OIL PRODUCTION AND IMPACT ON FOOD SECURITY AND CLIMATE CHANGE

By John A. Jia, Ph.D. The 1996 World Food Summit defined food security as “when all people, at all times, have physical and economic access to sufficient safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life.” So, Food Security is “the measure of an individual’s ability to access food that is nutritious and sufficient in quantity.” On the other hand, Wikipedia explains Oil and Gas Production as “the process of extracting crude oil and natural gas from underground reservoirs and bringing them to the surface for processing and distribution. It further explains that “The petroleum industry is responsible for the exploration, extraction, refining, transportation, and marketing of petroleum products.” Various components of the process listed here can have impacts on Climate leading to climate change. How then can oil and gas production have direct or indirect impacts on food security – preventing access to sufficient, safe and nutritious food meeting dietary needs and food preferences? Oil and Gas production have key activities that make it possible for it to happen if not well managed namely: •Seismic Operations – in layman’s terms, is the search for oil using various technologies to survey and ‘see’ under the ground to discover reservoirs holding the oil deep in the ground. The “surveys allow professionals to identify prospects, assess potential resources, reduce risk and even quantify reserves – in short, to make well-informed decisions that drive successful exploration efforts.” •Drilling of appraisal wells/Production Wells to confirm that what was ‘seen’ under the ground is good enough for additional investments to develop the field and recover the volumes – the discovery is in commercial quantities. An appraisal Well may be developed into a Production Well. •Field Development – involves the process of drilling, building of non-oil and gas infrastructure (NOGI) and Oil and Gas Infrastructure (OGI) for extraction, processing, handling and exporting or sale of the oil produced. •Production operations – utilization of all the infrastructure (Wells, Flowlines, Pipelines, Flowlines, Production Stations, Gas Plants, and Tank Farms including export facilities) for daily extraction of crude oil/gas, processing and sale/export. •Abandonment – loosely speaking involves management of NOGI and OGI facilities and the environment after the life of the Field. This will not be discussed in this article for lack of space for this article. All the above steps have various aspects that can interact with the environment to impact Food security and Climate change. According to FAO and others, there are 5 dimensions or components of Food Security namely: Availability, Access, Utilization, Stability and Sustainability. While many biological factors like population increase, changing diets, pests and pathogens, environmental changes, conflict, poverty/unemployment, et cetera, can reduce food security, each step involved in the Oil and Gas production can also have direct or indirect negative impacts on availability, access, utilization, stability and sustainability of food security especially in the Niger Delta of Nigeria. Seismic activities for oil and gas exploration can disrupt farming operations. The noise, vibrations, and movement of heavy machinery can affect soil structure, water flow, and crop growth. For example, in Nigeria’s Niger Delta, seismic surveys have been reported to have caused soil compaction and water contamination, reduced agricultural productivity and harming local farmers’ livelihoods. As the activities often involve the use of chemicals that may contaminate surface and ground water sources, there is potential for water contamination. Polluted water can affect irrigation systems, leading to poor crop yields and unsafe drinking water for livestock. Chemical spills during seismic surveys in agricultural areas can lead to contamination of water sources, which then impacts the health and productivity of crops and livestock. Another impact is the Destruction of Natural Habitats. Clearing land for seismic lines can destroy forests, wetlands, and other natural habitats, reducing biodiversity. This loss of biodiversity can impact pollinators, soil health, and natural pest control, which are essential for sustainable agriculture. The Amazon rainforest, a critical ecosystem for global biodiversity, has been reported to have seen significant habitat destruction due to oil exploration, threatening indigenous food systems and biodiversity. Seismic exploration can lead to the displacement of local communities, including farmers. Displaced communities may lose access to their agricultural lands, leading to food insecurity. How does this stage of Oil and Gas activity impact on climate change thus affecting food security? You have Greenhouse Gas Emissions, an occurring decimal throughout the oil and gas production value chain. Seismic activities are part of the oil and gas extraction process, which is a significant source of greenhouse gas emissions. The burning of fossil fuels contributes to global warming and climate change. Methane emissions from natural gas extraction are a potent greenhouse gas, significantly more effective at trapping heat in the atmosphere than carbon dioxide. Seismic surveys often require clearing large areas of land, leading to deforestation and land degradation. Forests act as carbon sinks, and their destruction releases stored carbon dioxide into the atmosphere, exacerbating climate change. Example, in the Congo Basin, deforestation for oil exploration has released large amounts of carbon dioxide, contributing to global climate change. Healthy ecosystems such as forests, wetlands, and grasslands sequester carbon dioxide from the atmosphere. Seismic activities that damage these ecosystems reduce their ability to absorb carbon, increasing atmospheric carbon levels. An example is the destruction of mangroves for oil exploration which reduces their capacity to sequester carbon, thus contributing to higher atmospheric CO2 levels. Also, climate change, driven in part by fossil fuel extraction, leads to more frequent and severe natural disasters such as floods, droughts, and hurricanes. These events can devastate agricultural systems, further threatening food security. Rising global temperatures contribute to more intense droughts in agricultural regions, affecting crop yields and food availability. Drilling involves land take, utilization of drilling mud, generation of drill cuttings which may be oily depending on the depth at which the cuttings are generated. The land taken (and in some cases may be significant) is no longer available for food production. The land may have been rightly acquired but is

