Why OPEC-member Nigeria introduces biofuels to its energy mix

As is well established by now, biofuels may offer major advantages to developing countries. These countries can 'leapfrog' into a greener world that is based on a new energy and development paradigm. Biofuels bring a reduction of dependence on oil and the high fossil fuel prices that are so detrimental to their economies, they offer increased energy security through fuel diversification, income generation for farmers and rural communities, new jobs in a wide range of sectors, decreased air pollution and greenhouse gas emissions, a democratisation of access to mobility and increased energy access - in short, a virtuous cycle of factors that leads to a strengthened economy, both on the macro- as on the micro-level.

Ultimately, biofuels hold the potential to include some of the world's poorest people into the wider economy, by looking at them as energy producers. Especially in Africa, where more than 70% of people make a living from agriculture, social inclusion and income generation on a massive scale through biofuels can lead to lower pressures on the environment, strengthened livelihoods and to more sustainable development.

Engineer Funso Kupolokun, group managing director of the Nigerian National Petroleum Corporation (NNPC), explains why Nigeria introduced biofuels into the nation's energy mix, despite being an OPEC member and the continent's largest oil producer. He explained that the integration of the agricultural sector with the energy sector opens a new world of opportunities to all members of society.

Speaking at the 18th Enugu International Trade Fair, Kupolokun shed light on a US$350 million 'Nigerian Content Support Fund' (NCSF), which has been created as an avenue through which indigenous companies can source biofuel funds to compete with their foreign counterparts and to strentghen Nigeria's grip over its own energy supplies. Even though Nigeria is a crude oil producer, the refined fuels sold in the country are under control of foreign capital. Nigeria wants to change this situation.

Engineer Austin Oniwoh said the effective combination of efforts of the agricultural sector and the energy sector would have profound impact in increasing the nation's Gross Domestic Product (GDP), in addition to the creation and spreading of wealth among a very large segment of the Nigerian people.

Nigeria's people are highly frustrated by the fact that they see virtually none of the benefits from the oil wealth that is generated from the country's petroleum sector. The Nigerian oil sector is foreign-owned and operated, produces very small numbers of jobs compared to the profits made, fuels corruption and a concentration of power, and destroys ecosystems. Biofuels production on the other hand, is based on distributed production of feedstocks amongst many different farmers and is based on local instead of foreign labor. In short, petroleum and biofuels are based on two entirely different logics (earlier post).

Oniwoh said that in the pursuit of kickstarting this new energy industry in Nigeria, the NNPC has engaged the Federal University of Agriculture, Markurdi, as a consultant to develop high yielding, short gestation cassava and sugar cane breeds:
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"The seedlings will be made available to both small and large scale farmers for cultivation and subsequent supply of the produce to ethanol distilleries, to be established in various parts of Nigeria," he said.

Kupolokun for his part said the biofuels initiative will have the twin effect of protecting the nation's environment as green fuel, and spreading wealth amongst the poor rural farmers and the mechanised urban farmers who hitherto have been distant beneficiaries of the oil and gas economy.

He invited entrepreneurs from the South-east and members of the Enugu Chamber of Commerce, Industry, Mines and Agriculture (ENCCIMA), to take advantage of the NCSF fund.

As regard to the oil-sector and the aim to strengthen Nigerian companies' participation, Kupolokun said the dividend of the liberalisation of the downstream oil and gas sector has engendered effective and active private sector inclusion and participation in bulk products importation, distribution and expanded retailing, resulting in the much desired wealth creation across the products supply chain.

He said NNPC has now shifted emphasis to creating the same enablement of Nigerian entrepreneurs in the upstream sector through the Nigerian Content initiative, adding that the Corporation's management has been actively engaged in promoting and monitoring local inputs to all on-going and new projects in the sector.

"Our target of achieving 45 per cent Nigerian content in 2006 was largely realized, while concerted efforts are on to achieve the targeted 70 per cent in year 2010. The Nigerian Content initiative seeks to significantly improve the quantum of composite value-added or created in the Nigerian economy through the effective utilisation of Nigerian human and material resources for the provision of goods and services to the oil and gas industry," he said.

Image: Nigerian field technicians showing "super cassava" developed with multiples of the normal chromosome count, by the International Institute for Tropical Agriculture.