News & Politics

The Price of a Barrel of Oil

Foreign oil companies in the Niger Delta region are finding it cheaper to "flare off the gas" -- a technique of oil drilling that lights up the sky with wasted energy. Meanwhile, Nigerian villagers go without electricity.
AKARAOLU, Nigeria -- Olimini sweats profusely in Chief Steward Job's unlit chamber. He sweats all the time, but his high animation and the humid murk of the oven-like room make the perspiration cascade from his body, soaking his white T-shirt and stinging his eyes. He doesn't sit; he bounces around the room like a trapped bat, arms gesticulating wildly, eyes ablaze, voice raised.

His raised voice is as much a matter of necessity as it is passion. Outside the mud hut it's almost impossible to talk. A roaring, dancing, twisting tongue of fire jets from the ground 700 yards from where we're sitting, a 300-foot natural-gas blowtorch lunging into the white African sky.

With ever-increasing passion, Olimini, the secretary for the local council of elders, voices villagers' frustrations with the gas flare and the oil company that put it there. Besides the constant heat and noise, the flare is also responsible for a wide range of health and environmental problems in Akaraolu. Everything from dead streams and empty forests to increased instances of miscarriage and lunacy can be attributed to the flare, says Olimini.

"Sometimes we'll move like a madman and men will lose their brains," Olimini says as he flits about the room.

Endless Days

Visiting reporters are the only people who are impressed by the gas flare. Residents of the village have long assimilated it into their lives. It has burned night and day nonstop for 30 years. They've gotten used to not sleeping well and not seeing the moon and the stars. They're accustomed to yelling at one another to be heard over its roar. And they've adapted to temperatures 10 to 30 degrees higher than normal. Closer to the flare, the heat becomes deadly. None of the village's residents under the age of 29 has known a dark and peaceful night's sleep.

The flare is owned by AgipPetroli S.p.A. of Italy, one of six multinational oil companies with operations in Nigeria that extract a combined average of two million barrels of crude oil a day from the Niger Delta region. Like the other companies, Agip finds it cheaper and easier to flare off the gas, a byproduct of oil drilling, than to capture it. Although Nigeria is believed to have the world's eighth largest reserve of natural gas, there's almost no market for the fuel in the country and no infrastructure to capture it and transport it for use somewhere else. So it burns relentlessly, morning, noon and night.

This is a source of great irony in places like Akaraolu. While oil that will eventually be fed into sport utility vehicles the world over is pumped from beneath their towns, flares light up the sky with wasted energy, a fraction of which could power their village forever. As it is, most villages in the oil-rich Niger Delta have no electricity, and it's sporadic at best in the handful of towns fortunate enough to be wired to the state power company. Even in large cities like Port Harcourt, the teeming capital of Rivers State, the Nigerian Electric Power Association can keep the lights on for only a few hours each day, with barely enough energy to power a 60-watt bulb. Everything is dim, and appliances function at half capacity, if they function at all. Rolling blackouts are the norm, and businesses without their own diesel generators don't stay open long in Nigeria.

There's one generator in Akaraolu and when there's gasoline to fuel it, it's used to operate the chief's air conditioner and a small refrigerator in a closet-like general store. The proprietor keeps Cokes and Nigerian-bottled Guinness stout on hand, a relief for visiting journalists not accustomed to the village's extreme heat.

The lack of gasoline or power in towns like Akaraolu, in spite of the icon of international energy consumption that's roaring on the village's outskirts, is surprising only to those unfamiliar with Nigeria's special breed of corruption and governmental incompetence.

Even though Nigeria is the world's sixth largest oil producer, churning an average of two million barrels of crude from the region every day, 16 years of greedy and ruthless military dictators have squandered oil royalties on their own Swiss bank accounts rather than investing it for the nation's 123 million people. The result is an energy infrastructure that's either nonexistent or woefully inadequate. Olusegun Obasanjo, the president of Nigeria's 18-month-old democracy-who was a military dictator himself in the late 1970s-won control of an oil-rich country so disorganized and politically backwards that it must import fuel. None of the conveniences taken for granted by foreign consumers of Nigeria's oil-telephones, reliable electricity and motor fuel-are readily available in Nigeria itself.

Thanks to heavy government subsidies, gasoline legally sold in Nigeria is among the cheapest in the world: 22 naira per liter, about 18 cents. But the price controls created a vibrant black market that makes it far more profitable for tanker-truck drivers to head to the Cameroon border rather than to the local filling stations. There, they can sell their entire load for up to 30 times the state-mandated rate. Such opportunists are rarely ever caught because anyone who may be in a position to catch them is usually in on the scheme for a cut of the profits. It's a man-made shortage where price regulation has nearly eliminated supply.

