Analysis

Nigeria’s whirlwind romance with coal

by ISAAC ANYAOGU

September 10, 2017 | 10:00 am
  |     |     |   Start Conversation

Nigeria’s decision to grant tax exemptions to coal producers looks very much like a bold step back to the past, writes ISAAC ANYAOGU

It started as mild as a benign tumour. One hole in the ground, another deeper hole, one foot away and soon a small cluster of holes emerged.

Ikedi and Amaka, two young lovers used to meet by the foot of aneem tree, a few meters away from where the holes start to emerge.

Theirs was young love, complete with the idyllic tremor of passion they consummated with quick kisses by the foot of the tree. Their villages were only separated by brushes but as the holes morphed into a crater, it cut a major road, divided clans and separated the two lovers.

An advisory from the state warned that residents should abandon the stream and their communal farmland soon as a full blown erosion took over.

Enugu State is reputed to have the worst erosion in the entire nation– a condition attributable to unreclaimed mines and unregulated artisanal mining at abandoned mine sites throughout the state.

The most popular erosion sites in Anambra State are located at the Nanka-Agulu-Oko axis, Nkisi near Onitsha, Ojoto, Alor, Umuchiana in Ekwulobia, Ozubulu, Oraifite, Uli and Awka, among many other areas. Some are the height of three floors, a crimson cliff, with scraggy paths and forlorn crevices. Erosion has humbled tall buildings, sacked communities, cut roads into two, divided communities.

Some of these erosion sites are examples of the consequences of poor management of coal sites. Coal is found in Nigeria, in the Middle belt and South-eastern regions of the country of Kogi, Benue, Gombe and Enugu with estimates put at nearly 3billion tons of indicated reserves in 17 identified coal fields and over 600 million tons of proven reserves.

But Nigeria also has over 22 redundant coal mines, many in south eastern part of the country, four of which were fully developed coal mines.

A study by the Journal of Environmental Science and Technology on the effects of mine drainage on water bodies, specifically looking at coal mining in Enugu concluded that “the quality of the water is significantly influenced by acidic mine drainage and its impact on human health could be severe.”

Through tax concession to coal miners, Nigeria is looking to resuscitate its coal industry. Last month, the ministry of Trade and Investments released a list of industries that will be granted pioneer status, which comes with tax exemptions, placing coal at the top of the list.

This is irrespective of the fact that the rest of the world is getting out of coal. A new report by the International Energy Association, (IEA) a Paris-based energy sector think tank, shows that global coal production fell by 458 million tonnes in 2016.

The IEA’s World Energy Balances shows that coal production fell sharply inworld’s biggest producer, China by 9 percent or 320 million tonnes, which is more than the total production from South Africa, the world’s 5th largest coal exporter. Coal production also fell elsewhere, such as the US and Australia.

The move away from coal generation is most clear within the OECD, where electricity generation from gas in 2016 was virtually equal to coal generation for the first time ever.

However, Nigeria, currently issuing N150billion worth of green bonds didn’t see the contradiction in granting tax concession to coal producers.

What is wrong with coal, anyway?

Coal is an important source of energy. Some 23percent of primary energy needs of the world are met by coal and 39percent of electricity is generated from coal. About 70percent of world steel production depends on coal feedstock. Coal is the world’s most abundant and widely distributed fossil fuel source.

However, coal is made up of 65-95percent carbon while also containing traces of hydrogen, sulphur, oxygen and nitrogen, is considered as dirty fuel. Carbon is present in the air as carbon dioxide and contributes to the “greenhouse effect” and related global warming.

Abiodun Baiyewu, executive director at Global Rights Nigeria, said that while the benefits of the coal mines were largely economical and immediate, it also had negative and long term effects, especially on the environment.

“These effects are particularly compounded by the failure of the government to reclaim most of these mines, especially those abandoned during the civil war,” said Baiyewu.

The World Nuclear Association says that burning coal produces almost 14 billion tons of carbon dioxide each year which is released to the atmosphere, most of this being from power generation. Burning coal, such as for power generation, gives rise to a variety of wastes which must be controlled or at least accounted for.

However, scientists are trying to develop ‘clean coal’ technologies aimed at addressing this problem.Alongside nuclear power and harnessing renewable energy sources, ‘clean coal’ technologies, such as carbon capture and sequestration, also called carbon capture and storage or carbon capture, use and storage (CCUS). It involves the geological storage of CO2, typically 2-3 km deep, as a permanent solution says the World Nuclear Association.

“Much of the challenge is in commercialising the technology so that coal use remains economically competitive despite the cost of achieving low, and eventually ‘near-zero’, emissions. The technologies are both costly and energy-intensive,” says the World Nuclear Association.

In its 2014 Energy Technology Perspectives the IEA notes that “Carbon Capture and Storage is advancing slowly, due to high costs and lack of political and financial commitment. Few major developments were seen in 2013, and policies necessary to facilitate the transition from demonstration to deployment are still largely missing.”

Nigeria does not even have a policy to regulate the use or the means to invest in clean technologies. Officials of the Federal Ministry of Environment say they have no policy to deal with coal production. “At the moment we do not have any policy about that,” said an official without authorisation to speak officially, in response to questions.

Others are doing it

Source: World Nuclear Association.

 

There are arguments that other countries are yet to decommission their own coal plants. Coal production in US was estimated at 16.1 million in the week ended July 29, up 4.4percent from the prior week and up 13.1percent from the year-ago week, according to US Energy Information Administration data.

Donald Trump, US President spurned the Paris Agreement and lifted ban on new coal leases on public lands. This has spurred other nations in the race for the dirty fuel source.

“One reason why production fell in China was lower demand, particularly for power generation, though China still uses half the world’s coal. Lower coal demand has also been seen across the OECD, specifically in the US and the UK. So globally, despite an increase in India, global coal consumption in 2016 fell by around 2percent in energy terms,” the IEA said in its report.

James Taylor, president of the Spark of Freedom Foundation, that focuses on energy and sustainability issues told Forbes that China is financing the construction of a growing number of coal power plants in foreign nations, building a future market for more Chinese coal exports.

With Chinese citizens demanding cleaner air to alleviate heavy air pollution, Chinese coal consumption has been declining since 2014, Taylor says that the country is propping up its coal industry by financing more foreign coal plants and exporting more coal to operate them. Particularly in the growing Asian energy market, U.S. coal producers have a difficult time outcompeting Chinese coal on its Asian home turf.

But bad behaviour by irresponsible countries has never validated a wrong action. This is investments in natural gas seen as a cleaner form of energy is rising in Europe. According to the IEA, the greater demand for gas led to increases in trade, with growth in pipeline gas trade going into the Organisation for Economic Co-operation and Development (OECD) countries, and LNG trade going to Asia. Together the increases saw total global gas imports increase by about 47 billion cubic meters (bcm) in 2016 – around 4.5percent higher than 2015.

With power supply barely at 4,000 MW, Nigeria is desperate to ramp up electricity but there are no significant efforts at addressing any fallout from increased coal production. This is why experts are urging the country to focus attention on renewable energies particularly solar.

“I will say we should focus on renewables and natural gas for energy generation,” said Olu Ogunlela, a co-founder of Gridless Africa, a clean energy and sustainable development think tank.


by ISAAC ANYAOGU

September 10, 2017 | 10:00 am
  |     |     |   Start Conversation

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