By NJ Ayuk, Executive Chairman, African Energy Chamber (www.EnergyChamber.org)
Africa stands at a precarious juncture, where the transition from fossil fuels to renewables intersects with the economic benefits of a strategically managed oil and gas industry.
Down one road, the continent expands exploration and production of its vast natural gas and oil reserves to bring electricity, fuel, and financial power to millions. Down the other, it yields to pressure to help achieve climate targets, including outright bans on fossil fuels that would eliminate funding for natural gas projects.
Is it possible to put one foot on each path? Absolutely. Doing what’s best for Africa and what’s right for the environment do not have to be mutually exclusive. Some form of balance is always possible.
On a continent where millions of families are using traditional, hazardous biomass for cooking, where 600 million people lack access to reliable electricity, the idea of leaving valuable oil and, especially, natural gas, in the ground seems neither practical, palatable, nor appropriate. In fact, as the African Energy Chamber’s newly released African Energy Outlook 2021 says, beyond the calamity created by COVID-19, in the short-term, the drive to curb carbon emissions is one of the conventional oil and gas industry’s biggest challenges — and one of Africa’s, too.
Curbing emissions is a noble and essential goal. The problems associated with climate change aren’t something we can look on from afar and let someone else worry about. After all, Africa is considered more vulnerable to the effects of climate change than many other areas, especially since so much of the population depends on regular rainfall to grow food crops. With a warming planet bringing drought and dust storms to one part of the continent and floods to another, affecting quality of life and livelihoods, we know first-hand how important climate justice is. We also understand that it’s our responsibility as global citizens to participate in energy transition.
Within reason, that is.
Energy transition, the so-called path from fossil-based to zero carbon, cannot be applied with a broad brush. What will work in Norway isn’t always feasible in Namibia. What makes for sensible policy in London isn’t necessarily pragmatic in Lagos.
For one thing, Africa uses so little energy now, our emissions from oil and natural gas are minimal. In fact, the World Economic Forum estimates that if all of sub-Saharan Africa tripled its electricity consumption overnight using only natural gas, the additional CO2 would be equivalent to just 1% of global emissions.
Admittedly, as rising incomes and population growth propel energy demand in Africa — we have the fastest growing population in the world, as well as the youngest — greenhouse gas emissions are likely to increase as well. That is, unless we follow an intelligent, modern energy plan that incorporates renewables along with natural gas. There’s room for both, as well as need: While solar power and wind can help provide electricity to fill the current and impending power void, neither can furnish feedstocks for industry, gasoline for transportation, or process heat for manufacturing.
Solar Power Has Great Potential
Harnessing a renewable resource for electricity is something African has history with. We’ve been using hydropower for decades. It makes sense, then, that we can transfer our experience to the adoption of solar power.
In fact, when it comes to solar power the future, pardon the pun, seems bright. Africa has already made considerable progress using solar photovoltaics (PV) to capture and convert abundant sunlight to ample energy. South Africa, for example, has eight of the 10 largest solar plants in Africa; the continent’s largest is in Morocco. At the same time, we’ve also seen advances in bringing off-grid, home-scale solar systems to rural villages in sub-Saharan Africa. The International Renewable Energy Agency (IRENA) suggested that, with the right policies in place, by 2030 Africa should be able to generate more than 70 gigawatts (GW) of solar PV capacity. Considering 1 GW could realistically power 300,000 American homes, that’s a significant figure.
But is it enough?
According to the International Energy Agency (IEA), demand in Africa today is 700 terawatt-hours (TWh), with the vast majority — more than 70% — of the total derived from North African economies and South Africa. But the IEA predicted that by 2040, the fastest demand growth will come from sub-Saharan nations.
Can solar scale up to meet accelerated needs in time? Without natural gas in the energy mix — especially without the gas-to-power initiatives that are part of the 2030 Roadmap — will people remain in the dark?
And what can be done to take natural gas off the banned fossil fuels list?
We Must Curb Wasteful Gas Flaring
The biggest concern about the continued use of natural gas comes down to one word: Flaring.
