Posts Tagged ‘Gas Flaring’

The following information is in the form of extracts from a recent report produced by Louisiana Bucket Brigade environmental health and justice organization.

Louisiana refineries averaged one accident per day in 2010. There was a total of 354 reported accidents which released more than 975,000 pounds and 225,000 gallons of pollution.

Tuesday, 18 October 2011 00:00 From Kelvin Ebiri, Rotterdam

Dear John,

Shell in Nigeria. An opportunity to discuss the challenges of this complex environment.

In 2009, Shell hosted a webchat focused on our work in Nigeria. It was a constructive and productive debate, which is why we now return to the subject.

At Shell we have enjoyed a long relationship with Nigeria, having been in the country for over 60 years, and have played a major role in developing the country’s oil and gas industry. Shell companies in Nigeria help support the country’s economy, which gets 85% of its income from the oil and gas industry, and have created thousands of skilled jobs for Nigerians. We invest millions of dollars each year in community development.

But how does the rest of the world see our work?

Join us on July 21st

This webchat invites public debate about our activities in Nigeria. Shell in Nigeria – working in a complex environment invites a transparent discussion covering everything from pollution to people.

Hosted by Mutiu Sunmonu, Managing Director of the Shell Petroleum Development Company in Nigeria, and supported by a team with years of experience working in the region, this webchat promises to attract wide attention and stimulate lively debate.

We hope you’ll be able to join us and participate.

Yours sincerely,
Shell Dialogues Team

You can choose a session and register for this webchat now. Then return on July 21st to join the discussion.

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Second webchat session: 15:00 GMT
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Ogoni: Less Hot Air and More Action – Gas Flaring Increases in the Niger Delta

Despite repeated commitments by oil companies and governments, gas flaring continues in Nigeria at an environmental cost.

Below is an article published by Think Africa Press:

Gas flaring in the Niger Delta region highlights the environmental problems posed by resource extraction, and the failure of successive governments to tackle these problems. Goodluck Jonathan, elected as president of Nigeria this April, has the opportunity to take action where his predecessors have failed.

Gas flaring is a routine practice with a number of extractive processes, including the flaring of associated gas following oil extraction. It is a wasteful process, as much of this gas could be used to provide fuel, either for the local market or for export. According to some estimates, $2.5 billion is wasted annually through gas flaring in Nigeria. Perhaps more importantly, the release of these gasses damages the health of the surrounding population, releases enormous amounts of greenhouse gases and contributes to acid rain. In fact, according to a World Bank  report released in 2002, gas flaring in Nigeria is the single greatest source of greenhouse gases in sub-Saharan Africa. Nigeria has the secondhighest gas flaring rates in the world, following Russia.

Companies in Nigeria are reluctant to reduce flaring and instead harvest the gas, as gas that is extracted alongside oil is more difficult and costly to separate and process than non-associated gas. So gas flaring is a simpler and cheaper alternative to obtaining the oil.

Shell, under the Shell Petroleum Development Corporation (SPDC) flares the  most gas out of all the corporations operating in Nigeria. The problem has long been recognized and highlighted by organizations, such as the Movement for the Survival of the Ogoni People (MOSOP), who are sharply critical of Shell’s practices within the region. In addition to gas flaring, the multinational is responsible for polluting the delta, killing fish and therefore harming the livelihoods of the people who live there. Shell’s well-publicised Corporate Social Responsibility programmes issue repeated commitments to reducing flaring, but no action has been taken to significantly reduce this dangerous practice. Statements by Malcolm Brinded, the director for exploration and production at Shell, suggest that the company may not be taking gas flaring seriously, as he declared that there was little evidence of the damaging health risks that flaring poses.

Broken promises: Gas flaring is not a new issue, and there have been numerous domestic and international attempts to rein in the practice. Yet each time there has been a reluctance to follow through on government statements and legislation. This was first recognized as an issue in 1969 by the federal government under the leadership of General Yakubu Gowon, who ordered the introduction of gas collecting facilities by 1974. When the deadline wasn’t met, it was shifted forward twice until 1984. This year saw the culmination of the Associated Gas Reinjection Act, as well as General Gowon’s executive order to make excessive gas flaring an illegal practice in the country. However, what started off as an attempt to reduce flaring turned into another royalty payment for the federal government, as companies found it more profitable to pay the annual fine than reduce their flaring practices. The international community eventually took notice and the OECD placed its own deadline on western companies to  reduce flaring by 2008. The deadline has since passed without enforcement or the penalisation of Shell.