NALDA To Crash Maize, Rice Prices Across Nigeria

*Commences Harvest From Farm Estates The National Land Development Agency (NALDA) is set to crash the price of maize and rice as it commences crop harvest from its farm estates across Nigeria. The Agency has farm estates across Nigeria has achieved tremendous success in both farms built and run solely by the agency and in collaboration with private and public institutions across the six geopolitical zones. Harvesting, bagging and storing of rice and maize are currently ongoing in Niger, Nasarawa, Benue, and Oyo states. The agency targets 150 metric tons of maize while the faro 44 and 59 rice cultivated at Nasarawa state is expected to yield over 300 metric tons of paddies. Harvesting and bagging have also ongoing in the NALDA-cultivated 150-hectare rice farm in Gboko, Benue State. According to the agency, it is anticipated that the harvests will boost Nigeria’s grain supply (rice and maize), which will have a big effect on the value chains. Evidence from states during the media tour of harvest activities at farm sites showed that the harvests will help to reduce the gap in domestic production and supply of rice and maize. Speaking with journalists, NALDA Executive Secretary, Prince Paul Ikonne, said the harvest will be released into the markets immediately as it would greatly assist in cushioning the effects of high food prices. In Bauchi State, maize harvest is ongoing at the well-equipped NALDA farm estate located at Galambi. Although the overall land area is 500 hectares, 50 hectares were cultivated due to a 15-day rain delay and a late start to activities. The farm is equipped with four tractors, two maize threshers, planters, boom sprayers, maize harvesters, and a finished grain warehouse. The Bauchi State Coordinator for NALDA is Jalaludeen Muhammad Mu’Azu. said that the NALDA farm will boost significant production in the area because no farms in the state possessed such machinery. Head, Department of Engineering, at NALDA, Engineer Owolabi Matthew Olusegun, speaking with journalists about the level of mechanisation on the farm expresses joy at the level of impact the harvest will have on the Nigeria economy. “This is what we have been preaching, and it is proof that Nigeria is capable of doing so, as you have witnessed firsthand at NALDA Farm. With this, you can see how much labour we have removed, how much drudgery has been eliminated, and how the entire process has been streamlined. “We are therefore appealing to the federal government to invest more in NALDA. We are ready to replicate this farm all over the country. With this we can increase the acreage to ensure that we get food self-sufficiency. We can do it and we are doing it,” he said. According to Mu’Azu, the crop’s success has already piqued the interest of farmers in the surrounding farming communities. He explained that the entire farm operation was entirely mechanized, from harrowing to planting to spraying fertilizer with a 400-litre capacity boom sprayer and machinery for weeding and harvesting. According to him, “we have just started our harvest and you know this is the first time we are farming here. From the stories that we heard from people, there is a particular place they showed us that since they came here 40 years ago, they have never seen maize production that can be compared to our own.”

36 Military officers lost in tragic incident in Niger State -DHQ

In a heartbreaking announcement, the Defence Headquarters (DHQ) has confirmed that 36 military officers lost their lives in Niger State. Speaking during the biweekly briefing of the Defence Media Operations, Major General Edward Buba, the Director of Defence Media Operations, provided a somber breakdown of the casualties stemming from two separate incidents: an ambush on troops and a tragic helicopter crash that occurred on August 14, 2023. Responding to inquiries about the helicopter crash’s cause, Major General Buba reiterated that a comprehensive investigation is currently underway to ascertain the factors behind the incident. He also emphasized the importance of remaining vigilant against terrorist propaganda and staying steadfast in one’s patriotic commitment. According to him, the tragedy unfolded when insurgents ambushed troops in the Zungeru area of Niger State, resulting in the ultimate sacrifice paid by valiant members of the Nigerian Army. Additionally, in a separate incident, a Nigerian Air Force MI-171 Helicopter, en route for a casualty evacuation mission, tragically crashed in the Shiroro Local Government Area (LGA) of the state.

