The Effect of Gas Production, Utilization, and Flaring on the Economic Growth of Nigeria
Affiliation(s)
Project Management Technology Department, Federal University of Technology, Minna, Nigeria. Department of Entrepreneurship and Business Studies, Federal University of Technology, Minna, Nigeria.
Project Management Technology Department, Federal University of Technology, Minna, Nigeria. Department of Entrepreneurship and Business Studies, Federal University of Technology, Minna, Nigeria.
ABSTRACT
The extent to which a country develops is anchored around its resources; and this is evidenced in how the revenue derived from natural resources (especially the oil and gas industries) has influenced national development strategies. This notwithstanding, the existence of natural resources does not always translate to development, as these often times lead to complacency and mismanagement; Nigeria may have suffered from this. This paper establishes the impact of gas production, utilization, and flaring on the estimated monetary value of the goods and services produced in Nigeria (GDP), using multiple linear regression analysis. The result shows that while gas utilization has a positive impact on the nation’s GDP, gas production and flaring are negatively associated with GDP. The paper concludes that for these to positively stimulate economic growth, there is need to invest more in infrastructure in the industry, and review the regulatory framework guiding operations of the oil and gas industry.
Cite this paper
I. Diugwu, M. Mohammed, A. Egila and M. Ijaiya, "The Effect of Gas Production, Utilization, and Flaring on the Economic Growth of Nigeria," Natural Resources, Vol. 4 No. 4, 2013, pp. 341-348. doi: 10.4236/nr.2013.44041.
I. Diugwu, M. Mohammed, A. Egila and M. Ijaiya, "The Effect of Gas Production, Utilization, and Flaring on the Economic Growth of Nigeria," Natural Resources, Vol. 4 No. 4, 2013, pp. 341-348. doi: 10.4236/nr.2013.44041.
References
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[1] K. L. Karl, “The Paradox of Plenty: Oil Booms and PetroStates,” University of California Press, Berkeley, 1997. [2] M. L. Ross, “The Political Economy of the Resource Curse,” World Politics, Vol. 51, No. 2, 1999, pp. 297-322. doi:10.1017/S0043887100008200 [3] G. Nankani, “Development Problems in Nonfuel Mineral Exporting Countries,” Finance and Development, Vol. 17, No. 1, 1980, pp. 6-10. [4] J. D. Sachs and A. M. Warner, “Natural Resource Abundance and Economic Growth,” NBER Working Paper No. 5398, 1997. [5] D. Wheeler, “Sources of Stagnation in Sub-Saharan Africa,” World Development, Vol. 12, No. 1, 1984, pp. 1-23. doi:10.1016/0305-750X(84)90033-0 [6] R. Prebisch, “The Economic Development of Latin America and Its Principal Problems,” Lake Success, New York, 1950. [7] H. W. Singer, “The Distribution of Gains between Investing and Borrowing Countries,” American Economic Review, Papers and Proceedings, Vol. 40, No. 2, 1950, pp. 473-485. [8] R. Nurske, “Trade Fluctuations and Buffer Policies of Low-Income Countries,” Kyklos, Vol. 11, No. 2, 1958, pp. 141-154. doi:10.1111/j.1467-6435.1958.tb02361.x [9] A. O. Hirschman, “The Strategy of Economic Development,” Yale University Press, New Haven, 1958. [10] R. E. Baldwin, “Economic Development and Expert Growth: A Study of Northern Rhodesia, 1920-1960,” University of California Press, Berkeley, 1966. [11] W. Reno, “Corruption and State Politics in Sierra Leone,” Cambridge University Press, New York, 1995. [12] Nigerian National Petroleum Corporation, “Gas Production,” Nigerian National Petroleum Corporation. http://www.nnpcgroup.com/NNPCBusiness/UpstreamVentures/GasProduction.aspx [13] E. Ugwuanyi, “Need to Optimise Utilisation of Flared Gas, THE NATION. Energy Section,” Vintage Press Ltd., Lagos, 2013, p. 47. [14] US Energy Information Administration, International, “Energy