Be Mindful Of Our Environment As We Decide Our Leaders

By Aryampa Brighton

Uganda has a vibrant landscape blessed with a green environment and abundance of natural resources. 0ver time, this environment has been encroached by human activities inform of industrialization, agriculture, brick making among so many others. Protected forests of Bugoma central forest reserve and Zoka forest have been the current notable examples being threatened during this pandemic. More environments are at risk of being degraded in this election period or if we don’t take action to protect it.

It is a well-known global fact that Uganda is now close to national elections due January 2021.  So far the election campaigns have been trailing with a firestorm of protests in the country. The protests have been characterized by burning of tyres, polythene, poles among so other toxic materials. And of course, the police, army and other security organs have retaliated to the protests with teargas, live bullets. Posters, polythene papers, plastic bottles among others are being loitered everywhere during campaigns. These events are raising significant health and safety concerns not only for those protesting but for the environment. As a country, we are facing air and water pollution, deforestation, swamp encroachment and other environmental issues now. They are a danger to our environment, ecosystems, biodiversity and most importantly our lives.

Therefore it is critical to protect the environment so as to reduce the destruction of ecosystems caused by these myriads of avoidable human activities. I believe it should be a moral obligation for every Ugandan to protect the environment from such degradation because every time an environment is degraded it threatens the long term health of Ugandans, animals and plants. This puts our ecosystem, biodiversity and humanity at great risk of distinction. Therefore it should be every Ugandan responsibility to take care of the environment to make this country and planet a wonderful place to live. We don’t need to put a lot of money to go green but rather simple changes in daily lifestyle is all that is required to keep the environment conserved for the present and future generations. All we need is to think clean and biodegradable, to resist so much from buying plastics and dumping them, plant one tree and then another, encourage recycling.

Take this election period to create an environmentally friendly country, protest peacefully if you must but desist from using materials that will harm our environment.  Exercise your right of voting under article 59 of the constitution by voting accountable and transparent leaders that will engage every Ugandan and put policies that create an environment that we all desire, leaders that will respect the vibrant environmental policies that we have as a country. This will be achieved if you put questions to the aspirant leaders on policies they intend to establish so as to protect the threatened environment and ensure clean air and energy. A Clean and healthy environment is one of the essential rights of a welfare state as stipulated under article 39 of the constitution of Uganda, therefore I urge the government to ensure that their agencies work harder to ensure the same, let’s not normalize the use of teargas and as chemical sprays to disperse peaceful protesters. We can probably use water or any other environmental friendly sprays. As a country, we should always remember that a healthy environment, healthy communities and a healthy economy go hand in.

Aryampa Brighton, Youth For Green Communities

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What Happens To African Energy Industry If Western Lenders Cut Off Loans For Fossil Fuel Projects?

By NJ Ayuk

A little more than a year ago, in November 2019, the European Investment Bank (EIB) declared its intention to phase out funding for fossil fuels. Specifically, it said that it would no longer grant loans for projects involving crude oil, natural gas, and coal as of January 1, 2022 (with a scant few exceptions for gas projects that meet rigorous environmental criteria).

In making this announcement, the EIB made history. It became the first major multi-lateral financial institution to make a public commitment to abandon fossil fuels in the name of combatting climate change.

Its pledge did not go unnoticed. In October 2020, Antonio Guterres, the secretary-general of the United Nations (UN), called on the world’s publicly funded development banks to follow suit. Less than a month later, all 450 of these institutions — including, incidentally, the African Development Bank Group (AfDB) — agreed to bring their lending policies into line with the Paris climate accord.

The agreement did not include a categorical ban on fossil fuel loans, since some of the lenders involved, such as the Asian Development Bank (ADB), were unwilling to make this commitment. However, a group of European lenders did exactly that — and they were hardly alone in doing so.

You see, public development banks aren’t the only institutions to have made climate commitments. Since the beginning of 2020, a number of major private lenders — including but not limited to giants such as Barclays, HSBC, and Morgan Stanley — have rolled out plans to reach net-zero in greenhouse gas (GHG) emissions by 2050.

Others — such as Blackrock, a major asset management firm — have pledged to make more money available for renewable energy projects. And just a few weeks ago, South Africa’s Standard Bank Group joined the chorus, saying it would no longer fund fossil fuel projects unless the sponsors could demonstrate compliance with strict environmental standards.

And it’s not just the banks. Climate considerations are now driving some of the world’s largest oil and gas firms, with multi-national giants such as BP and Royal Dutch/Shell and slightly smaller operators such as Occidental Petroleum, aiming to hit the net-zero mark by 2050. They may also come to drive the U.S. government’s policies, as President Joe Biden has declared climate change one of the first priorities of his administration.

Is This a Tipping Point?

So what next? Should I follow the Bloomberg news agency’s example and talk about 2020 as a tipping point for climate activism? Should I try to extend the story I outlined above into the future and paint this year as the beginning of the end for fossil fuels?

That’s not what I want to do.

That’s not what I want to happen.

Instead, I’ll try to explain why I think the move away from financing fossil fuel projects has the potential to hurt Africa. And I’m going to do it by imagining what might happen if this move continues.

What Happens If Climate Concerns Dominate?

In this scenario, climate concerns come to dictate the lending policies of Western financial institutions. By 2025, all of the world’s publicly funded development banks have joined the EIB in declining to fund fossil fuel projects (even though a select few organizations are still managing to attract small-scale creditors after agreeing to adopt onerous and costly carbon offset arrangements). Private lenders have followed suit, making it known that they will only support renewable energy schemes (and that they prefer to do business with companies and governments that fall in line with their own net-zero pledges).

