National oil companies (NOCs) produce most of the world’s oil and natural gas and bankroll governments across the globe. Although NOCs superficially resemble private-sector companies, they often behave in very different ways. To understand these pivotal state-owned enterprises and the long shadow they cast on world energy markets, the Program on Energy and Sustainable Development (PESD) at Stanford University commissioned Oil and Governance: State-owned Enterprises and the World Energy Supply. The 1000-page volume, edited by David Victor, David Hults, and Mark Thurber, explains the variation in the performance and strategy of NOCs, and provides fresh insights into the future of the oil industry as well as the politics of the oil-rich countries where NOCs dominate. It comprises fifteen case studies, each following a common research design, of NOCs based in the Middle East, Africa, Asia, Latin America, and Europe. The book also includes cross-cutting pieces on the industrial structure of the oil industry and the politics and administration of NOCs.

NOCs are distinguished from private companies by their need to respond to state goals beyond profit maximization. Governments seeking to retain their hold on power use NOCs to deliver benefits to influential elites (“private goods”) or to the broader population (“social goods”). Oil and Governance finds a strong correlation between such non-hydrocarbon burdens on the NOC—which include providing employment, subsidizing fuel, or handing out plum jobs to the politically connected—and deficiencies in oil and gas performance. The highest-performing NOCs, like Norway’s Statoil and Brazil’s Petrobras, face relatively circumscribed non-oil demands from their governments.

How governments administer their oil sectors also proves to be a crucial determinant of NOC performance. Democracies (e.g., Norway, Brazil) and autocracies (e.g., Saudi Arabia, Angola) alike are capable of grooming successful NOCs. What matters most for outcomes is not regime type per se but rather that governance systems provide unified signals to the NOC. (By contrast, regime type is observed to be an important driver of whether governments nationalize their oil sectors in the first place, or privatize existing NOCs.) Fragmented governance, in which multiple government actors assert their interests but no one assumes strategic responsibility, appears uniformly fatal to NOC performance. Nascent democracies like Mexico’s can be particularly vulnerable to oil sector dysfunction stemming from fragmentation. Governance systems must also be matched to a country’s institutional and political realities. Nigeria has arguably set back its progress in oil through attempts to slavishly imitate Norway’s forms of oil organization in the absence of Norway’s mature political and civil service institutions.

The close ties between the NOC and its government can have a detrimental effect on the ability of the NOC to manage the risks that are so characteristic of the oil and gas industry. Whereas private companies are forced to hone their geological knowledge and skills through global competition for capital and hydrocarbon licenses, NOCs for the most part are comfortably sheltered from competitive threats at home. They therefore fail to develop the global reach that helps private players (the international oil companies, or IOCs) manage risk by means of a diversified global portfolio and the ability to link resources to customers around the world. (Some NOCs have begun to internationalize in recent years, but it is striking that none of the NOCs studied in Oil and Governance went down this path until forced to by domestic resource scarcity, or at least of the perception of future scarcity.) The soft budget constraint faced by the NOC also discourages the cost efficiencies that help mitigate risk.

This gulf in risk management capabilities between IOCs and most NOCs suggests that the resource dominance of NOCs does not pose an existential threat to private oil companies. Private players will continue to play a key role in the frontiers of oil and gas development—frontiers like shale gas, oil sands, and the remote Arctic. NOCs will continue to control low-cost oil around the world, while a select few of the most focused and unencumbered among them start to build up their own risk management skills through partnerships with IOCs.

NOC control over resources has important implications for the world oil price. The NOCs studied in the book produce their reserves at half the rate of the major IOCs—whether due to lower performance or a deliberate attempt to preserve resources for the future. Moreover, governments tend to rely most heavily on the risk management skills of IOCs when prices are low and then swing back towards NOCs in high price periods when they can afford to focus on delivering benefits to favored constituencies. The result of this dynamic, which is observed in the case studies of Oil and Governance, can be “backward bending supply curves” that exaggerate price volatility in the world oil market.

This effect of NOCs on global oil supply and price appears to be much more important than any geopolitical fallout from NOC primacy around the world. Oil and Governance finds very little evidence that NOCs act as effective foreign policy weapons on behalf of their host states. Even where politicians may desire to employ NOCs in this way, the incentives of the NOC itself are usually strongly opposed to such an exercise of power. As one example, Europe’s Gazprom depends overwhelmingly on revenues from gas exports to Europe because gas is so heavily subsidized in Russia. When NOCs do venture abroad, as in the case of China’s CNPC, they are often motivated to do so precisely by the desire to achieve more autonomy from their political masters at home.

