IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v153y2021ics0301421521001294.html
   My bibliography  Save this article

Gas flaring, ineffective utilization of energy resource and associated economic impact in Nigeria: Evidence from ARDL and Bayer-Hanck cointegration techniques

Author

Listed:
  • Okoro, Emmanuel E.
  • Adeleye, Bosede N.
  • Okoye, Lawrence U.
  • Maxwell, Omeje

Abstract

This study aligns with Sustainable Development Goal 7 which aims at “ensuring access to affordable, clean energy, reliable, sustainable and modern energy for all”. The Gazetted Flare Gas Regulations 2018 provides a legal framework to support the policy objectives of the Federal Government for the reduction of Green House Gas emissions through the flaring and venting of natural gas. The Regulations provide the legal basis for the implementation of the Nigerian Gas Flare Commercialization Programme. This study investigates the factors contributing to gas flaring activities in Nigeria from 1970 to 2019. Using the autoregressive distributed lag error correction representation and cointegration techniques, findings reveal, among others, that in the long-run: (1) gas flaring activities is persistent; (2) economic growth induces flaring activities; (3) gas prices exert asymmetric impact; (4) gas utilization and fossil fuel are negative predictors. The result shows that gas price contemporaneously exerts positive and statistically significant impact at the 1% level. Gas price contributes 0.187 percent increase to gas flaring while its first lag induces significant reduction in gas flaring by 0.293 percent at 1 percent level of significance. This study also provides sufficient evidence on the persistency of gas flaring activities in Nigeria.

