Creating a Gas Economy - The Supply Side

This is the second instalment on the issue of creating a viable and sustainable gas-based economy in Nigeria, a nation richer in gas than it is in oil. Last week’s contribution looked at the demand side of this resource for industrial and commercial use. The all-important role of gas power generation was also discussed. This was discussed with the country’s Gas Master Plan (GMP) as a main tapestry that forms the background of both the opportunities and challenges of using gas as the take off fuel of Nigeria’s industrialisation.

Today’s article looks at the supply side. Or, now that the potential use of the resource is identified how will it be sourced?

Whoever follows the Nigerian hydrocarbons industry has heard on time or another that Nigeria is blessed with more gas than oil. What sometimes befuddles the mind of those who see gas as a more desirable blessing than  oil is that almost all gas discoveries in Nigeria are ‘accidental’, that is, gas is discovered as we go about looking for oil. There is hardly an international or local exploration and production (E&P) company in Nigeria that has planned and executed a campaign to drill for and produce gas. So for the most part the 179.4 trillion cubic feet (tcf) of proven gas reserves that place Nigeria 9th in the world and first in Africa is composed of associated gas - or gas that is locked in by subsurface pressure within the proven oil reserves and which is released from suspension (and in Nigeria mostly flared) as the oil is produced and gas fields that were discovered when searching for oil.

From very poor and inadequate power generation capacity (think power plants) to industrialisation and small and medium enterprises, SMEs (think job creation), to cheaper and cleaner burning fuels for homes and vehicles (think kerosene substitution and natural gas vehicles); Nigeria can indeed do no better than to reverse its poor local gas consumption and harness its gas resources for the use of its people.

All one needs to do is cast one’s mind to the immigration employment scandal of last few months to see that there are over twenty million reasons why as a nation Nigeria has no choice but to tap into its gas resources for job creation. Every one of the twenty million young people pounding the streets with a CV in well worn manila envelop is a reason why Nigeria has to give gas both the respect it deserves as the nation’s fuel of choice and the path to its economic El Dorado.

Even, Saudi Arabia, a giant with the world’s most extensive hydrocarbon reserves has tied its future of becoming a global leader in petrochemicals to an ambitious shale and conventional gas exploration programme. The country is currently developing six additional ‘Economic Cities’ with focus on skills development and employment generation similar to Jubail and Yanbu; two cities that rose in the desert to service an export market in secondary petroleum products.

For once the country, which has the sixth largest gas reserves in the world,  has elevated gas development above that of oil to respond to demands both at home and abroad. The Karan non-associated gas field discovered in the Arabian Gulf in 2006 and opened for production in 2011 with a production capacity of 240 million cubic feet of gas per day (cf/d) is not typical of a Saudi hydrocarbon development - as it is the first non-associated gas development in the kingdom. The company has since developed the field to a production capacity of 18 billion cf/d. In 2013 Saudi Arabia also discovered two giant gas fields in their eastern core operating area in addition to their new focus on shale gas development, which a few years ago would be an anathema to Saudi oil and gas development focus.

Access to gas for existing industries and power plants, old and new, is nowhere near adequate. Spanking new power plants are starved while the country channels gas to LNG gasification plants to meets its export obligations. As the country starts work on its first Gas Industrial Park in Delta State and builds even more industries and power plants across length and breadth of the nation, the issue of access to gas to these industries and how much such gas is priced becomes a central issue for the incoming government.

Enter the gas supply obligation and pricing policy which has in it a proposal to create the Strategic Gas Aggregator (SGA). These are both contained in the Gas Master Plan (GMP) to facilitate easy and regulated access to gas for the industries that need it. While the gas supply obligation ensures a pricing framework based on whether the end user is a power, industrial or commercial concern while the SGA, which has already been created, manages demand and supply to the market in accordance with availability.

Third-party investors with feasible plans to use new technology in harvesting stranded gas (from flares) for monetisation must be empowered with a disciplined flare-out campaign. Medium industrial concerns and local power plants will find routes to profitability this way. Local communities can also be empowered to cooperatively develop this resource being wasted and convert the nuisance flares in their backyard to readily usable gas for domestic use and to power small scale industries and mini/micro power plants. According to the U.S. National Oceanic and Atmospheric Administration (NOAA), natural gas flared in Nigeria accounted for 10% of the total amount flared globally.

