Dr. Wisdom Enang is a fellow of the Nigerian Society of Engineers, a chartered engineer with the Institution of Mechanical Engineers, UK and an internationally published expert in the petroleum engineering field. His research interests and professional expertise span across the areas of carbon capture, energy economics, operations integrity management, oil and gas policy formulation and implementation, as well as enhanced oil recovery and operations digitization. He is known to provide technical advice on the Nigerian “oil and gas industry reform programme.” In this interview with Valuechain, he bares his mind on the issue of gas flaring in Nigeria and potential solutions to the problem of illegal refining, which is also a contributor to pollution in oil producing communities. He also commented on the potentials of deploying cellular refineries as a decarbonization measure and recommended a number of approaches to attenuate the level and impact of pollution, while pointing to the PIA provisions enacted to address gas flaring and its associated impacts on the environment, among other issues. Excerpts:
There is this pollution issue regarding sooth from petroleum extraction and refining activities in the South-South region of Nigeria; do you think the situation is worsening?
Certainly yes. You do not need an environmentalist to tell. The practice of gas flaring, in which natural gas associated with petroleum extraction is burned off in the atmosphere rather than being removed by alternative means such as subterranean re-injection or confinement to storage tanks for eventual sale, is particularly controversial. The bad practice of gas flaring has led to high air pollution which has adverse impacts on the lives of people living in the South-South region.
Aside the environmental impacts of gas flaring, which are well known, including acid rain and global warming, its opportunity cost for Nigeria is estimated to be about $2.5 billion yearly. A combination of both the associated health and economic costs creates an urgent case for a more holistic solution to ending gas flaring, away from the use of fines, which is typically the default measure, and has proven to be ineffective to a large extent. A more effective and recommended approach to eliminating gas flaring would be a commercial or market-driven approach, such as the one proposed by the Nigerian Gas Flare Commercialization Program.
As such, I recommend that the Federal Government expedites plans to execute the Nigerian Gas Flare Commercialization Program, and make it effective by solving some of the market frictions militating against the domestic gas market, such as low domestic gas pricing and inadequate gas infrastructure, to aggregate gas from low volume sites into commercial volumes.
Those who suffer from this most are the locals, or residents, and we know that illegal refiners in the creeks are adding to the burden; what do you think can be done differently to discourage them if the current measures have not been effective?
Frankly, the activities of these illegal refineries that are unregulated and do not adhere to expected engineering guidelines, regulations and industry standards, are harmful to the environment. The sad aspect is that the current military approach deployed as a deterrent is not effective, rather it is worsening the situation by aggravating the conflict in the affected areas. To solve this problem, the government needs to x-ray the situation more from an economic standpoint. In economics, as long as there is demand, there will be supply.
The fact is that, for decades, Nigeria has not been producing enough refined petroleum products to meet local demand. In other words, there is a mismatch between local production and local demand. This explains the continuous rise in petrol prices over the years, in spite of major investments in the industry by successive state and federal governments. The resulting impact of this demand-supply deficit is an ever-growing number of illegal refineries in Nigeria. As such, a more practically viable solution would be for the Nigerian government to investigate and understand what it will take to get the activities of these refineries legalized and regulated. Certainly, there are some lessons to be learnt from the modular refining technology and skillsets deployed in these refineries. And if Nigeria can effectively leverage these lessons, then we may potentially be closer to solving this problem and benefiting from the additional refined petroleum product volumes produced and sold.
Recently, a certain Nigerian scholar claimed that “cellular” refineries can be effective in containing soot, if deployed; what exactly is cellular refinery?
Cellular refinery is a form of refinery system that utilizes microbial agents for efficient and complete catalytic cracking of heavy and long chain hydrocarbon molecules into smaller chain hydrocarbon products, thereby drastically reducing pollutants in the atmosphere. This environmentally friendly method is a type of biological air pollution control process that uses microorganisms to remove pollutants like sulphur, nitrogen, or hydrocarbons from contaminated air or industrial gases. This method involves an anaerobic bioreactor that uses bacteria to break down pollutants before they can leave the facility. According to research findings, a cellular refinery could reduce black carbon emissions by 80% by utilizing microbes, such as Halomonas Elongata, for catalytic conversion into fuel.
You are an expert on safety matters, how do people better protect themselves when the pollution cannot be immediately checked?
Gas flare smoke is composed of sooth and other toxic gases. The by-product of combusting sooth is the smog we see in big industrial cities like Lagos, Port Harcourt and so on. In addition to efforts from the government to curb pollution through gas flare fines, there are a number of measures that could be adopted at an individual level by the people living in the affected areas, to further attenuate the impact of the resulting pollution on their health. For example, the use of personal protective equipment for those around these areas would be vital. Majorly nose masks or nose protectors to protect them from inhaling pollutants which are hazardous to health.
Do you think the recently passed Petroleum Industry Act (PIA) has good provisions enough to address these industry concerns?
