Biofuel Production to resolve Nigeria’s economic meltdown.
The current fuel crisis in Nigeria and the need to avoid environment pollution have propelled the Managing Director of Global Biofuel Limited, Dr. Felix Obada, into biofuel production. In this interview with CHARLES OKONJI, he explains some of the benefits of biofuel production to the Nigerian economy.
Can you tell us the progress you have made on this biofuel project?
We have been making steady progress on the project. We are happy that the Federal Government of Nigeria is concerned about the fuel situation in the country. We have been working behind the scene with the government to start the full implementation of the biofuel policy. The policy was gazetted in 2007, but we have not started to implement it because there is need to agree with the government on the guidelines and operational principles required to jump-start implementation. With regards to our project, it is going on steadily. We have completed the Environmental Impact Assessment (EIA), both for wet and dry seasons. We have done the trial plantation of our feedstock and the result has been very successful.
We understand that you are going to build dams as part of the project. How far have you gone with the dam construction?
Dam construction is an integral part of our project. We are going to build dams and retention ponds because to harvest rain water. Our feedstock production refinery and housing estate is going to consume millions of litres of water on annual basis. All of the water we need will not come from boreholes alone because of the rock formation of the area we are building our first plant. The underground water level in that area, based on our studies will not be sufficient to sustain the development of such a project. So, we will be harvesting rainwater, to a large extent to supplement the yield from boreholes. Dam construction, definitely, will happen. The full implementation was delayed because government was not ready with the guidelines. You will recall that some marketers brought products which contained biofuels and they had some problems. It destroyed the engines of certain cars. For that reason, I think a decision was taken at that time to slow down on the implementation of biofuels blending with gasoline.
We have since then thrown some light on the issues and reassured government that biofuels are excellent products. It does not damage cars at the right concentrations. It is an octane booster. It will make our cars to drive very smoothly. It will even help to prolong the lifespan of car engines. It will make gasoline in the engines to burn under lower temperatures and prolong the lifespan of spark plugs. Ethanol is an excellent product, please quote me.
The problem that occurred initially was due to lack of proper preparation for the introduction of biofuels. Nobody knew much about it and suddenly it was imported into the country. Nobody tested the concentration of what was blended with the gasoline; was it E15, E10, E20 or E50… nobody could say. You know that ethanol is cheaper than gasoline. A marketer who wants to make quick gains in an unregulated environment may be tempted to import ethanol blends of up to E30. The marketer may not even be aware that such blends are dangerous to conventional cars. I suspect that this is what happened with the faulty steps we took. It was clearly a problem of lack of awareness and failure of regulation. But now, all the stakeholders – the Major and Independent marketers, road transportation, Nigerian National Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR), Ministry of Agriculture, Standard of Organisation of Nigeria (SON) and the biofuels producers – have been brought together by the Hon Minister of Petroleum Resources and a solution has been proffered. We have held several meetings and we have all agreed that biofuel is the present and future of the energy sector worldwide. That is what the whole world is doing right now and Nigeria cannot be an exception. Secondly, it has been shown clearly that the biofuels sector will create a lot of employment opportunities for Nigerians. As a matter of fact, It is the sector that will take Nigeria quickly move out of the global economic meltdown because it is linked to agriculture. It will employ labour much more than the petroleum industry. Thirdly, it is renewable and it will help the world to mitigate the harmful effects of global warming, which is a major concern to all the countries of the world. Fourthly, if we implement the biofuel policy correctly, Nigeria stands the chance of earning huge amount of dollars from carbon credit. Nigeria must not lose this opportunity. The amount of carbon credit that will accrue to Nigeria on annual basis from biofuels projects is massive.
Government has demonstrated her willingness to support Biofuels production. The President is going to make some pronouncements on it very soon and I believe they are going to be positive pronouncements, which will warm the hearts of many Nigerians and show the outside world that Nigeria is ready to take the lead in biofuel production, not only in West Africa, but also in the whole of Africa. This will help us to begin to address the issue of global warming and desert encroachment.
We understand that some state governments have vested interest in the project. How committed are they?