According to the information obtained fro the US Energy Information Agency on gas development in Nigeria the three main IOCs in the country, Chevron SPDC and ExxonMobil, together have eight gas projects in the pipeline totalling nearly 1.5 tcf per day that are scheduled to start between 2016 and sometime after 2020. Some of these, such as Shell’s Forcados Yokri Integrated and Southern Swamp Gas Gathering projects are linked to a flare out programme.

There are also many gas fields discovered decades ago lying undeveloped in the Niger Delta. Some were earmarked to service an export market which never took off, such as the fields designated by the governments of Obasanjo and Jonathan to feed the Olukola Liquefied Natural Gas (OKLNG) the Brass Liquefied Natural Gas (Brass LNG) projects respectively. What makes this situation unfortunate and untenable is that final investment decision (FID) on both of these two proposed politically-motivated projects has not even been taken which means their gas requirement is way into the future. What concerns this column is that the gas assets dedicated to supply these projects can easily be diverted to feed local demand, such as the Lagos Free Trade Zone or additional Gas Industrial Parks in the Niger Delta, but no one is even talking about that.

But it is not all bad news. Nigerian indigenous operators, such as Frontier Oil, and Seplat Petroleum Development Company are rising to the plate venturing into the very lucrative world of gas monetisation.

Uquo field located in OML 13 in the eastern Niger delta is owned, developed  and operated by Frontier Oil. The company acquired it from Shell Petroleum Development Company (SPDC) as a marginal oil field in 2004 but it turned out to have no oil but gas. They took that in their stride and it became the first and largest non-associated gas development by an indigenous operator in Nigeria, boasting of a 200 million standard cubic feet of gas processing facility and an 18” pipeline that runs 62Km from Uquo to Ikot Abasi. It currently has a contract to supply over one trillion cubic feet of gas to the Ibom and Calabar independent power plants. The company now has plans  in the pipeline for similar acquisitions.

Another good story in the making is the Ohaji South gas and condensate field in OML 53. The 40% equity held by Chevron in the OML has recently been acquired by Seplat. While the produced condensate is sold off to the international market, Seplat will coordinate the development of the gas production with Shell’s plans for the Assa North project located in nearby OML 21 which is targeted to supply the domestic gas market.

More positive E & P stories featuring indigenous Nigerian concerns can be written and there are still many undeveloped gas fields held by IOCs that are waiting to be central characters in such stories. From the two examples above and with a supportive government providing the right regulatory tools and incentives, the development of non-associated gas fields can easily be the forte of Nigeria’s indigenous operators.

Incentives that include the right pricing structure for their production. An impediment that creates shortage in the supply of natural gas for power generation in Nigeria is because it competes with exports which is more profitable for producers of gas than selling it to the domestic market. A generation capacity of over ten thousand megawatts is required to meet the  current power demands of the country and presently not even half of that is generated. That demand cannot be met as long as the IPPs and the other generating companies (GenCos) are struggling to access the required gas to be operational. Because price is the major bottleneck is the pricing structure the Nigerian authorities are now working to approach price parity between what the domestic power producing companies pay for the gas and the export price. Price of gas for power generation in Nigeria is currently $2 per million British thermal units (MMBtu) up from $1 a year ago while industrial user pay $3/MMBtu. Gas users in the US pay about $1.38 - $2.89 per MMBtu in the United States depending on trading location. How this play out with the economics of the IPPs already constructed and for which the investment decision was based on lower gas prices remains to be seen.

Finally, the regulatory uncertainty has also slowed the development of natural gas projects as the Petroleum Industry Bill, PIB, is expected to introduce new fiscal terms to govern the natural gas sector. And as we all know, it is still debatable if the proposed bill will pass as is, go through some further modifications or be jettisoned all together. Many proven gas fields are being held strategically by their owners, as you would a chess piece, waiting for the right regulatory and commercialisation environment to manifest.

The Demand Side to Creating a Gas Economy

This is the first of twin write-ups on the possibilities, potentials, benefits and challenges of creating a full-blown gas economy in Nigeria, an economy that is driven by the supply and utilisation of the resource. This could be either as an industrial feedstock - where it is used as a raw material in the manufacture of various products ranging from plastics to fertiliser to fabrics to methanol, for commercial use where the resource is used as a fuel in industry or domestic or light industrial use.

