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Exploring Utilisation Options of Local Energy Resources in Nigeria in Vol PM World Journal Exploring utilisation options of local energy resources in Nigeria in Vol. V, Issue I – January 2016 compliance with the Paris Climate Agreement www.pmworldjournal.net Featured Paper by O. Chima Okereke, PhD Exploring utilisation options of local energy resources in Nigeria in compliance with the Paris Climate Agreement O. Chima Okereke, PhD Introduction The objectives of this paper are to review briefly the main clauses of the Paris Agreement and to explore investment and utilisations options of the natural energy resources in Nigeria in compliance with the agreement. Accordingly, the paper comprises the following sections: 1. Stipulations of Paris Agreement and some of its economic implications 2. Current status of investments and utilisation of energy resources in Nigeria 3. Renewable sources and uses in some developed nations 4. Analysis of resources and alternative options 5. Recommendations 1. Stipulations of Paris Agreement The Paris Agreement is designed to enable the international community to respond more effectively to the threat of climate change in order to enhance sustainable development and efforts to eradicate poverty. The Agreement was reached at the 2015 United Nations Climate Change Conference, COP 21 held in Paris from 30th November to 12th December 2015. It was the 21st yearly session of the Conference of the Parties (COP) to the 1992 United Nations Framework Convention on Climate Change (UNFCCC). It is relevant to note that the COP is the supreme decision-making body of the Convention. All countries that are Parties to the Convention are represented at the COP. The conference negotiated the Paris Agreement, its text is a consensus of views of the representatives of the 196 parties in attendance. The agreement will become legally binding when it will be joined by at least 55 countries which together represent at least 55 percent of global greenhouse emissions. Such parties will need to sign the agreement in New York between 22 April 2016 and 21 April 2017, and also adopt it within their own legal systems through ratification, acceptance, and approval by their relevant bodies. They will deposit their instruments of ratification with the UN The national governments agreed to the following [1]: A long-term goal of keeping the increase in global average temperature to well below 2°C above pre-industrial levels and to aim to limit the increase to 1.5°C, since this would significantly reduce risks and the impacts of climate change; Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production; © 2016 O. Chima Okereke www.pmworldlibrary.net Page 1 of 15 PM World Journal Exploring utilisation options of local energy resources in Nigeria in Vol. V, Issue I – January 2016 compliance with the Paris Climate Agreement www.pmworldjournal.net Featured Paper by O. Chima Okereke, PhD Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. It may be helpful to explain what is meant by the statement “to keep the increase in global average temperature to below 2 degrees Celsius above pre-industrial levels”. The average temperature recorded between the pre-industrial years, 1850 – 1900, is considered the reference temperature. In effect, one of the objectives of the Agreement is to maintain the global average temperature to be lower than 2 degrees Celsius above this reference temperature. By November 2015, it was noted that the Global annual average surface temperature in 2015 was getting to 1°C above the pre-industrial average (as represented by the 1850-1900 reference period). As stated in the third statement of the Agreement, the final text also pledges financial support from rich, developed nations to developing countries as they adopt changes needed to meet the temperature targets. Some Economic Implications Use of fossil fuels, such as oil and coal, is the major cause of greenhouse gases. These fossil fuels also are resources that constitute the main source of revenue for developing economies. Eliminating their use and switching to renewable energy sources, such as wind and solar power, could be very costly for developing countries. For example, Nigeria’s national budget is almost completely based on oil revenue. The 2016 budget is proposed to be funded on oil price of $38 per barrel. After reviewing the trends in the global oil industry, the government set a benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day for 2016. The budget presented by President Buhari amounted to N6.08trillion (US$ 0.03 trillion, that is US$30billion) on December 22, 2015. It is therefore difficult to contemplate the survival of the country if revenue from oil is completely removed. Prior to the oil boom and the wealth, it has created in Nigeria, this