Having the petroleum and mining sectors under one ministry is a matter that has been lobbied for ever since Kenya discovered oil in 2012.
The shared similarity between oil, gas and minerals is their geological source since they are all “extracted” from the earth. As “extractives” they have similar legal, licensing and regulatory frameworks.
At their early stages of value chain, petroleum and minerals also share similar “community” related challenges. Their exploration and development are often domiciled in economically marginalised areas.
That is why the strongest proponents for joint ministerial management of petroleum and minerals are groups focused on conflicts, rights and welfare of communities hosting extractive activities.
In their commercialisation, petroleum and minerals are labelled “commodities” with a similar fate in global markets and price volatility.
They have significant impacts on national GDPs and often define the ups and downs of national economic performance. They are also vulnerable to economic abuse.
That is why groups working on extractive resource governance and transparency will also salute joint ministerial management of petroleum and minerals.
However, it is a different thinking when it comes to national energy demand and consumption, because oil, gas and coal (called fossil fuels) are key inputs into the national energy mix.
How much of the fossil fuels to include in the national energy mix has a significant impact on the economy especially the cost of energy, balance of payments, and carbon emissions.
Balancing national energy supply and demand is a tricky game of conflicting choices, often under stressful influences from vested interests and, of late, green lobbies.
For this reason the energy economists and also the climate change lobbies would wish to see the fossil fuels grouped together with the other sources of energy. And this is quite understandable and logical.
However, this time around the “extractives” lobbies have it and we now have a combined Ministry of Petroleum and Mining under Cabinet Secretary nominee Peter Munyes, whom I wish to congratulate.
The CS happens to come from a county endowed with both petroleum and mineral resources. The area is also classified as marginally developed and prone to community related resource conflicts.
I will now come up with a shopping list of priority issues for Mr Munyes.
On top of the list is getting the Upstream Petroleum Law signed off and promptly operationalised into facilitative regulations and institutions. The reality is that not much progress will be achieved with the Turkana oil without this law.
For advice, Mr Munyes should not waste political goodwill and time on the “little” early oil export project through Mombasa, and instead maximise focus on the ultimate prize, which is exporting oil via Lamu. Actualising the oil pipeline is an urgent task.
My number two petroleum action item is getting affordable and widely available cooking gas (LPG) to every part of Kenya. This has been on the drawing board since 2005.
The LPG project can be a perfect replica of the successful “last mile’ electricity connection. LPG plans are already done.
On the mining side, the country cannot make significant strides without the finalisation of the comprehensive national minerals survey.
Establishing which and how much minerals are where is essential for guiding investments.
Further, there is a need to translate the now forgotten Kitui coal and the limestone-for-cement projects into economic reality. The renowned continental investor Dangote had plans of using the two mineral resources to make cement in Kitui. Because we are slow, he moved to Tanzania.
Then, we have the woes of artisanal miners in Nyanza and Western Kenya. There is a need to formalise this mining sub-sector and empower these struggling miners to create more local jobs and decent incomes while significantly improving the occupational safety to minimise accidents.
Local enterprise has to be developed to cut out exploitation by middlemen.
The listed can be quick game-changers in the petroleum and mining sectors. And they are achievable within the next four years.
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