Though there are growing concerns that global shift from fossil fuel to cleaner energy could hurt economies of developing nations especially core oil bearing nations that depend on oil revenue, experts see huge opportunities coming from there.
The global clamoring for sustainable and clean energy sources to replace the current fossil-based fuels with their attendant issues of climate change and energy security have continued to drive changes in the global energy policy.
Consequently, renewable energies are currently receiving global attention and have begun to form part of the essential components of responsive nation’s energy strategy for economic development sustainability.
Therefore, oil and gas producing companies and oil producing nations around the world face a unique and intense period of change as they navigate through the energy transition.
But more worrisome are the general concerns of the impact of the global energy shift from fossil- based systems of energy production and consumption on global economies, particularly those of emerging economies like Nigeria, in West Africa.
The government, in their response to a global transition from fossil-based fuels, has come up with a policy known as National Renewable Energy and Energy E ciency Policy (2015) for consideration.
The Policy aims at removing the barriers that put renewable energy and energy efficiency at economic, regulatory, or institutional disadvantages relative to other forms of energy in Nigeria as well as to provide a conducive political environment that will attract investment in the renewable energy and energy efficiency arena. However, the effect of the Policy is yet to be felt in preparing the nation for the potential adverse e ects of the Global energy transition on an emerging economy like Nigeria that depends largely on revenues from crude oil.
Energy transition requires huge investment in renewable, decarbonisation, electric vehicle batteries, and energy efficiency, so thus increased investment in the new global energy order is expected to engender a vibrant renewable energy industry but such would cause a decline in the current oil exploration and production activities in Nigeria.
According to Omoniyi Oluwafemi, Chief Operating Officer of Mak Mera Nigeria Limited, if the total new investment in the renewable energy technologies, decarbonisation technologies, and energy efficiency technologies is greater than the total divestment in the oil industry due to low oil exploration and production activities, it is expected that Nigeria economy will receive a boost and the GDP will increase.
This is even more true in the case of Nigeria’s current economy that is far from equilibrium of full employment of available resources, and excess savings over investment due to lack of investment ideas.
Oluwafemi argued that thus additional investment would cause a shift in the economy towards greater utilisation of resources and the GDP would increase. However, he observed that if the total new investment in the new global energy order is lower than the total divestment in the oil industry, the economy would suffer a decline in growth rate due to reduced investment, low income, and loss of employment by the employees in the oil industry, oil service rms, and other sectors that are linked with the oil industry.
Currently, the Nigeria oil industry according to International Labor Organization (ILO) employs 65,000 direct staff and 250,000 indirect staff, and a decline in oil exploration and production activities would push huge numbers of the employees, both direct and indirect, into the labor market. If this happens in Nigeria, the economy will experience low spending, reduced taxes and high borrowing. This added to the current huge rate of unemployment and low revenue, generally, will cause the GDP to suffer a decline.
On the other hand, the perception is different from the position held by the Chief Executive Officer, Seplat Energy Plc, Mr. Roger Brown.
Brown is full of optimism as he maintained that Energy transition creates huge opportunities in Nigeria as it supports economic and social development, job creation, improved health and education.
Mr. Brown said this during a panel session at the University of Dundee Alumni, Nigeria Chapter seminar held at the weekend in Lagos.
The panel session which dwelt on the topic: ‘Optimising energy Security In A Global Transition Era’ provided a platform for the panellists to x-ray the current global trajectory of energy transition, and how energy security could be guaranteed in the face of transition, relating the subject to Nigeria’s domestic market situation.
The Seplat CEO, explained that energy transition conundrum is all about how stakeholders balance three realities of climate change and the need to decarbonise the world; the need for energy security; and urgent need for economic development in Africa, tackling poverty and lack of access to energy.
He said, “Seplat Energy remains committed to improving Nigeria’s access to affordable and reliable energy that drives social and economic development, in line with the UN’s Sustainable Development Goals. We can make Nigeria a more attractive destination for global energy investment that will allow us to fund our energy transition towards lower-carbon sources of energy, such as gas to provide baseload, and renewables.
“By developing our gas industry we can transition Nigeria’s population away from expensive and polluting diesel generators, and from using biomass for cooking .
