NASS backs diversification of downstream energy options

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The National Assembly Complex, FCT, Abuja.

…Promise sustainable reforms in the energy sector

The leadership of the National Assembly of the Federal Republic of Nigeria has said that Africa is in dire need for a switch to cleaner alternative fuel options in view of rapidly changing global energy demand patterns.

The legislators who were speaking at the virtual edition of the 14th Oil Trading and Logistics (OTL) Africa Downstream Week on Monday emphasized the need for the continent’s downstream oil and gas operators to actively expand their options for cleaner and more efficient energy, which incidentally is the core of Sustainable Development Goals (SDG 7).

President of the Senate, Dr Ahmad Lawan, delivering a keynote address at the opening session of the event with the theme “Downstream Energy: Renewing Markets, Expanding Options” said it had become important to review the market and stimulate it to accommodate contemporary realities due to its significance to the circulation and consumption of petroleum products.

Lawan, who was represented at the event by the Chairman, Senate Committee on Petroleum Downstream, Sen. Sabo Nagudu, said “This event speaks to contemporary policy focus and the importance of alternative fuel options in Nigeria and Africa in general. The context and trends in the downstream energy space are changing and we do not only have to understand these dynamics, but also need knowledge on its tendencies and potential.”

He advocated for more creativity to enable operators and consumers respond to the era of continuous changes in technologies of production, distribution and consumption. Lawan also warned against the likelihood of foreseeable challenges like slumps, and unforeseeable disruptions like the Covid-19 pandemic, in order to maintain efficiency and productivity.

Speaker of the House of Representatives, Hon. Femi Gbajabiamila, in his address noted that Nigeria’s heavy reliance on non-renewable fossil fuel, biofuels and waste for her energy needs put the country in a compromising situation.

Gbajabiamala, speaking through a representative, the Chairperson, House Committee on Maritime Safety, Education and Administration, Hon. Lynda Chuba-Ikpeazu, said that Nigeria was not only one of the highest producers of greenhouse gases globally, but the second highest carbon dioxide (CO2) emitter in Africa, only behind South Africa.

“There is a dire need for a switch to clean energy technologies that would promote carbon capture and rapid development of alternative energy sources”, he said.

Gbajabiamila argued that as the world evolved towards adopting more sustainable energy, it had become pertinent to look inwards to discover Africa’s vast and untapped local potential through the development of more sustainable energy technologies.

He said, “To borrow the words of the United Nations (UN), Africa needs to make this a remarkable “decade of action”, by intensifying our effort towards cleaner energy. This is no longer an option; it has become a necessity in order to combat the obvious and increasing effects of climate change in our societies. I, therefore, reiterate the commitment of the ninth National Assembly in the passage of Bills to provide sustainable reforms in the energy sector.”

In his welcome address, Chairman, OTL Africa, Mr Emeka Akabogu highlighted the fact that the pandemic has affected downstream petroleum businesses in many ways, not least of which was a quantum drop in petroleum products consumption as a result of lockdowns, heralding an unprecedented negative-cost barrel, historic cuts to margins and very loud sounds of silence across the roads and the skies.

Akabogu opined that business has been tough for many, yet good for some; and suggested that therein lies the silver lining waiting to be latched upon – a quest for reduced costs and increased efficiency.

“In Nigeria, our vocal advocacy over the years has yielded fruit in the deregulation policy which has been announced by government following our consistent calls. But announcement must morph into form, defined by competition, peer review, consumer value and overall market growth. This has to be on the back of data, intelligence and strategy, key elements which OTL is focused on to deepen downstream business and policy on the continent”, the OTL chairperson declared.

Delivering a keynote address, Chairman, Major Oil Marketers Association of Nigeria (MOMAN), Mr Adetunji Oyenbanji spotlighted gas as his preferred alternative fuel option in line with the Ministry of Petroleum’s ‘Year of Gas’ mantra.

“Energy demand has been on the increase in the last three decades yet majority of Africa’s population still do not have access to affordable and sustainable energy. It is also instructive to note that access to energy is directly proportional to poverty alleviation and quality standard of living”, Oyebanji said.

He called for the promotion of Compressed Natural Gas (CNG) as a viable alternative to petrol and diesel emphasizing that CNG has a five percent combustion rate compared to petrol at 15 percent.

Oyebanji also highlighted the numerous opportunities available in the CNG value chain to include feedstock pipelines, compression stations, CNG storage and trucking and auto-gas filling stations.

He insisted that mass adoption of CNG as an alternative fuel option would result in foreign exchange savings; increased power generation; complete removal of subsidy, diversification of the country’s energy mix; environmental integrity and 60 percent savings on running cost for fleets.

On the role of government, Oyebanji advised officials on the proper application of legislation; single digit loans; and allocating an attractive price regime for local gas consumption.

Chairperson, Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Dame Winifred Akpani said Africa’s population growth would exert more pressure on energy demand. She noted that with current challenges in the industry, expectations were very high for operators to achieve more with less.

Akpani also noted that while operators awaited full deregulation of petroleum products, government was still subsidizing the price of petrol, with the prevailing exchange rate bearing the cost of the under-recovery.

She advised operators to invest in alternative energy options as natural gas already constitutes 24 percent of global energy consumption, while oil and gas and renewable energy have been forecast to contribute 27 per cent and 50 per cent respectively to global energy demand patterns by 2040.

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