As far as the leaders of these financial institutions are concerned, they’ve done the right thing. They’ve done their part to uphold the Paris agreement and prevent the disasters caused by climate change. They’ve responded to the concerns of the public (and of their shareholders). And aren’t fossil fuels a risky investment nowadays? After all, demand never quite recovered after the COVID-19 pandemic hit, and prices have stayed rather low. Oil and gas are quite out of fashion now, really!

The View from Africa

But the view from Africa is likely to be different.

In Africa, climate considerations and ideological commitments to eliminating GHG emissions may well take a back seat to more urgent questions about how to encourage economic growth and supply basic necessities to the continent’s growing population.

In countries with large natural gas reserves such as Mozambique, Tanzania, South Africa, Nigeria, Algeria, Equatorial Guinea, Ghana, Cameroon, Senegal, and many others, politicians, businessmen and everyday people should ask their western counterparts why they should decline to extract a resource that could be used to produce electricity cheaply and reliably for both households and businesses.

They should ask why they should forego the opportunity to develop an industry that creates jobs, both directly and indirectly, and promotes trade with neighboring states that also need energy. They should ask why they are being discouraged from using the least polluting of the fossil fuels and pushed towards renewable energy solutions that are less reliable and more expensive per unit of power generated.

They should ask why Africa should be punished for western nations GHG emissions. They should ask what happens to energy poverty. They should ask who will pay reparations to Africa if Africans have to abandon their natural resources.

They may also ask why they should make the same sacrifices as Western countries when they don’t have the same advantages as those countries — including, say, the complement of legacy, gas-fired power plants needed to ensure that electricity supplies continue all day and night, without interruption, even at times when the wind isn’t blowing, and the sun isn’t shining.

Africans should also question the need to leave crude oil in the ground – and they should! For many of them, their oil industry and service companies are a major source of income. And while they may be willing to see that source phased out gradually, they’re not likely to assent to plans for killing them off abruptly.

Also, what about independent African exploration and production companies? What about African oilfield service companies and midstream operators? Shouldn’t they have a say in their future too?

Meanwhile, what about all the time and resources that a number of African leaders have invested in creating policies that encourage international oil companies to invest in their countries, from improved fiscal regimes to transparency laws to win-win local content policies? There’s no question that these leaders were interested in oil revenue, but there is so much more to gain from these policies, from much-needed technology transfers to business and growth opportunities for local entrepreneurs. In the wake of the COVID-19 pandemic, African economies need these opportunities more than ever.

Leaving China As the Only Option

Amidst all these questions, there may be a few determined types who seek to push forward with upstream oil and gas development despite the lack of support from Western banks. Heads of state may try to subsidize gas projects (or provide other forms of support) in an attempt to build up domestic capacities and promote self-sufficiency in energy. Entrepreneurs may reach into their own pockets or work to drum up local support, in the hope of using abundant natural resources to turn out products for which there is demand.

Without access to Western capital, such initiatives are more likely to fail — or, at least, to falter. If so, their backers may very well look for support elsewhere. And they may find it in China, which has been very willing to provide financial and technical assistance for fossil fuel projects in Africa.

Personally, I find the prospect of Beijing becoming the main source of outside financing for African oil, gas, and gas-to-power projects to be concerning. I’m not saying this because I think African states ought to shy away from cooperation with China. I’m saying it because I want them to have as many options as possible. I want them to be ready to work with a wide range of partners, rather than fall into a pattern of not having to look further than satisfying China’s requirements.

And this won’t happen if Western lenders cut off funding for African oil and gas projects as a consequence of their commitment to curbing climate change.

Instead, China will come to have more influence than any other party over the African oil and gas sector. China, which has already put a number of African countries in the position of handing over important assets when they find themselves unable to keep up with loan payments. China, which has a less-than-stellar track record on environmental protection, despite being a signatory to the Paris climate accord.

Time to Make a Case for Oil and Gas

As I’ve already said, this is not the outcome I want.

Instead, I think Africa should have the chance to use its own oil and gas to strengthen itself especially with the coming into force of the Africa Continental Free Trade Agreement.

I also think Africa should have more than one option when it comes to financing petroleum projects.

Most of all, I think Africa should have the chance to make its own choices without undue pressure from Western institutions that don’t face the same challenges. Africans have to become more visible, more vocal and even more hopeful about the future and the energy sector.

As a result, I think African states ought to push back against the idea that it’s time for Western banks to stop all funding for fossil fuels. I think that African oil and gas producers ought to stand up for themselves and make a case for developing their own resources — particularly for using the least-polluting fossil fuels to deliver as much electricity as possible to as many people as possible.

And the time to make that case is now, while financing for oil and gas is still available.

Urgent Action Needed For Energy Transition In Heating & Cooling

The transition to cleaner, more sustainable heating and cooling solutions can attract investment, create millions of new jobs and help to drive a durable economic recovery in the wake of the global COVID-19 crisis, says a new study by leading energy organisations. 

The joint report by the International Renewable Energy Agency (IRENA), the International Energy Agency (IEA) and the Renewable Energy Network for the 21st Century (REN21), highlights the benefits, identifies investment barriers, as well as the policies to drive faster uptake of renewable heating and cooling worldwide. Renewable Energy Policies in a Time of Transition: Heating and Cooling describes five possible transformation pathways, encompassing renewables-based electrification, renewable gases, sustainable biomass, and direct uses of solar thermal and geothermal heat.

"Energy efficient heating and cooling based on renewable sources has emerged as an urgent priority for countries striving to meet climate commitments under the Paris Agreement and to build resilient, sustainable economies," said IRENA Director-General, Francesco La Camera

"The transition to cleaner, more efficient and sustainable heating and cooling solutions can attract investments, create millions of new jobs and help to drive a durable economic recovery in the wake of the global COVID-19 crisis. It will make much needed heating and cooling services available to everyone, including to remote islands and least-developed countries of Africa and Asia."

