AbstractCarbon dioxide emission due to associated natural gas flaring is among the major causes of climate change which affects the global environment adversely. Nigeria is rated as the country with second largest volume of associated natural gas being flared the world over. Dominant oil and gas companies being operated by foreign multinational oil companies have been responsible for over ninety percent of associated natural gas flaring in the Nigerian upstream sector. Aside from being waste of valuable energy resource, the damaging, environmental impact of gas flaring, along with the intense physical nature of the practice, is among the major causes of environmental-accountability-triggered conflict especially in the Niger Delta region of the country. With this in mind, this study aims at evaluating gas flaring-related environmental accountability of dominant companies operating in the upstream sector of the Nigerian oil and gas industry. This is carried out via the evaluation of gas flaring-related ‘environmental performance’ and ‘environmental disclosure’ individually and together within the same framework. Deductive research strategy underpinned by positivists’ research philosophy is employed to facilitate the empirical conduct of the research. Consequently, five testable hypotheses were developed from three theories, namely, Environmental Kuznets Curve theory, Pollution Haven Hypothesis and Voluntary Disclosure Theory. Each of the five hypotheses is directly related to a specific objective, so that they can be the mechanisms for meeting the objectives. By virtue of its nature, objective six is the only objective that does not have a corresponding hypothesis. To test the five hypotheses and also explore objective six, a number of analytical tools were employed. They include DEA window analysis, content analysis, one sample hypothesis test for mean, correlated two sample t-test for means, Panel Corrected Standard Errors (PCSE) using Prais-Winsten regression and simple timeseries Ordinary Least Squares (OLS) regression in the first difference.
Results obtained enabled the documentation of important key findings. Thus, the study documents empirical evidence confirming that the elements of gas flaring-related environmental accountability, namely, ‘environmental performance’ and ‘volumetric environmental disclosure’ are adverse and inadequately low respectively; and that the relationship between them is significantly positive. The ‘substance’ of the disclosure is also found to be not superior. It is also found that dominant companies in the sector use ‘specific’ or ‘hard’ gas flaring-related information that gives positive reflection on their reputation to legitimise their associated gas flaring and production activities. All these support the evidence, provided in this study, that gas flaring-related environmental responsibility, reporting and, in general, accountability by dominant companies in the Nigerian upstream are poor.
The significance of these major findings is evident in the empirical support they lend to Environmental Kuznets Curve theory, Pollution Haven theory and Voluntary Disclosure Theory in the context of a less developed country, and the confirmatory empirical evidence that ‘consequentialism’ is the dominant environmental moral philosophy in the Nigerian upstream sector. The significance of the findings is further indicated by providing evidence that change in gas flaring-related environmental performance is responsible for the undulating trends in the level of environmental disclosures by companies operating in less developed countries over time.
|Date of Award||May 2012|
Corporate environmental accountability in the Nigerian oil and gas industry: the case of gas flaring
Hassan, A. (Author). May 2012
Student thesis: Doctoral Thesis