From pages 10, 11 & 12 of Royal Dutch Shell and its sustainability troubles Background report to the Erratum of Shells Annual Report 2010
The report is made on behalf of Milieudefensie (Friends of the Earth Netherlands)
Author: Albert ten Kate: May 2011.
The gas flares of Nigeria
Below the surface, crude oil is often found mixed with natural gas. The natural gas must be separated from the oil during extraction. Technically the gas can easily be captured and utilized. In Nigeria, however, the associated gas is primitively flared in the open air. Rushing for oil exports in the 1960s and 1970s, Shell and the Nigerian government only built oil pipelines. They didn’t care about infrastructure to utilize the valuable natural gas: just burn it. There are currently approximately 100 continuously burning gas flares in the Niger Delta and just offshore, some of which have been burning since the early 1960s.
Based on satellite data, the World Bank estimates that the amount of gas flared by Nigeria has reduced from 21.3 billion m3 in 2005 to 15.2 billion m3 in 2009, a decrease by 29%. In 2010, Nigeria represented 11% of global gas flares. Only one country flared more gas than Nigeria: Russia. In 2009, Russia flared about three times more gas than Nigeria. However, it produced about 4.5 times more oil than Nigeria. Per litre of oil produced, Nigeria exceeded Russia in flaring gas.
Mainly due to the flaring and venting of gas, the greenhouse gas emissions of crude oil production in Nigeria are among the world’s highest. A recent study, at the request of the European Commission, refers to two different studies that have calculated the emissions of Nigerian oil production. The first study puts the oil production emissions at 16.8 grams of CO2 per megajoule, the second one is quoted as putting the emissions at 21.1 grams. The study at the request of the European Commission, puts the most likely average emissions of conventional oil production for the European market at 4.8 grams of CO2 per megajoule. So, oil production in Nigeria is considered to cause 3.5 to 4.4 times more greenhouse gases than average conventional oil production.
Greenhouse gases are not the only reported problems with respect to gas flares:
? The United Nations Development Programme has declared that gas flares destroy natural resources and local livelihoods, alienate people from their land, and adversely affect human development conditions.
? In November 2005, a federal high court in Benin ordered Shell to stop gas flaring near the village of Iwherekan, after the community had applied for an order enforcing or securing the enforcement of their fundamental right to life and dignity of human person. The judge ruled that gas flaring is a gross violation of the constitutionally-guaranteed rights to life and dignity, which include the right to a clean poison-free, pollution-free healthy environment.
Shell appealed and the case is still pending.
? The Nigerian Gas Association (NGA) has estimated that Nigeria has lost about USD 72 billion in revenues (about USD 2.5 billion annually) in the period 1970-2006 period due to not selling, but burning the gas.
? In a report published in 2005, the Climate Justice Programme and Environmental Rights Action/ Friends of the Earth Nigeria have calculated the yearly health impacts from gas flares in one of the Niger Delta states: Bayelsa. The particulate matter and benzene emissions from gas flaring at the 17 onshore flowstations in Bayelsa state would likely cause, each year, at least: 49 premature deaths, 4,960 respiratory illnesses among children, 120,000 asthma attacks and 8 additional cases of cancer. SPDC declares, however, that there is no evidence to support the argument that flaring damages the health of local communities.
? The federal government of Nigeria states that heat stress and acid rain from gas flaring continue to degrade the ecosystem.
? Local communities have reported numerous other impacts of the gas flares, such as: the eyes may turn red; there is never any darkness; corrugated roofs corrode more quickly; there is constant noise from the gas flares; the walls of houses crack due to ground vibrations caused by the gas flares.
Shell’s Nigerian flares: mystifying messages
Estimating from what is stated in Shell’s Sustainability report 2010, SPDC (government share 55%, Shell share 30%) must have released about 7 million tonnes of greenhouse gases (measured in CO2 equivalents) through gas flaring during the year 2010. This is equivalent to the annual greenhouse gas emissions of about 3 million cars driven on roads in Europe.
Shell states that in the period 2002-2010 SPDC’s flaring has decreased by about 50%.43 The company mentions two reasons for this:
? Since 2000, SPDC has spent over USD 3 billion on installing associated gas gathering infrastructure at 32 flowstations. These projects reduced continuous flaring by more than 30%. This 30% result was already achieved in 2005. There has been little progress from 2006 onwards.
? The rest of the decrease is a result of reduced production since 2006 in Nigeria and, to a lesser extent, the installation of gas gathering equipment in 2010.
In 2007, SPDC promised to shut down production from any fields where there is no prospect of a solution for gathering the associated gas by 2009. In May 2009, SPDC stated that it would need to invest another USD 3 billion to gather some 85% of the total associated gas produced in its operations. Wikileaks revealed a statement in October 2009 by the Shell Executive Vice President (EVP) for Shell Companies in Africa, Ms. Ann Pickard. She stated that the SPDC-flares could be out by 2011. SPDC would have to spend USD 4 billion to do this, but the Nigerian government would also have to fund its part and that was a risk. Shell would shut in oil production in fields where it is uneconomic to end gas flaring. In 2011, Shell stated that it still needed funding from partners to execute projects that would bring flaring down by 90%. In a letter dated 31 December 2008, the government directed SPDC and other oil companies to continue with production (and therefore flaring) until instructed otherwise. During this process of oil extraction the oil fields will be running out of oil, making investments in gas gathering infrastructure less economically attractive. Thus, gas might be flared to the bitter end of oil operations.
In May 2010, SPDC announced that it was working on a series of projects totalling investments of more than USD 2 billion. The Managing Director of SPDC, Mutiu Sunmonu, said: SPDC is pleased to be able to restart work on delayed projects and begin new ones to further reduce gas flaring in our operations to the lowest practical volume. Security and funding conditions permitting, we have a real chance to progress our flaring reduction plans through these key projects. SPDC did not provide for a time-line as to when the facilities would be fully functioning, and how much associated gas would be gathered. By mid January 2011, three additional associated gas gathering sites had been completed.
As of this moment, it is not clear how the gas flare picture of SPDC will evolve in the near future. In 2010, Shell’s flaring rose by 32% compared to 2009. This was mainly due to increased oil production in Nigeria and the start of its oil production at the Majnoon field in Iraq.54 In 2010, Shells oil production in Nigeria rose to 302,000 barrels of oil per day, up from 231,000 barrels of oil per day in 2009.
Whenever the security situation allows SPDC to produce more oil, its gas flaring might increase again. On the other hand, the series of projects SPDC is working on at present might decrease gas flaring to some extent.
Over the years, SPDC has been spreading mystifying messages with regard to its flaring operations. The company has never shown a breakdown of flowstations where gas is flared. It has also never publicised a detailed plan to achieve a flare-out status. Like with oil spills, the company has never made a serious effort to get the facts clear with regard to the damages communities in the Niger Delta have suffered and still suffer.
Meanwhile, the Nigerian government may be busy with some deadlines to end gas flares, as it has been since the 1980s. Experience shows that these efforts can’t be taken too seriously.