1 THE IMPACT OF FLARE GAS UTILIZATION ON THE ECONOMIC GROWTH OF NIGERIA (1980-2016) CHAPTER ONE INTRODUCTION 1.1 Introduction Nigeria is a nation that is richly endowed with vast energy resources such as oil, natural gas, coal, tar sand, hydroelectricity and solar to mention a few. However, the oil and gas sector accounts for about 35 percent of gross domestic product (GDP) and petroleum exports revenue represents over 90 percent of total exports revenue; Hence, oil, and gas play a significant role in the development of the Nigerian economy (Gabriel et al., 2012). Oil and gas in Nigeria dates back to 1958 after the first oil discovery well was drilled in Oloibiri (Present day Bayelsa State, Niger Delta Region, Nigeria). Noticeable increase in gas production commenced in the early 1970s ultimately rising beyond 2.7Bscf/day by 1979. Adenikinju (2008) and EIA (2011) affirm that Nigeria has an estimated 188 trillion cubic feet of proven natural gas virtually without sulphur, low in C02 and rich in liquid content split which in energy terms, is in excess of the nations’ proven crude oil reserve. It comes in two (2) sources - gas discovered together with oil otherwise known as associated gas and gas in isolated wells also known as non-associated gas. Associated Gas (AG) refers to the gas that appears both in compound form (dissolved) directly within petroleum and as a gas directly above the oil reservoir. Associated gas in other words is unavoidably lifted together with crude oil and must either be harvested or disposed on-site as an unwanted by-product of oil and the common on-site disposal methods by venting, if the volume is small enough or flaring for larger volumes (Ibitoye, 2014). It may be utilized, flared or vented into the atmosphere (Johnson and Coderre, 2012). About 63% of the associated gas is routinely flared in the course of producing and processing oil. Non Associated Gas (NAG), also known as free gas or dry gas is a naturally occurring gas that is not