[DEBATE] : (Fwd) Nnimmo Bassey sez: leave Niger Delta oil in the soil
pbond at mail.ngo.za
Fri Jan 30 12:21:29 GMT 2009
Way Out for Nigeria: No More Oil Blocks!
Let’s leave the oil in the soil
Environtmental Rights Action brief by Nnimmo BASSEY
As the Niger Delta boils and as Nigeria looks towards a bleak future
with diminished oil revenues, the oil corporations operating in Nigeria
continue to garner obscene profits. This happens because the
corporations are not paying for environmental costs of their operations
and because ecological debts go unattended to. Local communities have
shouldered the burdens while the corporations laugh all the way to the
banks secured by their opaque Joint Venture agreements.
The trend of profits made by oil companies over the past couple of years
are very telling. These companies reap profits in the face of whatever
woes the world is confronted with.
In 2007 Shell's net profit rose to $11.56 billion from $8.67 billion a
year earlier. According to reports, Exxon, the world’s largest
privately held oil company, reported a 14% rise in profit to a record
$11.68 billion, which was adjudged to be the largest ever for a US
corporation. In the first quarter of 2008, Exxon made nearly $90,000
profit a minute!
Today, we expect Shell to declare another big profit underscoring the
fact that the Niger Delta environment is still not receiving the
attention it deserves. Spills remain unattended to at Ikarama in Bayelsa
State, Ikot Ada Udoh in Akwa Ibom State, Uzere and Iwerekhan in Delta
State. Today we demand that they use their “profit” to clean up their
mess in the Niger Delta.
The convulsions currently gripping the global system have directly
impacted on the economic outlook of Nigeria. Banks and other
money-gobbling corporations have begun to bop belly side up and citizens
of the world have been forced to bear the brunt of their profligacy.
What we are witnessing may be on a new scale, but certainly it is not a
novel thing. We do well to note that crises of capital would always heap
the burden on the producer and consumer while the middlemen constrict
both and live off their blood.
The major challenge of the Nigerian Sate is related to the collapse of
crude oil revenue from an unprecedented height of about $150/barrel to
below $40/barrel. This crash has revealed that behind the cheap piles of
petrodollars is the true face of active fingers behind the forces that
shape the market. We quickly note at this point that the so-called
market forces are not as free as international financial institutions
would want the world to believe.
Some Nigerians are equally worried that even the cheap oil that we
depend on may soon be set aside due to the real possibility that the
world will move on to new alternative energy sources. If that happens
and crude oil attracts less attention, what will be the consequence for
the Nigerian economy?
While these are legitimate concerns, they also present us with a great
opportunity to transform our environment and by extension our economy.
And this is why we are making this proposal.
Cheap petrodollars drove us into believing that money was not a problem
but how to spend it. They drove us into debt and debased our sense of
nationhood. Cheap petrodollars turned Nigerian politics into a struggle
for the control of the national purse and led to a massive regime of
conversion of public funds and properties into private control. That has
been the visible meaning of privatisation in our nation. Cheap
petrodollars invited the jackboots into Dodan Barracks and into Aso Rock
and rocked and overturned every sense of common good and collective
ownership in our dear nation.
The drive to maintain the flow of foreign exchange into the national
coffers made it impossible for the government to see that a safe
environment is a basic requirement for citizens to be productive. The
government overlooked the fact that in a largely subsistence economic
system where the vast proportion of the citizens thrive outside of the
formal economy, the first thing that must be secured for national health
and productivity is an environment that supports the people’s efforts in
the areas of family farming and livelihoods. The grave inability to
grasp this truth allowed oil companies (national and transnational) to
operate with impunity in the oil fields and to pollute, destroy and
dislocate the very basis of survival of the people in the region. This
inevitably spread to the entire nation since we run a quirky unitary
We have a clear proposal on how to turn the crises into a real
opportunity for breaking from an ignoble system and moving on to a
sustainable path. As they say, it will require sacrifice: especially
that of jettisoning our firmly held prejudices.
· Quench the Flares
The issue of gas flaring is a burning one that must be addressed once
and for all. An estimated168 billion cubic meters of natural gas is
flared yearly worldwide and 13% of this is flared in Nigeria (at about
23 billion cubic meters per year). After years of paying lip service the
Nigerian state must wake up to its responsibilities to protect the lives
of Nigerians. The many health impacts of gas flaring are well documented
and include: leukaemia, bronchitis, asthma, cancers and other diseases.
In economic terms, Nigeria sends over $2.5 billion worth of gas up in
smoke annually, going by 2005 estimates. If we assume that this rate
held good for the last10 years, we are talking of $25 billion wasted and
if we extend it to the past 20 years that figure doubles. For each
additional year that the government refuses to act in this regard the
amount wasted continues to rise, as does the log of the dead due to the
poisonous nature of the gases.
