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Comparative Appraisals of Legal and Institutional Framework Governing Gas

Flaring in Nigeria’s Upstream Petroleum Sector: How satisfactory?

Article in Environmental Quality Management · July 2020

DOI: 10.1002/tqem.21680

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DOI: 10.1002/tqem.21680

RESEARCH ARTICLE

Comparative appraisals of legal and institutional framework

governing gas flaring in Nigeria’s upstream petroleum sector:
How satisfactory?

Olusola Joshua Olujobi1 Temilola Olusola-Olujobi2

1
Business Management Department,
Covenant University, Ota, Nigeria Abstract
2
Olujobi Olusola & Co. Lagos, Nigeria Nigeria is rated number one producer of crude oil in Africa, and owing to this oil explo-
ration activities have resulted to a high rate of gas flaring, which was intensified by
Correspondence
Olusola Joshua Olujobi, Business Management poor enforcement of anti-gas flaring laws by the regulatory authorities. Associated
Department, Covenant University, Ota, Nigeria natural gas is generated from oil production, and it is flared in large volumes, thereby
Email: olusola.olujobi@covenantuniversity.
edu.ng leading to the emission of greenhouse gases and a waste of natural resources which
could have possibly generated billions of dollars for the Federal Government of Nige-
Funding information
Covenant University, Ota, Ogun State, Nigeria
ria. There are concerned that if nothing is done to curtail this menace, the environ-
ment and man will be at peril due its negative consequences. There is therefore the
need to abate gas flaring by replicating the strategies applied in the selected relatively
advanced petroleum countries to combat the menace. The study is a comparative anal-
ysis of national legal regimes on gas flaring in Nigeria, Canada, the United Kingdom, and
Saudi Arabia. The study adopts a doctrinal legal research method with point-by-point
comparative approach with library-based legal research method. Weak enforcement
of laws is largely identified as the key factor responsible for the menace. The study rec-
ommends the use of more advanced technologies, a sophisticated mixture of regula-
tions and nonregulatory incentives such as fiscal policies and gas market restructuring.
It offers further suggestions based on the lessons learnt from the selected case study
countries.

KEYWORDS
Enforcement of Laws, Environment, Gas flaring, Global warming, Nigeria

1 INTRODUCTION tries endowed with natural gas in the world (Orlando, 2006). It has an
estimated 159 tcf of proven natural gas reserves. An approximately
Nigeria is endowed with enormous gas reserves of about 159 trillion 2.5 billion cubic feet of gas is asserted being flamed by the numerous
cubic feet (tcf) of natural gas, and it is ranked one of the top 10 coun- oil facilities in Nigeria (Oyewunmi, & Oyewunmi, 2016). Gas flaring is

Environ Qual Manage. 2020;1–14. wileyonlinelibrary.com/journal/tqem © 2020 Wiley Periodicals LLC 1

2 OLUJOBI AND OLUSOLA-OLUJOBI

the disposition of natural gas or associated gas that comes with crude lack of infrastructure to commercialize flared gas in the sector (Flu-
oil during oil exploitation and exploration processes in the upstream enta, 2019). Besides, the need to regulate gas flaring, there is need
petroleum sector. to protect the environment from degradation, acute damage to the
Generally, gas flaring is an operational waste of energy resources in ecosystem as well as human health, and to generate more revenues
the petroleum sector that encourages greenhouse gas emissions. The to Nigeria from gas owing to the current declined in the global oil
1992 United Nations Convention on Climate Change as well as the price.
1997 Kyoto Protocol require government to reduce greenhouse gas Furthermore, the Petroleum (Amendment) Act of 1969 and Asso-
emissions in the oil sector (Malumfashi, 2007). However, gas flaring ciated Gas Re-injection Act 1979 (as amended) enacted to com-
occurs in refineries, chemical plants, oil rigs, and landfills by fiery off bat gas flaring and other environmental pollutions by compelling
the flammable gas. It also occurs when oil companies burn off the extra petroleum companies to make available their plan for gas reinjec-
gas that escapes due to oil drilling and other oil-related activities in the tions in Nigeria have not been implemented vigorously by the regu-
upstream petroleum sector. latory agencies in the sector to combat gas flaring. Gas flaring occurs
Numerous studies have shown that in relatively advanced in the oil-producing areas of Niger delta, and the Federal Govern-
petroleum countries like the United States, petroleum companies ment has made several attempts to combat gas flaring, but associated
process natural gas or reinject the same into the field, and only 1% gases are still being flared without any efforts to preserve it. Most
of the gas is flared unlike in Nigeria where over 60% of the asso- petroleum companies wrongly assume that they will not have copi-
ciated gas is flared. This could have generated billions of dollars to ous financial profits from utilization and commercialization of asso-
the Federal Government’s treasury through processing, distribution, ciated gas in Nigeria. Gas flaring is also attributed to non-existence
use of such gas as cooking or industrial gas. This can also be used to of modern or advanced technologies to utilize gas in Nigeria (Okorie,
generate electricity for the populace to end incessant power outage 2018).
at the time the nation is experiencing persistent poor power supply It is also assumed that exploitation of associated gas or reinjection
and loss of oil revenues due to global oil price slump (Ojide, 2012). appear to be more costly than flaring due to lack of storage facilities
However, due to this among others, Nigeria is rated seventh highest for the associated gas at the rig site and owing to these among oth-
gas flaring nation globally by the World Bank’s Global Gas Flaring ers reasons, petroleum companies operating in Nigeria prefer to flare
Reduction Partnership (Nigerian National Petroleum Corporation, gas because it is cheaper and due to the perceive low investments
2017). prospects on associated gas utilization due to the absence of sufficient
On the other hand, gas flaring being an international concern and incentives on gas utilization and poor gas infrastructure and also due
major source of air pollution with deleterious effects on climate which to limited markets for gas trading in Nigeria. Regulation of gas flaring
have prompted various studies which have revealed that approxi- through legal and institutional framework is a global concern that now
mately 150 billion cubic meters (bcm) or 5.3 tcf of natural gas is burnt requires national efforts to combat at domestic level due to its delete-
yearly with 400 million tons of emissions discharges annually. In Nige- rious consequences on individuals’ well-being and on the environment
ria, approximately 800 million standard cubic feet (Mmscf) of gas is (Otitoloju, 2010).
flared regularly in virtually 144 gas flare locations in Nigeria. The study The objective of this study is to analyze the legal and institutional
has also revealed that oil company flared an aggregate of 301.69 billion frameworks on gas flaring, to exterminate gas flaring, and to recom-
standard cubic feet of gas in November 2016–November 2017 at the mend practical measures for ending gas flaring in Nigeria. The paper
exchange rate of 360 to a dollar and the domestic supply obligation is divided into five sections: section one comprises of introduction and
rate of $1.50 per 1,000 standard cubic feet of gas, this means forfeiture Section two discusses statement of the problems, theoretical frame-
of N162.912 billion revenues which could have accrued to the Federa- work, and national legal regimes for combating gas flaring. Section
tion account (The Nigerian National Petroleum Corporation Monthly three describes institutional legal framework and carries out compar-
Financial and Operations Report, 2017). ative analysis of national legal regimes of Nigeria, Canada, the United
Furthermore, the existing legal framework that regulates gas flar- Kingdom, and Saudi Arabia on gas flaring. Section five discusses fac-
ing in Nigeria has remained ineffective due to poor enforcement tors militating against the effectiveness of national legal regimes for
and insignificant monetary penalties of 10 per thousand standard combating gas flaring in Nigeria with some practical lessons Nige-
cubic feet imposed on the defaulters, and as result it has become rian can learn from the selected case study countries on how to
inefficient in combating gas flaring. The Federal Government loses combat gas flaring. The last section deals with the conclusion and
approximately $1 billion of revenue to gas flaring every year due to recommendations.
OLUJOBI AND OLUSOLA-OLUJOBI 3

