From: John Clancy <[EMAIL PROTECTED]> To: [EMAIL PROTECTED] MIME-Version: 1.0 Sunday, June 3, 2001 (SF Chronicle) NIGERIA/Wasted Oil-Field Resources/Life in the shadow of 300-foot gas flares Greg Campbell, Chronicle Foreign Service ---------------------------------------------------------------------- The original article can be found on SFGate.com here: http://www.sfgate.com/cgi- bin/article.cgi?file=/chronicle/archive/2001/06/03/M N145971.DTL ----------------------------------------------------------------------- In this small fishing village deep in Nigeria's oil-rich Niger Delta, no one under the age of 29 has ever known a dark and peaceful night's sleep. Once the sun sets behind the mangrove swamps, its light is supplanted by the fiery glow of a roaring natural gas flare that has been turning the night into day for nearly 30 years. The flare, operated by Italian oil company AgipPetroli S.p.A., is a burning, dancing icon of how life in this region - from which six international oil companies extract an average of 2 million barrels of crude oil per day is affected by the oil industry. Nigeria is the 12th-largest oil-producing country in the world - and the fifth-largest source of oil imported to the United States in 2000, although little or none of that makes its way to California. Natural gas is a byproduct of the oil drilling, but it is expensive to capture and liquefy for transport. With world demand and prices rising, the international firms that drill for oil here are laying plans to exploit the natural gas, but until now the easiest and cheapest alternative has been to burn it off into the atmosphere. Across the country, more than 100 flare stacks consume about 2 billion standard cubic feet of natural gas per day - wasting the equivalent of nearly one-third of the 6.7 billion standard cubic feet of natural gas that energy- starved California uses during an average day. Regulations meant to encourage oil companies to reduce or eliminate gas flares have been in place in Nigeria since 1969. But the fires still burn, mainly because the cost to oil companies of turning off the flares far exceeds the fines for keeping them on. In 1998, the federal fine for gas flaring was raised from 4 cents per 1,000 standard cubic feet of gas to an only slightly less meager 11 cents. Environmentalists say the practice contributes measurably to the world's total greenhouse gas emissions, releasing an estimated 35 million tons of carbon dioxide and 12 million tons of methane into the atmosphere annually, according to World Bank estimates. When Agip first came to Akaraolu in 1972, the villagers danced in celebration. The oil company constructed a road to its flow station near the village, greatly improving transportation and trade between Akaraolu and neighboring villages. But the town's council of elders says no one from Agip accurately defined a "gas flare" or explained its potential effects on the village. Agip did not respond to numerous requests for comment. Towering into the African sky nearly 300 feet, the flare's waterfall roar can be heard half a mile away. The village's 2,000 residents have grown accustomed to shouting at one another to be heard. And of course, there's the heat. It's rarely cool in the Niger Delta, but it's never less than sweltering in Akaraolu. The burning gas pushes temperatures 10 to 30 degrees above daytime highs. Palm trees within a 200- yard radius of the flare are brown and brittle, and villagers say the water near the flare is too hot for fish to live. The noise and the heat are only the most obvious symptoms of living close to the flare. Saturday Olimini, the town's secretary, says that corrugated zinc rooftops corrode at an accelerated rate because of the air pollution; women miscarry more frequently because of the heat and the stress; when there's more gas for the flare to consume, the earth trembles and the buildings crack; and men urinate blood because of some undiagnosed problem villagers attribute to the flare. Sometimes, he adds, "We'll move like a madman, and men will lose their brains." "We suffer here. We plenty suffer," says Olimini. "We need help from our federal government. We are crying out and writing letters." Olimini says complaints to Agip have gone unanswered, and the government is unresponsive to the town's plight. The only visit to the village by government representatives occurred when some residents blockaded the road leading to the flow station, refusing to leave until a meeting with Agip officials had been arranged. Mobile Police, the government's feared rapid-reaction force, promptly arrived and arrested several men and dismantled the roadblock. Here and across Nigeria, very little of the wealth generated by the oil industry trickles down to the villages. Oil royalties account for about 80 percent of the federal government's annual revenue, but billions of dollars have been squandered or stolen during nearly three decades of rule by military junta. With oil companies providing the majority of federal revenue, the government has been lax in its regulation of the industry. The oil firms argue that they are operating within local laws and that any complaints about lack of such basics as power and clean water in villages near the extraction sites should be handled by the government, since it receives most of the oil proceeds. The firms hand over proceeds on a sliding scale, so the more oil prices rise, the greater the government's cut. In a Shell-operated joint venture that accounted for 35 percent of Nigeria's oil production in 1999, for example, the government's take at $17 a barrel was set at $12; at $25 a barrel, it rose to about $20. With OPEC's current price at about $28 a barrel, the government stands to collect about $14 million a day in royalties from the operation. Here in the Delta, the only thing that seems likely to bring a peaceful darkness back at night is the promise of more money. Oil companies are responding to increasing consumer demand for cleaner- burning fuels and have initiated a number of projects to capture and sell the gas, particularly to European power generators. Shell estimates that by 2020, up to 50 percent of the energy generation needs of Organization for Economic Cooperation and Development countries could be met by natural gas. In October 1999, the Shell-run joint venture, which includes the Nigerian state petroleum company, Agip and the French oil giant TotalFinaElf, opened a $4 billion liquid natural gas plant. Although the gas initially exported was not associated with oil production, the facility eventually is expected to use all the gas currently flared into the African sky, making the practice obsolete by 2008. The other major oil companies extracting oil in Nigeria - Chevron, Mobile and Texaco - have made similar pledges. Chevron, based in San Francisco, is completing the second phase of a three-phase gas harnessing project that will eventually process up to 680 million cubic feet of gas per day. Nevertheless, villagers in Akaraolu are skeptical about the bright promises for the future. In 1988, the Nigerian National Petroleum Corp. set up a natural gas company to develop facilities to use the gas, but so far the resulting projects only use about 5 percent of all natural gas produced in the region. Only when abrupt silence and pitch darkness engulf the village will anyone here believe that the gas flare that has been a permanent fixture in their lives will finally be gone. "As God has greeted man, because of this light, we cannot be happy again," Olimini said. "The effect of this flare is unconscionable." -- -------------------------------------------------------------------- Copyright 2001 SF Chronicle " JC _________________________________________________ KOMINFORM P.O. 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