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The companies

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So what of the companies?

Here the first thing that has to be said is that the flaring is not the result of some gigantic conspiracy to pollute West Africa. When these wells were first drilled to produce Nigeria's high quality oil in the 1960s, 1970s and 1980s, flaring natural gas was common practice throughout the oil industry from Texas to Saudi Arabia. The natural gas industry was in its infancy. The use of it in combined cycle gas turbine (CCGT) power generation was unheard of, when most power was produced directly by raising steam from oil products. Nobody suspected climate change.

In places like the North Sea, the associated gas produced in oil production found a market close by in an existing gas grid that had previously used coal-produced town gas. To be valuable, natural gas needs a market and an infrastructure to get it to that market. None of this was immediately available in the Niger Delta.

Now however, it is more or less unheard of for associated gas to be flared in the western world, by western oil companies, except in emergency for safety. Flaring on this scale is nowhere found outside the former Soviet Union and nowhere in areas of such population density.

There are in practice three ways to stop flaring.

The operating companies can find a market for the gas and gather it from the individual wells, reinject it for increased oil flow or they can shut in the oil they are producing.

In relation to the latter, Nigeria's production of crude oil is already falling. Since 2005, Nigeria's oil production has fallen from around 2.5 million barrels a day (mbd) to 2.1 mbd, or by 400,000 bd. Even at an average price of around $50 a barrel, this is a revenue loss of $20 million a day, or $3.7 billion a year.

Logically, to maximise the reduction in flaring, the best choice is to shut in those wells producing the lowest level of crude for the highest level of associated gas. Some of the companies may have been doing this, hence the fall in crude production but there is little clarity on production changes due to security, strategic decisions, or other problems. Certainly complying with any Opec required reduction in oil output could have an impact in reducing flaring which could even be enhanced with good decision making.

Reinjection is normally used to improve the uplift of the crude and increase its flow. It is used to greatest effect when the oil produced is ‘heavy', which Nigeria's is not. Much depends on the geological structure of the oil field concerned. Too much pressure can damage the oil reservoir. In addition some of the gas - around 3% - may be needed to fuel the compressors and, in terms of the future, some gas, maybe 15-20% will be lost and not recovered for future use. The chief argument against it is likely to be cost.

Getting the gas to market is a different proposition altogether. For SPDC, one of the more open of the companies, the dilemma is best shown by the point that to cut its own remaining flaring of 256 million standard cubic feet a day (mscfd) requires creating a gas-gathering system linking over 1,000 wells in an area the size of Portugal, or roughly one well per 91 square kilometres. If averaged out, this would suggest that each well is producing around 256,000 standard cubic feet a day (scfd). While having devastating consequence on the local environment, in terms of gas produced, these are not, individually, very large gas producers.

In truth, it would require some 400 of these wells to produce enough gas to power a 1,000 MW gas-fired power station, or the yearly output of almost 550 of them to produce a million tons of export LNG.

The companies thus face a considerable dilemma; either shut in crude, or build substantial gas-gathering networks across hundreds of kilometres to gather small batches of gas. (The irony here is that some gas gathering has to occur in order to get the gas to the flare stacks.) Naturally, the current security situation in the delta does not help such an undertaking. Indeed SPDC's plan to eliminate flaring on the Forcados Yokri field, due for completion in 2006, has been stalled for precisely this reason.

However, before suggesting that the companies are entirely blameless in the current situation, it has to be said that the instinct towards secrecy that pervades this difficult issue effectively prevents a better understanding of the problem in Abuja.

Chevron or Mobil, for example, may or may not be the biggest flarer of gas, but are certainly not going to admit to it. The net result has been a chronic failure to adequately define the problem and thus seek a better way to resolve it.

Above all the single most obvious economy with the truth is to define everything in the context of "percentages of gas flared". Sure the percentage of total output burnt and wasted may be falling, but actual volumes are not, at least not by very much.

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