Heating and cooling demand accounts for around half of global final energy consumption, mostly for industrial processes, followed by residential and agricultural applications. Most of this energy now comes either from fossil fuels or inefficient, unsustainable uses of biomass. Heating and cooling, consequently, is a major source of air pollution and accounts for over 40 per cent of global energy-related carbon dioxide (CO2) emissions. At the same time, around 2.8 billion people currently rely on wood fuel, charcoal, animal dung and other inefficient and polluting fuels for cooking.   

The demand for heating and cooling is set to keep growing. Cooling demand has already tripled globally since 1990, and as climate change increases the number and severity of heat waves, so does the urgency for supplying air conditioning and refrigeration to billions of people.

Policy makers have so far given limited attention to the heating and cooling transition. By the end of 2019, only 49 countries--mostly within the European Union--had national targets for renewable heating and cooling, in contrast with 166 having targets for renewable power generation. To decarbonise the energy used for heating and cooling, aggressive and comprehensive policy packages that phase out the use of fossil fuels and prioritise renewable energy and efficiency are even more urgent amid the COVID-19 pandemic, which has cut demand for renewables-based heating and cooling services, including in households and small businesses. The health and economic crisis has also worsened conditions for energy access in many developing countries.

Transitioning to renewable sources will help to increase access to clean, affordable and reliable heating and cooling services, even on remote islands and in some of the least-developed countries of Africa and Asia. At the same time, renewable heating and cooling can create new jobs, stimulate local economies, and improve people's livelihoods, while strengthening countries' energy security and independence, the report notes. 

Don't Underestimate The Power Of Natural Gas To Transform Africa

By NJ Ayuk

Africa has already made an indelible mark in the oil industry. It is home to four of the world's top 20 crude oil producers — Nigeria, Angola, Algeria, and Libya — and these same four countries also have some of the largest oil reserves in the world.

So far, it hasn't made quite as much of a splash in the gas industry. The only African countries on the list of the world's top 20 gas producers are Algeria and Nigeria, and one of the states that has the largest gas reserves is Mozambique, which is still several years away from bringing its major fields on line.

But the gap between African oil and gas doesn't have to be permanent. The continent's gas industry is on the verge of real transformation, as the African Energy Chamber (AEC) notes in our 2021 Africa Energy Outlook, released earlier this month. I'd like to describe what forms that shift might take — and explain how the changes would benefit Africans.

New Sources of Production

Some of the change I expect is going to happen in the upstream sector — that is, in the realm of exploration and production.

First, the continent's current leading producers are likely to produce more. North African states such as Egypt and Algeria will account for part of this increase, as they are looking to ramp up development at existing natural gas fields. But another part of it will stem from programs designed to reduce the flaring of associated gas found in oil fields.

Both Nigeria and Angola, for example, have plans to expand the use of associated gas. The former aims to deliver its production to the domestic market, while the latter is looking to split its production between the local market and the export-oriented Angola LNG project.

The upshot of these trends is that the list of Africa's top gas producers will probably remain static until the middle of the decade. As the AEC's outlook explains: "The (continent's) top five crude oil producers — Nigeria and Angola from the west, and Algeria, Egypt, and Libya from North Africa — complete the top five natural gas producers for 2020 and 2021.

These five countries contribute about 90% of the overall natural gas output from the continent for both (2020 and 2021), and the expected forecast suggests the share of these countries will remain the same going into the mid-2020s."

At that point, though, new producers will start to play a more prominent role. Mozambique is due to launch its first greenfield project at Area 1 in 2024, and its offshore zone may become a major source of natural gas by 2025-2026.

The Mauritania-Senegal offshore zone may follow a similar timeline, as the Greater Tortue/Ahmeyim blocks may begin yielding natural gas in 2023, followed later by the Yakaar-Teranga and BirAllah projects. What's more, all four of the projects mentioned in this paragraph will support gas liquefaction plants capable of producing and exporting LNG.

By the end of the decade, then, there will be more than five countries accounting for the bulk of Africa's total gas production. Nigeria, Angola, Algeria, Egypt, and Libya will be joined by at least three others —Mozambique, Mauritania, and Senegal.

Domestic Consumption vs. Exports

Meanwhile, consumption patterns are going to shift along with production patterns. Once again, this shift is likely to begin once the large new fields in the Mozambique and Mauritania/Senegal provinces come online.

The change may not be obvious on a macro level, because it won't be evident in the split between exports and domestic consumption. That is, Africa will continue to use about 70% of the gas it extracts and will export continue to the remaining 30%. As the AEC's outlook explains, though, the geography of African gas exports will not remain static.

"The pattern has been relatively stable since 2012 with about 70% serving local markets, 20% exported to Europe and 10% exported to Asia," the report states. "The mid-2020s LNG startups are also expected to distort this picture by increasing the market share for East Asia LNG exports.

This development is, however, not (a consequence) of local markets' (rising demand), but rather the shrinking ability of North African countries to maintain their export capacity to Europe on the back of strong domestic demand growth. By 2030, the expectation is effectively for East Asia and Europe to be inverted, while domestic market share remains constant."

In short, Africa is on track to produce more gas by the end of the decade but will keep the same share of the total for its own use. At the same time, Asia will replace Europe as the most important market for African gas exports.

Gas Means Jobs

These trends are interesting, but you may want to ask: What do they mean for ordinary Africans, for people who are less concerned with production data and trade balances than with questions about how to support their families?

They mean a great deal.

As I've mentioned, the 2021 Africa Energy Outlook report projects that African gas production is going to rise, especially after new fields come on line and ramp up development in the middle of the decade. It also anticipates that African gas consumption will rise, even if domestic consumption continues to absorb a full 70% of total production.