Pictures of Gas flaring in Oil Facilities

Source: Nigeria’s New Gas Flare Agenda 2019, available at Thisday online newspaper, https://www.thisdaylive.com/index.php/
2019/04/16/nigerias-new-gas-flare-agenda/ (accessed September 16, 2019)

Nigerian National Petroleum Corporation sets 2020 target to end gas flaring, available at http://www.epiczone.com.ng/nnpc-
sets-2020-target-end-gas-flaring/amp/ (accessed September 16, 2019)

2 STATEMENT OF PROBLEMS ing in Nigeria by ordering oil companies to acquire resources and
technologies that will facilitate the use of associated gas in 5 years.
Crude oil being the main stay of Nigeria’s economy with over 90% The petroleum companies botched to acquire such resources that will
of its foreign exchange earnings from the sector has made it difficult gather the flared gas. Similarly, in 1983, another deadline was also fixed
for the Federal Government of Nigeria to enforce its anti-flaring laws as zero flare date with stringent penalties for non-compliance and in
stringently and consistently to avoid losing multinational oil compa- 1984 the date was also shifted via executive orders. The date was fur-
nies patronage of its oil. This has affected diversification of its mono- ther shifted to January 1, 2008 as a zero tolerance flare period with a
economy from oil to other agricultural products such as cocoa, ground- serious threat to winding up any oil company that infringed the order;
nut, and palm oil to boost its economy (Oyewunmi, 2018). nevertheless, no oil company has been shut down after the end of the
In addition, there are also allegations of connivance of multinational deadline without meaningful compliance recorded with the laws pro-
oil companies with government officials in the sector to truncate hibiting gas flaring in Nigeria.
efforts of the Federal Government in exterminating gas flaring in the Academic researchers have shown that some of the hurdles to the
sector in compliance with the International Conventions for Sustain- Federal Government’s efforts to eliminate gas flaring are lack of finance
ability of the Ecosystem. It is asserted that Nigeria flared about 12.5% to install essential modern technologies and infrastructure to prevent
of the world’s aggregate of gas flared (World Bank, 2006). gas flaring. Poor enforcement of legal, institutional, regulatory frame-
However, in Nigeria, a series of dates have been set to end gas flar- work for combating gas flaring, and other environmental risks that
ing without any serious commitment to enforce the same. In 1969, were aggravated by gas operators’ limited access to international and
the administration of Yakubu Gowon made effort to combat gas flar- local gas markets for gas exports (Olujobi, 2017).
4 OLUJOBI AND OLUSOLA-OLUJOBI

3 RESEARCH METHODOLOGY degradations. There is therefore the need for stringent enforcement of
antiflaring and other environmental laws to protect social, economic,
The objective of this study is to analyze the legal and institutional and other environment interests in the sector and to improve the wel-
framework regulating gas flaring in Nigeria and to determine their effi- fare of its citizens.
ciency in exterminating gas flaring in the upstream petroleum sector
and to recommend practical measures for ending gas flaring in Nigeria.
To achieve this objective, the researchers explored the library-based 5 NATIONAL LEGAL REGIME FOR COMBATING
doctrinal legal research method, supported by a contextual legal anal- GAS FLARING IN NIGERIA
ysis, including reference to Internet sources, an extensive review of
academic literature, examination of case studies, and through anal- In Nigeria, several legislative efforts have been made to combat gas
ysis of relevant judicial and statutory provisions with comparative flaring particularly sections 33(1) and 34(1) of the 1999 Constitution
analysis of the legal framework for combating gas flaring in Nigeria, that guarantees right to life and right to dignity of human persons.
Canada, United Kingdom, and Saudi Arabia. The study adopts sec- These rights can only be sustained through clean and healthy environ-
ondary sources, such as journals, textbooks, and primary sources, such ment, but section 3(2)(a)(b) of the Associated Gas Rejection Act which
as case laws and statutes. It suggests the need to use the lessons learnt allows gas to be flared with the consent of the Minister of Petroleum
from the selected case study countries to reform Nigeria’s anti-flaring is in contravention of the 1999 Constitution that guarantees right to
laws for efficiency in the utilization of gas in the sector. life and right to dignity of human person; therefore, the act became
null and void for being inconsistent with the provisions of the Consti-
tution. Furthermore, sections 13 and 20 of Chapter two of the same
4 THEORETICAL FRAMEWORK FOR 1999 Constitution (as amended) fail to make breach of the duty of the
COMBATING GAS FLARING IN NIGERIA Federal Government to protect Nigeria’s environment from degrada-
tions enforceable. The Constitution fails to provide direct legal reme-
Sustainable Development Theory of 1980, which emanated from dies for the aggrieved parties on environmental degradations. Also, the
Stockholm Conference on Human Environment in 1972, states that Associated Gas Re-injection Act was enacted to prohibit gas flaring on
government should use their extractive resources in a sustainable way. January 1, 1984, the gas flaring ultimatum date was later changed to
However, the Brundtland Report perceives “sustainable” as develop- December 2003, and it was subsequently moved to 2006. It was fur-
ment that satisfies the current necessities without compromising the ther shifted from January 2008 to December 2008.
ability and the needs of forthcoming generations (Brundtland Report, In July 2, 2009, the National Assembly enacted the Gas Flaring (Pro-
1987). It is a development where the utilization of extractive resources, hibition and Punishment) Act 2009 with a gas flaring time limit fixed
the course of financings, thrust of technological advancement, and for December 31, 2010. The abandoned Petroleum Industry Bill also
institutional legal framework are in conformity with the international set gas flaring deadline for 2012, while the new Petroleum Industry
best practices to enhance current and future potentials in the mid- Governance Bill 2017 outlaw gas flaring. The Gas Flaring Prohibition
stream sector to satisfy mortal needs, with the aim of promoting har- and Punishment Bill 2016 set the ultimatum for gas flaring to Decem-
mony among human beings and between humanity and nature in gen- ber 2016. Several deadlines with meager sanctions were fixed by the
eral (Olujobi and Olujobi, 2020). Federal Government, which has not deterred gas flaring in Nigeria. It
The theory helps the study by emphasizing that the use of natural is quite unfortunate that the Gas Flaring Prohibition and Punishment
resources ought not to jeopardize the value of life of present-day and Bill and Associated Gas Re-Injection (Amendment) Bill, which could
upcoming generations and should not damage the ecosystems (United have combated this challenge in Nigeria and minimizing other ecologi-
Nations Development Programme, United Nations Department of Eco- cal consequences of gas flaring, are pending at the National Assembly
nomic and Social Affairs and the World Energy Council, 2000). The the- without any urgency of national importance attached to the bill by the
ory helps the study by emphasizing that human beings must be cautious National Assembly.
of the way they manage natural resources in order to aid sustainable In addition, the Flare Gas (Prevention of Waste and Pollution)
development in the sector through proper management of petroleum Regulations 2018 is to combat greenhouse gas emissions via flaring
resources to combat gas flaring by oil companies. and venting of natural gas in Nigeria. It adopts the polluter pays
Another theory that is germane to this research is the resources principle with carbon tax (Nnona, 2003). It increased the penalty
curse theory, which is traced to 1970–1990, and emphasizes those from 10 per thousand standard cubic feet for gas flaring especially
natural resources abundant countries are largely suffering from poor where the company produced more than 10,000 barrels of crude oil
economic growths. That resources wealthy countries lack economic or more to US$2.0 per thousand standard cubic feet of gas and where
prosperity and developments that commensurate with their abundant the company produced less than 10,000 barrels of crude oil per day
petroleum resources due to prevalent corruption, failure to diversify US$0.50 per thousand standard cubic square feet of gas. It sanctioned
their economies and natural resources to other natural endowments failure to make available precise flare figures and denial to offer
such as agriculture, solid minerals among others to enhance their access to flare sites with suspension or termination of the company’s
industrial developments to combat gas flaring and other environmental operating license. It offers to implement the provisions of the Nigerian
OLUJOBI AND OLUSOLA-OLUJOBI 5

