By NJ Ayuk
As African
oil and gas countries struggle with Covid-19’s devastating impact on demand,
two international groups seem to be celebrating it.
Earlier this month, the Organisation for
Economic Co-operation and Development (OECD) and the International Energy
Agency (IEA) described the low oil prices caused by the pandemic as a “golden
opportunity” for governments to phase-out fossil fuel support and usher in an
era of renewable energy sources.
“Subsidising fossil fuels is an inefficient use
of public money and serves to worsen greenhouse emissions and air pollution,”
OECD Secretary-General Angel Gurría said in a joint OECD-IEA statement. “While
our foremost concern today must be to support economies and societies through
the Covid-19 crisis, we should seize this opportunity to reform subsidies and
use public funds in a way that best benefits people and the planet.”
I would argue that the OECD and IEA don’t
necessarily know what’s best for the people who live on this planet. Pressuring
governments to stop supporting fossil fuels certainly would not be good for the
African oil and gas companies or entrepreneurs striving to build a better
future. And it could be downright harmful to communities looking at
gas-to-power initiatives to bring them reliable electricity.
Too often, the discussion about climate change —
and the call to leave fossil fuels in the ground— is largely a western
narrative. It does not factor in the needs of low-income Africans who could
reap the many benefits of a strategic approach to oil and gas operations in
Africa: reduced energy poverty, job creation, and entrepreneurship
opportunities, to name a few.
Ironically, a policy that would jeopardize
Africans’ ability to realize those benefits is being recommended at the same
time protesters across America are calling for equity in some of the same
areas. Although police violence against people of color is at the center of the
protests — a response to the horrific death of a black man, George Floyd, after
a white police officer knelt on his neck for nearly nine minutes — the protests
also point to social and economic disparities between the races in America.
While I don’t want to exploit the death of
George Floyd, I do see parallels between the racial disparities in America and
the struggles of Africans whose lives could be improved through oil and gas. I
always see a common pattern of ignoring black and African voices.
Too often in America, the value of black lives
was not given proper consideration until George Floyd’s death forced the topic
to the forefront and rightly so. And on the global stage, OECD and IEA are
dismissing the voices of many Africans who want and need the continent’s oil
and gas industry to thrive. I would advise these organizations not to ignore
the needs of poor people in African countries.
As it stands, African energy entrepreneurs, the
African energy sector, and Africans who care about energy poverty are basically
saying, “I can’t breathe.”
It’s time to get the knees off their necks.
The Dangers of Energy Poverty
Consider the impact of energy poverty.
Approximately 840 million Africans, mostly in sub-Saharan countries, have no
access to electricity. Hundreds of millions have unreliable or limited power at
best.
Even during “normal times,” energy poverty is
dangerous. The household air pollution created by burning biomass, including
wood and animal waste, to cook and heat homes has been blamed for as many as 4
million deaths per year. How will this play out during the pandemic? For women
forced to leave their homes to obtain and prepare food, sheltering in place is
nearly impossible. What about those who need to be hospitalized? Only 28
percent of sub-Saharan Africa’s health care facilities have reliable power.
Physicians and nurses can’t even count on the lights being on, let alone the
ability to treat patients with equipment that requires electricity — or
store blood, medications, or vaccines. All of this puts African lives at risk.
That’s what makes gas-to-power initiatives so
critically important: It only makes sense for African countries to use their
vast natural gas reserves for power generation. And we’re already making
progress on that front. Today, about 13 African countries use natural gas
produced domestically or brought in from other African countries, and there’s
every reason to believe this trend will grow.
In Cameroon, for example, Victoria Oil and Gas
PLC already provides domestic gas for power generation, and its subsidiary, Gaz
du Cameroun (GDC), has agreed to provide the government gas for a new power
station with the potential to accommodate growing demand.
And in Mozambique, the Temane power plant, also
known as Mozambique Gas-to-Power, is being developed now, and plans are
underway to develop a second plant. Both will rely on Mozambique’s Rovuma basis
for feedstock.
I have heard calls, including some from the
OECD, for the development of sustainable energy solutions to meet Africa’s power
needs. Great — let’s go for it. I’m all for renewable energy solutions, but
Africans should not be forced to make either-or-decisions in this area. Energy
poverty is a serious concern, and it’s wrong to make it more difficult for
African countries to use a readily available natural resource to address it.
Investment — Not Aid
One of the benefits of oil and gas operations in
Africa is they provide opportunities for both indigenous companies and for
foreign ones. And as foreign companies comply with local content laws, they
invest in the communities where they work. Africa needs those investments,
particularly training and education programs that empower people to make better
lives for themselves.
I want to be clear: Africa does not need social
programs, even educational programs, that come in the form of aid packages.
What’s more, offering Africa aid packages to compensate for a halt or slow-down
of oil and gas operations will not do Africans any good. I tried to make that
point recently during a friendly debate with Prof. Patrick Bond, a very bright
man and a distinguished professor at the University of the Western Cape School
of Government. He argued that Africa should keep all of its petroleum resources
in the ground to minimize greenhouse gas emissions and prevent further climate
change. Developed nations, the professor continued, should compensate Africa
for that sacrifice, and Africa could use that money to develop other
opportunities. No. This is not the time for Africa to be calling for more aid. Africa
has been receiving aid for nearly six decades, and what good has it done? We
still don’t have enough jobs.
Investment creates opportunities, meaning
Africans aren’t receiving, they’re doing. They’re learning, working, building,
growing, deciding. We, as Africans, must be responsible. Our young people
should be empowered to build an Africa we all can be proud of. Relying on the
same old policies of the past, relying on aid, simply isn’t going to get us
there.
The truth is, no matter how you feel about the
American Shale Revolution, Africans can learn from it. One of the reasons it
succeeded is because you had small businesses willing to take a chance on new
technology. They worked hard, and in the end, they boosted production. America
became the largest crude oil producer in the world. Those companies made
something extraordinary happen, and so can African businesses. We need more
entrepreneurs willing to seize opportunities and, in some cases, make mistakes.
That’s how we grow and learn. We need government leaders to do their part by
creating a welcoming environment for foreign investors and establishing local
content policies that result in opportunities for business partnerships,
quality jobs, and learning opportunities for Africans.
Africa is capable of building a better future,
of ending energy poverty, strengthening our economy, and improving the lives of
everyday Africans. If we’re smart about it, and we work together with purpose,
our oil and gas resources can help us get there.
And that’s why this is a horrible time for OECD,
IEA, or any other outside organizations, to interfere with our natural
resources.
Don’t Stand in Our Way
I understand and respect the OECD and IEA’s
commitment to preventing climate change. But when you describe the chance to
harm a major African economic sector as a great opportunity, there’s something
wrong.
When you put independent African oil and gas
companies at risk, you’re saying your objectives are more important than
African livelihoods and aspirations.
American institutions are coming under fire for
failing to recognize that Black Lives Matter and to work alongside
African-American communities to create positive change.
I encourage the OECD and IEA to take a different
approach.
This
is an opportunity for all of us to join forces, to take a team approach to
growing Africa’s energy sector, and to do it without dismissing Africa’s right
to capitalize on its own natural resources.
NJ Ayuk is Executive Chairman of the
African Energy Chamber, CEO of pan-African corporate law conglomerate Centurion
Law Group, and the author of several books about the oil and gas industry in
Africa, including Billions at Play:
The Future of African Energy and Doing Deals.