As production goes up, upstream operators will create jobs. They will need people to help them build, operate, maintain, and repair production, transportation, and processing facilities. They will also need people to administer their local operations. Additionally, they will need to meet legal requirements or contractual commitments for local content, so they will need to hire African contractors. Those African contractors, in turn, will need employees of all kinds, and so will hire African workers.

And as consumption goes up, even more jobs will be created. Distributors will need new pipelines to deliver the gas to end-users, so they will need people who can help them build, operate, maintain, repair, and administer those pipelines, along with associated infrastructure facilities such as storage depots.

And even in the absence of pipelines, they will need to acquire tankers and containers so that they can bring gas to customers by road, rail, or river. Accordingly, they will need people to procure, operate, maintain, repair, and administer these operations.

Meanwhile, there's more. The hiring of more African workers is sure to have knock-on effects. If, for example, employees of upstream operators need a way to get to a remote worksite, local transportation companies may be able to serve them. If so, those transportation companies may have to hire more people to drive their vehicles.

Likewise, if African construction firms need to procure extra building materials to uphold their contracts with upstream operators, local suppliers may be able to meet their needs. And if so, those local suppliers may have to hire more people to handle their inventory.

In other words, as Africa's gas industry grows, it has the potential to create thousands and thousands of jobs! Of course, some of them, such as construction jobs, will be temporary. Some of them will be more permanent, though, especially if the governments of gas-producing states work with upstream operators to develop local hiring and training standards that expand the capacity of the local workforce.

All the Way Down the Value Chain

But the knock-on effect doesn't have to stop there.

In my most recent book, Billions at Play: The Future of African Energy and Doing Deals, I urged African oil and gas producers to look as far down the value chain as they could. I advised them to pursue projects that treated hydrocarbons not just as exportable raw materials but as inputs for value-added operations such as fertilizer or petrochemical manufacturing. I also suggested that they look for ways to focus on gas-to-power projects with the intent of improving domestic electricity supplies — and not just because new power grids would benefit African businesses.

It is true, of course, that some African businesses will be able to create more jobs if they do not have to worry about blackouts. Likewise, it is true that gas-to-power projects will create jobs of their own in areas such as construction, operations, maintenance, and administration. But it is also true that African households need and deserve access to reliable energy supplies, regardless of employment levels — and that gas-to-power plans can help them!

I'm hardly the only person to reach this conclusion. When I wrote Billions at Play, several African countries had already rolled out ambitious gas-to-power schemes. Nigeria, for example, was in the process of implementing a program that promoted associated gas as fuel for new power plants. Since then, others have followed suit. For instance, as the AEC's energy outlook notes, Senegal has unveiled plans for using its future gas production to generate electricity for the domestic market. Mozambique already has a couple of gas-to-power projects in the works, too.

But it shouldn't stop there. I'd like to see more gas producers do this as they ramp up gas production in the second half of the decade. If they do, they will have accomplished something beyond merely increasing output levels. They will have taken concrete action to strengthen their economies and benefit their own citizens. And in so doing, they will have made their mark on the world!

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.

African Countries Must Take A Balanced Approach To The Energy Transition

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 COreleased 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.

Don't Underestimate The Power Of Natural Gas To Transform Africa

By NJ Ayuk

Africa has already made an indelible mark in the oil industry. It is home to four of the world's top 20 crude oil producers — Nigeria, Angola, Algeria, and Libya — and these same four countries also have some of the largest oil reserves in the world.

So far, it hasn't made quite as much of a splash in the gas industry. The only African countries on the list of the world's top 20 gas producers are Algeria and Nigeria, and one of the states that has the largest gas reserves is Mozambique, which is still several years away from bringing its major fields on line.

But the gap between African oil and gas doesn't have to be permanent. The continent's gas industry is on the verge of real transformation, as the African Energy Chamber (AEC) notes in our 2021 Africa Energy Outlook, released earlier this month. I'd like to describe what forms that shift might take — and explain how the changes would benefit Africans.

New Sources of Production

Some of the change I expect is going to happen in the upstream sector — that is, in the realm of exploration and production.

First, the continent's current leading producers are likely to produce more. North African states such as Egypt and Algeria will account for part of this increase, as they are looking to ramp up development at existing natural gas fields. But another part of it will stem from programs designed to reduce the flaring of associated gas found in oil fields.

Both Nigeria and Angola, for example, have plans to expand the use of associated gas. The former aims to deliver its production to the domestic market, while the latter is looking to split its production between the local market and the export-oriented Angola LNG project.

The upshot of these trends is that the list of Africa's top gas producers will probably remain static until the middle of the decade. As the AEC's outlook explains: "The (continent's) top five crude oil producers — Nigeria and Angola from the west, and Algeria, Egypt, and Libya from North Africa — complete the top five natural gas producers for 2020 and 2021.

These five countries contribute about 90% of the overall natural gas output from the continent for both (2020 and 2021), and the expected forecast suggests the share of these countries will remain the same going into the mid-2020s."

At that point, though, new producers will start to play a more prominent role. Mozambique is due to launch its first greenfield project at Area 1 in 2024, and its offshore zone may become a major source of natural gas by 2025-2026. The Mauritania-Senegal offshore zone may follow a similar timeline, as the Greater Tortue/Ahmeyim blocks may begin yielding natural gas in 2023, followed later by the Yakaar-Teranga and BirAllah projects. What's more, all four of the projects mentioned in this paragraph will support gas liquefaction plants capable of producing and exporting LNG.

By the end of the decade, then, there will be more than five countries accounting for the bulk of Africa's total gas production. Nigeria, Angola, Algeria, Egypt, and Libya will be joined by at least three others —Mozambique, Mauritania, and Senegal.

