Supply Chain

By NJ Ayuk, Executive Chairman, African Energy Chamber (http://www.EnergyChamber.org)

When examining how fossil fuel exploration, production, and usage differ between African and more developed nations, the contrast is so stark that it essentially defines the core mission of the African Energy Chamber (AEC). We exist not to bring these rates on par with each other but to amplify Africa's standing in the global energy industry such that it results in massive improvements in the quality of life across the continent.

Consider this: While Africa holds roughly 13% of global natural gas stores and 7% of its oil, when it comes to per capita use of these hydrocarbons for energy, Africa's consumption rate is the world's lowest.

Or this: While we're under pressure to adopt renewable energy resources, Africa already relies on renewables more than any other continent, but this refers to the wood and cow dung that fuel the cooking fires, which account for essentially half of Africa's energy consumption. Of course, both are linked to hazardous indoor air quality, adding to the already long list of vexing issues that many Africans must deal with daily.

In total, nearly one billion Africans have no access to clean cooking fuels. Another 600 million, with a majority living in the sub-Saharan regions, survive without access to electricity from any source.

Africa deserves relief from such difficulties.

As much as the African people stand to benefit from access to their own fossil-fuel resources, Africa's hydrocarbon-bearing nations possess a vast wealth they're willing and ready to share with the world. The prospect of forging development partnerships with foreign nations and international oil companies would offer much of Africa a path toward modernization, advancement, and prosperity while at the same time providing much-needed energy security to its business allies abroad.

We've been waiting for Africa to take its place alongside the equally resource-rich yet developed regions of the globe for far too long. However, Africa's readiness for this overdue transformation comes at a strange time in modern history. Just as we've observed increases in GDP per capita and average life expectancy parallel the proliferation of fossil fuels, we've also seen the rise of a small but vocal and influential minority that has set out to obstruct their continued extraction.

Activists and ill-informed ideologues mainly comprise this opposing faction. And either knowingly or as a result of having been taken in by false promises, they propose alternative energy solutions which are still far too expensive for Africa to implement effectively.

Africa needs affordable, readily available energy, but this group has steadily garnered sway over individuals, financial institutions, and world governments, convincing them that, for the sake of the planet's health, Africa's untapped resources must indefinitely remain right where they are today.

Over the years, these activists brought many to their side, ratifying their intentions through measures like the Paris Agreement of 2015 and the Glasgow Climate Pact of 2021 that require signatories to commit to green energy initiatives at home and abroad.

This movement proved effective in achieving its own goals and was allowed to carry on with its agenda unimpeded for many years. However, recent global events have rather suddenly forced both participants and onlookers to reconsider the merits of its claims and the value of any allegiance to it.

Eastern Aggression, Western Hypocrisy

When then-U.S. President Donald Trump, speaking before the United Nations General Assembly in 2018, warned Germany against their dependence on Russian energy, the German delegation in attendance famously snickered at his concerns. After Russia's invasion of Ukraine in 2022, the European Union's sanctions against the Russian energy sector that followed, and the subsequent sabotage of the Nord Stream pipelines, Trump's remarks appear more prescient in retrospect than they did at the time.

The war in Ukraine and the supply chain disruptions and fuel price spikes it induced sent world leaders scrambling to secure new energy sources for their countries.

Spring 2022 saw a frenzy of energy industry activity as Italy's foreign minister brokered new liquid natural gas (LNG) deals with Angola and the Congo, Germany engaged in gas talks with Senegal, and the energy ministers of Algeria, Niger, and Nigeria pledged to accelerate their work on the long-delayed Trans-Saharan gas pipeline project.

Even President Joe Biden, who notably vowed to end the United States' involvement with fossil fuels during his campaign, reached out to Saudi Arabia, urging the nation to increase oil production.

Coal: Don't Call It a Comeback

The 2021-2023 global energy crisis also led many nations to continue or increase their reliance on coal — the fossil fuel even conventional oil and gas companies are quick to disparage due to its negative impacts on human health and its history of environmental harm.

With their own power generation capacities in peril thanks to war shortages, below-average winter temperatures, overcast skies, and a wind drought that still threatens to starve turbines across Europe, the countries often most critical of Africa's modernization ambitions rushed to refill their stores of the very fuel they had scheduled for phase-out years before.

According to the International Energy Agency's mid-year Coal Market Update, global coal consumption grew by 3.3% in 2022, reaching an all-time high of 8.3 billion tons. While 2023 and 2024 might show a slight decrease in coal-fired power generation, the 1.5% rise in industrial coal use expected with improving economic conditions during the same period will likely negate this drop.

Putting a pause on an initiative begun in 2015 to shutter all its coal-fired power stations, the United Kingdom relaxed permitting conditions in July 2022, keeping its remaining plants operational albeit on standby into 2024.     

Around this same time, the EU imported roughly 11 times more coal than usual from Australia, South Africa, and Indonesia.

In August of 2023, in a move highlighted by opponents of the green agenda, German energy firm RWE began dismantling its wind farm in North Rhine-Westphalia to allow for the expansion of its Garzweiler II lignite coal mine.

Had these nations engaged in more earnest development negotiations with African oil and gas producers when we suggested they should, perhaps they would have found a better footing for dealing with unforeseen climate-related events, natural or political.

Gas Gets the Greenlight

In a move that helped to lessen the stigma cast upon a fuel much cleaner burning than coal, the EU voted in 2022 to officially recognize natural gas as a “green” or “sustainable” energy source. Unsurprisingly, this decision angered environmental activists. At the AEC, though, we support this development; we regard natural gas as crucial to Africa's battle against energy poverty and key to its future success as a sizeable supplier for the international market.

While the EU was at one point one of the loudest voices calling for full-scale decarbonization, we applaud this concession as this more positive classification will likely encourage European investment in African natural gas projects. And, as the AEC has always suggested, it will support our eventual transition to an emissions-free, fully renewables-based energy economy.

Our critics breathlessly warn us that future price drops could render African natural gas suppliers unable to compete against larger, established producers. Naysayers suggest that renewable energy technology will get up to speed and become widely adopted before any new African natural gas outfits can get underway. While these cynics regard oil and gas as merely trends in danger of falling out of fashion by next season, we remain confident that we are on the best course for Africa's future.

And while the wealthy, developed nations of the world have much to say about appropriate energy solutions for Africa, even as they flout the rules they've set for their own, we know we are in pursuit of the most beneficial gains for our people.

Just as the fuels that supported humanity progressed from wood to coal to oil as economies and technological needs evolved, so too will Africa's — naturally, and never as a consequence of dictated policy.

Distributed by APO Group on behalf of African Energy Chamber.