In this instalment we shall briefly discuss the demand side, or utilisation, of the resource while next week we shall look at the supply side, or the sourcing, of gas.

Nigeria is a said to be a gas region with some oil. It is estimated that Nigeria has about 197.4 trillion cubic feet (tcf) of proven gas reserves, placing it 9th in the world. The country’s proven gas reserves are little more than 5.1% of global total. In the 2014 edition of the authoritative BP Statistical Review of World Energy, Nigeria and Algeria are first and second in gas reserves in Africa. Nigeria also featured as the fourth in production after Algeria, Egypt and Libya. However, for total annual consumption, only three nations in Africa made the cut; Algeria  with 29.1 million tonnes of oil equivalent (Mtoe), Egypt with 46.3 Mtoe and South Africa came third with 3.5 Mtoe. Nigeria’s consumption is so insignificant that it was not even worth mentioning. The consumption of the rest of the entire African continent (Nigeria included) is about two-thirds that of Egypt alone.

At the turn of the decade, according to the US Energy Information Administration, the per capita total energy consumption of the three largest African economies is 35.2 Watts-Hours and 12.01 Watts-Hours for South Africa and Egypt respectively while Nigeria came a lamentable third with only 1.96 Watts-Hours. 75% of the countries in Africa have a more positive per capita energy  consumption statistics than Nigeria. Considering that a nation’s energy consumption is directly proportional to its industrial productivity it is then no wonder that Nigeria’s industrial sector is almost moribund.

Such a situation is not tenable. Not when the country is far from sufficient in electrical power generation, not when the country has over 40% youth unemployment crisis that creating gas based industries can solve and definitely not when the country has the capacity to provide raw materials needed for the small, medium and mega scale gas-powered industries.

Enter the Nigerian Gas Master Plan (GMP). This is a gas development framework document developed by the Nigerian authorities and approved for implementation in 2008. It outlines both infrastructural and policy directions for the refocussing the nations gas resources for domestic utilisation. The contents of the GMP are well thought out and if implemented will achieve the framework’s core aim of actualising the country’s ambition to use its gas resource for its industrial take off.

An important component of the GMP that is relevant to the demand side is its take on infrastructural development. The plan stipulates the creation of three central processing hubs where the produced gas will be treated and processed; and three major gas transmission systems that will form a network that delivers the gas to points of demand. The hubs are to be located at Warri/Forcados, Obiafu (near Port Harcourt) and Akwa Ibom/Calabar areas and are the points from where the processed gas is fed into the transmission networks. The three transmission systems are the Western System (from the delta to Lagos, with an extension to OKLNG) which includes the existing Escravos Lagos Pipeline System (ELPS), the South-North Transmission System (from Calabar to Ajaokuta, Abuja, Kano and Katsina with possible extension to the proposed Trans-Saharan Gas Pipeline and also a line to southeastern Nigeria), while the third line will act as a connector line that links the eastern gas reserves with the two transmission systems.

Added to the GMP - and seen as an acceleration of one of it core objectives of infrastructural development and enhanced industrial use of gas, the outgoing government also introduced the Gas Revolution. A major highlight of the Gas Revolution is the creation of gas industrial parks (GIPs) that will support major gas based industries that will use gas as a raw material and also to power their plants. Construction of an industrial park and a deep sea port has recently been flagged off by the present administration in Delta State as a take off point to the revolution.

So the will and the plan seem to be there. The incoming government will do well to continue on the laid down path to creating a gas-based industrial lift-off. If delivery of gas to power generation plants and the industrial parks similar to the one mentioned above can be achieved within the life of the next government, that will create millions of jobs and place Nigeria as a major economic power not only in Africa but globally. The power plants are mostly ready, albeit starved of gas and, as mentioned above, the industrial parks are on the drawing.

In all developed countries of the world, a greater majority of the employed work in small and medium scale enterprises. When gas is provided to the Power Holding Company of Nigeria (PHCN) and all the constructed independent and joint venture power plants, the acute power shortage that the country faces shall, hopefully, become a thing of the past. Small scale industries that now operate minimally will have greatly improved capacity utilisation and those that do not even exist will mushroom, which will in turn see the unemployment situation in the country abate rapidly.

