• Wednesday, June 12, 2024
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Proposals to defund gas projects in developing countries faulty – Osinbajo

Naira scarcity : Osinbajo seek deployment of more fintechs

Efforts to defund gas projects in order to force gas-rich countries like Nigeria to stop using gas and use renewables are faulty and could defeat the objectives of stemming the impact of climate change, Nigeria’s vice president has said.

Yemi Osinbajo, at a speech in Lagos, Thursday night at the 60-anniversary celebration of the Oil Producers Trade Section (OPTS), an oil sector advocacy group, faulted these calls to ban the funding of fossil fuel projects because they make no distinction between upstream oil and coal exploration; and gas power plants for grid balancing.

“Also no economy in the world has been known to use renewables, solely, to industrialise . Solar power simply does not have the base load capacity yet for industry,” he said.

Osinbajo admitted that already, it is evident from so many adverse climate occurrences, floods, desertification, rising water levels, and record high temperatures that there is a global climate crisis and while the obvious solution to the crisis is to stop carbon emissions and use green energy, the issues are nuanced.

Poor countries like Nigeria which have made an insignificant contribution to carbon emissions require fossil fuels to develop their economies. Gas is important for clean cooking to replace dirtier sources like firewood. This is why many have balked at the suggestion to stop developing fossil fuels.

“Stopping the use of gas means that we cannot use LPG for clean cooking stoves to replace the use of kerosene, firewood, and charcoal which are dirtier fuels that are widely used for cooking and other domestic purposes, particularly in the rural areas. The use of firewood means deforestation, cutting down trees and of course desertification and then the loss of our carbon sinks,” he said.

Read also: NNPC, US corporation, Exim Bank in talks to finance gas projects

He condemned the “double standards that wealthier countries have adopted on this issue.” In the wake of the energy crisis, many European nations have made recent announcements to increase or extend their use of coal-fired power generation through 2023, and potentially beyond.

“This is in violation of their climate commitments, and analysis suggests that this will raise power sector emissions of the EU by 4O degrees – a significant amount, given the high base denominator of EU emissions,” he said.

Osinbajo said Nigeria has drawn up an energy transition plan that will require $410b or $10b per annum above business as usual spending to meet its objectives.

To fund the plan, he said in addition to conventional capital flows both from public and private sources local and international, “we also made the case that we should be on the G7 Climate partners list which should attract significant funding,” he said.

Rick Kennedy, managing director of Chevron Nigeria and chairman of the OPTS in his remarks said the OPTS began modestly in 1962, with only three founding member companies(Chevron, ExxonMobil & Shell), and D. Fleming of then Shell BP as Chairman.

“The history of OPTS is thus the story of Nigerian oil and gas exploration and production. Over the last 60 years, we have evolved as a group and have become partners with Nigeria in the development of a sector that is key to the nation’s economic growth,” he said.

OPTS has evolved from an organization initially dominated by international oil companies to an all-inclusive 29-member group, out of which 21 are indigenous and homegrown.

“Our strength is not solely numerical. OPTS is also a credible voice in Nigeria’s upstream oil and gas industry. We use this voice responsibly to strengthen the long-term health of the industry, thus the Nigerian economy.

“Our long-term success has resulted from our partnership and collaboration with companies from across the industry, the government, and other stakeholders to address critical and common industry issues,” he said.