Since much of the fuel meant for the state-licensed pumping stations ends up on the black market, gas shortages are so common that cab drivers in Port Harcourt think nothing of parking their battered Peugeot 504s in a mile-long line at the filling station and walking home for the night. The gas used to fuel most cars and generators in Nigeria is sold by black-marketeers from jerry cans on the side of the highways, at prices inflated well beyond what anyone in impoverished places like Akaraolu can afford.

But the price of gasoline isn't measured in naira and dollars in such towns. It's measured in the sweaty, sickened faces of those who live there.

Tribalism and Skepticism

Nigerian oil villages aren't democracies. Reporters can't simply mingle with the villagers without first gaining the approval of the village chief, a series of negotiations that usually takes days. Akaraolu is no exception; pride runs deep, even though the 2,000 residents of the village of zinc-roofed mud huts have little to be proud of beyond simply surviving 30 years next to a nonstop inferno. Residents don't find it remarkable; the hordes of naked, malnourished children filling the streets have no concept of life without a screaming tower of fire raging in the background. The chief and the council of elders remember life before the fire however. They understand that life can be less painful. In our negotiations, the chief's major concern seems to be in finding out whether any good will come from allowing villagers to speak with an outsider.

"Why will anyone care?" Chief Job wants to know. Collapsed nearly supine in a battered green easy chair, wearing a white undershirt and threadbare pants, seemingly overcome by fatigue, he lets Olimini do most of the talking, preferring to stare at the outdated calendars ringing the walls of the chamber. From time to time, lizards darts across the walls from behind one calendar to another.

"What can you do for us?" he asks.

It's hardly the selfish question it seems. Letters sent to Agip and the state government complaining about the flare are routinely ignored. Olimini suggests that the only way to get Agip's attention would be to seize the flow station and cut off production, but he said villagers are reluctant to take such drastic action, with good reason. Years earlier, some had blockaded the road leading to the flow station, refusing to leave until a meeting had been arranged with Agip officials.

Instead, the Mobile Police, the Nigerian government's feared rapid-reaction force-known locally as "Kill and Go" because of its scorched-earth operations against civilians in the Delta's Ogoniland in the mid 1990s-arrived within hours in armored vehicles. Several of the village men were arrested and spent months in detention, Olimini said.

The flare kept burning.

To date, the only thing anyone has done for the village looms over the opposite end of town like a cruel joke on stilts. When Agip built the flare and the flow station in 1972, it also built the village a water tower as a token of corporate good will.

"Undrinkable," says ByGod Abaligwe, a schoolteacher, with a dismissive wave of the hand toward the tower. The unlocked hatch at the top of the tower reveals water so thick with mud and rust that the equatorial sun at noon barely penetrates three inches.

Though the residents of Akaraolu had no say whatsoever in the location of Agip's facilities, they were initially pleased about the discovery of oil under their cassava fields.

"When they came in, we were happy," Olimini says. Villagers performed a ceremonial dance for company officials when they announced the opening of the flow station, because Agip would also build a road to the facility that would greatly improve transportation and trade between Akaraolu and neighboring villages. No one from the company explained what a "gas flare" was or what effects it would have on the villager's lives.

"They did not tell the chiefs that this is what the flare will do," says Adabu Ebere, "There was no education of the chief." Another of the town's schoolteachers, Ebere keeps an eye on manic children as they chase a soccer ball through a nearby field. Those too weak or ill to play sit in the cinder block shell of an unused building and watch.

Ebere stares at the twisting column of fire leaping above the tops of coconut trees like an orange tornado and says that no one has danced in joy in Akaraolu since it was ignited.

Moving Mountains

Villagers have all but given up on convincing the company to move the flare, so now they're asking the company to move the village. Again, the letters remain unanswered.

"Agip should relocate the community," Olimini said. "We'll live comfortably like an American guy two kilometers away. Five families have already moved there and many more are planning to leave. But it's expensive."

So, too, is staying. Air pollution from the flare stack erodes corrugated zinc rooftops more rapidly than in other Niger Delta communities. Many buildings, including one used by the school, have gaping rusted holes in the roofs that turn rooms into shower stalls during the six-month rainy season.

Sometimes the flare soars when a well taps into a reservoir of highly-pressurized gas, causing the ground to shake and walls to crack. Even the seemingly sturdy council chamber, where scrawled in chalk over the entryway is the observation "A hungry man is an angry man," is cracked and sagging.

