The role of law in climate change mitigation in oil and gas production

Abstract

Scientific evidence and ideas about climate change suggest the need for a global energy shift from oil and fossil fuels to renewables and other forms of clean energy. This transition will not be possible without understanding the dynamics and legal frameworks in petroleum-producing countries. More so, the current significant position of oil and fossil fuels in the global energy mix justifies the need to inquire into sustainability practices in the oil and gas industry, while the energy transition continues to gain momentum. Against this background, this thesis examines the role of law in climate change mitigation in oil and gas production to identify some characteristics of an effective regime for abating upstream gas flaring, venting, and fugitive emissions. It adopts a qualitative analytical approach consisting of conventional legal analysis, comparative analysis, and the theory of regulation to study the applicable regimes in twelve major petroleum-producing countries to obtain insights of a general nature. It also discusses some industry measures and private corporate initiatives of oil and gas companies as part of the overarching governance structure for mitigating upstream greenhouse gas (GHG) emissions. Findings from the comparative analysis put forward the necessity of adopting sector-specific and dedicated prescriptive regulatory arrangements and market-based instruments that send strong price signals to incentivise large-scale emissions reduction in petroleum production. The study also suggests the need for complementarity between state and industry regulatory approaches to incentivise innovative strategies to reduce upstream GHG emissions significantly. These considerations constitute a hybrid design that regulators can consider while undertaking law reforms on the topic. However, political will, dependency, rent-seeking, and corruption are some political-economy issues that most petroleum-producing states must address to ensure the effective regulation of upstream GHG emissions and, by extension, support profound energy transition.