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 Everyone is talking of "alternatives" this year. Some oil producers, including the Nigerian Government, need alternative revenue sources, the Nigerian economy needs to continue the growth of its alternative sectors, the world may need an alternative global leader, some Nigerian electorate want alternative leaders, Nigerian barristers are thinking of alternative income earners (due to the continued closure of the courts), the list is endless. Having regard to the "go-slow" pace of the Federal Government of Nigeria power assets privatisation due to lack of gas, and my complete belief that increasing electricity supply is a sure way out of poverty, my "alternative" thoughts revolve on the use of other fossil fuels available in Nigeria as energy sources. Coal, to be exact, is the alternative fossil we should be thinking about.

 Nigeria has abundant coal reserves that remain largely untapped for various reasons, key of which are transportation issues and the "dirtiness" of coal when used as an energy source. Yes, coal is dirtier than some other energy sources but then why does coal fuel about 41% of global electricity?; with the USA relying on coal for 45% of its electricity production, South Africa- 93%, India - 68%, China -79%. Coal is widely used as an energy source because it is cheaper and more widely available than other sources, amongst other reasons. The "dirtiness' of coal will however, soon be  a historical problem due to the development of various ways of utilizing "clean" coal in the world today. The USA, for example has succeeded in developing clean technologies for generating electricity from coal that have resulted in lower emissions than was the case in the 1970s. Apart from electricity production, coal is also used as fuel by industries including steel and cement manufacturers. In thinking of alternatives, the Nigerian Government should encourage mining of coal for domestic electricity generation and industrial use.

The Nigerian Mining Act is investor friendly and begs for active implementation. Key terms in coal sale are the inherent nature of the coal- ash and sulphur content, moisture; preparation of the coal- crushing and sizing; and supply of the coal. Nigeria's coal reserves include bituminous coal whose low ash and sulphur content, that ensure higher energy potential, make obtaining off takers easier. World research on coal has developed technology for simplifying coal preparation. The one issue potential coal producers in Nigeria will face is ensuring supply of produced coal. The lack of infrastructure development around coal mines in Nigeria, will certainly be a problem. The Government will need to deliberately design PPP projects for infrastructure development (railways, roads) to encourage investment in coal production.  

 Financing for coal utilisation projects may also be a problem since Development Finance Institutions (DFIs) will generally not touch coal projects due to environmental issues. This DFI policy should certainly be reviewed as it is contrary to the DFI's general poverty reduction goals. How can an organisation geared to eradicate poverty and which agrees that electricity availability is a sure path to achieving this goal, snub use of fuel that will assist in achieving this goal, the same fuel that has assisted the growth of developed nations?  In doing its benefit-cost analysis exercise on a project for coal fired electricity production, the benefits of increasing electricity supply to developing nations, encouraging the development and use of clean coal technologies, (by the DFI  investing only in projects using clean coal technology), will certainly outweigh the cost of environment issues, especially as the associated environmental pollution has been and is being successfully combated.

 It is clear that utilisation of coal as an alternative fuel is an "alternative" the Nigerian Government and development institutions should embrace, especially if the UNDP's Millennium Development Goals for 2015 are ever to be attained. It is 2015, after all.

Happy New Year

Tonbofa Ashimi

Edward Ekiyor and Co. is a Nigerian law firm that has developed expertise in the Energy and Natural Resources Sectors, Finance, Corporate and Commercial matters and in resolving disputes.

 

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