No health studies have been done on the villagers to assess the dangers of living so close to the flare-Olimini says no doctor, Nigerian or otherwise, has ever visited the village-so it's difficult to judge how medically harmful the flare may be for those in Akaraolu. Residents have their opinions, however. Olimini says men sometimes urinate blood and many children have respiratory problems. The flare kills off fish and scares away game, he says, requiring extensive and arduous trade with neighboring villages so that Akaraolu residents can eat.

Like the letters from Chief Job, telephone messages left at Agip's Milan headquarter go unanswered, so there's no telling what the company's reaction is to Akaraolu's demands.

Global Waste

Mostly located in the Niger Delta, a 31,000-square-mile tropical area characterized by sensitive mangrove swamps, the precious oil of Nigeria coveted by SUV owners the world over resides with an estimated 124 trillion cubic feet of natural gas. This small, ecologically-sensitive tropical wetland is criss-crossed with more than 5,000 kilometers of pipelines and is home to more than 90 flow stations and 900 producing oil wells. In other oil-producing countries, most of the gas associated with oil drilling is reinjected into the ground to keep the oil fields pressurized, making the crude easier to extract. Otherwise, it's captured and liquefied for sale on international or domestic markets. In the United States, where natural gas prices more than tripled in the past year, the burning gas of Akaraolu would be coveted heating fuel.

In Nigeria, however, 75 percent of the natural gas produced annually is wasted into the atmosphere. Few facilities in Nigeria use natural gas-and since the geography of the swampy region makes reinjection difficult and costly, the cheapest way to get rid of it is to burn it.

Each barrel of oil sucked from the ground for later use as refined gasoline in developed countries results in 703 cubic feet of wasted natural gas, according to a 1999 report by Shell. As the largest oil company operating in Nigeria, Shell does the lion's share of the flaring, operating 92 flare stacks in the delta. Shell alone flares one billion cubic feet of natural gas per day, the energy equivalent of 180,000 barrels of oil.

Though it may be cheaper to burn it than use it, the practice is proving harmful far beyond the nearby villages. Burning natural gas produces methane and carbon dioxide, and the flares in the Niger Delta release 12 million tons and 35 million tons per year, respectively, according to World Bank estimates. Both gases are believed to contribute to global warming, and Nigeria releases a measurable percentage of the world's total output of greenhouse gases, according to a 1998 report by Human Rights Watch. Global warming may lead to rising sea levels, which would threaten every sea-level oil field and hamlet in the 40 miles between Port Harcourt and the coast.

There are signs that the gas flares won't roar in places like Akaraolu forever. Even though Shell predicted in its 1999 annual report that global demand for oil would rise by two million barrels a day in 2000-equal to Nigeria's daily output-rising consumer awareness is slowly creating markets for Nigeria's natural gas. Shell predicts that by 2020, up to 50 percent of the energy needs of Organization for Economic Cooperation and Development countries-30 free-market member states-will be met by natural gas. Shell, Agip and TotalFinaElf have joined forces to open the Bonny Terminal Liquid Natural Gas facility on the Nigerian coast, with the goal of capturing and selling all the gas currently flared by 2008. The joint venture likes to tout its concern for the environment in making the $4 billion investment, but it's likely that nothing would have been done if the demand for cleaner-burning fuel hadn't resulted in new markets and long-term contracts with European countries.

Broken Promise

While the 2008 deadline is encouraging, people in Akaraolu are less than enthusiastic about the news. Such promises are nothing new. In 1988 the Nigerian National Petroleum Corporation incorporated a natural gas company to develop facilities to use the gas, but to date the resulting projects use only some 5 percent of all natural gas produced in the region. Regulations meant to encourage oil companies to reduce or eliminate gas flares have been in place since 1969, but the fires still burn, mainly because the cost to the oil companies of turning off the flares far exceeds the fine for keeping them turned on. In 1998, the government fine for gas flaring was raised from a ludicrously low 4 cents per 1,000 cubic feet of gas to an only slightly-less-ludicrous 11 cents. To oil producers, it was merely an inflationary blip in the cost of doing business.

Until it makes economic sense for oil companies to replace firelight with starlight in Akaraolu, people like Saturday Olimini will continue to sweat, yell and pass blood.

Only when abrupt silence and pitch darkness engulf the village will anyone believe that the gas flare that has been a permanent fixture in their lives, is gone.

"As God has greeted man, because of this light, we cannot be happy again," Olimini said at the end of the day. "We suffer here. We plenty suffer."

Greg Campbell, former editor of Boulder Weekly, is a freelance journalist and author living in Longmont, Colorado. He is writing a book about the role of the diamond conflict in the Sierra Leone civil war.
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