It is not just some state governments, but all the state governments in Nigeria. They are committed to the development of this project because it has a great potential for success. I do not think there is any state that will not welcome such a project. It is a single project that will directly employ about 8,000 people. It is something every state government should welcome. So far, all the states governments we have approached have cooperated with us. Not only are they giving us land, they are also promising to invest in the project. The Federal Government’s biofuel policy, which has been gazetted, stated that the state and local governments should provide land, electricity, dam and other infrastructure. Also, the policy stated that both state and local governments should help in organising the Out-growers. So far, we are getting full cooperation from Ondo, Oyo, Osun, Ekiti and Kwara State Governments. We are talking to Kaduna, Kano, Plateau, Benue, Kogi, Nasarawa, Zamfara and many other state governors, and they are all willing to give us land and also provide infrastructure supports.
There was a report that the United States of America was endorsing your company on the biofuel project. Can you give us the detail of that endorsement?
As you are aware, biofuels companies in the United States of America have been using corn to produce fuel and this has shut up the price of grains worldwide. There has been loads of outcry everywhere. So, the Government of the United States of America, the Department of Energy and the Department of Agriculture has been looking for alternative feedstock that will not compete with the food-chain. As a matter of fact, President Obama has just approved a huge amount of money for research into a new generation feedstock which will not be corn. A recent report shows that the United States’ Department of Energy is investing $786.5 million. Same report also indicate that the Department of Agricultural is also investing heavily in research on biofuels. All they are trying to do is what we have already done. Our system will generate steam, electricity, power and biofuels all in a single integrated complex. What the United States of America is studying is really nothing but our feedstock type. We have already developed the most promising feedstock type and we are satisfied with what we have done. Our feedstock type will do well in Nigeria and it will also do well in West African countries lying between latitude 7° and 14° north of the equator.
What is going to be the capacity of the refinery, which you intend to build for the biofuel?
The first refinery we are building will be small. It is going to produce 90,000 litres of fuel ethanol per day. But we are going to increase the capacity to 240,000 litres per day within two to three years of it’s operation. The same refinery will also produce 100,000 litres of biodiesel per day. From the same facility, we will be producing about 30,000 metric tonnes of edible oil per day. That is for the first phase of our project. All other refineries will have larger capacities. The least will produce 350,000 litres per day. For instance, the plant we are building at Ekiti State is going to produce about 350,000 litres per day. There are some states where we may build a refinery that will produce half a million litres per day. States like Nassarawa, Plateau and Zamfara have very good arable land that can support production of up to half a million litres of biofuel per day.
Does that mean that in each state of the federation you will have a refinery?
Yes, as much as possible we want to build a refinery in each state lying between Latitude 70 and 140 North of the Equator. We want to develop one refinery per state because we need to produce three million litres of ethanol to be able to satisfy the E10 requirement of the Kyoto Protocol. Nigeria consumes about 30 million litres of gasoline daily. To satisfy E10, we must blend with three million litres per day. Meeting that requirement is a huge challenge, but it is a challenge that we can surmount easily because we have the land, we have the people and we have the best feedstock type. It is pure and simple agriculture. So, once we are able to put people back to work, they will produce raw materials for these refineries. So, rather than continue to drill our energy, we will begin to grow our energy, and we can do this forever, sustainably. It is really a sustainable agricultural practice. It is heart warming to note that the Federal Government recently announced a N200 billion fund in aid of agriculture.
How do you source your funds?
A project like this is bankable, once you can get your feasibility right. Funding is not very difficult, but it is not available locally. Left for the Nigerian banks, a project like this will not see the light of day. It will be dead on arrival. We can never successfully implement biofuel projects because of the attitude of some Nigerian banks. We work mostly with the import-export banks of various countries. Those are the institutions providing our funds. Also, there are venture capital funds. They are the ones who provide the equity. Only very few Nigerian banks invest in long term projects. This project is long termish in nature.
What other challenges are you facing?
The other major challenge, initially, was government’s non-challant attitude to support the sector. But today, that challenge has been overcome. I can say with certainty that government’s support has now been secured. Government is now very keen in developing this sector. The major marketers and NNPC who will be blending this product will come into it fully. They have no choice really because we just have to develop this sector of Nigerian economy. If the marketers are given the opportunity, they would prefer to be importing biofuels. But if we can make the product here up to international standard, I see no reason why the marketers will not take it from us to blend with gasoline. So, we will be talking to the major marketers and even encouraging some of them to invest in the project because it is 10 per cent of what they are importing right now. If we can produce that 10 per cent locally, there is no reason why we should waste scarce foreign exchange on that. So, I believe that the major marketers will be coming to partner with us to develop our economy. That one of the best ways by which is the way this country can take itself out of the global economic meltdown.