Gas flaring in Nigeria: Why compliance still lags, By Mide Alabi

Nigeria does not need new laws to end gas flaring because it already has them… What it does need is a regulatory posture that treats flaring as a breach, rather than a bargaining position. One that aligns penalties with economic reality, limits discretion, publishes data, and treats gas utilisation as non-negotiable… Until then, the flames will keep burning, not because the law is silent, but because its voice has not been made loud enough to matter.

If you grew up anywhere near an oil-producing community in Nigeria, gas flaring is not an abstraction. It is constant light without electricity, heat without benefit, and pollution without consequence.

What makes this more troubling is that, unlike a number of issues stemming from a lack of regulation, this is not happening in a legal vacuum. The country has spent decades legislating against it. Yet, Nigeria remains one of the countries with the highest rate of gas flaring worldwide (ranking in the top 10, according to the World Bank).

The problem is not whether Nigeria has laws on gas flaring. It is whether those laws are designed, enforced, and incentivised in a way that actually stops it.

The legal foundation of gas flaring regulation

Nigeria’s modern gas flaring regime is now principally governed by the Petroleum Industry Act 2021 (PIA).

Section 104 of the PIA establishes a clear statutory position: gas produced in the course of petroleum operations shall not be flared or vented, except under conditions expressly permitted by the Act or regulations made under it. Gas is legally recognised as a resource to be conserved and utilised, not wasted.

This is reinforced by Section 105, which places an obligation on upstream operators to submit gas utilisation plans as part of their field development approvals. In theory, no project should proceed without a clear plan for how associated gas will be handled.

The Act also empowers the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to issue permits, impose penalties, and enforce compliance in relation to gas flaring.

On paper, this looks like a robust piece of legislation that covers nearly all, if not all gaps.

The efficiency of penalties

The PIA does not merely discourage gas flaring; it also attaches penalties.

Under Section 104(4), unauthorised gas flaring attracts monetary penalties prescribed by regulation. These penalties are further operationalised through subsidiary instruments, including the Flare Gas (Prevention of Waste and Pollution) Regulations originally made under earlier petroleum legislation and now continued within the PIA framework.

The problem is not that penalties do not exist, it is that for many operators, especially large ones, flaring penalties remain cheaper than the capital expenditure required to capture, process, and transport gas.

And as we often see in the compliance field, when costs to comply exceed the penalties, the law loses its coercive power, as the incentive for compliance is simply no longer there.

Regulatory Discretion and Routine Exemptions

Another structural weakness lies in the wide discretion granted to regulators.

The PIA allows the NUPRC to issue flaring permits under certain circumstances, including technical, safety, or economic constraints. While this flexibility is understandable in limited cases, it creates room for flaring to persist through continuous renewals and exemptions, often through unascertainable or inconsistent criteria.

Another danger of this is the fact that what should be exceptional becomes routine, as cases that would typically trigger enforcement can be waived with paperwork.

Without the transparent publication of flaring permits, volumes, and exemptions, enforcement becomes difficult to scrutinise, even by industry participants.

The Nigerian Gas Flare Commercialisation Programme

In an attempt to realign incentives, the Federal Government introduced the Nigerian Gas Flare Commercialisation Programme (NGFCP).

The idea is rather straightforward. Instead of penalising flaring alone, allow third parties to capture flare gas and put it to commercial use. In theory, this transforms waste into value and reduces emissions simultaneously.

Legally, the programme is supported by regulations made pursuant to the PIA and earlier petroleum laws. In practice, however, the implementation has been slow. Licensing delays, financing risks, unclear host community engagement, and coordination problems between asset operators and flare permit holders have limited its impact.

Host Communities and Legal Blind Spots

The PIA also introduced the Host Communities Development Trusts under Chapter 3, intended to address the environmental and social impacts of petroleum operations.

While these provisions create funding mechanisms for community development, they do not directly prohibit gas flaring, nor do they provide communities with strong enforcement rights when flaring persists.

This creates a legal imbalance. Communities receive compensation after harm, but with limited tools to prevent the harm in the first place.

