Perhaps, more than any other phenomenon known to humankind, the Pleistocene epoch, sometimes referred to as the Ice Age, has been responsible for shaping and reshaping the construction of the earth. Scientists believed that this era lasted from 2,000,000-800B.C.E.
And then there was another age: The Oil Age. This age, it is believed, started in the United States of America some 153 years ago, when scientific endeavours led to the discovery of what was then called the Black Liquid Gold. If the Ice Age altered the natural construction of the earth, the Oil Age drastically changed global activity vis-à-vis the global economic system and structure.
Today, oil — with the possible exception of water — is the world’s most important resource. In many countries around the world, both resources, especially oil, have been the source of conflicts. Oil extraction is also responsible for some of the worst ecological disasters. On the positive side, it has made nations rich and wealthy. For instance, oil made it possible to transform large expanse of the desert and desolate regions of the world into oases of prosperity. Individuals and groups of individual and commercial entities have also become fabulously wealthy. But oil has many limitations. For instance, its supply is exhaustible.
Aggregated data from the US Energy Information Administration and the OPEC Annual Statistical Bulletin indicate that Saudi Arabia, Russia, and the United States are the top-three hegemony. For instance, Saudi Arabia’s crude production stands at 10.3 million barrels per day; and its proven oil reserves sit at 259.9 billion barrels. Russia’s crude production is 9.91 million barrels per day while its proven reserves are 60 billion barrels. The crude production for the US is 8.85 million barrels per day while its proven reserves are estimated at 19.2 billion barrels. The estimate for Nigeria is as follows: crude production, 2.51 million barrels per day; and its proven reserves are 37.2 billion barrels.
For about 20 years now, there have been speculations and scientific analyses that seem to suggest that the world will run out of oil “very soon.” But in more recent times, there have been contrary indications which seem to suggest that the world will “never run out of oil” because of several factors — including the discovery of new oil wells; unaccounted or unproven reserves; and the availability of new technology for extraction purposes. However, the Reserves-to-production ratio (RPR or R/P) as of the year 2011 suggests that Saudi Arabia has a reserve lifespan of 81; Russia 21; the US 10; and Nigeria 41. (RPR is the amount of known oil reserves divided by the amount of use per year.)
It is possible that new oil reserves will be discovered offshore or onshore — especially in the northern part of the country. Otherwise, going by the most recent calculations, Nigeria is likely to run out of commercial oil quantity sometimes between 2052 and 2077. Should this happen — and if this happens — what then? What will future Nigerians do? It is easy to assume that they will find solution to this unavoidable challenge. But frankly, it will be grossly irresponsible to empty the oil reserves and hope that they will find a solution to “their own problems.” Consequently, the current generation must have the foresight to bequeath prosperity to future generations.
Even before Nigeria runs out of oil, one or several things may happen. For instance, western governments and scientists across the world are hard at work searching for alternative energy sources such as Biofuels, solar power, and wind-aided energy. While it is true that the realisation and application of these energy alternatives are light years away, radical advancements in science and technology may quicken their dawn. Should these dreams come true, oil, as we know it today, may have far less significance globally (and such a scenario will greatly impact on the price of oil and the country’s budgetary earnings). Frankly, it is a brave new world we live in: a world with infinite, and sometimes, unimaginable possibilities. We must not be caught unprepared. What can we do? What should we be doing?
Sanitising Nigeria will not be easy. And frankly, nothing about good governance is easy. Even so, we must try. We, the citizens and our elected rulers, must do our best to salvage our country. Of what use is a one-dimensional economy that serves only the few — while the vast majority are neglected? Of what use is an economic system that benefits only the present, but ignores future generations? It would not be a sin to look to what other countries have done or are doing in terms of how their petrodollars are being managed. China, Dubai, Brazil, and Norway, for instance, are good countries to examine. Secondly, a reasonable percentage of current earnings must be put aside for future generations; and the economy — the entire economy — must be diversified.
The Economic Confidential (a Nigerian based news outfit) recently reported the World Bank Country Director in Nigeria, Ms. Marie Francoise Marie-Nelly, as saying that Nigeria “needed to prioritise non-oil sector for sustainable development in the future.” But of course, for more than three decades, several Nigerian economists and scholars have been counselling this or similar mantra, to no avail. And a national newspaper on April 4, 2012, reported Prof. Tam David-West as expressing his doubt towards economic diversification in the country. According to the professor of virology and former minister of energy, “Diversification will not work because oil has produced cheap millionaires overnight in Nigeria. If it is so cheap and easy to make millions from oil, why should anybody venture into agriculture or farming?’’
It is difficult to disagree with David-West. Nonetheless, my thinking is that Nigeria can diversify and prosper if certain deficits within the Nigerian political and economic systems are rectified: arrest the endemic corruption that is eating away at the country’s fibre; institute genuine reforms in the private and public sectors; and strengthen the nation’s political and governing institutions. A succession of first-rate leaders would also make these a reality.