Monday, July 4, 2022

Fossil Fuel: Sylva Cautions On Energy Transition

…Nigeria now among top 10 global gas users

Timipre Sylva
The Minister of State for Petroleum, Timipre Sylva.

Nigeria’s Minister of State for Petroleum Resources, Chief Timipre Sylva, has cautioned campaigners for energy transition to be mindful of the fact that the world still needs oil and gas and energy transition cannot happen overnight.

Sylva disclosed this while addressing the Society of Petroleum Engineers (SPE) in a meeting tagged “Energy Transition in Africa: A Strategic Pathway to Net Zero” at the Lagos annual technical symposium and exhibition, which held today (May 17, 2022).

The minister said despite the long-term and required drop in demand for fossil fuels, short-term demand and prices remain robust, providing strong commercial justification for their extraction and a need to smooth the transition.

Recoverable energy resources in Africa are estimated to be around 115.34 billion barrels of oil and 21.05 trillion cubic meters of gas (circa 743.4 tcf).

Represented by his technical adviser on gas business and policy, Engr. Justice  Derefaka, Sylva noted that gas is what Africa and the world need as it faces a period of profound change. This, he said, makes Nigeria – with approximately 208.62 trillion cubic feet (tcf) of proven gas valued at over $803.9 trillion and a potential upside of 600tcf of gas – the most expensive in Africa and the top 10 globally.

“And in line with the Federal Government’s declaration of 2021 to 2030 as the ‘Decade of Gas’, we are taking steps to expand and develop the nation’s huge gas resources through enhanced gas exploration, development and utilisation schemes which will lead to gas reserves growth, increased gas production, maturation of the domestic and export gas market, as well as gas flare elimination.

“The ‘Decade of Gas’ initiative is aimed at transforming the Nigeria energy landscape to run effectively on natural gas. The initiative was themed ‘Towards a gas-powered economy by 2030’ at the inauguration.

“According to the World Economic Forum, several high-profile developing market infrastructure funders are actively contemplating a blanket ban on fossil fuels that would prevent any new natural gas projects.

“For me, a ban on funding for gas-fueled power in Africa will not help to mitigate climate change but harm our continent’s growth. Worse, because gas is critical to Africa’s transition to sustainable energy, a prohibition today might stifle renewables adoption and establish a global energy double standard.

“African governments typically have three major priorities when setting energy policies: security of supply, economic competitiveness and a reduction of greenhouse gas emissions. At present, only gas can meet all three priorities simultaneously.

“Using natural gas is already helping to reduce carbon dioxide (CO2) and improve air quality where it replaces coal or diesel. Gas also supports an increasing role for renewables. This will be important as the use of electricity expands. Gas will also continue to play a critical role in sectors where demand is anticipated to grow, but which are more difficult to electrify,” he said. 

Sylvia stressed that the European Union has proposed labelling natural gas a ‘green energy’ source, a development that could translate into huge economic value for Africa.

“Premised on the above, I urge African leaders to put in place robust and investor-friendly fiscal policies and regulatory frameworks to attract the needed funds to enable us to meet and surpass the UN SDG7 targets.

“In Nigeria, the industry game-changer – that is, the Petroleum Industry Act (PIA 2021) – will undoubtedly support Africa and indeed the global endeavour to alleviate energy poverty as envisioned in the UN’s SDG No 7.

“Natural gas is a key resource for a just energy transition and has all the credentials to support Nigeria and indeed Africa meet up with her commitment with the UN 17 Sustainable Development Goals (SDGs).

“As a major source of wealth and energy in Africa, the development of oil and gas resources proves critical for our economic growth and revenue expansion. I would like to mention that the campaigns demanding the immediate cessation of oil and gas production, as well as denunciatory reports from environmental NGOs blasting and slamming banks for continuing to finance fossil fuels have become fixtures of today’s life in the West and Africa. However, I would like to remind them once again that fossil fuels are not going away soon.

“First off, Africa and the world need oil and gas for that matter. The world needs oil and gas because it is what the world relies on for its most basic needs. And that will not change overnight. Therefore, African governments and leaders should continue to invest in oil and gas, even as we work to help speed progress to a lower-carbon future.

“The International Energy Agency has reversed its calls for lower oil and gas spending. In just a few months, the industry think-tank has changed its tune and is now urging oil and gas companies to increase production.

“Multiple pathways to the energy transition should and must exist er to ensure that no country is left behind in the process of achieving net-zero by 2060. As a continent, we need to be intentional and recognize the need to develop hydrocarbon resources in environmentally and socially responsible ways.

“As alluded to by the African Union, we need to be realistic in choosing the energy transition pathways which address our unique requirements and circumstances. As well as enhancing policy, legislation and implementation approach across national, regional and continental level, to enable a favourable environment for development.

“We need to develop bankable projects to scale up access to funding and investment and adopt a mix of energy solutions to address the needs of each country, including solutions to high tariffs and accessibility to sustainable energy options. We need to promote energy efficiency which is necessary for energy transition and focus on building energy infrastructure and strengthening transmission corridors,” he rallied.

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