Equating zero carbon emission to zero fossil fuels is a major global problem for energy transition and the reason for the withdrawal of investible capital from fossil fuel investment across the globe.

This was disclosed by the Chairman of Seplat Energy Plc, Dr. A.B.C Orjiako, at the Milken Institute’s 24th Annual Global Conference themed “Charting a New Course”, in Los Angeles, California, USA.

According to him, the realistic thing is for energy transition to strike both collaboration and balance between the race to carbon neutrality and energy poverty prevalent in Africa and other developing nations.

What Orjiakor is saying about transition

The Seplat boss explained that while renewable energy is very important, Sustainable Development Goal 7, which hopes to achieve access to sustainable universal electricity in an affordable and reliable manner by 2030, could not be actualised by relying on renewable energy alone.

The energy entrepreneur, who was on the panel, which dissected the topic “Energy and Commodity Markets: Structural Bull or Earthbound” at the Conference, said: “One of the biggest challenges in energy transition is continuous discordant tunes that people are beginning to sing; and what you’re seeing today with the bull in commodity prices is because there are completely uncoordinated plans where there is a heavy race towards transition.

“But the real message is that energy transition, zero or net carbon emission, is not the same as zero fossil fuels. I think that’s where the payers got it wrong. So, there is a massive withdrawal of investible capital from fossil fuel investments. Quite a lot of funds go into renewable energy.”

He said that attention should be on multiple sources of power and ensuring investments in technology, innovations, and policies that take out carbon and greenhouse emissions.

He stressed the need for multiple sources of power to meet global energy needs but ensuring investments in technology, innovations, and policies to take out carbon and greenhouse emissions in the process of fossil fuel production.

Citing the Nigerian example, Orjiako explained, “Just to put things in context, Nigeria for example, has 200 million people, 12,500 megawatts installed capacity for grid power, but availability of off-grid power to the population is only three to four thousand megawatts.

“In the meantime, you have 25,000 megawatts off-grid power supplied by electricity generators. In this same country, more than almost 60 per cent of the population have no electricity. So, the luxury of turning the switch on to see light does not exist in the majority of the population.

“Now, in this same environment, you find out that 80 per cent of the energy need is actually in the households where they are using firewood and kerosene to provide the energy they need for cooking. And there is added to all of these the health challenges, and the poverty.

“So that, how do you prioritise to transit to renewable overnight when you have the abundance of fossil fuels in that environment that can leapfrog the provision of power. So, when you talk about the SDG 7 – access to sustainable universal electricity in an affordable and reliable manner – there is absolutely no way, you leave almost 200 trillion cubic feet of gas reserves that can give you this electricity and power very quickly and then you transit and start using renewable.”

He observed that whereas transitions from one source of energy to the other, such as well, coal, liquid, and gas, took over a century and the difference today is the obvious problems of climate change and some urgency of now it had triggered.

“Everyone wants transition that will happen overnight. I think that is really the issue: Where this transition is being driven on the one hand by mere politics, activism, and policy whereas indeed, what the whole players should be looking at will be more around the technology, innovations and the right policy so that you can have a coordinated transition globally.

“In Seplat, for example, we changed our name from Seplat Petroleum Plc. to Seplat Energy Plc.; and this is very important because we have to repurpose our identity to basically begin our drive in providing the real sustainable solution for energy in our society.

“Apart from what we are doing in producing fossil fuels, what we have decided to do is to takeoff our flay. The Federal Government of Nigeria put 2030 as the year when there will be no more flays. But we made a deliberate decision to take out flays by 2024. This will be taking out 2.8 million metric tons of carbon emission. These are part of the measurable plans we’re doing.

“So, even without putting any sophisticated technology, just by installing the right compression mechanism, we immediately convert those gas to really money-making gas.

“Another is the natural approach, to see how we can do effective carbon capture through tree planting. We just launched what we call the “Seplat Tree for Life Programme” where we’re going to be using it to intensify our commitment and deepen it in terms of ESG. Once you do this, you’re addressing the environment because a lot of the carbon will be absorbed by the trees. And then, you’re going to be addressing very strongly the earth. The social impact investment will create jobs. You mobilise a lot of youth to plant the trees and maintain them. And, of course, the governance aspect. So, there are quite a lot of things to be done rather than just taking money out of fossil fuel investment. These are really the challenges you have,” he added.

What you should know

Also on the panel were Angela Rosell, CEO, Alaska Permanent Fund Corporation; Eric Dresselhuys, CEO, ESS Inc., and Nicholas Stork, CEO, Archaea Energy.