Speech Delivered at the 2022 Annual Conferences of the Association of Professional Women Engineers of Nigeria, APWEN. Titled: “JUST ENERGY TRANSITION STRATEGY: An Enabler for Sustainable Development in Nigeria”.
1. It is with great pleasure that I address you all at this 2022 Annual Conference of the Association of Professional Women Engineers (APWEN), taking place here in Abuja on the theme “Just Energy Transition Strategy: An Enabler for Sustainable Development in Nigeria”.
2. I commend and applaud the leadership of APWEN for this conference and most especially for the commitment and resilience in advocating for women in the Engineering Sciences. There is no doubt that women’s education is a catalyst for National Development.
3. The education of the Girl Child through mentorship campaigns, organization of professional development programs like this conference, and motivation of female students to pursue Engineering and Sciences programs is also an enabler for Sustainable Development in Nigeria.
4. Let me start by stating that the pivotal role of energy in economic growth and the sustainable development of a nation cannot be overemphasized. Sustainable Development as a process of exploitation of energy resources seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future.
5. Therefore, the availability of energy from cost-effective sources, accessibility, and utilization strongly supports the rate of industrial and economic growth while significantly contributing to the development of the nation.
6. Over the last decade, energy transition, fossil fuels, climate change, and the negative consequences thereof have gained more attention in national and international public discourse generally due to rising environmental concerns resulting from increasing concentration of greenhouse gases (GHG), which are associated with fossil fuel combustion. This has led to renewed interest in low carbon-intensive and environmentally friendly energy sources.
7.There is a universal acceptance of the need to transition by reducing energy related CO2 emissions to limit climate change. However, there is also a need to recognize that while aggressive energy transition programs are being pursued in developed countries, many developing countries, especially those with hydrocarbon-dependent economies like Nigeria, require a more gradual and flexible approach to the energy transition mantra.
8. Especially, when it is a known fact that Africa accounts for the smallest share of global Green House Gasses (GHG) emissions at 3.8% when compared to the largest emitters like China at 23%, the USA at 19%, and the EU at 13%.
9. Some schools of thought have stated that it is remised for the developed countries who have been using fossil fuels this last century to expect Africa to be part of the plan of carbon zero by 2050 when Africa has been a victim of what they have caused over several decades.
10. However, let me state here that energy transition is real, and Nigeria must prepare for it, while at the same time advocating for a gradual and flexible approach to this change for developing countries. But we must note that the related activities that will accompany this change are vital and have come to stay with us and so we must deal with it.
11. Within the next 30 years, it is predicted that oil and gas might still account for a sizable portion of the world’s energy mix particularly in emerging countries amidst the growing calls for the business model to incorporate energy transitions in line with the goals of the Paris Agreement.
12. In decades past, previous Energy transitions have always been driven by economic growth, population growth, depletion of existing energy resources, change in technology, and pursuit to reduce cost and inefficiency. But the recent mantra of adverse changes in climate and environment has been attributed to the impact on the utilization of fossil fuels for energy needs.
13. Currently, Energy transition is moving very aggressively, the Internal Combustion Engine (ICE) is fast becoming obsolete in many developed countries, while students studying automobile engineering may not find a place to work shortly. Some international universities are removing Petroleum Engineering and Petroleum-related courses from their curriculum.
14. All of a sudden, major petroleum upstream investment fund providers are changing their strategies and saying we are anti-fossil fuels. They are not stopping at the big oil, they are probing other financial institutions, and even instigating EXIM Banks to stop fossil fuels investment. Thus, making the financing of oil and gas projects more complicated as banks, multilateral lenders, and investors are diverting capital away from fossil fuels to renewable energies.
15. At the COP26 in Glasgow, several countries and financial institutions pledged to stop funding fossil fuel projects. Recently, the European EXIM stated that they are no longer going to fund oil.
16. Consequently, the Energy transition will continue to impact the ability of Nigeria and oil and gas companies to attract capital as banks and investors prioritize Environmental, Social, and Governance (“ESG”) factors and are moving away from funding hydrocarbon projects.
