LOCAL CRUDE OIL REFINING AS ALTERNATIVE SOURCE OF LIVELIHOOD, JOB CREATION AND ENVIRONMENTAL SUSTAINABILITY IN THE NIGER DELTA.

By Piriye Kiyaramo

Nigeria’s Vice President, Prof. Yemi Osinbajo during his maiden tour of Niger Delta states in the capacity of Acting President of the federal republic of Nigeria in 2017 promised to build modular refineries in oil producing communities an alternative source of livelihood, job creation and environmental sustainability in the Niger Delta region as part the federal government’s new vision for the oil rich Niger Delta region.

The planned establishment of modular crude oil refineries were meant to substitute the ongoing illegal refineries in the creeks of the region with a view to increasing local production for domestic consumption and export.

However, this bold declaration by the then Acting President and subsequent efforts being made in driving the growth of modular refineries through private investment seemed to be slowing down. The people of the region, particularly the youth are gradually losing confidence in the present administration on its policy direction in respect of the proposed new vision for the region.

Findings show that Nigeria still has a long way to go in the establishment of modular refineries in oil bearing communities as an alternative source of livelihood for the oil producing communities where illegal refining activities go on a daily basis unabated.

It is against this background that a Non-Governmental Organisation, Youths and Environmental Advocacy Centre, Port Harcourt, in partnership with Development and Peace, Canada, recently organised a one day advocacy training/sensitisation workshop for artisanal crude oil refinery operators in the Niger Delta at Peretimi Hotel in Yenagoa, Bayelsa state, on ways to seek alternative sustainable source of livelihoods through establishment of modular refineries in oil bearing communities in the Niger Delta.

Resource persons were drawn from Rivers State University of Science and Technology, Port Harcourt and University of Port Harcourt to deliver papers on guidelines for the establishment modular refineries and the need to explore other available alternative sources of renewable energy. These initiatives, if executed rigorously, will drive growth and reforms within the oil and gas sector in the medium to long term.

Participants at the one-day training/advocacy workshop, numbering over hundred persons drawn from states across the Niger Delta region were unanimous on the fact that “there is a good margin in modular refinery business in Nigeria and that the establishment of modular refineries in oil producing communities remains a viable option in curbing the present challenge of energy insufficiency in Nigeria”

Workshop participants called on the federal government to be committed to the implementation of its earlier plans to introduce modular refineries in oil producing communities, using bottom-up approaches, adding that the new initiative will drive medium to long term growth and reforms within the oil industry, with a view to providing jobs and reduce ongoing degradation of the environment caused by the activities of artisan refineries which now litter all the creeks in the region. Such alternative source of livelihood would drastically reduce crime rate in the creeks and contribute to the attainment of a healthy and sustainable Niger Delta environment.

The federal government’s commitment towards providing the enabling operational business environment for indigenous investors in modular refineries, notwithstanding, the people of the area are becoming impatient as no meaningful action has followed the Vice President’s pronouncement on the establishment of modular refineries to boost local production of petroleum products for export.

Executive Director of Youths and Environmental Advocacy Centre (YEAC), Port Harcourt, Fyneface Dumnamene Fyneface, in his opening remarks,  said the training/sensitization workshop for artisanal crude oil refiners in Bayelsa state on guidelines for the establishment of modular refineries and renewable energy as alternative means of livelihoods for environmental sustainability in the Niger Delta with the theme: “Youths Training on Conflict Resolution and Alternative Livelihood through Modular Refineries for Environmental Sustainability in the Niger Delta”, was organized with the support from their foreign parter NGO, Development and Peace, Canada.

“This is one of many other activities to be carried out in Rivers and Bayelsa States to achieve the project objectives of making youths involved in acts of artisanal refining which cause environmental pollution to have alternative means of livelihoods through renewable energy and modular refineries.

“The modular refinery component of this training is aimed at preparing the youths for the modular refineries proposed by the federal government through the Acting President, Professor Yemi Osinbajo during his tour of the Niger Delta region in 2017.

“It is our believe that those of you who will benefit from this training today will become our ambassadors that will tell your colleagues to stop these acts of artisanal refining that contribute to the environmental pollution in the Niger Delta”, the Executive Director said.

According to Mr. Fyneface, the Advocacy Centre which is also the coordinating organization of Niger Delta Ex-artisanal Refiners Forum has severally called on the Federal Government to make real its earlier promise to establish modular refineries for youths in the Niger Delta that are involved in what he described as ‘Bush Refineries’.