The domestic sector presents an ocean of opportunity that flows parallel to the industrial demand side. For instance, with careful planning and very conspicuous and ‘in-your-face’ marketing campaign, the country can completely phase out the use of firewood and kerosene as cooking fuel for the vast majority of its citizens and replace it with liquefied petroleum gas, (LPG). No nation can afford to continuously use firewood as cooking fuel for over a hundred million people without damaging the environment irreparably.

Likewise, many countries in the world, some with no known gas reserves are moving from petrol and diesel to the cheaper and cleaner burning compressed natural gas (CNG) for their cars and public transportation. Iran, particularly, is driven by necessity to develop a robust CNG economy to survive the crippling sanctions visited on it by the western powers as a consequence of its nuclear ambition. The country anchored its energy independence drive on building a sustainable supply of cheap transportation fuel based on CNG. The aggressive plan initiated by the Mahmoud Ahmadinejad government started a programme to convert all the vehicles in the country to run on CNG within five years at a rate of 1.2 million vehicles a year. During the same period, over 10,000 filing stations were retrofitted to dispense CNG. Today, at almost three million vehicles, Iran has more natural gas vehicles on the road than any other country in the world.

In addition to the enormous opportunities that exist in the delta region for even more industrial parks, the vast swathe of arable land in the northern part of the country can provide enough primary agricultural raw materials to feed the African continent. With access to gas, many agro-based industries, from small scale concerns to major international players, will find an almost inexhaustible source of agricultural commodities to process for local consumption and export. For a change, Nigeria’s land borders could be made to overtake its seaports in how much revenue is earned for the country through them. An industrial corridor from the Niger Delta to the Lake Chad based on the twin factors of access to gas and availability of raw material is achievable in less than a decade.

If the last sixteen years are defined by inefficient petroleum products retail and opaque import deals, the next four can be defined by the increase in national productivity, job creation and countless economic benefits that are  anchored on gas utilisation. The foundation to achieve that has already been laid for by the outgoing government.

It is doable. Back in the 70s and 80s Saudi Arabia had similar industrialisation desires as today’s Nigeria. They rolled out an ambitious programme not very dissimilar to the GMP which they call the Master Gas System (MGS). They extinguished their flares and gathered their associated gas and further developed non-associated gas resources and pumped all into a network that includes power and water desalination plants and many industries. The MGS was designed to handle up to 3.5 billion cubic feet (bcf) of gas per day but it is processing almost triple that figure today. It is the same system that supplies feedstock and power to the refineries, petrochemical and fertiliser plants and the steel rolling mill and other industries in the new industrial cities of Jubail and Yanbu - two cities created with the singular purpose of being industrial cities. At 92.7 Mtoe of gas consumed annually, Saudi Arabia currently utilises more gas per capita than Japan, the USA and most western European nations.

It is often said that Nigerians are very good in writing policies but very poor in implementing them. Considering the state of gas utilisation in Nigeria, the ideas contained in the GMP are both revolutionary and necessary. Elements of the framework are already being implemented and what is required is for the country to remain on track in actualising their objectives. If there is one surefire approach that guarantees industrial take off for the country, it is to exponentially increase the amount of gas it uses domestically. The celebration that Nigeria is doing this now is almost diluted by the regret that it took this long to do it.

Next week we will take a brief look at the situation in the supply side to this gas equation. The Domestic Gas Supply Obligation, an integral part of the GMP will be looked at closely. We will also look at the possible pitfalls on the way to this industrialised promised land. That we have started on the journey is enough to get everyone excited.

PIB? Which PIB?

One of the casualties of the misgovernance of the last few years is the Petroleum Industry Bill, or PIB, as it is now widely known. Work on this governance tool started exactly fifteen years ago this April when the government of then President Olusegun Obasanjo commissioned two committees with parallel but convergent tasks of looking into and articulating ideas on sectoral reform of the oil and gas industry. The first committee, the Oil and Gas Sector Reform Committee (OGSRC), was chaired by his Vice-President, Alhaji Atiku Abubakar, and the second committee, the National Committee on Oil & Gas Policy (NCOGP) was headed by Dr. Bright Okogu, who was an energy economist at the Organisation of Petroleum Exporting Countries, OPEC.

