As crude oil prices soar on the world market, many African oil-importing countries are starting to think more seriously about ways to lessen their dependence on the fuel. They fear that continued high spending for imported oil may jeopardise the economic growth they have registered in recent years. As a result, alternative forms of energy are starting to look more attractive.
World crude oil prices jumped from less than $40 a barrel in 2004 to nearly $70 in September 2006. With expectations of increasing global demand, especially from China, experts predict that prices will remain relatively high for the next few years.
That is good news for the 13 African countries that are net oil exporters, but for the 42 others that need to buy oil from other countries, higher prices are creating serious challenges. If a country has to spend more to buy oil, it has less money to buy other items it must import. Businesses that rely heavily on energy and transportation are hit especially hard, making it difficult for them to produce goods affordably. This can lead companies to reducing production and letting staff go.
Africa, however, does not need to rely solely on oil. It has rich reserves of natural resources that can allow it to run its economies without depending on oil. Some African countries have already begun switching to non-oil energy sources, such as ”biofuels”, natural gas, solar power, and hydro-power created by the rushing of water through turbines placed in rivers. All of these produce less pollution than oil does.
Although natural gas is, like oil, a fossil fuel, it burns more cleanly. It is also easy to transport over long distances through pipelines.
Biofuels
In April this year, secretary general Supachai Panitchpakdi of the United Nations Conference on Trade and Development told African oil and gas officials meeting in Algeria that Brazil has made considerable progress in developing biofuels to replace oil.
These are made from plants such as sugarcane or maize, which are fermented to produce an alcohol known as ethanol. Usually ethanol is blended with petroleum to make a cheaper, cleaner-burning fuel. Brazil now uses half its sugar crop to produce ethanol and fuel half of the cars in that country.
”You may well ask whether biofuels are of interest to Africa,” said Supachai. A brief survey by Africa Renewal magazine shows that a growing number of African governments and companies have, in fact, begun to show a lot of interest. In Senegal, the government is urging villagers and businesses to copy Brazil. Farmers in Kaolack are already growing a grass that can be turned into ethanol.
In Zambia, D1 Oils Africa, a British company, has developed 174 000ha of crops that it is turning into biodiesel. This fuel is made from vegetable or animal oils for use in diesel engines. Demetri Pappadopoulos, chief executive of D1 Oils Africa, says the government has played an important role in the project, ”which will result in cultivating oil-bearing crops as a sustainable source for the betterment of the country”.
Large natural-gas reserves
Natural gas is also under-used in Africa. It can be captured and used for commercial and domestic purposes such as cooking and heating. It can also be used to create electricity for lighting and other purposes. It is found in oil fields, natural gas fields or in coal beds. Currently, much of the gas released from deposits of oil, or produced when oil is processed, is burned off as waste.
Africa has more known gas reserves today than ever before. From 6 300-billion cubic metres in 1995, new exploration is expected to increase known reserves to about 17 650-billion cubic metres by 2010. Most of the continent’s known natural-gas reserves (78%) are in Nigeria; the rest are mainly in Algeria, Egypt, Libya, Angola, Mozambique, Namibia and Tanzania.
Egypt is currently looking into building a liquefied natural-gas plant in the Nile Delta where there are thought to be deposits of 430-billion cubic metres. In Tunisia, development is centred on the Miskar gas field, which is located 125km offshore and has 23-billion cubic metres of recoverable reserves. This is British Gas’s largest project outside the United Kingdom.
The New Partnership for Africa’s Development (Nepad), an African Union programme aimed at achieving social and economic prosperity on the continent, states that Africans need access to cheaper and reliable energy.
One way to achieve this is by pooling energy resources. Nepad is in the forefront of efforts to develop a West African gas pipeline. The project, which is not yet fully financed, will eventually involve building a network of pipelines to carry liquefied natural gas from Nigeria’s huge reserves to neighbouring Benin, Ghana and Togo.
Some of these projects do require heavy funding. Building factories to capture and liquefy natural gas is costly and this fuel is also more expensive to transport and store than oil, for example. The cost of transporting 1 000 cubic feet of gas 1 000 miles (1 600km) by onshore pipeline is approximately 40 to 85 United States cents. In contrast, transporting a barrel of fuel oil (equivalent to 6 000 cubic feet of gas) is approximately 10 cents per thousand miles.
Hydro-electricity
The generation of hydro-electricity is the main alternative source of energy currently being developed in Africa, but much more could be done. Africa has huge and untapped rivers suitable for the building of dams needed to produce the water flow that turns the turbines and produces electricity. Unlike oil, the water can be reused.
In the Democratic Republic of the Congo, two dams that were earlier built at Inga Falls are currently inactive, victims of the country’s economic and political turmoil. The World Bank and other investors are planning to spend $500-million to get them working again. There is also a plan to build a third dam on the Inga River, which Nepad believes could supply electricity to much of the surrounding region as well.
Construction costs for the third dam are estimated at about $6-billion. It is expected that the project would generate as much power as all the Southern African countries combined currently do.
Like several of the other alternative sources of energy, a hydro-electric project requires heavy financing and considerable planning for its establishment. Some dam projects have been controversial for displacing villages from flooded areas, and for some health and environmental effects. Some development experts argue that smaller-scale hydro-electric projects are preferable to large projects.
Which form of alternative energy a country develops will depend on its particular circumstances. One thing is clear — if global oil prices remain high, more of Africa’s poorer, oil-importing countries will have to face the fact that it is more expensive to do nothing than to live with stalled economic growth and even more poverty.
Reprinted from UN Africa Renewal