‘European refiners groan as Nigeria’s subsidy removal bites harder’

Petrol subsidy removal by the Bola Tinubu administration is impacting European refiners negatively as demand for the product has reduced by more than 50 per cent, S&P Global Commodities at Sea has said. Imports of petrol to Nigeria plummeted to 106,000 barrels per day, b/d in July from 205,200 b/d in May, according to data from S&P Global Commodities at Sea, after local petrol prices skyrocketed. Total refined product demand has fallen 41 per cent in the same period, the data showed. Scrapping the long-standing subsidy could save Nigeria as much as Naira 11 trillion ($2.6 billion) in 2023, according to estimates from the World Bank in June, providing relief to a growing government deficit. Sinking Nigerian demand, driven by high fuel prices, has also led to a drop-off in demand for European exports, whose refiners had relied on thirsty West African markets. “There is zero demand [in West Africa] at the moment,” a source in the region said. Another European market source said: “Considering the [Nigerian] subsidy removal … demand is indeed depressed.” The 91 RON FOB AR WAF discount to FOB AR gasoline cargoes was $89/mt on August 10, down sharply from before the subsidy was taken away. On May 22, the spread was at a premium of $50.25/mt, but by the end of the month had fallen to a discount. The subsidy removal has shaken up longstanding arbitrage for European refiners. While Nigerian demand in particular has diminished, other destinations have picked up the slack. The US Atlantic Coast made up 28 per cent of total petrol exported from the Amsterdam-Rotterdam-Antwerp region in July amid persistently low stocks, according to Kpler shipping data, increasing its share from the low teens almost in tandem with the shrinking Nigerian demand. As a result, European refiners have been unfazed by sinking demand in West Africa. “The arb is strong. Octanes are tight, so petrol remains well supported” a trader in Europe said. European traders already faced being crowded out by Russian refined products that have flooded into Africa — including Nigeria — since the onset of the war in Ukraine saw European countries boycott Russian oil products. Yet even Russian exports to Nigeria have fallen sharply since the fuel subsidy was scrapped. Nigeria is Africa’s largest oil producer, with an output of 1.32 million b/d last month according to the Platts OPEC Survey from S&P Global, but a lack of refining capacity means the country is forced to import refined products. One potential solution is the long-awaited Dangote refinery inaugurated by former president Muhammadu Buhari in April. The mega project, built by Aliko Dangote, is designed to make Nigeria self-sufficient in fuels, soften the gasoline market, and even to supply countries across Africa and beyond. According to estimates from S&P Global, Nigerian gasoline production could overtake imports in 2025 and exceed them until the 2040s, if the refinery can get up and running.

