Nigeria’s Energy Transition Plan (3)

Thinking aloud and out of the box, Nigeria’s Energy Transition Plan (NETP) may need to start considering a strategic economic intervention move on methane gas (CH4) for its optimal utility in petrochemicals industrialisation-value-chain. The federal government’s attention is drawn to possibly weigh the option of doing this alongside with its programmed NETP. Their basic assignment here is to institute a policy, create an enabling environment and promote it, for local investors in the private sector to key in.

The strategy the government needs is to take advantage of the current global energy transition offers, through the UN carbon emissions mitigation action within the available timeline given in the multilateral agreements, to exit energy sourcing from fossil fuels. And to latch on this policy framework within the permissible timeframe, and to aggressively pursue this initiative with vigour, and optimally exploit the available capital stock of natural gas reserves, for economic gains in the economy. This, the nation (through the NLNG, the NUPRC and the NMDPRA) may implement by exploiting the availability of the nation’s stock of the massive stranded natural gas. This is apart from taking advantage of the present opportunity to export gas to Europe (based on the EU countries energy crisis caused by the ongoing Ukrainian invasion by the Russian military). Natural gas production and consumption can be given full attention as “the business of tomorrow”, trendy in today’s Nigeria (despite the global decline in interest for fossil fuels due to the environmental impact – global warming).

This suggestion might seem funny or belated to most people, concerning an energy source and a hydrocarbon business that are on their phasing out stage. But this strategy should not be ignored. It is being proffered for the nation’s economic gain, emancipation, survival and development; on the premise of the natural phenomenon that, “one man’s meat is another man’s poison”. Shall we have such abundant natural gas reserves of around 206.53 trillion cubic feet (TCF) of proven gas (worth well over $803.4 trillion; in addition to a potential upside of 600TCF) yet, the tumbling economy that is almost at a tipping point pushes the federal government to seek external support for the NETP, while we can internally tackle our economic problems by ourselves? One believes that with determination, diligence, political will, the national economy could be patriotically fixed with the resolve to always see opportunities in every situational challenge that the nation faces. This can also be achieved once the entire nation collectively realises and accepts the fact that the issue lies as a federal government policy problem that can only be handled and fixed internally. This becomes even clearer especially when we critically look at and identify the root causes of, say, inflation and the disastrous local currency multiple exchange rates and how moving in that direction can help solve these problems.

Going back in time, the real sector in Nigeria, since independence in 1960, has been operating solely with imported petrochemicals raw materials. Unfortunately, as the “Oil Boom” era was on, the requisite infrastructural development that should have provided a sound economic support-base for the progressive expansion of the economy, was wished away on the platter of systemic corruption. It is, therefore, very irresistible not to mention the monstrous economic “Dracula” called “Petrol Subsidy” that sucks the economy white, which was recently quantified to be larger than the total annual budgets of the 36 states in the country put together. It had since been identified by this writer as a “Thorn in the flesh” and declared as such in an article titled, “Nigeria’s Petroleum Subsidy, A Thorn in the Flesh” with the following highlighted quote, “The idea of subsidy in effect, is targeted at benefiting the masses in our system but, the benefit does not get to them. A few unscrupulous Nigerians that are privileged to be placed in high positions in the petroleum sector of our economy sabotage the efforts of the FG through unwholesome practices and diversionary measures at the expense and to the detriment of the interest of the masses.” (from BusinessDay page 15 of Monday, 29 September 2008; and page 11 of Tuesday 30 September 2008). Again, in the same paper in an article, “Which Petroleum Subsidy?”, on page 13 of Tuesday 28 June 2011, it had this quote; “We waste that huge [huge] of money annually on a very few Nigerians (without achieving the primary aim, the poor masses not benefiting or enjoying it) and at the same time, we ‘export labour’ to the countries.”

An industrialisation policy will address the downward trend of the economy, more so if the players in the manufacturing sector buy the idea to diversify petrochemicals manufacturing by utilising every available methane gas trapped and harvested for diverse syntheses. That would, in addition to massive exports of liquefied natural gas to EU countries presently facing an energy crisis while winter is already knocking at their doorsteps, result in a win-win situation to all the economies involved. Gas based energy sourcing for domestic production of LPG and CNG requires a critical focus. While the exploitation and optimization of the methane component is poised to be the sole and primary feedstock for general syntheses of all kinds of petrochemicals industrial raw materials that the nation’s real sector shall utilise, it can also be prepared to export the surplus portions produced within the economy. Even in the face of the four critical challenges bedevilling the economy – petrol subsidy, oil theft, naira exchange rate and insecurity – petrochemicals industrialization would create wealth and jobs for our teeming youths in the job market. That development alone can positively impact the macro economy by drastically erasing most of the national economic challenges.