Moving from gas flaring to gas conservation and utilisation in Nigeria: a review of the legal and policy regime

Nigeria is often described as ‘a gas province with significant oil accumulations’, due to her immense natural gas reserves. A large volume of Nigeria's gas reserves is found as ‘associated natural gas’ along with crude oil. In most cases, such associated gas is burnt off during oil field operations through a process that is commonly referred to as ‘gas flaring’. Recent statistics indicate that Nigeria is the second highest gas-flaring country in the world. Gas flaring has also been a major cause of environmental pollution and a waste of non-renewable resources that has resulted to a huge loss of revenue for the country. This article analyses the legal and policy regime to tackle gas flaring and enhance gas utilisation and re-injection or conservation in Nigeria. It reveals several obstacles that have hindered the success of such legal and policy regimes and suggests measures to reverse the trend. The article suggests inter alia that existing legal and policy regimes to tackle gas flaring and promote gas utilisation and re-injection have not been successful due to the absence of attractive incentives that will encourage oil-producing companies to invest in gas utilisation or re-injection facilities. It also suggests that the enforcement of existing anti-gas flaring regimes has not been successful due to the absence of deterrent sanctions and also as a result of Nigeria's heavy dependence on oil revenues. The article recommends the establishment of more punitive gas flare sanctions alongside attractive fiscal incentives that will encourage oil-producing companies to invest in gas utilisation and re-injection facilities.