September 07, 2005

Chevron and other sponsors of the West African Gas Pipeline (WAGP) are trying to make extra profit from the phony and yet unclear international “carbon market”, which is the product of the Clean Development Mechanism (CDM) - one of the instruments of the Kyoto Protocol aimed at reducing Greenhouse Gas Emissions (GHG) like carbon dioxide (CO2) and methane which are responsible for global warming.

Developed countries like the United States are mainly responsible for global climate change with their high volume of GHG emissions. Faced with the need to do something about the problem, the industrialized governments pushed for market solutions to reducing emissions. Part of their idea is to trade on carbon. With schemes like the CDM, energy project developers from a developed country can earn “carbon credits” in dollars if they invest in projects that reduce GHG emissions in developing countries like Nigeria. WAGP sponsors are claiming that the project would contribute to reducing GHG emissions, mainly by “eliminating significant levels of gas flaring in Nigeria”, while supporting the “sustainable development objectives” of the governments of Nigeria, Benin, Togo and Ghana.

For Chevron, a way to make extra profit from the proposed WAGP is to enter the emerging emissions trading market and request for “carbon credits”. According to the company, about 100 million tCO2e emissions reduction will be recorded with the West African Gas Pipeline in a twenty year period, of which 78% will be achieved by reducing gas flaring in Nigeria. But as we have pointed out earlier, the sponsors of the project including Chevron, Shell and the Nigerian National Petroleum Corporation (NNPC) do not have a clear programme for gas flare reduction in the Niger Delta region of Nigeria. Neither do the WAGP slide shows illustrate in any clear way a utilization plan for flared associated gas for the pipeline. Even the former Project Manager of the WAGP, Chevron’s Chris Miller agreed with ERA in a meeting in Amsterdam ahead of the November 2000 Climate Summit, that the estimates for emissions reduction from the WAGP were merely “theoretical”.

The problem of gas flaring has been created by oil companies like Chevron, Shell and their Nigerian government partners. They should be held responsible for correcting the problem, which they have created. Ending the dangerous flaring of associated gas should not be tied solely to profit considerations, as communities have borne too much of the costs already; in diseases, deaths and loss of livelihoods. It is indeed the communities that should be compensated for years of health and environmental problems associated with gas flaring.

CDM: SHOULD THE POLLUTER BE PAID?
ERA believes that the Kyoto Protocol and United Nations Framework Convention on Climate Change (UNFCCC) process offers some opportunity to address global climate change by the promotion of just, equitable and democratic mechanisms for dispersing cleaner, more sustainable and affordable energy alternatives, without further jeopardizing local livelihoods and sovereignty. However, the push by transnational oil companies and the World Bank to increase profit for the corporations mean that a global “carbon market’ is being introduced to provide more financial gain for the likes of Chevron while ignoring the plight of the victims of pollution and human rights abuses during 40 years of oil exploitation and indiscriminate associated gas flaring.

As we will show, the WAGP, which is being paraded by the World Bank as one of the fossil fuel projects for CDM consideration (under its Global Gas Flaring Reduction Public-Private Partnership - GGFR) fails to meet any reasonable criteria for CDM credits.

It is preposterous for Chevron and WAGP sponsors to seek CDM credits when the pipeline is not owned or initiated, according to Chevron, by an American investor. The sponsors of the project continue to claim that the WAGP is an indigenous West African Project initiated by ECOWAS. The West African Gas Pipeline Company is registered in Bermuda. So why should an American company take “carbon credit” for it?