Domestic Consumption vs. Exports

Meanwhile, consumption patterns are going to shift along with production patterns. Once again, this shift is likely to begin once the large new fields in the Mozambique and Mauritania/Senegal provinces come online.

The change may not be obvious on a macro level, because it won't be evident in the split between exports and domestic consumption. That is, Africa will continue to use about 70% of the gas it extracts and will export continue to the remaining 30%. As the AEC's outlook explains, though, the geography of African gas exports will not remain static.

"The pattern has been relatively stable since 2012 with about 70% serving local markets, 20% exported to Europe and 10% exported to Asia," the report states. "The mid-2020s LNG startups are also expected to distort this picture by increasing the market share for East Asia LNG exports.

This development is, however, not (a consequence) of local markets' (rising demand), but rather the shrinking ability of North African countries to maintain their export capacity to Europe on the back of strong domestic demand growth. By 2030, the expectation is effectively for East Asia and Europe to be inverted, while domestic market share remains constant."

In short, Africa is on track to produce more gas by the end of the decade but will keep the same share of the total for its own use. At the same time, Asia will replace Europe as the most important market for African gas exports.

Gas Means Jobs

These trends are interesting, but you may want to ask: What do they mean for ordinary Africans, for people who are less concerned with production data and trade balances than with questions about how to support their families?

They mean a great deal.

As I've mentioned, the 2021 Africa Energy Outlook report projects that African gas production is going to rise, especially after new fields come on line and ramp up development in the middle of the decade. It also anticipates that African gas consumption will rise, even if domestic consumption continues to absorb a full 70% of total production.

As production goes up, upstream operators will create jobs. They will need people to help them build, operate, maintain, and repair production, transportation, and processing facilities. They will also need people to administer their local operations. Additionally, they will need to meet legal requirements or contractual commitments for local content, so they will need to hire African contractors. Those African contractors, in turn, will need employees of all kinds, and so will hire African workers.

And as consumption goes up, even more jobs will be created. Distributors will need new pipelines to deliver the gas to end-users, so they will need people who can help them build, operate, maintain, repair, and administer those pipelines, along with associated infrastructure facilities such as storage depots.

And even in the absence of pipelines, they will need to acquire tankers and containers so that they can bring gas to customers by road, rail, or river. Accordingly, they will need people to procure, operate, maintain, repair, and administer these operations.

Meanwhile, there's more. The hiring of more African workers is sure to have knock-on effects. If, for example, employees of upstream operators need a way to get to a remote worksite, local transportation companies may be able to serve them. If so, those transportation companies may have to hire more people to drive their vehicles.

Likewise, if African construction firms need to procure extra building materials to uphold their contracts with upstream operators, local suppliers may be able to meet their needs. And if so, those local suppliers may have to hire more people to handle their inventory.

In other words, as Africa's gas industry grows, it has the potential to create thousands and thousands of jobs! Of course, some of them, such as construction jobs, will be temporary. Some of them will be more permanent, though, especially if the governments of gas-producing states work with upstream operators to develop local hiring and training standards that expand the capacity of the local workforce.

All the Way Down the Value Chain

But the knock-on effect doesn't have to stop there.

In my most recent book, Billions at Play: The Future of African Energy and Doing Deals, I urged African oil and gas producers to look as far down the value chain as they could. I advised them to pursue projects that treated hydrocarbons not just as exportable raw materials but as inputs for value-added operations such as fertilizer or petrochemical manufacturing. I also suggested that they look for ways to focus on gas-to-power projects with the intent of improving domestic electricity supplies — and not just because new power grids would benefit African businesses.

It is true, of course, that some African businesses will be able to create more jobs if they do not have to worry about blackouts. Likewise, it is true that gas-to-power projects will create jobs of their own in areas such as construction, operations, maintenance, and administration. But it is also true that African households need and deserve access to reliable energy supplies, regardless of employment levels — and that gas-to-power plans can help them!

I'm hardly the only person to reach this conclusion. When I wrote Billions at Play, several African countries had already rolled out ambitious gas-to-power schemes. Nigeria, for example, was in the process of implementing a program that promoted associated gas as fuel for new power plants.

Since then, others have followed suit. For instance, as the AEC's energy outlook notes, Senegal has unveiled plans for using its future gas production to generate electricity for the domestic market. Mozambique already has a couple of gas-to-power projects in the works, too.

But it shouldn't stop there. I'd like to see more gas producers do this as they ramp up gas production in the second half of the decade. If they do, they will have accomplished something beyond merely increasing output levels. They will have taken concrete action to strengthen their economies and benefit their own citizens. And in so doing, they will have made their mark on the world!

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.

Uganda’s Oil Developments Jeopardizing A Just Energy Transition

By Cirrus Kabaale

In the wake of the Covid 19 pandemic and the need for governments around the world to ensure a just recovery and transition to low- carbon energy systems for economic and social recovery. Clearly, our government continues to fail us in-terms of current fossil fuels development plans. Government of Uganda is still making progress towards the development of its 6.5 billion barrels of oil, with plans to build a $3.5 billion East African Crude Oil Pipeline EACOP.

However, as the government seeks to turn oil reserves into tomorrow’s fuels, oil development will certainly further lock us onto the path to irreversible climate change and failure to meet our Paris climate goals. Moreover, most oil projects continue to rob locals of their land and livelihoods with disregard and violation of their land, property rights. These are degrading the environment and climate in equal measure, fueling a triple crisis.

In Hoima district, 29 square kilometres piece of land was acquired by the government to pave way for the Airport and oil refinery. The crude oil pipeline covers 296Km and traverses 10 districts, 22 sub-counties and an estimated 172 villages. These projects continue to eat up land that locals depend on for their livelihoods. Uganda is an agriculture-dependent country. The sector remains the main source of livelihood and employment for over 60 percent of the population.