Environmental statutes, such as the Environmental Impact Assessment Act and NESREA regulations, all theoretically apply. In practice, coordination between environmental regulators and petroleum regulators remains weak.

Why the Law Still Struggles To Stop Flaring

Nigeria’s gas flaring framework is heavy on permissions, plans, and programmes, but lighter on hard enforcement. For every step forward taken, there seems to be a loophole that takes it two steps back as well. Penalties exist, but do not consistently outweigh commercial incentives. Regulators have discretion, but limited transparency. Communities are incentivised after the fact, but lack standing to compel compliance to mitigate harm in the first instance.

The result is predictable. Gas flaring continues, not because it is legal, but because the law tolerates delay.

Why this Matters for Energy Policy

Gas flaring is as much an energy policy failure as it is an environmental one.

Nigeria flares gas, while power plants lack feedstock, industries rely on diesel, and households live with unreliable electricity. The contradiction is built into the legal design.

Until gas utilisation is enforced as a condition of operation, rather than encouraged as a policy preference, flaring will remain an accepted inefficiency.

Five Practical Ways to Stop Gas Flaring in Nigeria

1. Gas Utilisation as a Binding Precondition

Under the Petroleum Industry Act (PIA), Field Development Plans (FDPs) are mandatory. However, to make them effective, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) must shift from viewing these as “submissions” to “binding covenants.”

• Potential Solution: Tie production quotas directly to utilisation progress. If a company fails to meet a six-month milestone for gas capture infrastructure, the NUPRC should automatically trigger a mandatory production cap on the associated oil, until the gap is closed. This moves the penalty from a “cost of doing business” to a threat against the primary revenue stream (oil).

2. Index Penalties to Market Value

Currently, flaring penalties are often flat fees that don’t account for inflation or the rising value of gas. If the fine is cheaper than the infrastructure, companies will choose to pay.

• Potential Solution: In my view, the solution to this is simple. Recalibrate penalties to be indexed to the prevailing international gas price plus a “pollution premium.” This ensures that flaring is always the most expensive option on the balance sheet. When the penalty for wasting gas is higher than the profit from selling it, the commercial incentive to flare vanishes.

3. Radical Transparency of Exemptions

The PIA allows for exemptions in “emergencies” or “safety” circumstances, but these are often used as permanent loopholes.

• Potential Solution: The solution to this is also simple. Transparency. The NUPRC should maintain a publicly accessible online “Flare Dashboard.” This would list every active exemption, the specific reason it was granted, the volume authorised, and, most importantly, the expiration date. Public pressure from investors (focused on ESG scores) and international watchdog groups is a powerful deterrent that costs the government nothing to implement.

4. Fix the Nigerian Gas Flare Commercialisation Programme (NGFCP)

The NGFCP aims to auction flare gas to third-party investors, but “first-party” operators (the oil companies) often frustrate access to their sites.

• Potential Solution: Standardise “Access to Flare” agreements. The law should mandate that if an operator cannot utilise its own gas, it must grant a third party physical access within 90 days of a permit being issued, or face a total suspension of its export permit. This breaks the “dog in the manger” hold oil companies have over flared gas.

5. Reframe Flaring as an Energy Security Crisis

Enforcement often fails because flaring is treated as a secondary “environmental” issue.

• Potential Solution: Explicitly link flare reduction to the National Domestic Gas Supply Obligation (DGSO). By treating flared gas as “stolen energy” from the national grid, the government can justify harsher enforcement. Captured gas should be the primary feedstock for the “Gas-to-Power” initiative, making every flared cubic foot a direct threat to Nigeria’s industrialisation and electricity stability.

Final word

Nigeria does not need new laws to end gas flaring because it already has them.

What it does need is a regulatory posture that treats flaring as a breach, rather than a bargaining position. One that aligns penalties with economic reality, limits discretion, publishes data, and treats gas utilisation as non-negotiable.

Until then, the flames will keep burning, not because the law is silent, but because its voice has not been made loud enough to matter.

‘Mide Alabi is a lawyer. He writes from Lagos and can be reached at [email protected]