic usage for cooking as well as industrial utilisation. The recent expressed interest of the TAQA Group to partner Ghana as independent power producer to operate 300 megawatts of power at Aboadze provides additional impetus for the gas demand.
The sad news is that the local demand for gas in Ghana will exceed all the supply sources combined including the West African Gas Pipeline by 2018. This therefore, indicates that the demand side in Ghana is not a major problem, but the supply side management should be considered seriously in order to avoid supply deficit in the near future. The country’s gas source from Nigeria is said to drop from 80 million standard cubic feet daily to as low as 30 million affecting the VRA’s capacity to generate electricity at the Aboadze Thermal Plant. The projection is that thermal electricity generation will exceed hydro generation in the next ten years. Therefore, alternative sources of gas have to be explored in order to augment the ever increasing demand for the gas to generate more electricity. These latest developments may put the intended establishment of the fertilizer factory in the Shama District on the back burner since its success depends on excess gas.
The delay of the gas infrastructure project as a turnkey contract will lead to cost overrun. The cost of the project may be doubled at the time of the completion. In order to keep the cost under reasonable levels, the current timelines for mechanical aspect to be completed on 31st March, test-run to be conducted on 28th April and supply of the lean gas to VRA to begin by the middle of May, 2014 as given by Mr. David Xu, the Technical Director of Sinopec, should be strictly adhered to. The Minister of Energy and Petroleum, Hon. Emmanuel Kofi Buah’s assurance of coordinated effort by all the stakeholders involved in the project aims at meeting the above timelines deserves commendations. The importance of the gas project to the accelerated economic development of Ghana is crucial and can not therefore, be overemphasised. The project would influence the lives of the youth of Western Region in particular and Ghana as a whole in many respects because it’s potential to create more jobs and lift up her economic outlook.
Even though the delay in the completion of the gas project is regrettable, Ghana is still alive of her responsibility of joining the international effort of reducing the gas flaring by this bold step in the construction of the gas plant at Atuabo. The project after the successful completion would process about 150 million standard cubic feet of the natural gas daily which otherwise would have been flared. I therefore, urge the government to hold on strictly to it’s “zero gas flaring policy”. We can not fail to wake up to the call of the “zero flaring policy” adopted by the Energy and Petroleum Ministry since the start of commercial production of oil in the continental shelf of Ghana. Let us take advantage of this valuable but non- renewable resource by drawing the experiences and lessons of other oil producing countries such as Nigeria. THE GAS INFRASTRUCTURE PROJECT: A WAKE UP CALL FOR GHANA
Message Body:
Oil companies burn off an increasing amount of associated natural gas into the atmosphere, a phenomenon known as gas flaring. Gas flaring is therefore freeing of the associated gas into the atmosphere by oil companies when the oil is being pumped up from the ground. Gas flaring is the most contentious environmental issue facing the oil and gas industry in recent times as it releases tonnes of carbon dioxide. About 110 million metric tonnes of carbon dioxide is released into atmosphere yearly representing nearly 0.5% of the World’s Carbon dioxide emissions. According to World Bank’s estimates, the yearly volume of natural gas being flared and vented globally in 2011 is about 140 billion cubic metres. Gas flaring or venting is an important safety measure in the oil production processes. A situation where gas can not be stored or used commercially, it is imperative that a risk of fire and explosion is reduced by either flaring or venting. However, the current level of this practice in both developing and developed countries is beyond sustainable and operational standards. Currently, some countries have been cited for flaring the highest amount of the natural gas in the world. After several years of strides to reduce the gas flaring, the oil and gas industry admits it has been backsliding from their flaring policies and needs to adopt innovative means of capturing more of the natural gas for both economic and environmental benefits. The reason for this is mostly due to lack of effective regulatory frameworks by respective oil producing countries. Other challenges include the cost of building pipelines to markets, the wide gap between oil and natural gas prices (lower gas prices), increasing drilling in remotest areas (deep waters) and the activities of politically powerful monopolists who limit competitors’ access to gas pipelines. Fundamentally, gas is flared or vented in oil and gas production operations for safety reasons.
However, there are enormous effects of the practice of gas flaring by oil exploration and production companies. It is a waste of valuable non-renewable source of clean energy causing the excess emissions of greenhouse gases into the atmosphere which is directly linked to global warming. Both carbon dioxide and methane are by-products of the gas flaring which cause the climate change. It can also affect wild life by attracting birds and insects to the flames and killing them in the process. Furthermore, it generates tremendous heat in the surrounding which do not support vegetation growth. For instance, gas flaring previously released an estimated 45.8 billion kilowatts of heat into the atmosphere around the Niger Delta area daily. This culminated into raising of the temperatures in the proximity, making large areas uninhabitable. Atmospheric contaminants such as particulate matter, hydrogen sulphide, carbon and sulphur acidify the soil thereby depleting soil nutrient. This naturally affects the livelihood of crop farmers in the catchment areas throwing them out of business. Therefore, gas flaring by the Jubilee Partners (if permitted) could greatly affect people in the districts that are closed to the oil production catchment areas such as Ellembelle, Jomoro, Nzema East and Ahanta West if not promptly harnessed.
