Experts at the just-concluded Society of Petroleum Engineers (SPE) Nigeria Annual International Conference and Exhibition in Lagos said the global energy mix would remain amid greater dominance by hydrocarbon energy sources. They argued that for African oil-producing countries, the energy transition should be better viewed as providing clean energy and not as abandoning some energy sources, MUYIWA LUCAS reports.
The National Aeronautics and Space Administration (NASA), a civilian agency of the United States Government that specialises in space exploration, is worried. Its worry stems from the changing climatic development the earth faces which poses a threat to human existence.
According to the body, in 2020 the planet’s average temperature was 1.02°C warmer than the baseline from 1950–1980 mean.This has led to global warming, whose effect has included but not limited to the polar ice caps melting and sea levels rising.The ripple effect of this has berthed other climate changes like desertification and an increase in extreme weather events such as hurricanes, floods and fires.
The industrial revolution has not been spared as a major cause of the development given that it is associated with the energy sector whose activities in drilling, exploration, production releases gas, carbon dioxide, among other substances into the atmosphere.
However, to achieve this goal, a key factor remains energy transition, that is, the shift from an energy mix based on fossil fuels to one that produces very limited, if not zero, carbon emissions, based on renewable energy sources.
According to Wikipedia, the energy transition is the ongoing process of replacing fossil fuels with low carbon energy sources. More generally, an energy transition is a significant structural change in an energy system regarding supply and consumption. A huge contribution to decarbonisation comes from the electrification of consumption, replacing fossil fuel-generated electricity with energy generated from renewable sources, which also makes other sectors like transport cleaner; the digitalisation of networks also contributes by improving energy efficiency.
It is, therefore, instructive that the urgency to achieve energy transition is accelerating the changes in the energy sector. For instance, between 2010 and 2019, the costs of renewable technologies fell by 80 per cent in the case of solar photo voltaics and 60 per cent for onshore wind power.
Such is the concern for the environment and the energy sector that stakeholders in the country’s energy sector converged in Lagos at a three-day conference – Nigeria Annual International Conference and Exhibition (NAICE) organised by the Society of Petroleum Engineers (SPE) Nigeria Council. The conference had as its theme: “Global Transition to Renewable and Sustainable Energy and the Future of Upstream Oil and Gas in Africa.”
The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, an engineer, said the commitments from the Paris Agreement of 2015 and the recently concluded 26th Conference of the Parties (COP26) in Glasgow, in which Africa actively participated, places demand on all to keep global temperature rise to within 1.5 °C – 2.0 °C of pre-sindustrial levels.
Komolafe explained that the implications of this for upstream oil and gas industry in Africa are far-reaching. “The need to decarbonise our oil and gas production facilities not only requires commitments but entails that we have the right discourse on policy direction to guarantee energy security throughout the journey to our net-zero target,” he said, adding that the event offered another opportunity for stakeholders to make invaluable contributions to the quest for cleaner energy and net-zero carbon regime. And as the process garner momentum, Komolafe reiterated the need for oil and gas producers in Africa to embrace the reality of energy transition and take strategic position to leverage the opportunities presented by the unfolding era, which he said has become more pressing.
The NUPRC boss however noted that recent events around the globe indicate that fossil fuels will continue to be a core part of the global energy mix well into the future, even beyond the 2050 targets for achieving net-zero that has been set by most countries.
While acknowledging that the future of upstream oil and gas in Africa is promising, especially as several African countries including Nigeria, Algeria, Mozambique, Egypt, Libya, among others, are blessed with huge gas reserves, estimated at over 620 trillion cubic feet of natural gas reserves and 125.3 billion barrels of crude oil, Komolafe warned that there is a need for the appropriate legislative framework and a change in policy direction if these countries are to benefit from the resources for maximum economic recovery and energy sustenance.
“Accordingly, the recently enacted Petroleum Industry Act (PIA), 2021 in Nigeria has generous fiscal provisions aimed towards attracting investment not just for oil development but for harnessing of the rich gas potentials of the nation which is among the highest in the world. As we drive for investment in cleaner hydrocarbon development, without prejudice to maximum economic recovery strategies for development of oil resources, the Commission empowered by the PIA has placed its focus on four cardinal areas for sustainable gas development and utilisation as follows: Gas reserves growth, Optimised gas production, Domestic gas utilisation; Gas flare elimination.
“We expect other African countries to adopt suitable anchor points and roadmaps similar to those presented in the foregoing in order to achieve the right energy mix while decarbonising our oil and gas development,” he submitted.
Similarly, the Minister of State for Petroleum Resources, Timipre Sylva, called for the deployment of technologies to make fossil fuel cleaner in the face of global energy transition.
For him, however, energy transition is better viewed as providing clean energy and not as abandoning some energy sources. According to him, the ongoing global energy is a huge challenge to the reliability and sustainability of renewable energy supplies as alternatives to fossil fuels.
He warned that the anticipated economic growth and rising global population, especially in Asia and Africa, will significantly push energy demand upward to a level that renewable energy sources only cannot meet by 2050.
