OIL POLITICS: Nigeria’s unacceptable biofuels policy
At the time the
barrel price of crude oil shot up, the world began to sing the biofuels
song. Biofuels were touted as a replacement for fossil fuels and the
answer to poverty and even the climate crisis. They were presented as
being both renewable and environment friendly.
Moreover, it was
said that they would not compete with food crops in terms of land
uptake, as some of them would be grown only on degraded and marginal
lands. The idea of biofuels giving fossils fuels a good fight was so
widespread that the formation of a “green” OPEC was proposed.
Research has shown
that biofuels are just as harmful to the climate as fossil fuels when
factors like loss of soil carbon and deforestation are computed. It has
been proven that the energy output is actually same or less than what
it took to cultivate, process, and transport the fuels. Thus, biofuels
are not so green.
The reality of the
push for biofuels is that they quickly metamorphosed into agrofuels –
targeting food crops and pumping foods into machines rather than empty
stomachs.The food crisis that hit the world when commodity
speculations, conversion of grains into fuels, and other factors drove
food prices up, made the mantra of agrofuels of the energy saviour of
the world to be re-examined.
Lester Brown, of
the Earth Policy Institute, warned in 2007, for instance, that the
“grain it takes to fill a 25-gallon (95 litres) with ethanol just once,
will feed one person for a whole year.” In the same year, the United
Nations special rapporteur on the right to food described agrofuels as
a “crime against humanity”, and called on governments to implement a
5-year moratorium on their production.
The Nigerian
biofuel policy has been gazetted as Nigerian Bio-fuel Policy and
Incentives No. 72 Vol 94 and is dated June 20, 2007. Let us briefly
look at what the wholesale adoption of the agrofuels highway means to
Nigeria and the world.
The push for
agrofuels has meant a massive uptake of lands for the cultivation of
oil palms, corn, cassava, sugar cane, and jatropha, among others. It
has translated to land grabs in Africa, loss of lands by pastoralists
to jatropha in Africa and India, and slave-like engagement of farmers
as mere outgrowers in many parts of the tropical world.
The rush for
agrofuels has some benefits, but the benefits have been for
agribusiness, and the losers are small scale and family farmers and
pastoralists.
In Nigeria, this
rush saw cassava as the major target, with large swaths of farmlands
being set aside for cassava to be converted into ethanol. Jatropha has
also been an attraction with one company allegedly promoting its
cultivation in Ogoni land for the production of what they cheekily call
Ogoni Oil! In many parts of Northern Nigeria, the best-watered lands,
often along rivers, have been grabbed for agrofuels cultivation.
In many cases,
communities have been cajoled to give up their lands and become farm
hands to big business on the promises of regular income and a better
life that often is nothing more than a mirage.
Bio fuel policy
The Nigerian
Bio-fuel Policy was produced, packaged, and delivered by the Nigerian
National Petroleum Corporation (NNPC) without any public participation.
It follows the signature pattern of oil sector arrangements where
everything is skewed in favour of corporate actors while the
environment is opened to nothing except exploitation.
The policy allows
for massive tax breaks and all manners of waivers – exempting the
operators from taxation, withholding tax and capital gains tax. They
are also exempted from paying import duties and other related taxes on
the importation and exportation of biofuels into and out of Nigeria.
Moreover, for the first 10 years, such companies would not have to pay
excise duties and would also not be required to pay value-added tax.
For what is known
as the seeding stage, Nigeria is expected to engage in large-scale
biofuels importation. This appears to follow the path already well
oiled by the NNPC, a path where Nigeria exports crude oil and still
depends on imports of petrol to meet our domestic needs. Starting off
with massive biofuels import may be a clever way of not kick starting
the use of the fuel but of entrenching the dependence on imports, while
the farms point at unreachable possibilities.
The biofuels policy
also recommends a most liberal loan system for the industry, with the
funds coming from an ‘Environmental Degradation Tax’ that would
probably include fines from gas flares. The policy expects to profit
from continued massive environmental degradation in the oilfields of
the Niger Delta, rather than taxing polluters and utilising the funds
to detoxify the degraded Niger Delta environment. The policy aims to
benefit from the crude oil and also from the damage inflicted on the
land and the people.
Instead of
requiring that the biofuels sector strictly obeys the Nigerian EIA Act
of 1992, this policy requires the Federal Ministry of Environment to
“prescribe standards” for the conduct of Environmental Impact
Assessment of biofuels projects. It appears the plan is to ensure the
subversion of subsisting laws and regulations.
The policy says
nothing about the social and other impacts assessments that an industry
of this sort requires. The idea is to build up sacred cows, as seen in
the oil industry with its jaundiced joint venture arrangements that
allow fines and charges (including community development project costs)
to be computed as production costs and, therefore, never touch the
profits of the oil companies. In addition, it sees local farmers as
outgrowers, with no sense of ownership or control in the entire scheme.
The present
Nigerian biofuels policy must be repealed and public debate opened over
what sort of policy is needed for this sector.
