"...Nigeria simultaneously is energy-rich and energy-poor was illustrated by the ongoing tug of war between the Nigerian government and Process and Industrial Developments Limited (P&ID).
This was over a prior agreement for P&ID to build a state-of-the-art natural gas processing plant along the Nigerian coast.
In a nutshell: The government was supposed to provide the land and build the pipeline to deliver the gas to the plant.
It failed to do either.
As a result, over 282 billion cubic feet of gas were wasted (flared) in 2018 alone.
...This arrangement was win-win.
...How is it that a nation with over 37 billion barrels of proven oil reserves can find itself in a position of energy poverty? This question confronts us yet again with age-old lessons about the importance of property rights, the rule of law, and the often-perverse incentives of government officials.
Merely contrast the Nigerian bungling of the P&ID contract with the recent evolution of the natural gas market in the U.S.
U.S. gas production in 1990 was 17.8 trillion cubic feet; in 2018 it was 30.4 trillion cubic feet, an increase of about 71 percent.
...The easy explanation for this sharp increase in US production is the fracking/horizontal drilling revolution.
That is correct as far as it goes, but it does not go far enough:
That tremendous technological advance did not take place in a vacuum.
It is the result of the US system of property rights---much of the modern increase in gas production has taken place on private land---combined with legally-enforceable contractual arrangements, investments in infrastructure that more-or-less are driven by market forces, and sharp constraints on the ability of government officials to interfere with private arrangements, except through processes constrained by the rule of law..."
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