“We believe that the federal government was not coaxed to make this promise and we believe also that the federal government has all it takes to fulfill this promise to the youth in the interest of our environment, job creation and revenue generation for the national treasury”, he reiterated

In his presentation on guidelines for the establishment of modular refineries, Mr. Kanee, Rogers Bariture from the Rivers State University of Technology, said modular refineries were ideally suited for remote locations and are viable for investments through Public-Private Partnership (PPP) as a source of rapid production of primary fuel products and raw materials for petrochemical downstream industries.

Mr. Bariture said establishing a crude oil refinery requires approval from the Department of Petroleum Resources (DPR) in Nigeria, informing that investors may need to partner with government at different levels on a PPP basis to guarantee investment and feedstock for the production plants.

According to him, the conditions required to make such an investment in modular refinery workable will include: proximity and access to crude supply; location to sizable markets with logistics advantages; project finance on preferential terms from development credit agencies; and government incentives.

He pointed out that investors in modular refineries should have knowledge of the oil industry, the technicalities and economic implication of the project, including the sociological implication on the immediate community and larger society.

“The knowledge of likely environmental effects of the refinery project and its associated activities, equipment and maintenance provisions required to protect the health of workers and safety of the plant are vital”, he noted.

The scholar advised prospective local investors to rather come together to form cooperatives to pull funds and constructively advocate for collective interest and benefit, while engaging with relevant government agencies for incentives such as training and capacity building, cost reduction, essential wavers and tax free timeline and enter into partnerships with foreign or indigenous investors (like Belema oil) and State and Local Governments to fund the project.

Modular refineries which are usually available in capacities ranging from 1,000 to 30,000 barrels per day (bpd), are ideal for stranded production fields and remote locations. They could be located in riverine areas where accessibility to the petroleum products seem to be very difficult due to logistics. This will allow the residents in such areas to purchase the products at cheaper price.

Modular refinery of 20,000bpsd can be established within a short period of about 15 to 20 months time at different locations. This will ultimately cut off expensive transportation of crude oil through pipelines, covering long distance, which are susceptible to vandalization as has been the case in several parts of oil producing states in Nigeria.

Presenting her paper on “the need to explore the option of renewable energy”, a lecturer from the Department of Plant Science and Biotechnology in University of Port Harcourt, Miss Josephine Ukomadu said renewable energy is obtained from sources that are essentially inexhaustible, saying that the adoption of renewable energy has the potential to promote sustainable development.

She maintained that though Nigeria is rich in high qualities of various energy resources, which include crude oil, natural gas and coal, the country has not exploited these potential energy sources, informing that the worldwide consciousness of the phenomenon of climate change as well as the predictable lack of conventional energy resources made various countries to develop more sustainable energy system to cater for development and growth.

“Energy is one of the key requirements for the economic development of any country. The over dependence on fossil fuel as primary energy source gave rise to global climate change, environmental pollution and degradation, hence, leading to human health problems. Worldwide energy crisis directed attention of countries to alternative sources of energy instead of underground fossil fuel. There is a necessity to create awareness as regards an alternative source of energy.

“The ensuing rise in global temperature is changing the complex web of systems that permit life to flourish on earth. Such as rainfall, wind patterns, ocean currents and distribution of plant and animal species. There is a need to adopt new source of energy for sustainability. Energy is one of the key requirements for the economic development of any country. Examples of renewable resources include wind power, solar power, geothermal, hydroelectric power, tidal power and wave energy”, the university don reiterated.

The Blue Economy online findings indicate that the Nigerian oil and gas industry is heavily regulated by multiple regulators, including the Ministry of Petroleum Resources (MPR), Department of Petroleum Resources (DPR) and even the Nigeria National Petroleum Corporation (NNPC).

The effectiveness of these bodies in the refining sector has remained debatable. Recent refusal of President Buhari to assent to the passage of the Petroleum Industry Governance Bill (PIGB) and full deregulation of the downstream sector are some of the factors that have dampened investor’s confidence.

According to the Nigerian Extractive Industries Transparency Initiative (NEITI), Nigeria loses an estimated $15 billion yearly in foreign investments due to regulatory uncertainty. Uncertainties in regulations have discouraged various institutional and individual investors in setting up modular refineries in Nigeria.

Piriye Kiyaramo is a veteran journalist and publisher of the Blue Economy News-magazine online Abuja. He writes from Yenagoa, capital city of oil rich Bayelsa state in Nigeria.