Gas Flare Commercialization Programme (NGFCP) 2018, but it has not ing Unlimited v. Federal Inland Revenues Services (2015), where the court
combated gas flaring due to poor enforcement and poor monitoring held that the prescribed punishments for gas flaring as enshrined in the
scheme of the regulatory agency saddled with such responsibility Associated Gas Reinjection Act are tax deductible. This implies that oil
under the applicable anti-gas flaring and other environmental laws in companies can flare gas as much as they desire as much as the pre-
the sector (Olujobi, 2017). scribed penalties are deducted from their taxable incomes. This verdict
In an attempt to combat gas flaring and to transform flared gas appears to have aggravated gas flaring by oil companies in the sector.
to commercial benefits, the Federal Government initiated the NGFCP Also, the National Policy on the Environment and Nigeria’s National
to transform the midstream sector with penalty of $2.50 per 28.317 Agenda 21, initiated by the Federal Ministry of Environment for pro-
standard cubic meter for gas flared for each day for noncompliance ficient directives on air quality, standard and natural gas preservation
with reporting standard. There is additional punishment of revocation with the aim of combating gas flaring and other environmental risks in
of oil license or lease by the petroleum minister in the case of non- the sector. Also, the Policy for Natural Gas Conservation and Develop-
compliance oil company. This will only achieve its objective if imple- ment requires that production sharing contracts executed by oil com-
mented stringently and consistently to combat gas flaring in the sector. panies must embrace gas application, clauses to combat gas flaring,
It is imperative to note that section 44 (3) of the 1999 Constitu- guarantee healthy, and sustainable environment. Gas companies are
tion of the Federal Republic of Nigeria (as amended) and section 1(1) obliged to perform gas field optimization on their gas concessions to
of the Petroleum Act 1969 (as amended) confers title to petroleum and prevent gas flaring. Noncompliance with this policy has not attracted
other extractive resources on the Federal Government, but this does any sanction as several oil companies have not performed their gas field
not impede the right to compensation from damage suffered or that optimization, and none have been sanctioned for non-compliance in the
occurred from petroleum exploration activities in the sector such as sector.
gas flaring (see the following relevant court cases: Elf Nigeria Limited Besides, the Gas Flaring (Prohibition) Bill 2017 is still undergo-
v. Opere Sillo and Anor (1994) 6 NWLR [Pt.350] 258; Shell Petroleum ing legislative scrutiny at the National Assembly without any national
Development Company Ltd v. Councillor F.B. Farah and Others [1995] importance attached by the legislatures There is therefore the need
3 NWLR [Pt. 382] 148 at 185). for thorough review of the notable gaps in the bill especially the pro-
As part of the efforts of the Federal Government to combat gas visions on taxes and other fiscal policies to avoid double taxations and
flaring, the Department of Petroleum Resources (DPR) is statutorily other legislative lacunas if it is finally crystallized into law for com-
entrusted to manage the oil sector as well as the Nigerian National bating gas flaring. Similarly, the Downstream Gas Act is to combat
Petroleum Corporation (NNPC) through its subsidiary, the Nigeria Gas institutional policies restrictions on investments in the downstream
Company which is assigned to regulate gas transmission and distribu- petroleum sector this may impede potential investments in the sector
tion in Nigeria with a monopoly of gas pipelines. This is a concern for especially where the government appears not to have enough political
potential investors. There is therefore, the need for explicit statutory will to enforce its anti-flaring laws.
guidelines on the roles of the agency, and there is the need for adequate The National Environmental Standard Regulation Enforcement
gas pipelines for efficient utilization of Nigeria’s vast gas resources to Agency (Establishment) Act (NESREA) 2007 expressly annulled the
boost the Federal Government’s foreign exchange earnings from gas Federal Environmental Protection Agency Act 1988. The aim of NES-
and to mitigate other oil and gas business risks in the sector. REA is to protect and develop Nigerian environment, biodiversity pro-
In addition to all other efforts in the sector, the Federal Govern- tection, and to ensure sustainability of its extractive resources. Sec-
ment set April–October 1980 for oil companies operating in Nigeria to tions 7(g),(h),(j),(k),(i) and 8(g),(k), (l),(m), (n)(s) of the act set up mobile
remodel gas application projects and to combat gas flaring. Equally, in courts for speedy trial of those that violate its provisions but the act
1984, a fine was introduced into the Associated Gas Re-Injection (Con- expressly prohibits petroleum industry from its operations. The penal-
tinued Flaring of Gas) Regulations which gave room for limited indem- ties for violation of its provisions are penal in nature without any pro-
nities to flare gas in certain circumstances. This was also amended visions for civil remedies for victims of environmental infringements;
1985 with a fine of 2 Kobo for non-compliance for each 1,000 standard this is another major flaw of the act. It is pertinent to note that oil
cubic feet of gas flared. The fine appears too meager, and the Federal companies are excluded from environmental audits and from estab-
Government increased the fine in January, 1998 to US$11 for every lishing repository for the implementation of mechanisms on environ-
1,000 standard cubic feet of gas flared by oil operator in the sector. mental standards. The justification for the exclusion of oil and gas
The Associated Gas Re-Injection (Amendment) Act 2004 was also companies from the act by the legislature cannot be easily fathomed.
enacted. It required detailed plans for gas utilization with zero toler- The agency’s power of investigations of oil pollution is limited to oil
ance for gas flaring by oil and gas companies unless exemption is given spillage as stated under section 8(g) of the act. The exclusion of oil
by the petroleum minister. The sanctions prescribed by the Associated and gas companies’ environmental degradation and pollution from the
Gas Re-injection Act against petroleum companies for flaring of gas are scope of the agency appears to be a serious legislative setback in
inadequate, due to fact that the act has not achieved its aim as com- combating gas faring in Nigeria’s midstream and upstream petroleum
panies prefer to pay the fine than to commercialize the flared gas due sector.
to low gas market in Nigeria. Gas flaring menace has been made worse The act combats gas flaring by oil companies being a legal entity
by the decision of the Tax Appeal Tribunal in the case of Mobil Produc- and by its employees who are individually prone to incarceration for
6 OLUJOBI AND OLUSOLA-OLUJOBI

