National oil companies and the global methane opportunity

By Paasha Mahdavi and Andrew Howell

At the UN’s annual climate conference, held last month in Azerbaijan, world leaders took the stage to promise a bold transition away from fossil fuels. But behind the scenes, the conference’s chief executive – a leader of Azerbaijan’s national oil company, Socar – was brokering oil deals. The controversy reveals a paradox at the heart of climate diplomacy: recent hosts such as the United Arab Emirates last year and Azerbaijan this year acknowledge the reality of climate change but have a vested interest in the world’s continued consumption of fossil fuels.

Across the globe, oil-exporting countries and their national oil companies (NOCs) — Socar, UAE’s ADNOC, Malaysia’s Petronas and roughly 70 other state-owned oil producers — have little incentive to support a rapid transition away from oil and gas. But there’s at least one thing oil exporters and climate advocates can agree on — the need to slash methane emissions.

Methane is a potent greenhouse gas, responsible for about a third of the global warming we are experiencing today. The oil and gas industry emits 80 million tons of methane each year, primarily through unintentional leaks. NOCs emit more than half of it. Given their operating size and global emissions footprint, our new research shows that these NOCs are the wild card that will determine whether the world succeeds in limiting climate change.

Read the full op-ed in Global Policy Journal