Suggested Citation

  • Okoro, Emmanuel E. & Adeleye, Bosede N. & Okoye, Lawrence U. & Maxwell, Omeje, 2021. "Gas flaring, ineffective utilization of energy resource and associated economic impact in Nigeria: Evidence from ARDL and Bayer-Hanck cointegration techniques," Energy Policy, Elsevier, vol. 153(C).
    • Handle: RePEc:eee:enepol:v:153:y:2021:i:c:s0301421521001294
    DOI: 10.1016/j.enpol.2021.112260
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421521001294
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2021.112260?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    2. Anindya Banerjee & Juan Dolado & Ricardo Mestre, 1998. "Error‐correction Mechanism Tests for Cointegration in a Single‐equation Framework," Journal of Time Series Analysis, Wiley Blackwell, vol. 19(3), pages 267-283, May.
    3. Christian Bayer & Christoph Hanck, 2013. "Combining non-cointegration tests," Journal of Time Series Analysis, Wiley Blackwell, vol. 34(1), pages 83-95, January.
    4. Nasiru Yunusa & Ismail Tijjani Idris & Adamu Garba Zango & Muhammad Umar Kibiya, 2016. "Gas Flaring Effects and Revenue Made from Crude Oil in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 6(3), pages 617-620.
    5. Uchenna Jerome Orji, 2014. "Moving from gas flaring to gas conservation and utilisation in Nigeria: a review of the legal and policy regime," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 38(2), pages 149-183, June.
    6. Zolfaghari, Mohabbat & Pirouzfar, Vahid & Sakhaeinia, Hossein, 2017. "Technical characterization and economic evaluation of recovery of flare gas in various gas-processing plants," Energy, Elsevier, vol. 124(C), pages 481-491.
    7. Ngozi Adeleye & Evans Osabuohien & Ebenezer Bowale & Oluwatoyin Matthew & Emmanuel Oduntan, 2018. "Financial reforms and credit growth in Nigeria: empirical insights from ARDL and ECM techniques," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(6), pages 807-820, November.
    8. Solarin, Sakiru Adebola & Ozturk, Ilhan, 2016. "The relationship between natural gas consumption and economic growth in OPEC members," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1348-1356.
    9. Boswijk, H. Peter, 1995. "Efficient inference on cointegration parameters in structural error correction models," Journal of Econometrics, Elsevier, vol. 69(1), pages 133-158, September.
    10. Willyard, Katherine Ann, 2019. "An historical political economy analysis and review of Texas oil and gas well flaring laws and policy," Energy Policy, Elsevier, vol. 128(C), pages 639-647.
    11. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    12. Balsalobre-Lorente, Daniel & Bekun, Festus Victor & Etokakpan, Mfonobong Udom & Driha, Oana M., 2019. "A road to enhancements in natural gas use in Iran: A multivariate modelling approach," Resources Policy, Elsevier, vol. 64(C).
    13. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    14. Tahouni, Nassim & Gholami, Majid & Panjeshahi, M. Hassan, 2016. "Integration of flare gas with fuel gas network in refineries," Energy, Elsevier, vol. 111(C), pages 82-91.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Okoye, Lawrence Uchenna & Adeleye, Bosede Ngozi & Okoro, Emmanuel E. & Okoh, Johnson I. & Ezu, Gideon K. & Anyanwu, Felicia A., 2022. "Effect of gas flaring, oil rent and fossil fuel on economic performance: The case of Nigeria," Resources Policy, Elsevier, vol. 77(C).
    2. Tsai, I-Chun, 2024. "Fossil energy risk exposure of the UK electricity system: The moderating role of electricity generation mix and energy source," Energy Policy, Elsevier, vol. 188(C).
    3. Adaku Jane Echendu & Henry Favour Okafor & Olayinka Iyiola, 2022. "Air Pollution, Climate Change and Ecosystem Health in the Niger Delta," Social Sciences, MDPI, vol. 11(11), pages 1-17, November.
    4. Gunnar W. Schade, 2021. "Standardized Reporting Needed to Improve Accuracy of Flaring Data," Energies, MDPI, vol. 14(20), pages 1-8, October.
    5. Fay?al Chiad & Smail Moumeni & Amine Aoussi, 2022. "The joint effect of financial development and human capital on the ecological footprint: The Algerian case," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2022(1), pages 69-93.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Balsalobre-Lorente, Daniel & Bekun, Festus Victor & Etokakpan, Mfonobong Udom & Driha, Oana M., 2019. "A road to enhancements in natural gas use in Iran: A multivariate modelling approach," Resources Policy, Elsevier, vol. 64(C).
    2. Solomon P. Nathaniel & Festus V. Bekun, 2020. "Electricity Consumption, Urbanization and Economic Growth in Nigeria: New Insights from Combined Cointegration amidst Structural Breaks," Research Africa Network Working Papers 20/013, Research Africa Network (RAN).
    3. Mary Oluwatoyin Agboola, 2021. "Female Labour Force Participation in Saudi Arabia and its Determinants," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 135-152.
    4. Avishek Khanal & Mohammad Mafizur Rahman & Rasheda Khanam & Eswaran Velayutham, 2021. "Are Tourism and Energy Consumption Linked? Evidence from Australia," Sustainability, MDPI, vol. 13(19), pages 1-20, September.
    5. Agboola, Mary Oluwatoyin, 2021. "Female Labour Force Participation in Saudi Arabia and its Determinants," Gospodarka Narodowa-The Polish Journal of Economics, Szkoła Główna Handlowa w Warszawie / SGH Warsaw School of Economics, vol. 2021(1), March.
    6. Md. Qamruzzaman, 2023. "Does Environmental Degradation-Led Remittances Flow? Nexus between Environmental Degradation, Uncertainty, Financial Inclusion and Remittances Inflows in India and China," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 9-26, March.
    7. Kingsley Imandojemu & Bosede Ngozi Adeleye & Babatunde Aina, 2023. "Monetary Policy And Economic Growth In Nigeria: Evidence From Bounds And Bayer-Hanck Cointegration Techniques," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 68(236), pages 81-103, January –.
    8. Nathaniel Solomon Prince, 2021. "Natural Resources, Urbanisation, Economic Growth and the Ecological Footprint in South Africa: The Moderating Role of Human Capital," Quaestiones Geographicae, Sciendo, vol. 40(2), pages 63-76, June.
    9. Solomon Prince Nathaniel & Festus Bekun & Alimshan Faizulayev, 2021. "Modelling the Impact of Energy Consumption, Natural Resources, and Urbanization on Ecological Footprint in South Africa: Assessing the Moderating Role of Human Capital," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 130-139.
    10. Liu, Yaping & Sadiq, Farah & Ali, Wajahat & Kumail, Tafazal, 2022. "Does tourism development, energy consumption, trade openness and economic growth matters for ecological footprint: Testing the Environmental Kuznets Curve and pollution haven hypothesis for Pakistan," Energy, Elsevier, vol. 245(C).
    11. Muhammad Shahbaz & Hrushikesh Mallick & Mantu Kumar Mahalik & Shawkat Hammoudeh, 2018. "Is globalization detrimental to financial development? Further evidence from a very large emerging economy with significant orientation towards policies," Applied Economics, Taylor & Francis Journals, vol. 50(6), pages 574-595, February.
    12. Mary O. Agboola & Festus V. Bekun, 2019. "Does Agricultural Value Added Induce Environmental Degradation? Empirical Evidence from an Agrarian Country," CEREDEC Working Papers 19/040, Centre de Recherche pour le Développement Economique (CEREDEC).
    13. Debi P Bal & Badri N Rath, 2019. "Nonlinear causality between crude oil price and exchange rate: A comparative study of China and India - A Reassessment," Economics Bulletin, AccessEcon, vol. 39(1), pages 592-604.
    14. Hemachandra Padhan & Deepak Kumar Behera & Santosh Kumar Sahu & Umakant Dash, 2023. "Does Corruption Hinderance Economic Growth Despite Surge of Remittance and Capital Inflows Since Economic Liberalization in an Emerging Economy, India," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 426-449, March.
    15. Syed Ale Raza Shah & Syed Asif Ali Naqvi & Sofia Anwar & Ashfaq Ahmad Shah & Abdul Majeed Nadeem, 2022. "Socio-economic impact assessment of environmental degradation in Pakistan: fresh evidence from the Markov switching equilibrium correction model," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(12), pages 13786-13816, December.
    16. Rasool Dehghanzadeh Shahabad & Mehmet Balcilar, 2022. "Modelling the Dynamic Interaction between Economic Policy Uncertainty and Commodity Prices in India: The Dynamic Autoregressive Distributed Lag Approach," Mathematics, MDPI, vol. 10(10), pages 1-21, May.
    17. Li Chunling & Javed Ahmed Memon & Tiep Le Thanh & Minhaj Ali & Dervis Kirikkaleli, 2021. "The Impact of Public-Private Partnership Investment in Energy and Technological Innovation on Ecological Footprint: The Case of Pakistan," Sustainability, MDPI, vol. 13(18), pages 1-16, September.
    18. Yongliang Zhang & Md. Qamruzzaman & Salma Karim & Ishrat Jahan, 2021. "Nexus between Economic Policy Uncertainty and Renewable Energy Consumption in BRIC Nations: The Mediating Role of Foreign Direct Investment and Financial Development," Energies, MDPI, vol. 14(15), pages 1-29, August.
    19. Pratibha Saini & Krishna Muniyoor, 2021. "Revisiting The Debt–Growth Nexus: Evidence From India," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 66(231), pages 151-172, October –.
    20. Shahbaz, Muhammad & Mallick, Hrushikesh & Kumar, Mantu & Loganathan, Nanthakumar, 2015. "Does Globalization Impede Environmental Quality in India?," MPRA Paper 67285, University Library of Munich, Germany, revised 15 Oct 2015.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:153:y:2021:i:c:s0301421521001294. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.