The thick, acrid smoke billowing above the tree line is the telltale sign of local refining of stolen crude oil in Nigeria’s troubled Niger Delta.
It is an environmentally catastrophic business, in a region already fouled by the spills and pollution of the international oil companies, who for the past 60 years have extracted oil with little regard for the health and welfare of the communities that live there.
“Artisanal refining”, as it’s known, is in a sense the communities’ revenge. Nigeria has earned something like $1.5 trillion from oil in the last five years (no one really knows as the accounting is so opaque). But in the villages along the creeks from where the crude is pumped, there is little to show for it, so people sometimes help themeselves.
“They insist that they are not stealing the crude, because they think it's theirs,” explains Michael Karikpo of Environment Rights Action/Friends of the Earth Nigeria.
The sad irony of local refining is that “it despoils the land and the fisheries, and the cycle of poverty continues”.
Breaking into a pipeline is not clinical. Oil spews out under pressure and only a fraction is collected. The refining process itself is filthy work, and leaves a residual toxic sludge that is usually dumped into the creeks. Accidental fires can incinerate vast areas of forest and mangrove, while the military’s tactic of blowing up the refineries it finds creates yet more environmental damage.
Local refining does meet a real need among communities in the creeks, cut off from commercial supplies of diesel and kerosene. When the limited fuel that is available is three times the price charged in the cities, the technically simple distillation of the crude found in your backyard becomes an expedient alternative.
Cheap to set up – not much is needed beyond drums to collect the distilled fuel – it is now so widespread that “Creek prices” is a benchmark for fuel pricing in the Delta, with the diesel smuggled throughout southern Nigeria.
Given the prevalence of local refining, Karikpo – among several other analysts and environmental campaigners – says the only sensible step is to now legalise it, manage it, and use it as a tool of economic empowerment.
He would like to see community groups paying the oil companies for the crude, using modern, small-scale and cleaner modular refineries that produce between 1,000 to 1,500 barrels of diesel or kerosene per day (petrol is a more complicated process) to supply the Niger Delta and beyond.
“Let’s get communities as shareholders, as economic actors in the oil business; so they feel a sense of ownership; so the need to break into the pipelines becomes a bit difficult to sustain; [so] the need to protect the environment becomes a project for everyone.”
But oil theft is no longer a Robin Hood-style act of resistance. Yes, the oil companies are rich, but robbing them does not only benefit the poor. Stealing crude is now a complex business involving cartels and payoffs to the security forces. It employs around 26,000 people, according to a groundbreaking report by researchers Ben Naanen and Patrick Tolani.
“Poverty certainly drives local level oil theft,” notes the report, but at the other end of the spectrum are syndicates “who are making fortunes exporting stolen oil” – estimated at $6 billion in 2013.
Decades of neglect of the Niger Delta gave rise to an armed revolt, which the government eventually chose to placate through an amnesty scheme and lavish spending on development programmes. In reality, the policy was aimed at coopting the militia leaders and created a new class of wealthy young men while reinforcing a sense of impunity.
“A few of the elites in the community have captured these [development] schemes,” says Karikpo. “They have ridden on the backs of the genuine agitation and suffering of the people to make a killing for themselves, and the people are even worse off than when [the Niger Delta protest movements] began.”
Rights campaigner Celestine AkpoBari believes this climate of lawlessness and dependency will probably derail any serious initiative to create community-owned modular refineries. The likely result will be the men already exploiting the black market business will be the ones with the financial muscle to benefit.
“Community ownership is the right thing to do if dealing with civilised characters, but we’re dealing with people who take the law into their own hands. People will rush in and try and take [the legalised refineries] over and it will create conflict.”
Environmentalist Jim Durugu points out that local refining will need new laws and regulations, which don’t yet exist. Although lobbied, Nigeria’s new government “hasn’t said anything about it so far”, with a controversial petroleum bill, which among other provisions would have made local ownership easier, still in limbo.
“Modular refineries in cooperatives owned by the communities will really help with the local economy. It will provide employment and a sense of pride,” says Durugu. He suggests protection mechanisms could be introduced to strengthen community benefits.
Poverty alleviation schemes by the government – and the half-hearted attempts by the oil companies – have failed spectacularly. “That means we have to reevaluate how we can intervene to have real impact,” says Karikpo.
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