Umaru Yar’Adua’s plan: Yet since 2008, the federal government has once again started to prioritise the issue of flaring. There is a risk, however, that these new efforts may follow a similar fate as General Gowon’s initiative. Action was taken under ex-president Umaru Yar’Adua’s government through two new executive orders. The first was the Nigerian Gas Master Plan (NGMP) in 2008. Part of the NGMP  addressed the wasteful status quo by providing legislation to encourage the integration of gas fields within the local infrastructure, and to create a market driven industry out of the resource by 2015, reducing gas flaring in the process. The plan includes the Domestic gas Supply Obligation (DSO), which contains a substantial penalty of $3.5m on companies that fail to integrate gas supplies into the local market.

Promising legislation was passed by the Senate a year later in 2009. It placed another penalty on the industry, this time requiring firms to pay the international market price for the quantity of gas still being flared after January this year. It is disappointing that the federal government did not stand its ground on the legislation: the deadline was moved again to December next year.

Whilst the deadline for the NGMP looms on the horizon and the new deadline for the senate bill is just over a year away, Shell’s most recent Sustainability Report released in April, states that the corporation has recently increased its use of flaring in the Niger Delta, blaming militants and a lack of government funding for this failure. The report also stresses the additional cost of the exercise, stating that additional gas collectors in the region would be priced at another $2 billion. Given that Nigeria’s oil production has amounted to over $56 billion over the last four years alone, the cleanup costs proposed seem more than manageable.

Goodluck Jonathan: the “Gas Revolution Agenda”: Rather than follow through with his predecessors commitment, Goodluck Jonathan launched the “Gas Revolution Agenda” in March this year. Despite the name, there is nothing revolutionary about the agenda. It mostly re-states what has been said since 1969 and there is little that distinguishes it from Umaru Yar Adua’s NGMP. So far, the agenda seems to be little more than a collection of words and intentions. It remains to be pushed into concrete legislation.

But Nigeria does not need another grand plan or agenda, nor does it need new legislation: the laws have been in place since 1984. What needs to take place is the enforcement of the laws and penalties that already exist and for the judiciary to take action for the persistent negligence of the oil industry within Nigeria in living up to its commitments. What is needed is less hot air and more action.

SOURCE

From pages 10, 11 & 12 of “Royal Dutch Shell and its sustainability troubles” – Background report to the Erratum of Shell’s 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.

Further extracts from this section of the report will be published in the coming days.

THE COMPLETE 73 PAGE REPORT (with reference sources)

From page 6 of “Royal Dutch Shell and its sustainability troubles” – Background report to the Erratum of Shell’s Annual Report 2010

The report is made on behalf of Milieudefensie (Friends of the Earth Netherlands)
Author: Albert ten Kate: May 2011.

PART ONE

Shell in Nigeria

In oil production, Nigeria is the most important country for Shell. During the period 2006-2010, Nigeria accounted for about 16% of Shell’s worldwide production of oil and liquid natural gas. During the year 2009, production falls due to disrupting activities by militant groups in the Niger Delta reached their peak for the time being. During the year 2010, production climbed back again, with Nigeria accounting for almost 19% of Shell’s worldwide production of oil and liquid natural gas.

Nigeria’s share in the profits of Royal Dutch Shell has been estimated at an annual average of USD 1.8 billion over the period 2005–2009, representing 7.3% of Shell’s total profit and 10.4% of its profits from upstream operations. Shell’s business in Nigeria seems to do well.

Shell’s Nigerian activities are divided among three companies. The largest is the Shell Petroleum Development Company of Nigeria Ltd (SPDC). SPDC is also Nigeria’s largest oil and gas joint venture. Most of its oil production takes place onshore in the Niger Delta. Shell is the operator of SPDC and has a 30% stake in the joint venture. SPDC has been pumping oil for more than 50 years in the Niger Delta. The other businesses of Shell in Nigeria refer to liquefied natural gas (LNG) for export, and offshore oil operations (among other the Bonga field). This case focuses on Shell’s onshore activities in the Niger Delta. This is the area where most environmental problems are manifested (such as oil spills and gas flares) and where oil production has caused severe conflicts.

The Niger Delta, resembling the South of Nigeria, is made up of fertile wetlands. It is one of the most densely populated regions of Africa. It has more than 30 million inhabitants. Subsistence farming and fishing are the mainstay of the people. The number of communities hosting oil / gas facilities in the Niger Delta is estimated at 1,500.

The SPDC-activities in the Niger Delta, as operated by Shell, are spread over some 30,000 square kilometres (about three-quarters the size of the Netherlands) and include a network of more than 6,000 kilometres of flowlines and pipelines, 86 oil fields, 1,000 producing wells, 68 flowstations, 10 gas plants and two major oil export terminals at Bonny and Forcados.

