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Govt delicately balancing both environment & oil activities

Many countries, especially those from the West, have announced major commitments to significantly cut carbon emissions as part of saving the environment from the effects of climate change.

In pursuit of this, huge cutbacks in the fossil fuels industry are expected to be undertaken, with a target of replacing them with new green technologies that are considered “environmentally- friendly” by 2050.

Many civil society organisations in Uganda have fanned the flames on this issue to the extent of opposing the development of Uganda’s oil and gas project. Environmentalists have reached out to funders and discouraged them from providing financing to the Uganda oil project.

Norbert Mao, the president of the Democratic Party, recently penned an article laced with pessimism on the likely success of the recently launched East African Crude Oil Pipeline (EACOP) project which is intended to transport crude oil from the Albertine Graben in Uganda to the Tanzanian Port of Tanga.

Mao’s pessimism about the project may be premised on some of the recent reports published by several global environmental bodies, which claim that fossil fuel-reliant countries will see a 51 per cent drop in oil and gas revenues in the next two decades as the world moves to cut emissions.

Contrary to this, a recent report by the US Energy Information Admiration (EIA) estimates that global energy demand will increase by 50 per cent by 2050 and that most of the demand will come from non- Organisation for Economic Co-operation and Development countries.

EIA also asserts that in order to achieve net zero emissions by 2050, primary energy demand needs to fall by 17 per cent between 2019 and 2030, to a level similar to 2006, even though the global economy is twice as large. Therefore, Uganda’s oil will have a ready market for a period of at least 40 years.

This is backed by the fact that there is a large part of this market that lies within the developing world whose reliance on fossil fuels cannot be easily replaced by the onerous green technologies.

The recent launch of the Uganda oil projects on 11th April 2021 at which the key agreements for commercialisation
of Uganda’s crude oil were signed points to great strides made by the country in ensuring sustainable exploitation and utilisation of Uganda crude oil resources.

This milestone will not only enable the shareholders raise the required financing for the EACOP project, but also de-risks the upstream and refinery projects. The current global energy demand indicates that oil and gas will continue to play a leading role in the world’s energy mix and will remain the largest source of fuel needed to meet 2040 global demand. Uganda’s oil will surely have market, both locally and internationally.

Energy experts have predicted that fossil fuels will still be relevant by 2050 and beyond given the gradual process that all major energy transitions take and the fact that the growing demand for fossils driven by commercial transportation and feedstocks for the chemicals industry still stands.

Whereas the rapid transition will bring new opportunities, energy transitions have been, and will continue to be, inherently prolonged affairs. For large nations with high levels of per capita energy use and massive expensive infrastructure, it is impossible to accelerate this transition even with highly effective interventions.

Developing countries such as Uganda need to consider a balanced approach that does not curtail development of the oil and gas projects. These projects will contribute to socio-economic transformation as a result of the opportunities, revenues and impact on other sectors of the economy.

Lastly, to quote NJ Ayuk, the executive chairman of the African Energy Chamber, “On a continent where millions of families are using traditional, hazardous biomass for cooking, where 600 million people lack access to reliable electricity, the idea of leaving valuable oil and, especially, natural gas, in the ground seems neither practical, palatable, nor appropriate.”

michaelwoira@gmail.com

The author is a patriotic Ugandan

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