A recent report by Environmental Governance Institute EGI working with three environmental organizations from Ghana, Nigeria and Togo in cooperation with Friends of the Earth Netherlands and Both ENDS reveals that since the signing of the Paris Climate Agreement, rich countries have provided almost 50 times as much support for fossil fuel-related projects less for clean energy projects in the four African countries. It further states that rich countries through export credit agencies ECAs insured energy projects with a total value of 11 billion US dollars and more than half of this export support is related to fossil fuels. Only 1% went to sustainable renewable energy. Export credit agencies provide insurances and guarantees to companies doing business abroad.

The report titled “A Just Energy Transition for Africa? Mapping the impacts of ECAs active in the energy sector in Ghana, Nigeria, Togo and Uganda”, calls upon these rich countries to stop support for fossil fuel developments including the EACOP and large hydro-power dams in Uganda that undermine the Paris agreement, aggravate climate change, destroy the environment, heighten human rights violations and leave local communities disenfranchised.

The report spotlights the story of 56-year-old widow Beneconsicla in Western Uganda who has to leave her land on which her banana plantation sits that she depends on to feed and provide for her family of 5 children. She has to pave way for the EACOP which is supported by the United Kingdom based Export Credit Agency UKEF.

Uganda is a signatory to the Paris agreement and according to its Nationally Determined Contributions, the country has committed to a 22% emission cut on a business as the usual basis by 2030 in a bid to mitigate and adapt to climate change and transit to a low-carbon climate-resilient economy. However, developing oil and gas resources will increase greenhouse gas emissions. One of the most significant gases emitted when fossil fuels are burned, is carbon dioxide, a greenhouse gas that traps heat in the earth's atmosphere and is responsible for global warming. 

Without urgent action to reduce greenhouse gas emissions and pollution, climate change will worsen. we will see more frequent and intense rains, flooding and deeper droughts that will have a major impact on vulnerable communities. It’s also important to note that scientists have long warned that climate change will cause an increase in infectious diseases, such as COVID-19. Warmer temperatures and increased contact between humans and animals due to loss of habitat will increase the transmission of diseases. 

Responding to the double crises of pandemics and climate change requires massive investment in clean energy projects that help tackle the climate crisis and protect the environment. Increased investments in renewable energy will help us transition to a more climate-friendly economy. Uganda still has plenty of clean energy sources to develop. According to Uganda’s renewable energy policy, the overall renewable energy power generation potential is estimated to be 5,300 MW. 

Cirrus Kabaale is the Program Officer Just Energy Transition at Environment Governance Institute Uganda

 

 

Why Are Developed Countries Funding Fossil Fuel Projects In Africa?

By John Peter Okwi

Africa based environmentalists have come out to strongly criticize and call out developed countries to stop backing dirty energy projects in Africa that undermine the Paris agreement and jeopardize efforts to curb global warming.

These projects which are in most cases made feasible by government-backed loans and guarantees through ECA’s end up violating human rights of local host communities, destroy the environment and leave local communities disenfranchised.

The activists want energy firms to funnel funding and steer financial flows towards cleaner energy projects that are low carbon and neither harm the environment nor citizens to end. They want humane energy systems in which the energy needs of the poorest are met using clean energy.

In a recent report the group from Ghana, Nigeria, Togo and Uganda, in cooperation with Friends of the Earth Netherlands and Both ENDS reveals that since the signing of the Paris Climate Agreement, rich countries have provided almost 50 times as much support through ECAs for fossil fuel-related projects less for clean energy projects in the four African countries.

The report titled “A Just Energy Transition for Africa? Mapping the impacts of ECAs active in the energy sector in Ghana, Nigeria, Togo and Uganda”, reveals that rich countries insured energy projects with a total value of 11 billion US dollars and more than half of this export support is related to fossil fuels.

Only 1% went to sustainable renewable energy. Export credit agencies ECAs provide insurances and guarantees to companies doing business abroad.

“Climate change is already having a significant impact on the lives of Africans. There is no excuse for carrying on with business as usual. It’s time to stop funding fossil fuel projects. These countries are busy decarbonizing their economies while driving the climate crisis in Africa” says Samuel Aede a researcher from the Ugandan based Environmental Governance Institute.

The report reads in part “Many industrialized nations are advocating a switch to renewables at home. But while they commit to phasing out fossil fuel energy domestically, these commitments are abandoned as soon as their companies cross international borders, where they continue to push dirty energy, and as such contribute to climate change.

This is happening in Africa, a region that is being hit particularly hard by the impacts of climate change. Prolonged droughts, floods, mudslides and other extreme weather events are affecting the livelihood opportunities of millions of people across the continent” 

"Despite international climate agreements and national climate ambitions, export credit agencies continue to support fossil energy projects abroad on a large scale," says Niels Hazekamp of Both ENDS. "This undermines the Paris Climate Targets. Export credit agencies hardly play a role in insuring green, sustainable projects. This report once again makes us wonder whether ECAs are able to make the changes that are urgently needed.”

Part of the research is based on reports from local communities in Uganda that have been affected by the East African Crude Oil Pipeline (EACOP) which is supported by the UK ECA UKEF. Local communities have had to leave their land to pave way for this huge fossil fuel project. They are hardly compensated for this, with many ending up living in poverty.

“Such projects have left people worse off than they were, these are communities that already have to deal with impacts of climate change such as food insecurity “, said Aede from EGI. “These developed countries must rethink their ECA related support towards sustainable energy projects”

The African continent of more than 800 million people, is already feeling the impacts of extreme weather events such as prolonged droughts, heavy rains and cyclones.

