The African Petroleum Producers’ Organisation (APPO) has alleged that the move to shift focus away from fossil fuel was a ploy by the other part of the world to push Africa below the poverty net.
Secretary-General of APPO, Nigeria’s Dr Omar Farouk Ibrahim, stated this at the maiden edition of the African Local Content Investment Forum organised by the Nigerian Content Development and Monitoring Board held in Lagos yesterday, with the theme:‘‘Evolving A Pan-African Strategy Towards Sustainable Funding of Africa Oil and Gas Projects’’.
Omar lamented that Africa has just come to the full realisation that the world, or more precisely, that part of the world that Africa has depended on for over three-quarters of a century for hydrocarbons technology, expertise, markets and funding, has now resolved to abandon hydrocarbons and by implication, the mainstay of many of the economies of Africa’s oil and gas producing countries.
He noted that it was important not to de-link the global paradigm shift away from fossil fuels to renewables from the failure of the doctrine of Project Independence, initiated by President Richard Nixon of the United States in 1973 aimed at ending US oil imports in response to the oil embargo placed on the US and some European countries by some Arab oil-producing countries, in the aftermath of the Arab-Israeli war of the same year.
According to him, the bitter experience of the United States from the oil embargo made it resolve to wean itself from foreign, particularly Arab oil. The US Government, he said introduced policies aimed at achieving this objective, among which was support for the development of shale oil.
‘For a number of reasons, these policies did not achieve the desired results. It was the failure to achieve that objective that led to a change in strategy,’ he stated.
He noted that having realised that shale cannot compete with conventional oil on the market, a deliberate strategy to demonise oil was hatched.
First, he said funds were provided to research institutions to conduct studies on the impact of burning fossil fuels on the atmosphere, and by implication on the health of the people living on earth.
These studies according to Omar, ‘unearthed’ the dangers of Green House Gas Emissions on the atmosphere with the findings then given wide publicity and lots of funds were devoted to the establishment of many NGOs whose mandate is to demonise hydrocarbons.
‘It is interesting to note that these findings were not new and that as far back as 1859, John Tyndall, an Irish physicist, had made similar findings. Svante Arrhenius, a Swiss scientist had also published his findings on the same subject.
‘But because it was not in the interest of the industrialising powers of Europe and America to stop the use of fossil fuels at that time, the findings of those studies were never publicised. And for nearly 200 years, but especially in the last century, they continued to use fossil fuels to consolidate their economies.
‘Now that their economies have graduated from reliance on intensive energy for production, and Africa is on the verge of its industrialisation, these countries have suddenly remembered that fossil fuels are harmful to humankind.
‘It is obvious therefore that the energy transition agenda had been on the agenda of the advanced countries since the last quarter of the last century, but for whatever reason, we failed to see them. We went on behaving as if the end of oil shall never come.’
Omar further lamented that if in the first half of the 20th century, Africa could say that it had no expertise, no markets, no technology and no funds to take effective control of its God-endowed natural resources because oil was sold at an average of about $1 per barrel and the Seven Sisters dictated what the owners of the resource received, can we say the same thing after the Arab oil embargo of 1973, when the price of the barrel doubled, tripled and even quadrupled?
‘Can we say the same for the period between 2003 and 2008 when oil prices rose from about $20 plus per barrel to nearly $150 per barrel? When the price of oil began a steep rise, not due to market fundamentals but to extraneous forces, including geo-politics and market manipulation, did it occur to us that the sudden windfall could also trigger a reaction from the powerful countries on whom we have always depended for the exploitation of our resources? Yet, we continued to spend the windfall, without making the necessary investments in the golden goose that lays the golden eggs.
‘We did not make the required investments in the industry’s Research and Development, not in technology, we did a bit in human capacity development, but not in financing the sector.
‘Rather, we saw the windfall as largess to be shared for consumption. Today, African oil and gas producing countries have gotten used to big expenditures and since what they get is not enough to sustain that expenditure pattern, many of them now resort to borrowing.’
Omar maintained that energy transition is real, adding that the advanced countries are determined to move away from energy that they do not control, saying it is a matter of national security, and national interest and for this, they are prepared to pay any price.
‘They are closing their institutions that had for about a century become global centres of oil and gas technology research. They are ordering their financial institutions that had for decades funded the industry not to fund oil and gas projects anymore. They are investing heavily in alternative energies. And all these are taking us by surprise because we have been caught napping.’
On the way out of the logjam, he said NCDMB under the able leadership of its Executive Secretary, Mr. Simbi Wabote, has been taking steps for close to six years at changing the predicament we have found ourselves in.
The APPO scribe equally pointed point out that a major study commissioned by APPO on the Future of the Oil and Gas Industry in Africa in the Light of the Energy Transition has concluded that the oil and gas industry in Africa shall need a new development model in order to survive the energy transition, saying if it fails to re-strategise and come up with a new model, it risks losing the 125 billion proven crude oil reserves and the hundreds of trillions of proven gas reserves as stranded assets.
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