FG to introduce new penalty for gas flaring
In the new draft gas policy, produced by the Ministry of Petroleum Resources and made available to our correspondent, said that Federal Government is considering the introduction of a new penalty for brown field sites, especially joint venture and service contracts, which contribute 88 per cent of the total associated gas flared in the country, and it also described the flaring of natural gas as one of the most egregious environmental and energy waste practices in the Nigerian petroleum industry. The document said, “The current gas flare penalty of N10/Mscf (equivalent $0.03) of associated gas flared is too low, having been eroded in value over time, and is not acting as intended, as a disincentive. Consequently, the low penalty has made gas flaring a much cheaper option for operators compared to the alternatives of marketing or re-injection, noting that while gas flaring levels had declined in recent years, it was still a prevailing practice in the petroleum industry, adding, “Billions of cubic meters of natural gas are flared annually at oil production locations resulting in atmospheric pollution severely affecting host communities. According to the gas policy, gas flaring affects the environment and human health, produces economic loss, deprives the government of tax revenues and trade opportunities, and deprives consumers of a clean and cheaper energy source. It stated that a whole suite of anti-flaring legislation and initiatives had been introduced over the years to minimize gas flaring in Nigeria.

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