We are worried that at a time when the world is seeking ways to combat
global warming we are busy cooking the skies through gas flaring. From
pronouncements on climate change emanating from government agencies it
is obvious that the government cannot plead ignorance of the massive
contributions of gas flaring to global warming. This places every
citizen of this country, and indeed the word, at risk. There can be no
excuse for this unhealthy and uneconomic act.
At this point we want to quote a 1963 confidential communication from
the British Trade Commissioner to the UK Foreign Office:
“Shell/BP’s need to continue, probably indefinitely, to flare off a very
large proportion of the associated gas they produce will no doubt give
rise to a certain amount of difficulty with Nigerian politicians, who
will probably be among the last people in the world to realise that it
is sometimes desirable not to exploit a country’s natural resources and
who, being unable to avoid seeing the many gas flares around the
oilfields, will tend to accuse Shell/BP of conspicuous waste of
Nigeria’s ‘wealth’. It will be interesting to see the extent to which
the oil companies feel it necessary to meet these criticisms by spending
money on uneconomic methods of using gas.”
“In the longer run, Shell/BP is going to have to consider very carefully
how it should explain publicly the large outflow of capital that is
likely to take place towards the end of the decade... it will no doubt
come as something of a shock to Nigerians when they find that the
company is remitting large sums of money to Europe. The company will
have to counter the criticisms which will very probably be made to the
effect that the company is ‘exploiting’ Nigeria by stressing the very
large contribution it is making to Nigeria’s export earnings.”
From the above quote, it is clear that the oil corporations have been
engaged in this action for at least half a century now. The 50 years old
script of pacification by underhand play requires urgent critical
political, environmental and socio-economic examination and replacement.
It was not until the 1979 Associated Gas Reinjection Act that routine
gas flaring was finally outlawed in Nigeria. Section 3 of the Act set
1984 as the deadline after which companies could only flare gas if they
have field(s)-specific, lawfully issued, ministerial certificates. There
are over 100 flare sites still emitting a toxic mix of chemicals into
the atmosphere in the Niger Delta. Through this obnoxious act the
country has lost about $72 billion in revenues for the period 1970-2006
or about $2.5 billion annually.
The proposal by the Gas Flares Prohibition Bill before the Senate
allowing for the penalty for gas flaring to be at the market price of
gas being flared is a good intention but the government must order the
immediate stoppage of gas flaring even if it means shutting down the
offending oil wells.
· Detoxify the Land
The stoppage of gas flaring will mark a major step towards detoxifying
the Niger Delta environment. The other steps are two fold. First is the
immediate auditing of all oil spills, drilling mud and cuttings
discharges, produce water handling and other related polluting incidents
in the entire Niger Delta. Second to this is the immediate commencement
of thorough clean up of the environment to international standards such
as those set by WHO for safe drinking water and air quality.
These steps will make it possible for the people to farm and fish with
reasonable hope of achieving living incomes from such activities. Life
expectancy would also increase beyond the current 41 years, as the
environment would once more become people friendly.
· No More Oil Blocks
ERA proposes that Nigeria should learn that there is no future in crude
oil as the major revenue earner. We propose that, as a starting point,
Nigeria should not make any new oil block concessions. We agree that
existing fields should continue to be exploited, but at internationally
acceptable standards. Halting the giving out of new oil blocks would not
mean a major loss in revenue. To start with, the current lowering of oil
prices is also leading to production cuts. This means that the current
fields can meet Nigeria’s quota for quite some time. Leaving the oil
underground does not translate to losses but saving. We must learn to
save. The oil under the ground is still our oil. We must not exploit
every resource simply because we have it. This is simple wisdom. Nigeria
must step back and think!
Generally, it is believed that the world will soon witness a peak in oil
production and this will coincide with the world having used more than
half of all currently proven reserves. It is already estimated that
Nigeria reached her own peak oil level a couple of years ago. Nigeria’s
production stands at 2 million barrels/day. That is the official figure.
The plan to increase this production level to 5.2 million barrels a day
by the year 2030 is a thinking that fits our profligate pattern. The
country should at this time be working on halting the daily theft of
crude oil from the oil fields. That amount which estimates place at
between 200,000 to 1,000,000 barrels/day would serve either to boost
production or to increase/sustain reserves.
Let us assume that Nigeria would have probably been in a position to
increase her crude oil production from 2015 by say 2 million barrels/day
from new oil blocks which we are demanding should not be given out to
the bidders. By this simple act, Nigeria would have kept the equivalent
tonnes of greenhouse gases out of the atmosphere. This would be a direct
measure of curbing global warming through an infallible technology of
carbon sequestration. This is a foolproof step that requires no
technology transfer and does not require any international treaty or
If Nigeria were to trade that amount of carbon using any of the
available market mechanisms for tackling climate change, such as the
so-called Clean Development Mechanism, the country would surely earn
some good income from keeping the oil under the ground. But we do not
support the use of market mechanisms for this purpose. We would rather
suggest the halting of the massive capital flight from Nigeria to boost
the economy and offset whatever may be seen as ‘lose’ of projected
revenue from crude.
