CONVERTING GAS FLARING TO WEALTH AND ENERGY USE – A CRITICAL SYMBIOSIS FOR ECONOMIC GROWTH IN NIGERIA

Abstract

Nigeria is the largest oil producer in Africa and is among the world's top five exporters of Liquefied Natural Gas (LNG).  Despite the relatively large volumes of oil it produces, Nigeria's oil production is hampered by instability and supply disruptions, while the natural gas sector is restricted by the lack of infrastructure to monetize natural gas which is currently being flared (burned off).  The lull in global oil demand and oscillation in prices has once again brought to the front burner anxieties about the future of the oil sector in the Nigerian economy.  The unfolding scenario has again exposed the Nigerian economy to downside risks of volatility in oil prices with attendant consequences and multiple effects on the economy and businesses as well.  Since the third quarter of 2015, fallen prices of crude oil and fluctuations in crude oil production in Nigeria have conspired to put the country's economy in dire straits. The oil price has fallen by more than 50 percent since June 2014, when it was $115 a barrel.  It is now consistently below $50 and has been as low as $37.  These developments have put the nation's fiscal operations in quandary. There is therefore, urgent need to explore other areas of improving the revenue generation of the government. Using descriptive and analytical survey with anecdotal evidence, the study argued for renewed vigor in gas monetization in Nigeria.  This will solve two key problems for the country.   One, gas flaring could be converted to energy use especially for a country that is suffering from huge deficit in energy capabilities.  Secondly, gas monetization and exportation could generate billions of dollars to government coffers and complement dwindling revenues from oil.  The spin-offs from these will be increased energy capabilities, more job creation and improved inflows in government revenues.  These are the critical symbiosis need for economic growth in the country