Expolration of compressed natural gas as an automotive fuel in Nigeria
2016-09-19T11:25:35Z (GMT) by
Flaring of associated gas, found during petroleum exploration and production in Nigeria, results in substantial environmental degradation, which endangers sustainable development and exposes the population to health hazards. In addition, it results in significant economic losses, especially from the opportunity cost of the disposed natural gas (NG). As part of the many initiatives to abate flaring and harness NG resources, the Nigerian government proposed the use of compressed natural gas (CNG) as an automotive fuel in 1997, but progress has been slow. This study investigates the barriers to use of CNG as an automotive fuel in Nigeria and how these can be overcome. It identified, validated, prioritized and built consensus on 29 barriers and 25 policy recommendations, using a combination of case study of selected countries, semi-structured interviews and a Delphi survey among participants who are key stakeholders in the energy and transportation sectors. Major hindrances identified include the absence of market coordination; lack of transparency and accountability; inexperience of the population with gas usage; lack of public awareness on the benefits of NG; artificial distortion of the economic benefits of CNG due to the subsidy on gasoline; focus on export market development to the detriment of the domestic market; absence of regulatory standards; poor infrastructure; and an old and dilapidated national vehicle fleet. There was no convergence on the impact of insecurity of human and material resources caused by militancy and pipeline vandalism in the oil producing areas, despite widespread views of the negative effect on the oil and gas industry generally. Based on the consensus built among study participants, the study recommends 12 policy interventions, which might stimulate growth in the use of CNG as automotive fuel; these comprise specific energy market reforms, fiscal and operational incentives, transportation sector reforms and the creation/building of public awareness.