a term not more than 10 years, respectively. Section 20(4)(5) of the act The Flaring (Prohibition and Punishment) Bill 2010 prescribed
allows the minister of petroleum to combat gas flaring and in certain stiffer penalty including closing down of oil fields that failed to com-
situations the minister may award special license to flare for a short ply with its provisions. The Environmental Management Bill 2010 made
period, and failure to conform to the act attracts punishment not above the directors of oil companies liable for gas flaring with 10 years incar-
the sum of 500,000,000.00. Section 27(2) of the act prohibits the ceration or fine of N500 million on conviction, but this bill has not been
release of deleterious substances into the air, land, and water in Nigeria passed into a law.
with a fine not above 100,000 or 1 year incarceration, if committed To combat gas flaring, the Federal Government also endorsed the
by a legal entity on conviction a fine not above 100,000 and supple- Paris Climate Change Agreement and signed the Global Gas Flaring
mentary fine of 50,000 for each day that the infringement continues Partnership’s principles to end global flare in 2030. Similarly, Nigeria
may be imposed by the agency. These penalties appear too meager to is committed to end national gas flaring in 2020. The Federal Govern-
combat environmental degradations in the sector. Additional remedy ment is empowered by virtue of Paragraph 35b of the First Schedule
such as restoration should be added to the remedies for environmental of the Petroleum Act 1969 (as amended) to capture gas at flare. This
degradation to discourage environmental abuses and gas flaring by oil prompted the introduction of NGFCP(as earlier said) to promote tech-
companies. nical and commercial sustainability of gas utilization in Nigeria through
The Petroleum Drilling and Production Regulation Act 1969 third-party investors to combat gas flaring and to enhance market
was enacted in conformity with the Petroleum Act to oversee the driven by commercial structure which will enable flared gas to be mer-
petroleum exploration and production in Nigeria. The Regulation 42 chantable in Nigeria and in other developed gas markets in Africa.
requires that oil companies are to submit scheme for application of nat- The various national legal frameworks enacted to combat gas flaring
ural and associated gas discovered in the course of oil exploration and and to promote sustainable development and efficiency in the utiliza-
for the companies to make use of advanced technologies or equipment tion of gas have not been efficiently implemented, monitored, and eval-
for oil exploration activities, but most of the equipment being utilized uated by the various regulatory agencies saddled with the tasks, due
by these oil companies are obsolete and in bad shape thereby making to lack of political will and lack of commitment to enforce the extant
enforcement of this act impracticable. Another flaw of the act is the anti-flaring and environmental laws in the sector to combat continuous
failure to define “good oil field practice” or set the yardstick for esti- flaring of gas by oil companies operating in Nigeria.
mating oil field. The oil companies in Nigeria have not complied with
the act, neither the act has been implemented efficiently by the regula-
tory agencies in the sector to deter gas flaring (Jamilu Ib, 2016). 6 STATUTORY INSTITUTIONS REGULATING GAS
Also, the Harmful Waste (Special Criminal Provisions Act Vol. 7, FLARING IN NIGERIA
Cap H1, LFN 2004, section 6 prohibits acquisition, trade deposit, and
stowage of toxic waste with penalty of life imprisonment if found cul- The statutory institutions saddled with the responsibility of regulating
pable of the offence and where the offence was committed by legal gas flaring among others are the Ministry of Petroleum Resources and
entity the officer of the company shall be liable except if the offence Energy, the ministry is headed by the petroleum minister who is statu-
was committed with his knowledge. The major weakness of the act is tory empowered to formulate policies regulating the oil industry via the
the failure to extend the act to all forms of harmful wastes generated DPR to enact regulations for oil exploration and production in Nigeria.
in the sector including gas flaring. Multinational oil and gas companies To reduce gas flaring, DPR must perform efficiently its statutory func-
have not also complied with the above provisions, and it has also not tion of regulating the oil sector devoid of corruption and other uneth-
been strictly enforced by the regulatory authorities in the sector due ical practices in the sector. There is the need for the Federal Govern-
to the absence of stringent sanctions under the regulation for non- ment to release the ministry budget or allocation on time to motivate
compliance with its provisions. The laws appear not to be in conformity them to perform their statutory mandates or oversight functions effi-
with the current legal reality in the gas sector and the anticipated legal ciently in the sector.
challenges in Nigeria. Therefore, there is the need for reform of the Another principal agency regulating the sector is the Nigeria Gas
act in conformity with the present-day developments in the interna- Company; it regulates the midstream sector to commercialize gas
tional midstream sector. The reform must inculcate zero tolerance for through the development of fully integrated gas supply system. It has
gas flaring and all forms of environmental degradations. Environmental not live up to expectation by fully optimized economic potentials of
protection for sustainability, and there is the need for active corporate Nigerian gas for the economic benefits of Nigerians and potential for-
social responsibilities by oil and gas companies in the sector to promote eign investors to end gas flaring and other environmental hazards in the
sustainable developments in Nigeria. sector (Ofuhie, 2006). The NNPC exercises both the fiscal and regula-
The Petroleum Industry Governance Bill 2017, which replaced the tory functions in the sector; it has 12 subsidiaries, encompassing the
Petroleum Industry Bill 2012, prohibits gas flaring without approval whole oil industry operations. The corporation should be allowed to
from the petroleum minister with a penalty not less than the worth of compete commercially with other oil companies in the sector via its
the gas flared by the oil company, but the bill has not been assented upstream petroleum subsidiary the Nigeria Petroleum Development
by the President to commence operation and to deter gas flaring in the Company. NNPC should be given full autonomy devoid of governmen-
sector. tal interference to enhance its full operation capacities like other legal
OLUJOBI AND OLUSOLA-OLUJOBI 7