First and foremost, we must appreciate the efforts of getting this omnibus Bill signed into law as an Act, after at least 18 years of several previous attempts by successive governments. However, the act is not yet perfect. Having said that, one of the key goals of the PIA in regard to addressing these industry concerns is the elimination of gas flaring and venting. Nigeria ranked among the top 10 gas flaring countries in the world as at August 2021. A report from the Africa Energy Portal also noted that Nigeria loses $2.5 billion yearly to gas flaring. As such, the PIA seeks to convert some of these opportunity costs through the use of gas flare fines for environmental remediation, and to improve the lives of the communities impacted by the flaring activities. As stated in the Act under section 104(4): “Money received from gas flaring penalties by the Commission under this section, shall be for the purpose of environmental remediation and relief of the host communities of the settlors on which the penalties are levied”. Another section of the Act also reads that one of the conditions for renewing a license for a mining lease would be compliance with environmental obligations, and compliance with host communities’ obligations. Thirdly, a host communities’ development trust would be established in all host communities. The trust will undertake infrastructural development, facilitate economic empowerment opportunities, and provide healthcare. All these provisions, if properly implemented, would to a large extent attenuate the effect of both the environmental and economic impact of gas flaring.
Looking at these solutions proposed by the PIA in the interest of host communities, what are your alternative suggestions, if the Act has not fully addressed the issues of concern?
In addition to the reactive approach proposed by the PIA towards curbing gas flaring and mitigating its impact, I would advocate for a more proactive approach that is technologically driven, commercially viable, affordable, effective, impactful, and sustainable. Such options include carbon capture for sale and the promotion of CO2 enhanced oil recovery for Carbon Capture and Storage (CCS), where technically and economically viable.
Decarbonization could be considered a blessing in disguise, as it also provides potential value-accretive business opportunities to the upstream players, such as carbon capture for sale and storage via CO2 enhanced oil recovery. Converting these value-accretive opportunities to a commercially viable and sustainable business would definitely necessitate the collective collaboration among upstream companies operating in Nigeria towards meeting the broad goal of decarbonization and providing a much greater return on investment, which is rather a target-based approach. If implemented wisely, such opportunities could deliver increased revenue streams, offsetting any negative effects of each company’s decarbonization efforts on its balance sheet. For example, CO2 could be captured post-combustion, and turned into a valuable raw material. Deloitte in their report, titled: “The 2030 Decarbonization Challenge: The Path to the Future of Energy,” predicted a trillion-dollar market for the use of CO2 as a feedstock for a variety of industrial applications, such as the development of building materials, chemicals and synthetic fuels.
Part of the continued discussion of whether CCS will contribute enough to meet climate targets is the discussion around the role of carbon dioxide enhanced oil recovery (CO2-EOR). Storing captured CO2 through CO2-EOR enters into a category called associated carbon capture, utilization and storage (CCUS), where the captured CO2 is utilized for a commercial activity, in this case EOR, as it becomes ultimately stored. CO2-EOR works by simply altering the properties of the oil through reduction in viscosity and increase in pressure, making it easier to extract.
Above the miscibility pressure, CO2 is highly soluble in crude oil, which causes the oil to swell and squeeze out of rock pores, causes the oil viscosity to reduce, and results in the creation of a miscible flood front that sweeps through the reservoir, displacing crude oil towards the production well. It is estimated that between 50 to 70% of the reservoir proven volumes can be recovered through the application of EOR. In a study conducted at the University of Texas, it was demonstrated that, depending on strategic operational choices, the incremental oil produced from CO2-EOR can achieve a net carbon negative status throughout most of the life of the operation. The mechanisms that trap oil within the reservoir also act to unavoidably and permanently trap over 90 to 95% of CO2 used for EOR within the formation, which cannot be produced back to the surface along with the produced reservoir fluids. Carbon dioxide enhanced oil recovery (CO2-EOR) has historically used more captured CO2 than any other industrial process, and is the only commercially established carbon utilization option that provides large-scale permanent storage for captured CO2.
In 2015 in the US, the EPA (Environmental Protection Agency) issued regulatory guidance that enabled CO2 injected during EOR to also be classed as stored CO2. As opposed to carbon storage generally being seen as a waste disposal activity when done in isolation of market activities, carbon storage paired with EOR can be a profitable activity that also reduces greenhouse gas emissions. Starting CCS projects at EOR sites, where oil profits offset the cost of deployment, is the most intuitive and economically justified action at the current stage of technology development.
There are people who say that the PIA has liberated host communities, while others think it has rather enslaved them. What is your view on this?
Presently, I would not know until the law is fully implemented and we will see how it plays out. Undoubtedly, the objectives spelt out in the PIA are well thought out to “liberate host communities”. Some of these objectives include fostering sustainable prosperity within the host communities; providing direct social and economic benefits from petroleum operations to the host communities; enhancing peaceful and harmonious co-existence between licensees or lessees and host communities; and creating a framework to support the development of host communities. However, far too often, our laws usually end up not living up to the expectations of the common man. On this ground I wouldn’t say it has liberated or enslaved host communities. Only time will tell.