The Oil & Gas Implementation Committee (OGIC), headed by Obasanjo’s Special Adviser on Petroleum and Energy Matters, Dr. Edmund Daukoru, was later inaugurated to formulate reform policies based on the recommendation of the two earlier committees. 

The three committees paraded technocrats that were amongst the best  Nigeria has produced in their various fields. Professionals including the late Dr. Rilwanu Lukman, Dr. Edmund Daukoru, Dr. Bright Okogu, Dr. Mohammed Ibrahim, Professor Nuhu Obaje, Mr. Chamberlain Oyibo, Miss Sena Anthony, etc, were brought together to look into various sub-sectors of the industry.

The games commenced in December 2008 when the work of OGIC, now a legislative bill, was forwarded to the national assembly for debate and eventual assent. Voices of understandable regional positions and business interests shouted louder and drowned those of national interest.

Since the original bill was presented to the national assembly it has under gone various official and unofficial revisions. At one point there was even a fake version of the bill circulating in the national assembly and the lawmakers were confused as to what or which bill was being discussed. 

Due to such confusion and the distractions of the 2011 general elections deliberations on the bill were suspended until after the elections. Once the elections were out of the way, the out-going Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, inaugurated a task force chaired by Sen. Udo Udoma to draft a ‘harmonized’ version of the bill from the various versions that were then in circulation. On July 18th 2012, the latest version was presented to the legislature for renewed cogitation.

That a need is found to re-assess the proposed legislation is nothing out of the ordinary. After all there are instances where even bills that have already become law were re-assessed and amended in light of new information. The difference in this case is that other contending interests that are perceived by the collective to be far from wholesome for the nation were given prominence by a pliable executive and legislative arm of government. Instead of the PIB to be seen as what will eventually reform the issues in the industry, it became the issue.

The highlights in the ‘harmonized’ version of the bill are mostly the same as those in the original version. The difference is in the specific legislation on the issues under those highlights and also the elevation of some provisions of the bill to higher prominence over others. 

In case we forgot, the main focus of the reform bill as penned by the first drafters, in broad strokes, include:

The unbundling and commercialisation of the national oil company, the NNPC;

The transformation of the existing joint ventures between the Nigerian state and the various international E & P companies;

The increase in the benefits accruing to the nation through the introduction of a new fiscal regime;

The promotion of openness and transparency in the industry;

The promotion of local value addition through Nigerian Content;

The deregulation of the downstream sector of the industry; and, 

The creation of new regulatory bodies.

It became apparent from the above that powerful interests would be affected by some features of the PIB. So, understandably, the guardians of these interests would seek for ways to mitigate or eliminate any potential damage to them or their principals. These guardians range from the international oil and gas companies, or IOCs, unhappy with almost all the aspects of the fiscal regime that the bill proposes to indigenous oil producing communities who see the PIB as an opportunity to correct an environmental injustice and extract some compensation from the centre. 

At one point, the most heated debate was centred around Sections 125 - 127 of the bill which deals with the issue of the Petroleum Host Community Fund (PHCF). Here, a tug-of-war ensued between the non-oil producing states who believe the oil states are already getting too much considering the 13% revenue derivation formula and the oil producing states who see that particular legislation as a legitimate compensation for the environmental degradation brought about by the economic activities in their domains.

But the most strident complain came from the IOCs who are not happy with the bill on so many fronts - most important of which is their calculation that the PIB’s fiscal provisions make 87% and 100% of new joint venture gas and deepwater PSC investments respectively unviable even at a $80/barrel oil and 15% rate of return - which is the minimum rate at which projects stand a chance of attracting funding.

Their other worries range from what they see as the PIB’s lack of clarity on key terms, such as how future JV obligations will be funded, to the unsettling scenario where key variables in any upstream investment calculations such as royalties, fees and penalties can be changed arbitrarily by the government. They are also unhappy that the bill seek to not only introduce these game-changing regulations to new investments but it also aims to revise existing projects to bring them in line with the new regulations with total disregard to the sanctity of contracts and funds already invested.

Further to that, a wholesale transformation of the industry with no clearly defined transition plan is but a recipe for large scale confusion, in their opinion. 