entities operating in the sector. There is the need to restructure the Energy Strategy was established to promote transparency and effi-
corporation by separating its commercial roles from its regulatory roles ciency in the administration of their oil sector. Canada is the fourth
to enhance its efficiency in the sector. major exporter of natural gas and 19th major of proven natural gas
Also, another statutory agency regulating the sector is the Fed- reserve in the world.
eral Ministry of Environment, which was set up in 1992 to regulate The Energy Utilities Board regulates the petroleum industry in
the environment and to prevent environmental hazards in Nigeria Canada, while in the United Kingdom the Department of Trade and
especially in the oil and gas sector. There is also the Niger Delta Industry regulates the sector by virtue of the Petroleum Act. Similarly,
Development Commission, which was created under the Niger-Delta the Nigeria Gas Company regulates the sector in Nigeria. In the United
Development Commission Act 2000 due to the Federal Government’s Kingdom, the Energy Act 1976, the fiat of the Secretary of State for
desire to end ecological problems in the oil-producing communities Trade and Industry regulates removal of natural gas by flaring or releas-
and to combat environmental and ecological problems associated ing unignited gas into the atmosphere in the sector.
with the petroleum sector’s operations in the areas as stated under It is vital to note that gas flaring is strictly regulated in Alberta,
sections 3 and 7 of the act. The major challenge of the agency is Canada; flair license and records of flared and vented gas are carried
mismanagement, corruption, and poor funding due to failure of some out by the National Energy Board, a Federal energy regulatory body
oil companies to comply with section 14(3) (b) of the act which requires in Canada. It is established by the National Energy Board Act. In
payment of 3% of the oil companies’ budgets to the agency. Also, there Nigeria, the Nigerian Gas Company under the Ministry of Petroleum
is a problem of persistent refusal of the Federal Government to fulfill Resources regulates gas flaring and grant permits to flare gas. In the
its legal obligations or commitment of 15% subvention annually to the United Kingdom, UK’s Oil and Gas Authority issues licenses and the
agency. This has hampered the efficiency of the agency in performing Hazardous Installations Directorate regulates gas supply and gas
its statutory functions in the sector (Abila & Damfebo, 2006). pipelines in the sector. Also, the Alberta Energy Regulator in Canada
The activities of the regulatory authorities in the sector over the enforces their laws stringently against gas flaring. Consequently,
years on gas flaring appear to be uncoordinated and not proactive many oil rigs have been shut down due to gas flaring as many oil
enough to combat the menace in the sector; therefore, there is the companies are going bankrupt. Abandoned oil rigs that are no longer
need for total overhaul of the legal framework establishing the agen- producing crude require hundreds of millions of dollars to remediate
cies for efficiencies in the discharge of their statutory responsibilities the gas flared in the sector while in Nigeria failure to comply with the
in the sector against gas flaring and other environmental hazards in the various environmental laws during decommissioning of oil rigs by oil
sector. companies are not sanctioned adequately.
In the United Kingdom, the main legislation regulating oil and gas is
the Energy Act 1976 and the Petroleum Act 1998 (as amended). These
7 COMPARATIVE ANALYSIS OF NATIONAL are the environmental statutes regulating onshore hydrocarbon com-
LEGAL FRAMEWORK OF NIGERIA, CANADA, panies. In Nigeria, the Petroleum Act 1969 (as amended), petroleum
THE UNITED KINGDOM, AND SAUDI ARABIA regulations enacted according to the act, the Associated Gas Reinjec-
FOR COMBATING GAS FLARING tion Act 1979, Associated Gas Re-injection (Continued flaring of Gas)
Regulation 1985, Environmental Impact Assessment Guidelines, Efflu-
The choice of the selected case study countries is based on the trans- ent Limitation Regulations 1991 among others are the legal framework
parent and proper management of their gas resources which have for regulating the sector.
eliminated gas flaring and other environmental degradation activities The United Kingdom’s Petroleum Act 1998 requires that each pro-
in their oil sectors. In addition, the selected countries being nations like duction facility has to preserve gas and to avoid needless depletion of
Nigeria with vast oil and gas deposits and being relatively advanced the ozone layer during oil exploration activities. The license to flare gas
midstream jurisdictions, with stringent anti-gas flaring legal frame- is for a long term of 3 year and flaring of less than 40 tons per day (Scot-
work, Nigeria can use the lessons from the selected countries to reform tish Carbon Capture and Storage, 2014). The Flare Transfer Pilot Trad-
its anti-flaring laws and to consider the selected case study countries’ ing Scheme is another mechanism put in place to combat gas flaring in
legal efforts towards combating gas flaring in the sector (see Exhibit 1). the United Kingdom through trading of gas flaring volumes. Oil compa-
The right to explore petroleum resources in Nigeria is vested exclu- nies are allowed to sell unused flare gas volumes. This has declined gas
sively on of the Federal Government by the section 44 (3) of the 1999 flaring to 11% in the United Kingdom (World Bank, 2006).
Constitution (as amended) and section 1 of the Petroleum Act 1969 Similarly, the Federal Government of Nigeria also initiated similar
(as amended), but in the United Kingdom the title to oil is conferred scheme called the Nigerian Gas Flare Commercialisation Programme
on the Crown as specified under the Petroleum Act 1998. The United (NGFCP) to transform flared gas to serious commercial benefits for the
Kingdom’s Government does not take part in petroleum activities but nation. Equally, the European Emission Trading Scheme was also intro-
only collects corporate taxes, while in Canada ownership of natural duced to eradicate emissions by the European oil companies through
resources is divided between the Federal and the provincial govern- payment for extra CO2 grants. This has declined gas flaring in the
ments, first nations groups (Aboriginal rights), and private freehold sector. In Nigeria, the Department of Petroleum Resources (DPR)
ownership to avoid regulatory conflicts in the sector. The Canadian authorized flare of gases that cannot be marketed which are beyond
8 OLUJOBI AND OLUSOLA-OLUJOBI

EXHIBIT 1 Comparative analysis of gas flared in Nigeria, Canada, the United Kingdom and Saudi Arabia with Approved Penalties

