Going green

US launches energy security dialogue with Nigeria

By Julian Pecquet, in Washington

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Posted on June 29, 2023 13:00

 © File photo of Dennis Skiper (C) Plant Manager of American Enron Corporation with then-Governor Bola Tinubu (R) of Lagos state during an inspection of the plant at the shores of Lagos Apapa dockyard 2 August, 2000. (Photo by PIUS UTOMI EKPEI / AFP)
File photo of Dennis Skiper (C) Plant Manager of American Enron Corporation with then-Governor Bola Tinubu (R) of Lagos state during an inspection of the plant at the shores of Lagos Apapa dockyard 2 August, 2000. (Photo by PIUS UTOMI EKPEI / AFP)

The US has launched a new partnership with Nigeria as the Joe Biden administration looks to balance its ambitious climate goals while helping to meet the energy needs of Africa’s richest, most populous country and deepening ties with freshly elected President Bola Tinubu.

The State Department announced the formation of an Energy Security Dialogue with the West African giant on 26 June following a visit by Assistant Secretary of State for Energy Resources Geoffrey Pyatt, his first trip to the continent since taking office in September 2022.

The talks aim to “advance collaboration on our shared energy and climate goals” with a country that Washington expects “will play a key role in the global energy transition.”

“This dialogue will bring together the combined resources of the US government to engage with our Nigerian counterparts on issues including energy access, energy security, decarbonisation, clean energy supply chains, and methane emissions reduction,” the State Department said in a statement.

“The US is committed to Nigeria’s success in achieving its energy and climate goals and looks forward to hosting the first Energy Security Dialogue in the coming year.”

Courting Tinubu

The formal announcement comes after Pyatt met with a number of top Nigerian officials during his 18-20 June trip to Abuja, including President Tinubu himself. Much of the discussion centred around Nigeria’s transition away from gas, which accounts for 85% of electricity production while helping deliver power to a country where 45% of the population still lacks access to functional electricity.

“We want to assure you that Nigeria is ready to work with your team to ensure the adjustment of the equitable and very swift transition the best we can,” the Permanent Secretary of the Federal Ministry of Petroleum Resources, Gabriel Aduda, told Pyatt and his team, Nigeria’s Guardian newspaper reported.

“We need to be mindful of resources available to us because there are quite a number of options that are open to the transition and for Nigeria now, gas is our transition fuel.”

Coming on the heels of the high-level US delegation who attended Tinubu’s inauguration, headed by Secretary of Housing and Urban Development Marcia Fudge, Pyatt’s trip and the new dialogue are a “good sign of continued senior engagement by the US government with the new Tinubu administration,” says Terence McCulley, a former US ambassador to Nigeria and head of the US-Nigeria Council, a trade group in Washington.

The new US engagement also comes as the Tinubu administration has taken several steps in its early days that have boosted investor confidence in the country and its energy sector, including moving to end Nigeria’s costly and inefficient fuel subsidy and floating the naira.

McCulley, who also serves as the senior managing director at McLarty Associates, an international trade consultancy in Washington, sees a “strong start for the Tinubu administration” toward improving the investment climate and creating “more openness” for engagement and foreign direct investment.

“My hope is the early positive signs are going to continue and we’re going to see greater interest from the US private sector and globally, investing in Nigeria,” McCulley tells The Africa Report.

Even before Tinubu’s second-round victory, Nestoil, which bills itself as the largest indigenous Engineering, Procurement, Construction and Commissioning (EPCC) company in Nigeria, hired The Marshall Harris Group of Alexandria, Virginia for $147,000 to boost its business with major US companies involved in oil exploration and extraction in the Niger Delta.

Global engagement

The dialogue with Nigeria is only the second such engagement with an African country following the launch of a US energy dialogue with Mauritania in December 2022.

That effort focuses on “increasing energy access, improving manufacturing capabilities, and addressing the root causes of climate change,” including via new energy cooperation between the US and Mauritania via the Bureau of Energy Resources’ Power Sector Programme to advance renewable energy development in Mauritania.

The Biden administration has launched several similar efforts over the past couple of years as part of its green agenda, notably with the UK in 2021 and with Japan in 2022. A similar dialogue with Australia started under President Donald Trump in 2018 and another with South Korea years earlier.

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