Mitigation of Greenhouse Gas Emissions from Gas Flaring in Nigeria: Perspectives on Law and Regulation
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Mitigation of Greenhouse Gas Emissions from Gas Flaring in Nigeria: Perspectives on Law and Regulation A Thesis Submitted to the College of Graduate and Postdoctoral Studies In Partial Fulfillment of the Requirements For the Degree of Master of Laws (LLM) In the College of Law University of Saskatchewan Saskatoon By Gideon Odionu © Copyright Gideon Odionu, September, 2018. All rights reserved. PERMISSION TO USE In presenting this thesis/dissertation in partial fulfillment of the requirements for a Postgraduate degree from the University of Saskatchewan, I agree that the Libraries of this University may make it freely available for inspection. I further agree that permission for copying of this thesis/dissertation in any manner, in whole or in part, for scholarly purposes may be granted by the professor or professors who supervised my thesis/dissertation work or, in their absence, by the Head of the Department or the Dean of the College in which my thesis work was done. It is understood that any copying or publication or use of this thesis/dissertation or parts thereof for financial gain shall not be allowed without my written permission. It is also understood that due recognition shall be given to me and to the University of Saskatchewan in any scholarly use which may be made of any material in my thesis/dissertation. Requests for permission to copy or to make other uses of materials in this thesis/dissertation in whole or part should be addressed to: Associate Dean Research and Graduate Studies College of Law, University of Saskatchewan, 15, Campus Drive, Saskatoon, Saskatchewan S7V 5A6 Canada OR Dean College of Graduate and Postdoctoral Studies University of Saskatchewan Room 116 Thorvaldson Building, 110 Science Place Saskatoon, SK CANADA S7N 5C9 i ABSTRACT This thesis explores the practicability of adopting legislative reforms as a solution to the problem of gas flaring in Nigeria. While the thesis does not anticipate solving the problem of gas flaring in Nigeria through legislative reforms in isolation, it argues that legislative reform is an important step that must be undertaken by the Nigerian government as the current statute governing gas flaring is inadequate, ineffective, and unconstitutional. While examining the practicability of legislative reform, this thesis considers whether Nigeria’s foreign investment laws, investment treaties and/or private contractual obligations would impede the enactment of new gas flaring legislation and if such legislation would impact on international oil and gas corporations (IOCs) engaged in oil production activities in Nigeria. In ascertaining the practicability of legislative reforms, it considers whether legislative reform would be considered expropriation of an IOC’s investment, or whether stabilization clauses in oil and gas contracts would impact the practicability of legislative reforms. The practicability of legislative reform is also considered from the perspective of whether the Nigerian government is currently demonstrating sufficient political commitment to taking steps to reduce gas flaring. This thesis envisages legislative reforms which are twofold. First, it considers the need to enact new gas flaring legislation in Nigeria in order to address the shortcomings of the current gas flaring legislation. Second, the thesis considers the importance of incorporating some of the relevant international environmental standards on GHG emissions to which Nigeria is a party into domestic laws given the potential impact of gas flaring on climate change. The domestication of these standards will make some of Nigeria’s binding commitments in the standards that impact gas flaring enforceable in Nigeria. The new gas flaring legislation will also make reference to those international environmental standards on GHG emissions. In order to achieve these purposes, this thesis presents some of the insights proposed by Institutionalist Legislative Theory and Methodology (ILTAM) as a possible tool for designing the legislative reforms. The ILTAM offers a guide to lawmakers in structuring evidence-based legislation hinged on factual evidence and public reasoning with capacity for effective implementation. ii ACKNOWLEDGMENTS I am immensely grateful to the Almighty God for the strength and wisdom He granted me to undertake this research. My sincere gratitude goes to the College of Graduate and Postdoctoral Studies and the College of Law, University of Saskatchewan for the generous award and scholarship that enabled me carry out my LLM program. I am especially grateful to Professor Ibironke Odumosu-Ayanu for her exceptional supervision, and invaluable contributions to my thesis. I would also like to express my heartfelt gratitude to my supervisory committee members, Professor Heather Heavin and Professor Jason MacLean for their insightful comments, and contributions to the development of my thesis. I greatly appreciate my parents, Mr Christopher Odionu and Mrs Beatrice Odionu, as well as my siblings for their support and encouragement over the years. I am also grateful to my colleagues and friends for their words of encouragement and love. iii TABLE OF CONTENTS PERMISSION TO USE ........................................................................................................... i ABSTRACT ............................................................................................................................ ii ACKNOWLEDGMENTS ...................................................................................................... iii TABLE OF CONTENTS ....................................................................................................... iv CHAPTER 1: BACKGROUND AND INTRODUCTION ..................................................... 1 1.1 Introduction and Context of Research Problem ................................................................ 1 1.2 Literature Review ........................................................................................................... 10 1.3 Methodology .................................................................................................................... 21 1.4 Significance of the Research ........................................................................................... 22 CHAPTER 2: THE LAW, REGULATION AND INCIDENCE OF GAS FLARING IN NIGERIA ............................................................................................................................... 24 2.1 Introduction ..................................................................................................................... 24 2.2 Incidence of Gas Flaring in Nigeria ................................................................................ 25 2.2.1 Gas Flaring and its Implications in Nigeria ............................................................. 25 2.2.1.1 Environmental Implications ............................................................................. 28 2.2.1.2 Health Implications .......................................................................................... 29 2.2.1.3 Economic Implications .................................................................................... 29 2.2.1.4 Social Implications ........................................................................................... 30 2.2.2 The Law ................................................................................................................... 31 2.2.2.1 Associated Gas Re-Injection Act (AGRA) ..................................................... 31 2.2.2.2 Inadequacies of the Associated Gas Re-Injection Act (AGRA) ..................... 32 2.2.3 The Regulatory Mechanisms and their Limitations ................................................. 36 2.2.3.1 Department of Petroleum Resources (DPR) ................................................... 37 2.2.3.2 Nigerian Environmental Standards and Regulations Enforcement Agency (NESREA) ..................................................................... 38 2.2.3.3 National Oil Spill Detection and Response Agency (NOSDRA) ................... 39 2.2.3.4 World Bank Initiatives ..................................................................................... 40 2.3 The Need for Legislative Reforms and its Implications for the Nature and Effectiveness of Gas Flaring Reduction in Nigeria ............................................................................. 42 2.4 Conclusion ....................................................................................................................... 43 iv CHAPTER 3: PRACTICABILITY OF LEGISLATIVE REFORMS: EXAMINING THE POTENTIAL IMPACT OF INTERNATIONAL INVESTMENT STANDARDS ON GAS FLARING REGULATION IN NIGERIA…………………………...……………........…....45 3.1 Introduction ..................................................................................................................... 45 3.2 Foreign Investment and Global Investment Trends ........................................................ 46 3.3 Liberalization ................................................................................................................... 47 3.4 Nigerian Law on Foreign Investment Protection ............................................................ 49 3.4.1 The Nigerian Investment Promotion Commission Act (NIPCA).......................... 50 3.4.1.1 Nationalization and Expropriation ................................................................... 50 3.4.2 Nigeria’s Bilateral Investment Treaties and Expropriation ..................................