Quantity of Gas
Countries Gas produced Gas flared Penalties utilized Remarks
Nigeria Two billion About 324 billion A penalty of 612.8 per About 22% of the gas Gas sales volume is
standard cubic standard cubic feet of thousand standard cubic produced is used approximately 350
feet of gas is gas is flared (as much feet of gas. commercially and mmscf per day
produced per day. as 40% of the natural A penalty of 50, 000 or 6 approximately 12% (mmscf/d)
gas it produced months incarceration or is re-injected
(Nigeria National both, for anyone who (Nigeria National
Petroleum Company, provided inaccurate flare Petroleum
2018) data Company, 2018)
(The Flare Gas Prevention
of Waste and Pollution
Regulations, 2018)
Canada In year 2016 the gas Approximately 3% of the Can$100,000 per day for Almost 95% of the gas Gas market is fully
production was gas produced is flared infringement by oil produced is utilized liberalized and
431 106 m3 /d with permit or license companies deregulated and about
(15.2 bcf/d) and sanction for 95% of its gas is
(National Energy infringement utilized.
Board, 2017)
United 2.735 tcf of gas per The offshore installations The penalties are unlimited About 95% of the gas The “Polluter pays”
Kingdom day 3.82 million cubic fines, imprisonment and produced is utilized principle is strictly
meters of gas is flared revocation of operating annually applied by the court in
per day. Gas flamed is license all flaring and
about 3% of oil environmental law
produced (Department provisions
of Business, Energy infringement cases in
and Industrial the sector
Strategies, 2018)
Saudi Arabia Saudi Arabia gas Less than 0.6 bcm of gas The government enacted a Approximately 50 Other economic benefits
production has is flared per year. This policy that make it bcm per year. It is such as extraction of
risen by nearly is a great reduction in mandatory for industrial expected to ethane and natural gas
60% over the quantity of gas flared usage of gas to generate increase over time liquids from the
decade from 71 electricity, water. and associated gases were
to 110 bcm (BP production of chemicals derived from
2018) for export and uniform midstream sector to
gas price of US$0.50 per raise revenues for the
MMB was introduced government which
Nigeria can replicate in
the sector

The table was prepared by the author but the contents were sourced from other literatures which are properly referenced.

the oil companies’ operational obligations, by assigning an Associated granting permission to flare and vent gas in the selected jurisdictions
Gas Flaring License to combat gas flaring. While in Nigeria, there is the but the Canadian area of Alberta has utmost inclusive and transparent
need for environmental impact assessment, which stipulates the pro- gas flaring and venting legal regime.
cedures that must be followed in the planning process prior to the pro- In Nigeria, there is the highest level of natural gas emission for
curement of oil rigs in Nigeria. Section 62 of the same act provides for upstream petroleum company’s operation which is fixed at 5,000 µgm3 ,
a penalty of 100,000 for an individual or 5 years’ incarceration or with a flaring emission limit of 5 mg/m3 hydrocarbons, other oper-
50,000 for legal entities but not exceeding 100,000. ational limitations are comprised in the guidelines. A fee is charged
In the selected countries, gas may be flared for uninterrupted in consonant with the terms of the Associated Gas Reinjection Act.
48 hours but not exceeding 144 hours in a month which may be due to Nigeria imposes the paltry sum of N10 per mcf on gas flared; this
equipment malfunctions. Every longer period of flaring require Miner- could be believed to be encouraging gas flaring instead of discour-
als Management Service’s consent. It may permit oil companies to flare aging it in the sector. However, a country like Canada (Alberta)
appropriate quantities of gas for 1 year as may be required to set up the should be emulated for putting in place comprehensive and transpar-
equipment that would prevent gas flaring. Oil companies are, however, ent regulatory procedures. The successes achieved by the selected
required to maintain comprehensive flaring data, which are subject to case study countries are attributed to their strong legal, regula-
Minerals Management Service regular inspection and other agencies tory regime, and strong political will to combat the menace in the
statutorily empowered to do so. Generally, there is a common mode of sector.
OLUJOBI AND OLUSOLA-OLUJOBI 9

The 2018 World Bank ranking of the selected case study countries
among other gas flaring countries in the world

Gas flared in
S/N Countries 2018 (bcm) Position
1. Nigeria 7.4 7th
2. Saudi Arabia 2.3 12th
3. Canada 1.3 22nd
4. United Kingdom 1.2 23rd

Source: World Bank: Gas flaring volumes 2014–2018 (bil-

lion cubic meters). Available at http://pubdocs.worldbank.org/en/
603281560185748682/pdf/Gas-flaring-volumes-Top-30-countries-
2014-2018.pdf (accessed September 16, 2019).

Source: This was designed by the authors but the information

was sourced from World Bank which was duly referenced in
the above table

Selected Dates Previously Fixed to End Gas Flaring in Nigeria by the Federal Government

Government/
administration in Reasons given for noncompliance by oil
S/N Dates power companies Remarks
1. 1969 Yakubu Gowon Lack of finance to construct a gas The Federal Government set new deadlines every year due to
re-injection plant (technologies) within lack of commitment and political will to enforce its
the stipulated time antiflaring laws
2. 1983 Muhammadu Buhari High cost of re-injecting gas in Nigeria. Lack of commitment and absence of political will of the Federal
Government to enforce its antiflaring laws stringently
3. 1984 Same as above Due to the flaw in the Act which require Weak enforcement of Nigeria’s antiflaring laws by the
license to flare from the minister for a fee regulatory authorities in the sector
4. 2003 Olusegun Obasanjo The alleged failure of the government to The noncompliance with the deadline exhibits lack of
engaged the oil companies before fixing commitment and the absence of the political will of the
the deadline date Federal Government to enforce its antiflaring laws
5. 2004 Same as above The claim that the deadline date was not Same as above
expressly spelt out in the legislation or in
regulation
6. 2008 Umaru Musa Same as above Same as above.
Yar’Adua
7. 2009 Same as above Same as above Same as above
8 2011 Goodluck Jonathan Lack of finance to install gas infrastructure Absence of commitment and political will of the Federal
to end gas flaring Government to enforce its antiflaring and other
environmental laws in the sector
9. 2012 Same as above Same as above The excuses given by oil companies are not tenable. The
government must wake up to its responsibility of preserving
the environment, health and wellbeing of its citizens
10. 2020 Muhammadu Buhari It is anticipated that they will comply in Gas flaring will be a thing of the past through stringent
2020 enforcement of Nigeria’s antiflaring laws and regulations
with incentives for gas utilization in the sector through the
implementation of Nigeria Gas Flare Commercialization
Programme (NGFCP to monetise flared gas fields. Except
where such oil company is issued with a certificate of
continue flaring by the petroleum minister in accordance
with the provisions of the Associated Gas Re-injection
(Continued Gas Flaring) Act

The table was prepared by the author, but the contents were sourced from other literatures which are properly referenced.
10 OLUJOBI AND OLUSOLA-OLUJOBI