John Peter Okwi is the Programs Coordinator at Environment Governance Institute Uganda

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Tourism Host Communities Threaten Murchison Falls National Park

By Cirrus Kabaale

Last month, the World Bank and Swedish Embassy signed a partnership agreement of worth 12.3 billion Uganda shilling fund support with several government institutions including National Forestry Authority (NFA), Uganda Wildlife Authority (UWA), Ministry of Tourism and among others to help the country to manage natural and tourism resources.

The purpose of the support was to help the country’s economy to recovery from the effects of post covid 19, promote green economy by reducing the carbon emission and address loopholes by enforcing environmental protection as part of the recovery plan for the tourism industry.

The tourism sector that facilitates mobility and human interaction has been amongst the hardest hit. The sector has been one of the leading foreign exchange earners for the country. In the 2018/2019 financial year, tourism earned Uganda over USD 1.6 billion.

And according to the estimates from the Ministry of Tourism indicate that Uganda is expected to lose nearly $ 500 million in tourism earnings in 2020 due to travel restrictions implemented after the coronavirus outbreak.

The presidential restrictions to curb the spread of the deadly virus have sharply curtailed tourism activities everywhere and the tourism host community has not been spared. While a gradual re-opening of society is underway, the pandemic in the country has not yet reached its peak and the long process towards recovery is just beginning.

As tourism crises elsewhere have demonstrated, communities who largely depend on tourism were left uncertain of how to survive after a national lockdown to contain the spread of Covid 19 halted tourism activities, which pushed communities to encroach on the wildlife habitat areas in search for food and income.

In efforts to ensure that the tourism host communities do not destroy Uganda’s environment, on the 10th and 11th November 2020, Environment Governance Institute (EGI) in partnership with Uganda Wild Life Authority Staff working in Murchison falls landscape with the support of the IUCN Save Our Species which is co-funded by the European Union organized community champion trainings for tourism host communities in Pakanyi and Ngwedo sub counties, Masindi and Bullisa districts respectively.

The training enabled tourism host communities to build their resilient capacity to adapt and apply alternative land-use and livelihood practices to secure food security, improved incomes and climate-resilient. This will help limit or stop them from destroying wildlife habitats and engaging in illegal activities including poaching.

Therefore, the diversification of livelihoods will enable communities, generate income, get food, and ensure the ecosystems are protected.

Cirrus Kabaale, Programs Officer Just Energy Transition at Environment Governance Institute (EGI)

 

 

Should Countries Fire Sell Their Oil & Gas Assets?

Does the energy transition imply a total ban on fossil fuels and should countries fire sell their oil & gas assets?

No, energy transition does not mean a total ban on fossil fuels. In simple terms, energy transition refers to a shift from fossil fuels to cleaner forms of energy. Energy transition is a progressive process; however, some experts and activists have used the term to shame countries that still desire to develop their fossil fuels. Although some parts of the globe such as Europe have made significant efforts to decarbonise the energy sector by among others deploying renewable energy, energy efficiency technologies, smart grids, smart meters and electric vehicles; other regions, especially rural areas in developing countries, are still progressing from traditional biomass, although there are various renewable energy projects in these countries.

Taking stock of the above, a wholesome transition away from fossil fuels is not expected. For example, it is often said that our world has transitioned from "coal age" to "oil age" decades ago. Yet, coal still accounted for more than a quarter of global energy supply in 2019 and the world used two and half times more coal in 2019 than in 1973. For most developed countries, traditional biomass (wood, crop waste, or charcoal) has lost its prominent role in the global energy mix since the industrial revolution.

Yet, the world used 60% more biomass in 2019 than did in 1860. Additionally, we note that many developing countries such as those in Asia and Africa, are still struggling to transition from traditional energy to modern energy. For instance, given the social roles of women in various Sub-Sahara African (SSA) countries, such as cooking and other domestic work, women spend a lot of time collecting biomass fuels such as firewood: estimates indicate that women spend on average 1.4 hours a day collecting fuel wood and four hours for cooking. This in essence highlights the essential role of access to modern energy in not only achieving SDG 1 on poverty eradication, but also SDG 5 on gender equality.

Taking into consideration the above, countries should not fire sell their oil and gas assets. Additionally, finances in these projects should not be reduced, but rather cleaner forms of technology should be embraced. What is desirable is for countries to invest in both fossil fuels and renewables. Nevertheless, given the global efforts to tackle climate change as stipulated in the 2015 Paris Agreement, coupled with public pressure and shaming; there have been developments in some countries aimed at totally banning fossil fuel dependency. In Norway, for instance, there has been a halt in fossil fuel investments.

In June 2020, the Norwegian parliament recommended that the Sovereign wealth fund sells off more than $10 billion of stocks in companies related to fossil fuels. Besides Norway, in November 2019, The European Investment Bank (EIB), approved a policy to ban funding for oil, gas and coal projects at the end of 2021. In that case, gas projects could still be funded but as long as they utilize clean technologies such as carbon capture and storage, combining heat and power generation, or mix in renewable gases with the fossil natural gas. These are just a few examples of the various developments in the energy sector, which negatively and directly have a financial impact on fossil fuel investments.

The above notwithstanding, the fact that oil has a higher energy density compared to other fuels and relatively moderate carbon emission rates makes it difficult to be replaced for certain uses, particularly in transportation. Even in the most dramatic scenarios projected by BP (2020), due to depletion, significant investment is still required to meet the global demand for oil and gas for several decades to come. So, there is no need to rush to sell your oil and gas assets.