Meanwhile, as the proverbial grass suffers where two elephants fight, inward investments into the sector dipped and stagnated. This unhealthy trend for the economy and the nation’s upstream ambition has everything to do with the uncertainty occasioned by the delay in passing the bill. It was estimated by industry insiders that since the squabbles started Nigeria lost a colossal $40B in inward investments due to this uncertainty. The bottom line is that although Nigeria remains a competitive (or borderline competitive, according to the IOCs) oil & gas investment destination, that competitiveness is eroded by the slightest infusion of unwarranted risk. To put it bluntly, no matter how welcoming the investment environment may be, a hugely capital intensive and risky business such as oil and gas exploration and production which already has its own inherent uncertainties to deal with would rather not have to contend with any additional precariousness.

Whatever one’s position may be on the bill the fact remains that the delay in passing it has hamstrung the great leap forward of the Nigerian energy industry - a leap that should be led from the front by a transformed and refocussed national oil company a là the Petronases and Petrobrases of this world.

In its first statement after the recent presidential elections, Wood Mackenzie, the powerful energy consulting firm that has been keeping a close eye on the bill, suggested a redraft of the PIB. Considering the dissimilarities between the original and the ‘harmonized’ version of the document, one is inclined to agree with them. But care has to be taken here that the process does not degenerate into another time consuming venture. Or a talk shop that adds nothing of substance to the final document.

Few stakeholders, apart from the Nigerian Extractive Industries Transparency Initiative, or NEITI, were agitating for those provisions in the bill that are unselfish and for the common good such as increased transparency or the deepening of the gains of the Nigerian content initiative. So a pertinent issue that the bill needs to address - also in light of new realities - is the need to open up the linkages between the petroleum sector, the most technologically driven in the national economy, and the rest of the economy in the arena of technology  and knowledge transfer. One has mentioned so many times on this column and in other fora that Nigeria’s technological uplift is best achieved when other sectors of the economy, from agriculture to manufacturing, are positioned to access and benefit for knowledge, technologies and systems that are commonplace in the oil and gas industry.

If redrafting the PIB is ever considered by the incoming administration then care must be taken to avoid introducing policies, no matter how well-intentioned, that could unsettle an industry that is already suffering from depressed revenues and competition for investments. Further to that, if possible, the fiscal reform provisions of the bill should be taken out, revised in light of new revenue realities and  expedited through the legislative process so that investors can have a clearer picture of the nation’s oil & gas investment position. The rest of the bill, which is bound to elicit more elongated and raucous debate, can then be put through the normal legislative process.

The oil and gas industry, anywhere in the world, is as dynamic as it is sensitive to uncertainty. A case in point is that of the rise in prominence of tight formation hydrocarbons, such as shale oil/gas, and the subsequent crashing of the price of oil. Coincidentally, as I write this, news just hit the wires that a local UK firm, UK Oil & Gas Investments, has just discovered nearly a hundred billion barrels of shale oil in the Kent countryside near Gatwick Airport, just outside London. Back in 2008 when the PIB was  initially presented to the national assembly this scenario was not factor because the rush for shale hydrocarbons was either non-existent or in the distant horizon. But it is now a reality that has pushed the price of a barrel of oil way below the amount used in investment modelling for the PIB.

Additionally, in the fifteen years since Nigeria has been working on the bill newly-minted west African oil states have emerged and are chasing investment dollars from the same international oil and gas operators as Nigeria. The point here is that any week, month or year wasted dragging our collective feet on this is more likely to be disadvantageous to the Nigerian commonwealth.

Nigeria’s target of increasing its daily production to 4 million barrels of oil per day from the current 2.37 million barrels by 2020 is hampered by many factors such as under-investment in the deepwater end, under utilisation of marginal acreages and oil theft. In addition to that, the country also expects to have a fully deregulated downstream industry and also enhance Nigerian local content to each link of the oil & gas value chain. A strategic positioning of the sector to achieve these goals is required and should start with the passage of a fair, comprehensive and workable PIB.

The in-coming leadership, headed by someone who was once intimately involved with the industry at the highest level, is expected to see beyond the smoke and mirrors and give Nigerians a bill that will be both a path and a light to the hydrocarbons sector. At the end of the day, Nigerians are not only eager to know when we shall be getting a PIB but equally anxious to see which PIB we shall be getting. We wait in the hope that a people-centred executive and legislative arm of government will see beyond narrow sectional, personal and business interests and give Nigerians a Petroleum Industry Bill worth its name. 

Doing that would surely be a CHANGE from the way things were done until recently!