But, let us do some calculations here, supposing crude oil prices
stabilize at $30/barrel over the next several years. In that case 2
million barrels/day would mean daily revenue of $60 million or an annual
income of $21.9 billion. Now, assuming our population to stand at 140
million, this means that the amount due to each citizen would be $156.4year.
If we factor in production costs (including staff salaries, payment of
the military, etc) and company profits, we can safely say that the
amount that would get to each citizen would be less than $156.4/year.
ERA proposes that rather than exploit new oil fields with the attendant
pollutions, human rights abuses and malformed political system, we
should keep the oil under the ground and require that every Nigerian
pays $156/year as a crude oil solidarity fund (for want of a better
name). This will bring additional revenues to whatever the country makes
from current oil fields, including the corked ones.
ERA recognises that not every Nigerian can afford to pay $156/year into
the national coffers. We can reasonably expect about 100 million
Nigerians to enthusiastically make this payment if the benefits are
carefully made public. Those who can pay multiples of the minimum
amounts would take up the amount the remaining 40 million Nigerians
could not pay. International aid agencies, philanthropists as well as
other countries can be approached to symbolically buy some barrels and
the entire budgeted income would be met.
Moreover, by 2015 there would be more Nigerians and the burden would
thus be less. We also consider that the Naira would regain strength as
corruption goes down and as governance becomes more transparent. If that
happens, the Naira equivalent of the amount to be contributed by each
Nigerian would further decrease. Note that these payments would not need
to commence until 2015 and this will give us sufficient time to take
caravans around the nation to explain the beauty of this economic move.
9-Point benefits of No More Oil Blocks:
1. Carbon capture and storage thereby tackling climate change
2. No oil spills and gas flares from new oil fields
3. No destruction of communities or high sea environments
4. No socio-economic ills related to oil field activities
5. Nigerians would have a direct stake in how national revenues are
spent. There would be greater accountability and transparency. Moreover,
hawks would no longer gather for so-called “excess crude cash.”
6. Halt to the corrupt nature seen in the oil blocks allocation exercises
7. No bunkering since the oil will be left in the ground
8. Safe and clean environment
9. Reduction and ultimately elimination of violent conflicts in the
It is our considered opinion that the best foot forward for Nigeria is
to halt new oil field developments and to leave the oil under the ground.
Oil in a Dead End
Decades of oil extraction in Nigeria have translated into billions of
dollars that have spelt nothing but misery for the masses of the people.
It is time for Nigeria to step back and review the situation into which
she has been plunged. The preservation of our environment; the
restoration of polluted streams and lands; the recovery of our dignity
will only come about when we stand away from the pull of the barrel of
crude oil and understand that the soil is more important to our people
Oil blocks licensing has become a bazaar in Nigeria. Huge signing
fees are exchanged as though the players in the game were soccer or
music stars. This signals the fact that there is something fundamentally
faulty about the entire enterprise. This is the time for all Nigerians
to demand that no more oil block should be given out for exploration or
for exploitation. Nigeria was richer through her great agricultural
produce before the ascendancy of crude oil as the major foreign exchange
earner for the nation. Crude oil brought about crude actions in every
realm of national life. ERA is making a modest contribution to give
Nigeria a better future by urging the nation to look away from oil and
at the same time keep a stable economic platform from where to leap unto
greater heights. This will be through agriculture with supporting
governmental structures. We must end our decades old dependence on oil
rents that has damaged our national psyche and sense of commitment to
Let every Nigerian contribute to the national purse. This will make it
clear to politicians that when they misappropriate public funds they are
indeed stealing from the suffering people. Our life and our future are
in our hands.
29 January 2009
 This briefing note issued 29 January, 2009 in Lagos, Nigeria
 http://wsws.org/articles/2008/aug2008/oil-a06.shtml. This report
indicated that “The major US oil companies appear headed for a combined
$160 billion in profits for 2008. That compares to $123 billion in 2007.
Exxon and other oil companies have rewarded their CEOs with
multi-billion dollar payouts. Last year Exxon CEO Rex Tillerson cashed
in $16.1 million in stock options in addition to his $1.75 million
salary. He also received a $3.36 million bonus. Conoco Chairman James
Mulva received $31.3 million last year.”
 Quoted in ERA/CJP, Gas Flaring in Nigeria: A Human Rights,
Environmental and Economic Monstrosity, Amsterdam, June 2005. This
booklet can be found at both www.climatelaw.org and at www.eraction.org
 ERA Fact Sheet on Gas Flaring, December 2008
 Multinational Monitor, The End of Oil (editorial), (Washington:
January/February 2007 edition). P. 6. This issue of the Multinational
Monitor illustrates, among others, that the “Corporate control of energy
policy and energy resources, especially in the United States, the
country that consumes more energy than any other, is the single greatest
obstacle to slow and hopefully reverse the world’s headlong rush to
 At a growth rate of 2.025%. See
New reports abound to show this. See for example, Obinna Ezeobi: FG
suspends oil bid rounds, The Punch , Saturday, 23 Aug 2008 at
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