Another selected case study country is Saudi Arabia’s whose natural encourage gas export as it is practiced in the United Kingdom, Canada,
gas reserve is about 8.04 trillion cubic meters and 284 tcf. It was ranked and Saudi Arabia. There is the need for improvement of gas network
sixth among the countries that have natural gas deposits globally after infrastructure to improve domestic gas market and to encourage opti-
Iran, Russia, Qatar, Turkmenistan, and the United States (BP, 2018). mal usage of liquefied petroleum gas and to reform the current gas
The Saudi Arabia’s national oil company Aramco churns out 109.4 bcm pricing structures to encourage investments in Nigeria like the selected
of gas. The country is a sovereign and independent nation-state with case study countries have done in their gas sectors.
absolute monarchical system of government unlike Nigeria that oper- The selected case study countries made it mandatory for big oil com-
ates a Federal system of government, while Canada operates Federal panies to make use of gas for production of electricity and for other
parliamentary system of democracy. The United Kingdom operates a usage in the sector. Federal Government must encourage domestic
parliamentary system of government. Saudi Arabia is governed by Holy usage of cooking gas and other industrial gases in Nigeria. This will
Quran and some other extant laws such as the Kingdom’s Basic Law of encourage commercial utilization of gas, and it will reduce gas flaring.
Governance that govern its energy sector as provided under Articles Gas flaring being a global threat; there is the need for robust regula-
14 and 15 of the law. Nigeria and Canada are governed by written con- tory and financial incentives for gas utilization. The selected case study
stitutions unlike the United Kingdom that is governed by the unwritten countries encourage gas utilization through incentivized legislations.
constitution. There is the need for the Federal Government to encourage optimal
The Ministry of Petroleum and Mineral Resources regulates the usage of gas to generate electricity by electricity production or gener-
country’s oil sector similar to Nigeria. It implements strictly Saudi ation companies through legislations with juicy incentives for compli-
Aramco Master Gas System, while the Nigerian Gas Company imple- ance in the sector. The selected case study countries have mechanisms
ments Nigeria’s Gas Master Plan but inefficiencies and corruption have in place for tracking flared gas by oil and gas companies with consistent
been an issue in the sector. Aramco ensures the installation of flare gas flare monitoring and evaluation scheme in place by the agencies. Reg-
recovery systems in every oil company facilities with zero gas discharge ulatory authorities must have adequate monitoring and enforcement
technologies. Currently, Saudi Arabia does not import or export natural powers to enforce the provisions of the anti-flaring laws in the sector.
gas with the aim of meeting its domestic gas production and consump- This can be replicated in Nigeria to combat gas flaring in the sector.
tion by its citizens. The selected case studies countries stipulate expressly similar Nigeria’s
The fundamental rhetoric question that call for attention is: Why circumstances when petroleum companies or gas operators can flare
do countries like Canada and the United Kingdom have such low lev- associated gas without prior regulatory authorities’ approvals, but this
els of gas flaring while Nigeria has such high ones and why is it that is done with effective gas flaring measurements. To prevent abuse of
many of the major oil gas companies that operate in Nigeria also oper- this procedure in Nigeria, there is need to put in place a control mech-
ate in other advances countries but continue to flare in Nigeria but will anism to benchmark the circumstances when gas operators can flare
not dare to do the same in Canada, United Kingdom and Saudi Arabia? without prior approval. This must be clearly defined in the law with
The challenge has been poor enforcement of our anti-flaring laws and effective gas flaring measurement such as Fluenta’s FGM 160 flare gas
institutional framework that plays a key role in combating gas glaring meter that uses ultrasonic technology for accurate flare of gas mea-
in the sector and due to low human capacity, poor funding, and inco- surement with a reporting procedure. This will ensure compliance with
herent policy implementation among regulatory agencies among oth- the existing anti-flaring legal regime, and it will prevent corruption and
ers unlike in Canada, United Kingdom, and Saudi Arabia that operate at others sharp practices in the sector.
an entirely different level of transparency legal regime and stringency The regulatory agencies in the selected case study countries
to combat gas flaring. develop clear and efficient operational procedures or processes for
We therefore opined that prescriptive approaches can also be combating gas flaring in the sector. There is the need for strict enforce-
adopted to end gas flaring in Nigeria, where oil and gas companies ment of Nigeria’s gas master plan to entrench zero tolerance of gas flar-
are obliged to comply with detailed gas flaring and venting regula- ing in the sector. Transparent gas flaring application and approval pro-
tions enacted by the legislature in conjunction with the regulatory cedures must be established in the midstream sector. There are strict
authorities with stringent enforcement procedures and sanctions anti-flaring legislations in the selected jurisdictions, which empowered
for non-compliance. Appropriate incentives for compliance with gas their regulatory agencies to combat gas flaring effectively in the sector.
flaring legal regime will enhance good governance structures, and it The responsibilities of regulatory agencies are clearly defined to avoid
will also combat gas flaring efficiently in the sector. overlapping of functions. There are independent from oil and gas oper-
ators’. This prevents conflict of interests. Regulatory agencies in Nige-
ria oil and gas sector must be properly staffed, incentivized, and funded
8 PRACTICAL SOLUTIONS FOR COMBATING to ensure strict enforcement of the existing antiflaring laws in Nigeria.
GAS FLARING IN NIGERIA’S OIL SECTOR BASED ON The laws regulating petroleum activities and the contractual agree-
THE LESSONS LEARNT FROM THE SELECTED CASE ments between the Federal Government and the oil companies should
STUDY COUNTRIES be detailed on the management and elimination of gas flaring. Licenses
are to be issued to new oil companies, and license renewals, produc-
There is the need for enhancement of gas network equipment to tion sharing arrangements, and joint venture agreements should con-
reduce gas flaring in Nigeria’s upstream petroleum sector and to tain anti-flaring clauses and gas utilization clauses in all the projects.
OLUJOBI AND OLUSOLA-OLUJOBI 11

Sources: Nigerian gas flare commercialization programme, available at: http://www.ngfcp.gov.ng/about-us/our-mandate/our-

strategy/(accessed September 16, 2019)

This will eliminate gas flaring with stringent penalties such as revoca- would in turn provide for precise data about gas flaring and venting
tion of oil licenses or leases and payment of pecuniary damages for non- volumes to the regulatory authorities for combating the menace in the
compliance as it is practiced in the selected case study countries to dis- sector. The research found out that flaring rates have declined in the
courage gas flaring. selected case study countries, while in Nigeria, it is still at the high-
The legal regimes for combating gas flaring must not be ambigu- est level despite existence of numerous anti-flaring laws. Strict regu-
ous; it must entail proactive monitoring, reporting, and enforcement latory measures were put in place in the selected case study countries
mechanisms. Fixing deadline to end gas flaring must be done consensus for oil companies to compulsorily submit their environmental impact
ad idem by all stakeholders in the sector, for feasible date to extermi- assessments on expected emissions and discharges from gas flaring
nate gas flaring with stringent penalties for non-compliance after the and to state detailed measures put in place for mitigating environmen-
agreed dates by all stakeholders in the sector. To combat gas flaring like tal impacts of their activities in the sector which Nigeria can replicate
the selected case study countries, there is the need to benchmark oil to combat gas flaring in the sector.
production with the capacities for gas utilization by the perspective oil The study is limited by the absence of accurate data on the quantity
companies operating in Nigeria before the DPR before the issuance of of gas churned out and the volume of gas flamed in the oil fields by oil
relevant operating oil license(s) by the DPR in order to end gas flaring companies in Nigeria. This would have enhanced insight to the levels
menace in the sector. of gas flared and vented in the sector and enhanced the panacea for
combating gas flaring.