Perhaps, the most grievous effect of flaring is the impact on the health of the people. Flaring has harmful effects on the health of the people of the communities in their vicinity as variety of poisonous chemicals are released into the atmosphere. The people who are exposed to these poisonous substances can suffer from variety of health problems such as cancer, leukaemia, anemia, asthma, breathing difficulties and chest pains as well as deformities including lung damage and skin problems among children. The health implications are more severe on those who live and work in proximity to the production process. The proximity has been defined as any distance between 0.2 to 35 km from the flare stack.
Also, gas flaring impacts grossly on the economics of a nation in terms of loss of funds and revenue. For example, Ghana is estimated to lose 1.2 million daily in revenue for either flaring the gas or delay in utilising the associated natural gas by the Ghana Gas Company. Conversely, according to the CEO of the Ghana Gas, Dr. Sipa Yankey, the country stands to save more than 500 million dollars per annum after the successful completion of the project. A sister country, Nigeria, is said to flare an estimated 2.5 billion cubic meters of gas every day occasioning the loss of 2.5 billion US dollars yearly to the gas flaring (Bureau of Public Enterprises of Nigeria). Subsequently, the burning off the natural gas has been outlawed in Nigeria since 1984 and several deadlines have been set up to end the practice but to no avail. However, in recent years due to the harnessing of the associated gas, Nigerian producers have started raking in additional revenue from local electricity generation companies and the sale of the associated gas to the West African Gas Pipeline which takes its feed from Ikoki Natural Gas Export Terminal in Nigeria.The three countries that rely on this gas for fuel gains through the pipeline are Benin, Togo and Ghana. But the company’s initial plan to carry a volume of 170MMscfd and the highest volume of 460MMscfd to the countries over a period of time have not been materialised due to multiple of factors such as force majeure, regulatory framework, economic viability concerns and technical challenges.
Despite the wide range of effects of the gas flaring and venting, many oil producing countries still engage in this unsustainable practice. Countries with highest level of flaring and venting records in the world are Russia, Nigeria and the United States of America with 37.4 bcm, 14.6 bcm and 7.1 bcm respectively. Libya, however, flares 21% of her associated gas, Saudi Arabia flares 20% and Canada flares only 8%. For instance, Saudi Aramco completed a multiple-mega project in 2009 aims at significantly increasing of the gas production and processing capacities. More so, the Dolphin Gas Project was established in 2006 to provide the lean gas to the Taweelah power Stations for electricity generation in the United Arab Emirates. Likewise, Ghana has huge potential for both associated and unassociated gas which must be harnessed for the purposes of electricity generation and domestic usages. As it is now, only 30% of this gas at the Jubilee fields is re-injected into the wells to boost their recovery rates. The rest of 70% of the natural gas from the Jubilee oil fields should not therefore, be allowed to flare as a matter of strict and conscious policy by the government.
Thus, many countries have employed a number of penalties and policies in order to reduce the oil producing companies from flaring and venting of the gas. These penalties take the form of a fine imposed on a unit of gas flared or vented. It is worth mentioning that oil companies in Nigeria were recently charged a maximum amount of 50 million naira yearly for flaring offences. To this end, most countries and oil companies alike have agreed that gas flaring is unsustainable and should be reduced significantly. That is why I consider the establishment of the Ghana National Gas Company to harness the associated gas from the jubilee oil fields as timely. However, the current request by the Jubilee Partners for approval from the Environmental Protection Agency to allow them to flare some of the associated gas on the grounds of safety concerns leaves much to be desired. If this request is granted, it could affect the operational capacity of the gas company and subsequently imposes severe impacts on the environment. Considering its economic and environmental consequences, proactive measures for the early completion of the gas infrastructure project are needed to prevent the gas flaring. Harnessing of the associated gas has become necessary in Ghana due to it’s potential usage in the electricity generation and awareness of huge environmental, economic and health effects.
At the time of the soaring electricity tariffs in Ghana, the least we could do to ameliorate its impact on Ghanaians is to waste this precious but non renewable resources. Lean gas has a potential of making electricity generation in Ghana affordable. The huge savings alluded to from the utilisation of the lean gas in electricity generation by Volta River Authority would be a mirage if the gas is flared. Ghanaians are upbeat about the early completion of the gas infrastructure project due to its capacity to drive down the electricity bills. Gas flaring should not particularly be an option in Ghana where the fuel electricity generation at Aboadze remains capital intensive. Due to the enormous benefits from harvesting the gas for the country, i implore his Excellency, President John Dramani Mahama and the Minister of Energy and Petroleum to leave no stone unturned to ensuring the early and successful completion of the project.
But it needs to be put on record that harnessing the associated gas is only a half way through the full story. Marketing has been a major problem in the gas industry. The locations of the natural gas are normally far from the market centres. Until now where it is commercially viable, it was regarded dangerous to handle and difficult to get to the markets. Piping the gas a long distance to the point of consumption is a preferred mode of reaching the market. However, the refreshing news is that the demand of gas in Ghana abound in the areas of the electricity generation, transportation sector and domestic usage for cooking as well as industrial utilisation. The recent expressed interest of the TAQA Group to partner Ghana as independent power producer to operate 300 megawatts of power at Aboadze provides additional impetus for the gas demand.
– The Chronicle
