Counterstrategies

Here are some of the steps that Nigeria has taken toward rectifying some of these serious energy-related issues:

• An antivandalism law that outlines penalties for pipeline vandalism, including life imprisonment.

• The Electric Power Sector Reform (EPSR) Act, signed into law in March 2004, which aims to reform the nation's unreliable and disorganized electricity generation system. The law enables private power companies to participate in electricity generation, transmission, and distribution and separates NEPA into 11 electricity distribution firms, six electricity-generating companies, and an electricity transmission company. The law calls for all of these operations to be privatized. Nigeria's passage of the EPSR Act set in motion the privatization of NEPA and a long-awaited reform of the nation's unreliable and disorganized electricity generation system.

• An effort to reform natural gas infrastructure and end natural gas flaring. Nigeria set a goal of ending natural gas flaring by 2008; it also established an infrastructure to begin collecting natural gas and processing it into liquefied natural gas (LNG). By the end of 2004 the country had reported a 30 percent reduction in natural gas flaring. The government also announced plans to stop subsidizing natural gas by 2007 and to develop its natural gas infrastructure fully by 2010. The primary goal is to raise revenues from natural gas exports to 50 percent of Nigeria's oil revenues by 2010. The government estimated, however, that $15 billion in private sector investments would be necessary to accomplish this.

• A plan to increase petroleum profit taxes that are paid by multinational oil companies in Nigeria. This plan was designed to provide Nigeria with better resources to fund infrastructure development, including oil exploration and production development, in the hope of reaching increased production targets. In March 2005 Nigeria began offering licensing of inland and offshore land for oil exploration and production in the Gulf of Guinea.

It is hoped that such measures will allow Nigeria to make use of its considerable natural resources base and emerge into a developed nation with a better quality of life for all of its people.

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