Statistics,” Department of Energy, Washington DC, 2010. [15] International Energy Agency, “The World Energy Outlook,” 2009. [16] R. L. Daft, “Organization Theory and Design,” West Publising, New York, 1983. [17] J. B. Barney, “Organizational Culture: Can It Be a Source of Sustained Competitive Advantage?” Academy of Management Review, Vol. 11, No. 3, 1986, pp. 656-665. doi:10.5465/AMR.1986.4306261 [18] M. E. Porter, “Competitive Strategy,” Free Press, New York, 1980. [19] M. E. Porter, “The Contributions of Industrial Organization to Strategic Management,” Academy of Management Review, Vol. 6, No. 4, 1981, pp. 609-620. doi:10.5465/AMR.1981.4285706 [20] M. E. Porter, “Competitive Advantage,” Free Press, New York, 1985. [21] M. E. Porter, “Why Are Firms Successful,” Paper Presented at the Fundamental Issues in Strategy Conference, Napa, 1990. [22] S. Madueme, “Economic Analysis of Wastages in The Nigerian Gas Industry,” International Journal of Engineering Science and Technology, Vol. 2, No. 4, 2010, pp. 618-624. [23] S. Madueme, “Gas Flaring Activities of Major Oil Companies in Nigeria: An Economic Investigation,” International Journal of Engineering Science and Technology, Vol. 2, No. 4, 2010, pp. 610-617. [24] S. I. Oni and M. A. Oyewo, “Gas Flaring, Transportation and Sustainable Energy Development in the NigerDelta, Nigeria,” Journal of Human Ecology, Vol. 33, No. 1, 2011, pp. 21-28. [25] A. Osuoka and P. Roderick, “Gas Flaring in Nigeria: A Human Rights, Environmental and Economic Monstrosity,” A Joint Report Written by the Environmental Rights Action/Friends of the Earth, Nigeria and the Climate Justice Programme, Amsterdam, 2005. [26] BP, “BP Statistical Review of World Energy,” June 2012. [27] D. Kahforoshan, E. Fatehifar, A. A. Babalou, A. R. Ebrahimin, A. Elkamel and J. S. Ltanmohammadzade, “Modelling and Evaluation of Air Pollution from a Gaseous Flare in an Oil and Gas Processing Area,” Paper Presented at WSEAS Conferences, Santander, 2008. [28] B. Buzcu-Guven, R. Harriss and D. Hertzmark, “Gas Flaring and Venting: Extent, Impacts, and Remedies,” Energy Study Working Paper—Energy Market Consequences of an Emerging US Carbon Management Strategy, Rice University, James Baker III Institute for Public Policy, 2010. [29] M. F. Farina, “Flare Gas Reduction: Recent Global Trends and Policy Considerations,” General Electric Company, 2011. [30] Government Accountability Office, “Natural Gas Flaring and Venting: Opportunities to Improve Data and Reduce Emissions,” US Government Accountability Office (GAO), 2008. [31] C. D. Elvidge, D. Ziskin, K. E. Baugh, B. T. Tuttle, T. Ghosh, D. W. Pack, E. H. Erwin and M. Zhizhin, “A Fifteen Year Record of Global Natural Gas Flaring Derived from Satellite Data,” Energies, Vol. 2, No. 3, 2009, pp. 595-622. doi:10.3390/en20300595 [32] GGFR, “Partners Kick off Work Program for 2010-2012,” The News Flare, World Bank-Global Gas Flaring Reduction, Washington DC, 2010. [33] GGFR, “GGFR Partners Mark 10th Anniversary by Scaling up Flaring Reduction Efforts,” The News Flare, World Bank-Global Gas Flaring Reduction, Washington DC, 2012. [34] C. D. Elvidge, K. Baugh, M. Zhizhin and F. C. Hsu, “Satellite Data Estimation of Gas Flaring Volumes,” NOAA National Geophysical Data Center, 2012. [35] P. A. O. Odjugo and E. J. Osemwenkhae, “Natural Gas Flaring Affects Microclimate and Reduces Maize (Zea mays) Yield,” International Journal of Agriculture & Biology. Vol. 11, No. 4, 2009, pp. 408-412. [36] B. S. V. Atevure, “Processes of Oil Production and Environmental Degradation: An Overview,” Journal of Environmental Analysis, Vol. 2, No. 1, 2004, pp. 76-85. [37] O. E. Inyang, “Gas Flaring and the Nigerian Economy,” Economic Review, Vol. 14, No. 1, 2007, pp. 25-33. [38] C. Collins and O. Oshodi, “Improper Abandonment of Oil,” Nigerians in America, 2010. [39] Nigerian National Petroleum Corporation, “2011 