The social and economic impacts of the energy transition for hydrocarbons-rich nations

By background, we note that Goal 7 of the United Nations Sustainable Developmental Goals (SDG) advocates access to affordable and clean energy for all. Access to modern forms of energy such as electricity is crucial to addressing other global challenges such as poverty, famine and gender inequality: reliable data shows that three billion people - more than 40% of the world population - are still relying on polluting and unhealthy fuels for cooking. With this data in mind, we must agree that a wholesome transition is likely to have both positive and negative impacts. Positively, more investments will be directed to renewable energy projects, and this will also present employment opportunities. However, this will also imply a decline in investments in fossil fuels. Below, a brief of the negative impacts:

Social impacts - Access to electricity

A wholesome transition is likely to escalate energy access challenges. Socially, many people lack access to electricity and are still reliant on traditional energy such as charcoal and firewood, as such the transition should focus on ensuring that these people progress from charcoal to other forms of modern energy such as electricity (which can be generated using both renewables and fossil fuels). The focus for developing countries in Asia and Africa, therefore is access to electricity.

Electricity in its natural form tends to appear as lighting and static, the technological advancement has enabled primary sources of energy such as coal, nuclear power, running water and of late renewable energy sources to provide this electricity. In this respect, for a country with more than 80% of the population lacking electricity, the focus will not entirely be on the kind of primary energy used to provide this electricity, but rather on ensuring that people shift from wood and biomass usage. Fossil fuels are also still essential for the urbanisation and industrialisation of many developing countries. As such, a wholesome transition will negatively affect developing countries that are counting on their fossil fuels for economic development.

Economic impacts

The economic impact is likely to be felt by producing countries such as Nigeria, Angola and Algeria that are massively dependent on hydrocarbons for their budgets. Whereas it might appear that extractive industries are key in tackling poverty and ensuring economic development, there have been instances where countries endowed with massive natural resources grow slower than resource-poor countries and faced with political instability. This is what scholars have termed as the resource curse, and it is attributed mostly due to corruption, poor governance and ineffective institutions. Nevertheless, if well managed, these resources can contribute to the economic development of countries as was the case in Norway and Botswana. The United States, Canada and Australia are also resource-rich countries. The challenge for resource-rich countries is therefore how to harness the windfall revenues from fossil fuel development and contribute to sustainable growth.

How do we reconcile fossil fuel development and efforts to address climate change?

It is true, fossil fuels are the main contributor to climate change as they produce around 60% of greenhouse gases. Additionally, the UN Intergovernmental Panel on Climate Change (IPCC) issued a warning in 2018 that humanity had just twelve years to limit global warming to below 2°C [1]. However, focus should be put on how to utilise these resources in a sustainable manner. Although fossil fuels are associated with climate change impacts, cleaner and more efficient production and utilization methods can reduce emissions from fossil fuel use. By investing in clean technologies such as carbon capture and storage, combining heat and power generation, or mixing in renewable gases with the fossil natural gas, the high carbon footprints associated with fossil fuel production and use can be significantly reduced.

How are countries reacting to fossil fuel developments in an era of energy transition?

They are mixed signals with respect to fossil fuel developments, as summarised below:

More investments in renewables

Huge investments in renewable energy projects are evident in different developing countries. In sub-Saharan Africa, South Africa and Kenya have taken a clear lead over such developments, including in wind, solar and geothermal energy.

Steady investments in fossil fuel infrastructure

With the new oil discoveries in countries such as Uganda, Senegal or Kenya, there have been initiatives to invest in more fossil fuel infrastructure. For instance, Uganda has proven crude oil reserves of 6.5 billion barrels, about 2.2 billion of which is recoverable. The country recently, on the 10th of September 2020, concluded and signed with Total, a Host Government Agreement (HGA) for the East Africa Crude Oil pipeline (EACOP) project. This $3.5bn project is intended to connect Uganda's oil fields to Tanzania's port of Tanga.

Gas infrastructure are evident in different oil-rich countries. For instance, on 30th June 2020, President Muhammadu Buhari launched a $2.6 billion gas pipeline project in Nigeria. The 614-km long pipeline will run from Ajaokuta to Kano under the auspices of Nigerian National Petroleum Corporation (NNPC).

All the above developments point to the keen interest hydrocarbon-rich countries have in utilising natural gas resources to meet the energy demand in the region. Besides ensuring energy security, fossil fuels, specifically natural gas, has been recognized as an environmentally preferable product (EPP) for a low carbon transition. Basically, "environmentally preferable" refers to products or services that have a lesser or reduced effect on human health and the environment when compared with competing products or services that serve the same purpose.

Conclusion

Like highlighted above, hydrocarbon rich countries should invest more in clean technologies to utilise these resources. Development of fossil fuels does not imply that renewables should not be utilized, as such countries should also invest more in clean energy such as wind and solar. Good governance, transparency and accountability are also key in utilising natural resource to ensure that revenues from fossil fuels can finance renewable energy projects. Additionally, mineral rich countries should take note of the increasing role of critical minerals such as cobalt and lithium in the energy transition.

An expanded version of this article is published in the Journal of Sustainable
Development Law and Policy, Afe Babalola University, Ado Ekiti, Nigeria, Volume 11 Issue 2, 2020


Dr. Victoria Nalule is a holder of a PhD in International Energy Law and Policy from CEPMLP, University of Dundee. Victoria is the Founder and Executive Director of the African Energy and Minerals Management Initiative (AEMI). She is currently involved as a Research Fellow with the DFID-funded, Extractives Hub project, based at CEPMLP, University of Dundee, UK.

Dr. Xiaoyi (Shawn) Mu is a Reader in Energy Economics at the Centre for Energy, Petroleum and Mineral Law and Policy (CEPMLP), the University of Dundee. He earned his Ph.D. in economics from the University of Oklahoma in 2006 and Bachelor's degree in economics from Renmin University of China in 1994. His research interest has focused on commodity pricing and volatility, the economics of oil and gas, electricity, renewables, regulation and restructuring of energy policy issues in developing countries.

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