Nigeria is a poor en corrupt country. It ranks number 142 (out of 169 countries) in the Human Development Index of the United Nations6 and number 134 (out of 178 countries) in the Corruption Perceptions Index.7 Over-reliance on crude oil and gas (accounting for about 95 per cent of foreign earnings and over 80 per cent of federal budget) has weakened investment in other vibrant sectors of the economy, including agriculture. The oil sector employs just one per cent of the labour force. Many reports and studies have reiterated that, despite its vast resources, Nigeria ranks among the countries with the widest gap between their poorest and richest citizens. Its 54.4 percent official poverty prevalence translates to about 70 million poor persons. Within the last decade the traditional challenges facing Nigeria – mass poverty and unemployment, absence of transformation and prevalence of high inequality – have remained largely unchanged.

THE COMPLETE 73 PAGE REPORT (with reference sources)

Further examples from this section of the report will be published in the coming days.

Published on : 18 May 2011 – 12:29pm | By Hélène Michaud

It is his very first visit to the Netherlands, home of the company that he says has destroyed his family’s investments: “Our fish ponds, our bakery, our land.” He wants them back.

The green parks, the urban infrastructure, trains that arrive on time: Eric Dooh is impressed at what he’s seen in the Hague, where he’s just attended Royal Dutch Shell plc’s Annual General Meeting . He says he came to inform the company’s shareholders about the ongoing level of devastation caused by oil spills in Goi, his community in the Niger delta.

“Since 2003, we don’t produce fish anymore, there’s not a single fish in the water. The source of drinking water is oil. When we cook, our food smells like kerosene. We grow cassava and yam: if you cook them, you get a taste of crude.” He asked when Shell would use part of its benefits to clean up the water and the land.

Smiling very soon

Shell’s response was consistent. CEO Peter Voser said that sabotage and theft accounts for more than 80% of the volume of oil spilt in 2010, amounting to around 100,000 barrels a day. When asked when if it has a timetable to clean up the spills or end gas flaring, the company responds that it is committed to do so, but that this depends on the Nigerian government’s willingness to invest and on limited access to sites because of violence by militant groups.

Eric Dooh says the answers are “purely political”. I’ve been hearing this story for so long. When governments want to deceive you, they say: ‘The people will soon smile’. So now Shell is telling us we will soon smile, and I asked: ‘How soon?’ They told me: ‘Very soon.’”

Dutch pension funds concerned

In recent years, shareholders big and small, have become increasingly vocal when it comes to Shell´s environmental record in Nigeria. At this year´s AGM, Sylvia van Waveren speaking on behalf of the Dutch APG pension fund, the Robeco investment fund and other important shareholders with pension funds worth over 500 billion euro, said they “remain highly concerned with the operations in Nigeria and the potential damage to Shell´s reputation.” She said they were equally concerned about the “low standard and quality” of Shell´s dialogue with stakeholders, especially in indigenous communities in Canada where controversial oil sands are being exploited and in Nigeria.

Eric Dooh, wearing a black hat a la Nigerian president Goodluck Jonathan and large necklaces with red and white beads around his neck, is impressed. “I noticed that people of this part of the world have great interest in the suffering of the people in the Niger delta. You don’t know us, and yet you are agitating for how the benefits of oil are being used in developing this area. I find this commendable.”

On trial

Eric Dooh’s Goi community and three other Niger Delta communities, supported by the environmental organisation Friends of the Earth, have started legal proceedings against Shell in the Netherlands. On Thursday, the trial resumes in the Hague. At stake is whether Royal Dutch Shell plc in the Netherlands can be held accountable for Shell Nigeria’s activities. They want their communities to be cleaned up and they want reasonable compensation for the loss of their livelihoods.

Chief Dooh will be sitting in the tribune during Thursday’s hearing. Before coming here he says he told his daughter that “I’m going to defend you, your mom and your grand dad in the Netherlands.” He says that if he is finally granted compensation he will send her to study abroad “so that she can attain the same knowledge that those people in charge of these multinationals have acquired.”

SOURCE ARTICLE

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Royal Dutch Shell has been hit with a class-action lawsuit in London by the Bodo community of Nigeria, which suffered a “devastating” oil spill when a key pipeline burst in the summer of 2008.

The new lawsuit against Shell has been sparked by a leak allegedly coming from the Trans-Niger pipeline, which the community says started flowing into the Bodo creek in August 2008.  Photo: AP

Lagos (Platts)–21Apr2011/820 am EDT/1220 GMT

Royal Dutch Shell Nigeria says it paid about $3.8 billion in taxes and royalties to the Nigerian government from its offshore and deepwater oil operations between 2006 and 2010.

In a briefing note on the company’s operations in Nigeria in 2010 published Thursday, Shell said its joint venture operations contributed about $31 billion in revenue to Nigeria during the same period.

Similar stories appear in Oilgram News. See more information at http://www.platts.com/Products/oilgramnews

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