was before 1970, coal was a major source of income. It was in much demand because it was used to power the electricity generating stations, factories, ships, locomotive trains, etc. When it was replaced by oil, much income was lost by the country and by the major cities built on its wealth. In Nigeria, there is an important state capital in the present South East, Enugu, it used to be referred to as the “coal city”; its commercial importance was greatly diminished when coal lost its income earning power. [2] 2. Current status of investments and utilisation of energy natural resources Natural resources relevant to this discussion include natural gas, oil, and renewable resources. Some of their uses are here reviewed. Natural gas Nigeria had an estimated 180 trillion cubic feet (Tcf) of the reserves as of January 2015, according to the Oil and Gas Journal (OGJ), making it the ninth-largest natural gas reserve holder in the world and the largest in Africa. It produced 1.35 Tcf of dry natural gas in 2013, ranking among the world's top 30 largest natural gas producers. Natural gas production is © 2016 O. Chima Okereke www.pmworldlibrary.net Page 2 of 15 PM World Journal Exploring utilisation options of local energy resources in Nigeria in Vol. V, Issue I – January 2016 compliance with the Paris Climate Agreement www.pmworldjournal.net Featured Paper by O. Chima Okereke, PhD constrained by the lack of infrastructure to monetize natural gas that is currently being flared. Most natural gas reserves are located in the Niger Delta. Natural gas flaring A significant amount of Nigeria's natural gas is flared (burned off) because some of its oil fields lack the infrastructure needed to capture the natural gas produced with oil, known as associated gas. In 2013, Nigeria flared 428 Bcf of its associated gas production, or 15% of its gross production. According to the U.S. National Oceanic and Atmospheric Administration (NOAA), natural gas flared in Nigeria accounted for 10% of the total amount flared globally in 2011. The government has been trying to end gas flaring for several years without success. In 2008, it developed a Gas Master Plan that promoted investment in pipeline infrastructure and new gas- fired power plants to help reduce gas flaring and provide more gas to fuel much-needed electricity generation. However, progress is still limited because security risks in the Niger Delta have made it difficult for the Independent Oil Companies (IOCs) to construct the infrastructure that should support gas monetization. [3] Gas-to-liquids (TL) Chevron-operated Escravos GTL project is still active although about nine years behind schedule. Chevron (75%) and Nigerian National Petroleum Company (NNPC) (25%) are jointly developing the $10 billion facility. Sasol Chevron, a joint venture between South Africa's Sasol and Chevron, provided technical expertise to design and develop the GTL plant. It finally achieved first production in mid-2014. The project is challenging due to its location in a swamp, requiring large quantities of sand landfill to support heavy reactors and other equipment at the site. It will convert 325 MMcf/d of natural gas into 33,200 bbl/d of liquids, principally synthetic diesel for cars and trucks. This will provide significant environmental benefits by converting natural gas to produce ultraclean GTL diesel. LNG and pipeline exports Nigeria exports the vast majority of its natural gas in the form of liquefied natural gas (LNG), and a small amount is exported via the West African Gas Pipeline (WAGP) to nearby countries. Nigeria exported about 800 Bcf of LNG in 2013, ranking it among the world's top five LNG exporters, along with Qatar, Malaysia, Australia, and Indonesia. Nigeria's LNG exports accounted for about 7% of globally traded LNG. Japan is the largest importer of Nigerian LNG and imported 23% of the total in 2013, followed by South Korea (17%) and Spain (14%). Bonny LNG facility The Nigeria's LNG (NLNG) facility on Bonny Island is the country’s only operating LNG plant. Its partners include NNPC (49%), Shell (25.6%), Total (15%), and Eni (10.4%). NLNG currently has six liquefaction trains with a production capacity of 22 million tons per year (1,056 Bcf/y) of LNG and 4 million tons per year (80,000 bbl/d) of liquefied petroleum gas. A seventh train is planned to increase the facility's LNG capacity to more than 30 million tons per year (1,440 Bcf/y). © 2016 O. Chima Okereke www.pmworldlibrary.net Page 3 of 15 PM World Journal Exploring utilisation options of local energy resources in Nigeria in Vol. V, Issue I – January 2016 compliance with the Paris Climate Agreement www.pmworldjournal.net Featured Paper by O. Chima Okereke, PhD Brass LNG Limited There is also an LNG plant in Brass which is being developed since 2006.
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