“I believe we can achieve all of these development wins for Africa at little incremental cost to the environment.”
According to Mr. Brown, “We must use Nigeria’s gas resources for the direct benefit of Nigerians, and use it to increase production of grid-scale energy that will power people’s homes without choking them on diesel fumes, and allow them to cook without having to collect firewood and have the risk of open fires in the home.
“This gas-fired power will also keep the lights on at night so the kids can study, and power businesses across Nigeria so they can create wealth at much lower costs.
He added that “Increasing access to cheaper, more reliable energy creates so many positive effects that will drive economic and social development in Nigeria; access to energy supports wealth creation, improves health and will allow Nigeria to achieve development goals.”
The Seplat Energy CEP described gas as the natural transition fuel that will support a longer-term transition to renewables, saying Seplat Energy is looking at ways to combine gas-fired power generation with solar arrays, so gas can provide the essential baseload overnight.
Seplat Energy is a major supplier of gas for domestic power in Nigeria. We produce 300MMscfd, enough to power 1GW of generation. Adding ANOH and Sapele will add 2GW by 2024
Seplat Energy’s transition priorities are: end routing flaring and capture gas for economic benefit; decarbonising our operations by using more renewable energy to power them; displace small-scale diesel and petrol generators with gas-to-power, at large and smaller scales of generation (from power stations to local power on business parks, campuses etc); extend along the value chain into power; and develop hybrid gas/renewable generation.
The Seplat Energy CEO, who is also an alumnus of the University of Dundee commended the school’s Alumni, Nigeria chapter for putting the event together and charting the right path for the energy industry. In turn, the Alumni congratulated Mr. Brown for his display of excellence at Seplat Energy whilst also presenting him with an award of excellence.
That same expectations further influenced theme of the Nigerian Association of Petroleum Explorationists, NAPE’s 40th Annual International Conference and Exhibition (AICE).
The AICE, which opened in Lagos, last week specifically between November 13 to 17, is perhaps the largest gathering of earth scientists and other stakeholders in the oil and gas space in Sub Saharan Africa is set to take place in Lagos.
The theme is Global Energy Transition & the Future of the Oil and Gas Industry: Evolving Regulations, Emerging Concepts & Opportunities.
This year’s AICE according to Dr. James Edet, NAPE president elect hosted speakers who are high level industry practitioners, key personnel in government and the academia, delivering technical papers on seven sub-themes topics.
The rising need for transition towards more sustainable energy sources, energy poverty and global geopolitics require strategic reappraisal of the energy industry in Nigeria.
Experts at the conference indeed had robust discussion on the nation’s Energy transition plan which aims to achieve net zero greenhouse gas emission by 2060.
Edet said there were many factors that need to be considered and appropriately addressed in the nation’s shift to its sustainable energy future.
The reality of the climate change is facing Nigeria with desertification in the north and flooding in the south and some parts of the north.
This change calls for a crucial need to significantly reduce carbon emissions while ensuring available and affordable electricity.
He said now that the Petroleum Industry Act (PIA) is now in place and the Climate Change Act signed into law, the oil and gas industry has a role to play towards the successful implementation of these regulations and ambitious plans.
Globally, significant consumers of the hydrocarbon industry are undergoing a massive technological shift towards low or zero carbon energy usage like electric vehicles.
He observed that the ongoing war, global politics, in-country insecurity challenges and asset divestment have exacerbated the impact of energy supply shortage and altered the energy landscape.
“Furthermore, there are other contenting and increasingly relevant issues such as: energy security; the dynamics of gas development, commercialization and monetization; development of Nigeria’s under explored gas rich cretaceous basins; and how Nigeria will adapt her policies and diversify her energy portfolio in the energy transition era so as to achieve sustainable growth for her economy,” noted the president.
It is against the backdrop of the foregoing that the NNAPE at its 40th Annual International Conference & Exhibition deliberated on the petroleum business and the regulatory environment with a view to addressing the challenges of the global energy transition, evolving regulations, and geo- environmental strategies in the energy transition era.
The conference also beamed its searchlight on new technology application in exploration and production, geo science training in the new energy mix, and adapting in a changing world.
