Managing Africa’s Oil In A green- Energy Future (Article)

As the world approaches peak oil, and Africa’s population booms, options are emerging to mitigate the carbon impact of the continent’s oil industry – meeting its urgent development needs, as well as its climate commitments, writes Iman Hill, Chief Executive Officer at IOGP and Africa Oil Week (AOW) Advisory Board Member.

Despite seeing global oil production coming to a peak, we still need to continue a hard focus on the responsible management of our hydrocarbon resources, as we move towards a zero-carbon world.

Recent data certainly supports this scenario. The latest Ember Global Electricity Review found that wind and solar produced a record 12% of global electricity in 2022. This represents a 19% rise in global wind and solar electricity production, compared to a negligible 1.1% rise in coal-powered electricity.

However, oil remains an important energy source, and a cornerstone of the global energy mix. Fortunately, there are now significant opportunities to develop oil resources more sustainably.

In Nigeria, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is leading the decarbonisation charge. With demand for natural gas as a transition fuel growing, major projects like the Nigeria Liquefied Natural Gas (NLNG) Train 7, the Nigeria/Morocco pipeline, NLNG Train 8 and Ajaokuta-Kaduna-Kano (AKK) pipeline are well positioned.

In Ghana, Tullow Oil is working to become net zero by 2030, in terms of its Scope 1 and 2 emissions, by eliminating routine flaring, boosting gas-handling capacity and ramping up nature-based offset programmes.

Meanwhile, in Cote d’Ivoire, Eni will bring its large Baleine discovery on stream as Africa’s first net-zero (Scope 1 and 2) development. Emission-compensating initiatives are already under way and include reforestation projects and the distribution of tens of thousands of high-efficiency cookstoves.

These projects will have to meet growing continental energy demand. The International Energy Agency (IEA) predicts that Africa’s electricity demand will grow by 4.1%  by 2025 – surpassed only by China.

Despite this growth, Africa’s energy needs are still a tiny fraction of global energy demand. The region’s energy consumption made up just 3.4% of global energy consumption in 2019, while we are home to 17% of the world’s population.

Per capita electricity consumption in Africa averages 181kWh compared to 13 000kWh in the US, and 6 500kWh in Europe.

That said, our energy consumption has increased by a factor of eight since 1965. Our energy needs have grown, while we have been working to improve the quality of life for our people.

However, we are far from reaching parity with the countries of the industrialised world. To quote a recent report by the African Development Bank, “While Africa has made steady improvements over recent decades, it remains the global region with the lowest average life expectancy and highest mortality ratios.”

Because Africa is at a different stage of our growth path, our energy needs are also different. Meeting these needs will require developing the full range of our resources. These include proven oil resources, and exciting opportunities for biofuels and natural gas.

It is estimated that Africa contains around 13% of the world’s natural gas reserves. In terms of biofuels, a  project has been launched in Zambia, using cassava as a feedstock. It aims to produce 120 million litres of ethanol a year, which will allow it to meet 20% of the country’s petroleum needs. Projects to produce energy from agricultural and municipal waste are also already running in parts of Africa.

To continue our development path, Africa will need energy. Unfortunately, besides being financially poor, Africa also faces energy poverty. The African Development Bank has noted that on the continent, 645 million people have no access to electricity, and 700 million have no access to clean cooking energy.

Africa must therefore do what it can to access all of its energy resources in a responsible, sustainable manner, in order to lift our people out of poverty. The continent is already evolving a well-balanced energy mix. The IEA estimates that natural gas produced 42% of Africa’s electricity in 2022, coal 27% and renewables 24% (up by 2%).

As participants in the African energy sector, we are committed to doing our bit to develop our resources responsibly. We support the development of renewable energy, and we applaud the growth of this sector, as we work towards achieving the planet’s goals for net-zero carbon emissions by 2050.

However, as a small, historically underdeveloped part of the global energy environment, we believe Africa must reserve the right to develop every component of its energy mix, as we scale up to meet the needs of our growing and developing population.

This must mean a large and growing renewables industry, but also due consideration for developing hydrocarbon resources and new discoveries – of which there have been several, most notably in Namibia.

It’s worth remembering that Africa’s energy assets must power the development needs of a rapidly expanding population. We are not an industrialised region like Europe with a stable or even shrinking population. Africa is set to grow to 2.5 billion people by 2050, when our population will make up a quarter of the earths.

We, therefore, reserve the right to map our development path in the way that makes most sense to us, using all of the energy resources at our disposal and building partnerships that will best suit our needs.

What is encouraging is that, even in developing our hydrocarbon resources, we have the opportunity to do so in a way that is kinder to the environment, and which generates the lowest possible carbon emissions possible. We can do this through decarbonising initiatives such as operational greenhouse-gas reduction, offsets, carbon capture and storage, flare curtailment and renewable energy use.

Some of these initiatives are already underway. Nigeria, for instance, has made the largest gas-flaring reduction on earth, cutting flare volumes by 1.3 bcm in 2022, a 20% reduction from 2021. In Namibia, green-hydrogen initiatives are set to play a pivotal role in decarbonising the energy sector. In Ghana, nature-based offset agreements have already been signed.

Natural gas also offers a significant opportunities for African economies to effectively meet their energy needs while reducing their carbon impacts. The BP Energy Outlook predicts increasing demand for natural gas in emerging economies as they grow and industrialise in the midst of the global transition to lower carbon energy sources.

It is now possible to produce oil with a far lower carbon intensity than previously, and generating these “lower-carbon barrels” can still generate the employment and the growth that Africa so urgently requires – in parallel with the renewables development that we are already pursuing.

We are excited about the possibilities this new energy era presents, and how it can help fuel the next phase of Africa’s development. “
 

Source: Africa Oil Week