Flaring is the practice of routinely burning off associated natural gas that is produced from the reservoir during oil production. Flaring is often done for technical, safety, or regulatory reasons, but there’s no denying that routine flaring, which happens when the economics don’t support using the natural gas, is a waste of a precious resource. And even though nearly all — 99% — of natural gas is combusted when flaring is done under the right circumstances, when there are problems with the flame or other operating conditions, flaring can create a significant environmental problem. Estimates from satellite data put the amount of CO2 released into the air by flaring at 300,000 tons per year. And, unfortunately, that figure is on the rise: Between 2018 and 2019, the total increased by 3%.
It’s worth noting, however, that most of the increase during that period came from three countries: the United States, Venezuela, and Russia. Specifically, emissions during gas flaring rose 23% in the United States alone. Venezuela’s total increased by 16% and Russia was up by 9%. If you include Iran along with the other three, just four countries were responsible for 45% of all global gas flared between 2017 and 2019.
By contrast, in the rest of the oil-producing world, gas flaring has declined, down approximately 10% between 2012 and the first quarter of 2020.
That includes Nigeria, where flaring has dropped 70% over the last two decades, and Angola, where reducing flaring is part of a program to capture natural gas and convert it to liquefied natural gas (LNG) for export. State-owned Sonangol has partnered with four oil and gas majors, Chevron, BP, Eni, and Total, to develop a $12 billion offshore project to produce 5.2 million tonnes of LNG per year.
It’s heartening to know that five African countries - Algeria, Cameroon, Republic of Congo, Gabon, and Nigeria - are among the nations, companies, and organizations that have joined in The World Bank’s Global Gas Flaring Reduction Partnership (GGFR). This forward-thinking group is dedicated to identifying and overcoming the barriers to flaring reduction on a country-by-country basis. Through research, sharing best practices, and advancing flare measurements and reporting, GGFR is equipping the world to live with natural gas, the fossil fuel with the lowest carbon footprint, rather than try to live without it.
We Can Find a Balance
Like GGFR, the African Energy Chamber also seeks to balance what on the surface may seem like competing interests. While their mission is to make plentiful natural gas even cleaner so it remains a viable alternative in tomorrow’s modern energy mix, we would like to see a diversified energy industry in Africa where people and local businesses benefit from both fossil fuel activities and clean energy production.
We have only to look as far as Kenya to find a pertinent example.
The nation, which is home to east Africa’s largest solar generation plant, derives 93% of its electricity from renewables. Along with wind and hydropower, solar is responsible for increasing the proportion of the population who have access to electricity from 63% in 2017 to 75% today — a nearly 20% increase in just three years. As renewables become increasingly affordable, it is likely that wind and solar development will continue, although for now, it’s tough to find investors and financing to bring new projects online.
Economics are also at the heart of Kenya’s new oil and gas developments, and in a positive way. With the discovery of the massive Turkana fields in the nation’s north-western region, Kenya has an opportunity, albeit one that may be years away, to grow its oil and gas service sector, continue its new role as an oil exporter, and further diversify its economy. Legislation regulating oil exploration and production and outlining revenue-sharing will help local communities as much as they protect the government and companies.
This Isn’t The Time to Leave Resources Stranded
As the Chamber has stated, we are all for a diversified energy mix and are looking forward to seeing cleaner energy developments surface across the continent. Currently, however, solar and wind projects rely on global value chains, which limits their ability to support local jobs, business opportunities, and capacity building. Until this can be resolved, the renewable energy industry simply cannot offer Africa the same value as a strategic approach to our oil and gas industry. Natural gas production is particularly important, not only because of the role it can play in alleviating energy poverty, but also because of its potential to be monetized, to facilitate infrastructure development, and to foster the creation and strengthening of other sectors. And that, in turn, can lead to even more jobs, business opportunities, and economic growth for African communities.
Africa needs natural gas to light the way in both a literal and figurative sense. Our future is at stake, and we need to make our voices heard: We can curb emissions without cutting off a pathway to economic growth for the 20 African nations that have natural gas reserves. We can embrace clean energy without missing out on a critical means of giving more African households and businesses access to electricity. That’s a message we can’t let others drown out. The road to energy transition might be bumpy for all of us, but the idea of banning all fossil fuels makes it exceptionally treacherous, if not impassable, for Africa.
NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of Centurion Law Group, and the author of several books about the oil and gas industry in Africa, including Billions at Play: The Future of African Energy and Doing Deals.
Distributed by APO Group on behalf of African Energy Chamber.
African Countries Must Take a Balanced Approach to the Energy Transition (By NJ Ayuk)