Draft Annual Statistical Bulletin,” Corporate Planning and Strategy Division, NNPC, 2012. [40] Total, “Reducing the Flaring of Associated Gas,” undated. [41] B. Omiyi, “Shell Nigeria Corporate Strategy for Ending Gas Flaring,” Seminar on Gas Flaring and Poverty Alleviation, Oslo, 18-19 June 2001, pp. 1-13. [42] M. Watts, “Petro-Violence: Community, Extraction, and Political Ecology of a Mythic Commodity,” In: M. Watts and N. Peluso, Eds., Violent Environments, Cornell University Press, Ithaca, 2001, pp. 189-212. [43] Africa News Service, “Oil Companies and Gas Flaring in Niger Delta,” P.M. News/All Africa Global Media, Lagos, 2003. [44] GGFR, “Report on Consultations with Stakeholders,” Report 1, World Bank—Global Gas Flaring Reduction, Washington DC, 2002. [45] C. D. Elvidge, K. E. Baugh, B. T. Tuttle, A. T. Howard, D. W. Pack, C. Milesi and E. H. Erwin, “A Twelve Year Record of National and Global Gas Flaring Volumes Estimated Using Satellite Data,” Final Report to the World Bank, 2007. [46] ERA, CJP/FOE, “Gas Flaring in Nigeria: A Human Rights, Environmental and Economic Monstrosity,” A Report by the Climate Justice Programme and Environmental Rights Action/Friends of the Earth Nigeria, Amsterdam, 2005. [47] Energy Sector Management Assistance Program, “African Gas Initiative: Main Report,” Joint UNDP/World Bank Energy Sector Management Assistance Programme, 2001. [48] N. J. Ashton, S. Arnott and O. Douglas, “The Human Ecosystems of the Niger Delta—An Era Handbook,” Environmental Rights Action, Lagos, 1999. [49] The World Bank, “Regulation of Associated Gas Flaring and Venting: A Global Overview and Lessons from International Experience,” World Bank—GGFR Report 3, The International Bank for Reconstruction and Development/The World Bank, Washington DC, 2004. [50] T. Blasing, J. Hand and B. Kimberly, “Monthly Carbon Emissions for Natural Gas Flaring and Cement Manufacture in the United States,” Tellus B, Vol. 59, No. 1, 2007, pp. 15-28. doi:10.3402/tellusb.v59i1.16965 [51] B. Manby, “The Price of Oil: Corporate Responsibility and Human Rights Violations in Nigeria’s Oil Producing Communities,” Human Rights Watch, New York, 1999. [52] S. Akpan, “The Production and Utilisation of Natural Gas Resources in Nigeria: A Review,” The Nigerian Annual International Conference and Exhibition, Abuja, 3-5 August 2009, 3 p. doi:10.2118/128356-MS [53] R. Hill, J. Moore, D. Boone and C. Randall, “Associated Gas Utilisation with Liquid Recovery,” The Offshore Technology Conference, Houston, 6-9 May 1985, 10 p. doi:10.4043/5039-MS [54] A. Abdulkareem and J. Odigure, “Economic Benefit of Natural Gas Utilisation in Nigeria: A Case Study of the Food Processing Industry,” Energy Sources, Vol. 5, No. 1, 2010, pp. 106-114. [55] C. W. Cobb and P. H. Douglas, “A Theory of Production,” American Economic Review, Vol. 18, No. 1, 1928, pp.139-165. [56] D. Canning, “Infrastructure’s Contribution to Aggregate Output,” World Bank Policy Research Working Paper No. 2246, World Bank, Washington DC, 1999. [57] T. A. Oyeniyi, “Fundamental Principles of Econometrics,” Cader Publication Ltd., Lagos, 1997. [58] W. H. Greene, “Econometric Analysis,” Prentice Hall, Upper Saddle River, 2008. [59] O. M. Gabriel, S. D. Kareem, F. Kari, G. M. Alam and O. D. Matuin, “Impact of Gas Industry on Sustainable Economy in Nigeria: Further Estimations through Eview,” Journal of Applied Sciences, Vol. 12, No. 21, 2012, pp. 2244-2251. doi:10.3923/jas.2012.2244.2251 [60] National Bureau of Statistics, “Macro-Economic Data: Gross Domestic Product,” National Bureau of Statistics, Abuja, 2013. [61] The World Bank, “World Development Indicators: 1960-2011,” The World Bank Group, 2012. http://databank.worldbank.org/data/views/reports/tableview.aspx [62] Nigerian National Petroleum Corporation, “2009 Annual Statistical Bulletin,” Corporate Planning and Strategy Division, NNPC, 2012.