9 DISCUSSION OF FINDINGS
10 RECOMMENDATIONS
The writers observe non-existence of gas flare management legal
framework and the absence of advanced technologies to capture flared Environmental protection laws must have adequate provisions for
gas for electricity generation and to eliminate gas flaring in the sector. combating oil and gas pollution, degradation, and gas flaring. NESREA
Poor enforcement of anti-flaring laws due to low human capacity and 2007 should be amended to extend its purview to oil and gas sector
poor funding, there is therefore the need for more private sector par- pollution and other environmental degradations in the sector to com-
ticipation in gas distribution networks to ensure gas availability, devel- bat gas flaring.
opment, increase in gas utilization, and increase its economic storage Section 20 of the 1999 Constitution (as amended) on enforcement
to reduce gas flaring. of environmental objective should be overhauled and moved to the
There is also absence of efficient regulatory legal framework with Fundamental Human Rights in chapter 4 of the 1999 Constitution,
techniques for computing, monitoring, appraising, and enforcing anti- thereby making it justiciable. It will thus protect and guarantee healthy
flaring law’s provisions with compulsory installation of advanced mod- and sustainable environment. The right to healthy environment will
ern operational equipment for measuring gas flared and for eliminat- deter gas flaring by oil companies through payment of pecuniary
ing gas flaring and venting in many developing countries. Oil companies damages to the Federal Government and the victims of their environ-
operating in these domain tend to abide by their discretionary opera- mental degradations, thereby promoting stringent compliance with the
tional practices that often contravenes national environmental protec- anti-flaring policies and other enabling environment laws in the sector.
tion laws and international best practices which have resulted to vari- Enactment of detailed, fiscal, legal, and regulatory framework gov-
ous environmental risks in the sector. erning gas utilization and development will unbundle the gas pipelines
It is the view of the writers that, for there to be an effective regu- networks with effective gas distribution to all zones in Nigeria. There
lation of gas flaring, the acts must be comprehensive and provide for is also the need for a review of regulatory framework with satis-
computation and reportage of volumes of gas flared and vented, which factory operational mechanism to ensure proper implementation of
12 OLUJOBI AND OLUSOLA-OLUJOBI

anti-flaring and other environmental laws and regulatory policies in the tribution networks since this is sine qua non for national development
sector. Nigeria is referred to as gas province because of the tremendous and sustainability of gas resources in the sector.
economic benefits the sector will offer the nation if gas flaring is com-
bated. It will enhance gas distribution networks in Nigeria.
Oil companies are to update their drilling tools in conformity with 11 CONCLUSION AND POLICY IMPLICATIONS
international standards to end gas flaring through utilization of modern
technologies; this is to guarantee environmental protection and natu- The research has examined the various approaches adopted by the
ral resources management. Regulatory policies should be transparent selected case study countries and lessons Nigeria can learn from the
with incentives for gas development (Oyewunmi and Olujobi, 2016). selected case study countries in combating gas flaring. The research
Again, there is the need for oil companies to implement the environ- has also evaluated several efforts made by the Federal Government of
mental management system that will determine possible environmen- Nigeria to combat gas flaring in 2020. The flaws of the various laws
tal impacts of its activities and to put in place appropriate measures to examined were brought to the fore. Suggestions were made, where
combat gas flaring. suitable, in addressing the flaws. Regulatory authorities are to come up
The Federal Government should increase electricity generation in with practical and reasonable ways of monitoring compliance in rela-
Nigeria through the use of gas to earn more revenues for the Federal tions to the volume of gas flamed or vented, vis-à-vis the permissible
Government through local utilization and export of gas. Installation of levels of gas utilization. Strict implementation, monitoring and enforce-
gas flare meters electronically with data and gas recovery mechanisms, ment of the NGFCP will save for the Federal Government the huge rev-
independent reportage, and scrutiny by the Nigerian Gas Company are enues lost to gas flaring, which could have been utilized for infrastruc-
essential in the sector. Stringent financial sanctions for non-compliance ture development and to enhance power supply in the country. Strict
with Nigeria’s anti-flaring laws will combat gas flaring. Regulatory bod- implementation of environmental protection laws will enhance ecolog-
ies saddled with the tasks of regulating the midstream sector in Nigeria ical development and financial viability of oil-producing communities
should be overhauled due to its poor enforcement mechanisms of the in Nigeria, and it will combat unfriendly practices in the sector through
existing anti-flaring laws. stringent implementation of strategic environmental protection mea-
The requirement under the Nigeria Gas Flare Commercialization sures to combat gas flaring in the sector.
Programme (NGFCP) that investors or licensees are to execute, deliver, There is the need for national gas transmission grid for easy access
or pay the oil company for the agreements to flare the gas is bound to gas by potential users in Nigeria to enhance gas utilization and devel-
to give room for the large-scale utilization of gas and it will be legally opment through private sector participation projects with detailed and
responsible to reimburse the gas investor if the agreed quantity of practicable gas policy for the nation to encourage gas investors and to
gas is not produced. However, petroleum companies may not be eager end overreliance on impromptu policy statements by public officials as
to accept such commitment due to the fact that flared gas is based governing policies in the sector.
on the production of crude oil, which is also based on their upstream To make the regulation efficient, the regulatory authorities must
petroleum activities and economic assessments of their operations by enforce antiflaring laws without fear or favor to ensure total com-
their managements. Any legal framework that requires oil companies pliance with the antiflaring and other environmental laws to combat
to provide certain magnitude of flared gas especially at a time when gas flaring in Nigeria’s midstream sector. Optimal development of gas
the demands and production of crude oil has dropped globally may be reserves with more advanced technologies will add enormous eco-
favorable but it might dampen investments in the gas sector (Yemi Oke, nomic benefits to Nigeria and Africa continent if properly executed by
2012). the regulatory authorities saddled with the responsibility of enforcing
The standard Production Sharing Contracts clause 3.3 made provi- the laws for combating gas flaring and other environmental degrada-
sion for reward for obtaining finances at interest and assuming opera- tions in the sector.
tional risks such as exploration, production risks by petroleum compa-
nies which are commercial concerns in the growth of petroleum and gas ACKNOWLEDGMENT
markets. This may hinder the Federal Government powers to issue per- The financial support by Covenant University, Ota, Ogun State, Nigeria
mit to petroleum financiers to capture flare gas from oil field which was is gratefully acknowledged.
exploited under a production sharing contract except such petroleum
companies offer to share in the incomes accruing to the Federal Gov- CONFLICT OF INTEREST
ernment from the contract. The authors declare no conflict of interest whatsoever.
There is the need for more gas pipeline networks to be created to
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