“All these imply that the global energy mix will remain with us, amidst greater dominance by hydrocarbon energy sources, at least in the foreseeable future. It also indicates that energy transition will remain a gradual process, as against a rapid and radical shift as some have presented it. It is, therefore, necessary that more effort should be put on the use of available technologies like the Carbon Capture Utilisation and Storage (CCUS), to make fossil fuels cleaner. This will encourage a win-win situation in terms of CO2 emission reduction and meeting global energy demand,” Sylva said.
According to him, many countries have already come to the realisation that the adoption and deployment of the CCUS technologies in large scale will play a critical role in supporting energy transitions globally, noting that investment into the CCUS technologies was a very appropriate step at this stage of addressing climate change concerns.
The Minister, who noted that Africa was bedevilled with energy poverty, advised African countries to adopt adaptive strategies taking into account the different socio-economic, political and developmental peculiarities of individual nations.
“Africa’s energy poverty would have to be addressed by responsibly developing and utilising Africa’s abundant natural resource – fossil fuels, from where the renewable energy would be funded amidst a gradual energy transition. Nigeria, as the oil and gas industry leader in Africa, is committed to pursuing the energy transition to promote economic growth,” he said.
Sylva informed that the country was gradually investing in renewable energies, primarily solar, to reduce carbon emissions, whilst continuing to exploit hydrocarbon resources, especially natural gas – recognised as the energy transition fuel for Nigeria.
The SPE International President, Mr Kamel Ben-Naceur, blamed the global energy crisis on the sharp decline in investment in the upstream petroleum sector in pursuit of energy transition.
Ben-Naceur said with the return to normalcy after the COVID-19 pandemic and the ongoing tension in Eastern Europe had driven the price of petroleum products very high leading to inflation in many countries.
He said projections had shown that oil and gas would continue to be a significant part of the energy mix in the foreseeable future hence there was need to increase investment in the industry
The Director, New Energy, Seplat Energy, Mr. Effiong Okon, who represented the firm’s Managing Director, Roger Brown, at one of the panel sessions, agreed that for a successful energy transition in Africa, it is very important to support the goals of the Paris Agreement and align with society’s objective to get the world to net zero carbon emissions by 2050, if not before, adding that lower-emission hydrocarbons, particularly gas, have a role to play during energy transition by replacing diesel generators and biomass.
“Though hydrocarbon export will continue to be a mainstay of the Nigerian economy and will fund Nigeria’s growth as well as its energy transition, the Oil & Gas industry has a role to play as a responsible steward of Nigeria’s oil and gas assets, including those that might be divested,” he said.
According to him, in the longer term, the reality and threat of climate change requires the decarbonisation of energy systems in Nigeria, but sustainability and transparency must be at the heart of business operations and decision making.
On ‘just transition’ Okon noted that there is the need to balance decarbonisation with development, adding that: “Global warming and climate volatility are existential threats to humanity and nature. The world needs to accelerate efforts to achieve net-zero and mitigate warming effects. Africa’s climate, agriculture and people will suffer most in the coming decades. The problem has been caused by emissions from developed-world countries that have enjoyed their ‘carbon privilege’ and built strong economies on fossil fuels.
“However, we need to consider the reality in the continent. Poverty, hunger, unemployment, population growth abound here. Africa contributes just 3.3 percentage of global emissions. Most Africans (600 million) lack access to reliable energy, which hampers development. Use of inefficient and costly diesel/petrol generators saps financial resources, drains foreign exchange and creates pollution.
“Biomass use for cooking causes deforestation, health problems and nearly 0.5 million premature deaths in Sub-Saharan Africa every year. The developed-world’s drive to impose decarbonisation on Africa will constrain development,” he added.
Making the case for gas, the Seplat Director said the developed-world pressures to abandon fossil fuels are being pushed back by recognition of the need to drive development with reliable energy.
COP27, he explained, would focus on how best to achieve this balance for the benefit of tomorrow’s 2.5 billion Africans, of whom 500 million will be Nigerian, adding that given current low emission levels, Africa can achieve a disproportionate improvement in living stands through a globally small increase in emissions from cleaner gas for power and cooking.
He called on players in the continent to leverage oil and gas revenues to cash flow transition, but also tap international transition funding where available, hence the need for good corporate governance.
The Seplat Energy executive therefore urged industry operators to focus on quick wins first, which are: decarbonising the upstream and focus on producing ‘advantaged’ low-carbon barrels with low Scope ½; end routine flaring and redeploy gas to power operations and local communities; and deploy renewables to power operations where possible, and share with local communities.
“We need to develop gas as transition fuel (Gas-to-power to replace diesel, move along value chain into power, e.g. business parks, large buildings; hybrid gas-to-power / solar offerings; and bottled gas products for domestic use. In addition, we can expand into renewables (hydro, wind, geothermal, blue/green hydrogen; and develop and monetise carbon capture and storage,” Okon submitted..