Is the Nigerian fuel crisis the mother of energy opportunities?

The news about the current Nigerian fuels crisis is already spreading beyond the realms of the Gulf of Guinea. It is said that this one is the worst since anyone can think. This is truly not an enviable legacy for the outgoing president Goodluck Jonathan.

Could the incoming Nr. 1, president-elect Buhari, be more successful in tackling this rampant crisis? Let’s not forget that this is not the only big problem he inherited from his predecessor.

But as any educated person knows well – crisis equals opportunity. Where is the opportunity in this fuels crisis then?

About 10 days ago I published a post on distributed electricity generation for being the new frontier in energy production. I proposed that the lack of an integrated energy system in most African countries plus the current state of technological advancement would create a fertile situation for a new paradigm of energy production would spring into existence. I proposed that emerged economies already had lots of infrastructure in place, much of which would not be built the same way anymore if we had to start from scratch but as it’s already here, we use it until it falls apart which in turn hinders innovation.

Africa would start from a blank slate and even better. The backbone of African electricity is the generator which by pure accident already resembles much of what the new energy system is finally going to look like. Better, stronger, more resilient, and self-healing – different from what we have in other parts of the world. A far cry from what exists today in Africa.

Back to Nigeria and its fuel crisis.

I used the mobile phone analogy to make my point in the last post and this example just keeps hammering me. As in Nigeria, the mobile phone network runs on diesel. Let me explain.

A mobile phone network is essentially nothing but an array of relay stations covering a certain area. In Nigeria, there are thousands, and cover whole swathes of the country. Because of the enormous success of the mobile phone, landlines were left to deteriorate at worst or simply not improved or expanded at best. This means that those countries are utterly dependent on the mobile phone network for the quasi entire communicational needs.

Those relay stations need electricity to run and as power supply in Nigeria (and countries around it) is unreliable, each of those relay stations has its own generator producing power when centralized supply fails. If those power generators cannot be fueled anymore, there is no backup power anymore which in turn leads to the relay going down. If many relay stations go down, the mobile network collapses.

This means that not only is there no fuel to propel your car, deliver wares to shops, run public transportation services, to keep lights on at homes and offices when the grid fails but many people are also cut from the rest of the world. The country goes dark in many more ways than only light bulbs going cold.

It is said that this is the worst fuel crisis ever in Nigeria. I am not Nigerian and have not spent enough time there to know better but it sure is a huge burden to the country and it also hampers the country’s possibilities as one of the beacons of African growth.

On the other side, Nigeria flares huge amounts of gas. It flares it because there seems to be no way to make better use than burning it off – but is that true? Some say that building a gas pipeline system that would collect all the gas currently flared and put it to the service of the Nigerian population would be a colossal undertaking that would take decades to realize. This might even be true.

That said, there is another solution. At any moment in time, countless transportation trucks bring gasoline and diesel to every corner of the country. Why could that not be done with Liquefied Natural Gas?

The Natural Gas that is being flared in Nigeria today could fuel the country several times over and with that, I don’t only mean electricity production. I mean everything that requires energy to get done including fueling vehicles (any vehicles) and running gensets.

It’s an opportunity that has been there for decades but maybe now, through the pain of the current fuel crisis (and those that will surely follow) Nigeria might take things into its hands a start converting flares into locally consumed LNG. For the technology is ready and projects are there and they just wait for someone to take action and create the right incentives. But this is another story.