Tinubu, subsidy, NLC and Nigeria’s economic turbulence

On May 29, 2023, during his inaugural speech, President Ahmed Bola Tinubu made a momentous decision to scrap Nigeria’s fuel subsidies, citing pressing budgetary concerns. However, this move triggered a staggering surge in fuel prices, widespread panic-buying of fuel, and a sharp increase in the cost of various essential commodities. The ramifications of the fuel subsidy removal have struck fear in the hearts of millions of Nigerians, particularly low-income earners who worry about their ability to afford transportation, education, food, and healthcare and other social amenities. In response to the government’s decision, the Nigerian Labour Congress (NLC), entrusted with the responsibility to protect and defend workers’ rights and well-being, vehemently opposed the move. Joe Ajaero, the NLC President, criticized Tinubu’s decision, asserting that it lacked careful consideration and predicted it would cause the country’s economy to regress by more than 50 percent within the coming weeks. In light of their objections, the Congress issued a seven-day ultimatum to the Federal Government, demanding the reversal of all “anti-poor” policies, including the petrol price hike. The NLC accused the government of showing disdain and contempt for the Nigerian people and declared a war of attrition on workers and the masses. Citing the strength of Section 40 of the 1999 Constitution as amended, the NLC announced on June 7 their intention to launch a nationwide protest on August 2, 2023, against the fuel subsidy removal. In response, the Federal Government took legal action, seeking to stop the union from proceeding with the proposed strike. The government argued that such industrial action could severely impact society and the nation’s overall well-being. In a ruling on an ex parte application, Justice O.Y Anuwe ordered the unions not to embark on any industrial action or strike pending the hearing and determination of the motion on notice, dated June 5, 2023. The court highlighted the potential disruptions to economic activities and essential sectors. Unfazed by the court’s injunctions, lengthy negotiation meetings, and warnings from the Federal Ministry of Justice regarding contempt of court, the NLC stood firm on their threat and flooded the streets with protesters on August 2. The demonstrations aimed to voice opposition against the recent fuel price hike, tuition fees increase in public schools, and the withholding of salaries for university lecturers and workers. Meanwhile, the government, through the Solicitor General of the Ministry of Justice, accused the NLC leaders of treating the order of the National Industrial Court (NIC) with contempt. Justice Beatrice Jedy-Agba asserted twice that the organized labour’s industrial action was illegal, as there was a subsisting interim order restraining the NLC from engaging in any industrial action. The government prayed the court to hold NLC President Joe Ajaero, Deputy Presidents Audu Aruba, Prince Adeyanju Adewale, and Kabiru Sani, General Secretary Emmanuel Ugboaja, TUC President Engr Festus Usifo, and Scribe/Chief Executive Nuhu Toro in contempt of court and commit them to prison. In response, the NLC condemned the industrial court and the Justice Ministry as “anti-democracy” agents, and they demanded the withdrawal of the lawsuit or face mass strike. Following discussions at the NLC’s NEC meeting in Abuja, the union issued a stern ultimatum, warning that failure to comply with their demand could result in a nationwide strike on August 14, 2023. This ongoing saga showcases the deep-seated tensions and concerns about the impact of the fuel subsidy removal on the lives of Nigerian citizens and the overall health of the nation’s economy. As both sides engage in a legal battle and the NLC continues its protests, the future remains uncertain, and the fate of Nigeria’s fuel subsidy hangs in the balance, even as ordinary Nigerians continue to bear the brunt.

$6trn wasted on subsidies can address climate change – World Bank

Trillions of dollars are wasted on subsidies for agriculture, fishing, and fossil fuels that could be used to help address climate change instead of harming people and the planet, a World Bank report says. The report, Detox Development: Repurposing Environmentally Harmful Subsidies, says global direct government expenditures in the three sectors are $1.25 trillion a year—around the size of a big economy such as Mexico. To subsidize fossil fuel consumption, countries spend about six times what they pledged to mobilize annually under the Paris Agreement for renewable energies and low-carbon development. “People say that there isn’t money for climate but there is – it’s just in the wrong places. If we could repurpose the trillions of dollars being spent on wasteful subsidies and put these to better, greener uses, we could together address many of the planet’s most pressing challenges,” said Senior Managing Director of the World Bank, Axel vanTrotsenburg. The report notes that government subsidies of $577 billion in 2021 to artificially lower the price of polluting fuels, such as oil, gas, and coal, exacerbate climate change, and cause toxic air pollution, inequality, inefficiency, and mounting debt burdens. Redirecting these subsidies could unlock at least half a trillion dollars toward more productive and sustainable uses. The problem is bigger than direct government expenditures. The report assesses the harmful impact of implicit subsidies, which amount to $6 trillion each year. These represent the costs on people and the planet from pollution, greenhouse gas emissions, road congestion, and the destruction of nature ultimately resulting from the subsidies. In agriculture, direct subsidies of more than $635 billion a year are driving the excessive use of fertilizers that degrade soil and water and harm human health. Subsidies for products such as soybeans, palm oil, and beef cause farmers to push into the forest frontier and are responsible for 14 percent of forest loss every year. Fisheries subsidies, which exceed $35 billion each year, are a key driver of dwindling fish stocks, oversized fishing fleets, and falling profitability. With more than 1 billion poor people obtaining most of their animal protein from fish, it is critical that the world’s fish stocks are restored to healthy status. The burning of oil, gas, and coal causes 7 million premature deaths a year around the world through the bad air that people must breathe. The burden falls mostly on the poor. Chief Economist of the Sustainable Development Practice Group at the World Bank Richard Damania, noted that “With foresight and planning, repurposing subsidies can provide more resources to give people a betterquality of life and to ensure a better future for our planet. Much is already known about bestpractices for subsidy reform, but implementing these practices is no easy feat due to entrenched interests,challenging political dynamics, and other barriers.” For successful subsidy reform, governments must compensate the most vulnerable groups through social assistance programs, like cash transfers; build public acceptance through transparent communication; give people and businesses time to adjust; as well as show how freed-up revenue is being reinvested to support longer-term development.