17. Globally, the transportation sector generates the largest share of greenhouse gas emissions which primarily comes from burning fossil fuels for our cars, trucks, ships, trains, and planes; 90% of the fuel used for transportation is petroleum based, which includes primarily gasoline and diesel.
18. About 60% of the fossil fuel market in Nigeria is driven by the transportation industry and this is a very significant consumption percentage for fossil fuels, hence the replacement of Internal Combustion Engine with Electric Vehicles (EVs) will automatically affect the market demand for fossil fuel vehicles. With about 60% of your fossil fuel (crude oil) demand impacted, it will significantly and negatively impact crude oil production.
19. Unfortunately, for us in Nigeria, we produce and sell crude oil, which is an anti-energy transition. Nigeria is endowed with abundant natural resources. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) puts Nigeria’s Crude Oil reserves at 37.046 billion barrels and Gas reserves at 208.62TCF as of January 31, 2022.
20. Nigeria’s Crude oil and gas remain a key elixir for the successful implementation of our national budget as well as the source of funds for Nigeria’s sustainable development and more diversified economy. But this fossil fuel is anti-energy transition.
21. However, there is a respite resource in the analysis of our energy mix in the next 20-50years, which remains resilient and that is Natural Gas. In all the equations, usage of renewables; solar, wind, Tidal wave, etc., Natural gas remains a very important Transition Fuel for sustainable development and Nigeria has a healthy balance of gas and oil.
22. The good news is that financial Institutions will fund gas projects. Therefore, leveraging upon gas development will be a way for Nigeria to navigate the energy transition mantra.
23. Energy transition also comes with the opportunities of carbon credits and because Nigeria produced gas and oil, we can market our carbon which will also be an incentive for us to process funding from Financial Institutions.
24. Therefore, it is imperative to continue to develop our substantial gas resources while also advancing the adoption of renewable energy sources, to advance and succeed with its energy transition strategy.
25. As a country, the declaration of the years 2021-2030 as the Decade of Gas is a clear indication of the country’s resolve to drive economic growth with natural gas exploitation while deepening Domestic gas utilization to monetize our proven gas reserves.
26. The acceleration of natural gas utilization and implementation of our energy sector reform will not only help in reviving oil and gas production but will serve as a catalyst to foster gas-to-power, industrial development, and expansion of the gas network to Gas Based Industries.
27. Nigeria’s energy transition will create significant investment opportunities such as the establishment and expansion of industries related to solar energy, hydrogen, and electric vehicles. It is pertinent to acknowledge that Nigeria is well endowed with abundant Renewable Energy (RE) which includes Hydropower, Solar Photovoltaic Technology, Wind, Geothermal, and Biomass. These alternatives can be exploited to diversify the nation’s energy mix beyond the current fossil fuel sources and guarantee energy security for the nation.
28. The Renewable Energy sector still has many unexplored potentials and securing the appropriate funds, partnerships, and technology will accelerate large investments in the nation and put it in line with the global decarbonization movement.
29. The recently enacted Petroleum Industry Act (PIA) and the anticipated deregulation of the Downstream petroleum sector will also provide an opportunity to incorporate a Renewable Energy funding framework that will transfer real economic benefits in terms of energy access.
30. As more businesses enter the market and become more lucrative as a result of government initiatives and rising demand, they will grow and increase employment opportunities that will improve the living standards of the vast majority of the Nigerian population. The Nigerian electricity sector would see an increase in investments due to the sizeable market and growing demand for Renewable Energy technologies.
31. Ultimately, the major goal is to promote optimal energy resource utilization, effective management of the energy infrastructure, and energy conservation through the supply of affordable, dependable, and sustainable energy. This would act as the dependable catalyst for the country’s pursuit of all-around sustainable development and growth.
32. In closing, Ladies, and Gentlemen, before the window closes on fossil fuel, Nigeria must utilize its huge Oil and Gas resources to boost our economy and promote sustainable growth and social development for the present and future generations.
33. Nigeria must therefore move away from being an energy exporting country to an energy utilization country; by processing and utilizing our crude oil and gas for our domestic energy needs in other to drive industrialization, create jobs, and provide electricity for over 200 million Nigerians. No one will do this for us – things must change.
34. Once again, I thank you for this opportunity and wish us a successful conference.
20th September 2022