Leadership (Abuja)

Nigeria's Oil Faces Crisis As U.S. Controls Energy Future

Nigeria's oil boom may be coming to an end. United States president Barack Obama has declared that the America is now ready to take control of its energy future.

Obama made the declaration yesterday in his state of the nation presentation to the US Congress.

He said: "After years of talking about it, we are finally poised to control our own energy future. We produce more oil at home than we have in 15 years. We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar. We produce more natural gas than ever before.

"Indeed, much of our new-found energy is drawn from lands and waters... So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good."

While urging the Congress to pursue a bipartisan, market-based solution to climate change, Obama stressed that he would make it happen through executive orders should the Congress fail to do so.

"If Congress won't act soon to protect future generations, I will. I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy," he said.

He disclosed that, in 2012 alone, wind energy added nearly half of all new power capacity in the US and added, "So let's generate even more. Solar energy gets cheaper by the year - so let's drive costs down even further. As long as countries like China keep going all-in on clean energy, so must we."

The US president pointed out that, in the meantime, the natural gas boom has led to cleaner power and greater energy independence for the US. Obama said his administration will keep speeding up new oil and gas permits, adding that the country would continue to encourage research and technologies that help natural gas burn cleaner in order to free Americans "from the painful spikes in gas prices we've put up with for far too long."

The major reason behind the US oil independence is their perfection of the hydraulic fracking technology which can get oil and gas out of shale rock.

Following the development, the US, which is one of the major importers of Nigeria's oil, has drastically reduced its demand from 57,929 to 2,362 million cubic feet.

America's oil imports from Nigeria slumped in 2012 from 810,000 barrels per day to 361,000 barrels per day. The figure is expected to further drop by 50 per cent in 2013, and possibly reach 0 per cent by 2015.

The US shale gas revolution has also challenged countries with large shale gas reserve into action. Many high energy consuming countries which have perfected the shale gas technology are already in talks with other countries of need on how they can export their excess to them.

Reports say that the US and the United Kingdom (UK) have concluded plans to export shale gas to Japan while India has concluded plans with US companies for the supply of its gas.

This reality, therefore, spells doom for Nigeria oil which will in the near future lose its place in the international oil market following its shrinking market access.

The US Energy Information Administration, in a recent study of countries with shale gas reserves, observed that China, a potential buyer of Nigeria's oil and gas, with the world's largest shale gas reserve, has begun the process of exploitation and production for shale gas.

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