The four-volume Encyclopedia of Global Studies covers the field of global studies and subjects related to it, such as globalization, transnational activity and themes of global society. This encyclopedia is written for the educated general reader as well as students and professionals working in the field of global studies. It is the first encyclopedia of its kind, and aims to become the internationally-recognized reference work for academics, policymakers, and practitioners interested in the various dimensions of globalization. It provides succinct summaries of concepts and theories, definitions of terms, biographical entries, and organizational profiles; offers a guide to sources of information; and establishes an overview of Global Studies in different parts of the world and across cultures and historical periods.  The wide range of subjects covered include the following:
            - intellectual approaches, such as global sociology, political economy, world systems theory, peace and conflict studies, and communications;
            - global and transnational topics, such as cross-border conflicts and terrorism, worldwide health crises and climate disruption, the planetary immigration patterns and new cultural diasporas, and the seemingly boundless global market, rapid communications, and transnational cyberspaces devised by technology and new media.

The four-volume Encyclopedia of Global Studies covers the field of global studies and subjects related to it, such as globalization, transnational activity and themes of global society. This encyclopedia is written for the educated general reader as well as students and professionals working in the field of global studies. It is the first encyclopedia of its kind, and aims to become the internationally-recognized reference work for academics, policymakers, and practitioners interested in the various dimensions of globalization. It provides succinct summaries of concepts and theories, definitions of terms, biographical entries, and organizational profiles; offers a guide to sources of information; and establishes an overview of Global Studies in different parts of the world and across cultures and historical periods.  The wide range of subjects covered include the following:
            - intellectual approaches, such as global sociology, political economy, world systems theory, peace and conflict studies, and communications;
            - global and transnational topics, such as cross-border conflicts and terrorism, worldwide health crises and climate disruption, the planetary immigration patterns and new cultural diasporas, and the seemingly boundless global market, rapid communications, and transnational cyberspaces devised by technology and new media.

The four-volume Encyclopedia of Global Studies covers the field of global studies and subjects related to it, such as globalization, transnational activity and themes of global society. This encyclopedia is written for the educated general reader as well as students and professionals working in the field of global studies. It is the first encyclopedia of its kind, and aims to become the internationally-recognized reference work for academics, policymakers, and practitioners interested in the various dimensions of globalization. It provides succinct summaries of concepts and theories, definitions of terms, biographical entries, and organizational profiles; offers a guide to sources of information; and establishes an overview of Global Studies in different parts of the world and across cultures and historical periods.  The wide range of subjects covered include the following:
            - intellectual approaches, such as global sociology, political economy, world systems theory, peace and conflict studies, and communications;
            - global and transnational topics, such as cross-border conflicts and terrorism, worldwide health crises and climate disruption, the planetary immigration patterns and new cultural diasporas, and the seemingly boundless global market, rapid communications, and transnational cyberspaces devised by technology and new media.

The four-volume Encyclopedia of Global Studies covers the field of global studies and subjects related to it, such as globalization, transnational activity and themes of global society. This encyclopedia is written for the educated general reader as well as students and professionals working in the field of global studies. It is the first encyclopedia of its kind, and aims to become the internationally-recognized reference work for academics, policymakers, and practitioners interested in the various dimensions of globalization. It provides succinct summaries of concepts and theories, definitions of terms, biographical entries, and organizational profiles; offers a guide to sources of information; and establishes an overview of Global Studies in different parts of the world and across cultures and historical periods.  The wide range of subjects covered include the following:
            - intellectual approaches, such as global sociology, political economy, world systems theory, peace and conflict studies, and communications;
            - global and transnational topics, such as cross-border conflicts and terrorism, worldwide health crises and climate disruption, the planetary immigration patterns and new cultural diasporas, and the seemingly boundless global market, rapid communications, and transnational cyberspaces devised by technology and new media.

Background

Cardiovascular diseases represent an increasing share of the global disease burden. There is concern that increased consumption of palm oil could exacerbate mortality from ischemic heart disease (IHD) and stroke, particularly in developing countries where it represents a major nutritional source of saturated fat.

Methods

The study analyzed country-level data from 1980-1997 derived from the World Health Organization's Mortality Database, U.S. Department of Agriculture international estimates, and the World Bank (234 annual observations; 23 countries). Outcomes included mortality from IHD and stroke for adults aged 50 and older. Predictors included per-capita consumption of palm oil and cigarettes and per-capita Gross Domestic Product as well as time trends and an interaction between palm oil consumption and country economic development level. Analyses examined changes in country-level outcomes over time employing linear panel regressions with country-level fixed effects, population weighting, and robust standard errors clustered by country. Sensitivity analyses included further adjustment for other major dietary sources of saturated fat.

Results

In developing countries, for every additional kilogram of palm oil consumed per-capita annually, IHD mortality rates increased by 68 deaths per 100,000 (95% CI [21-115]), whereas, in similar settings, stroke mortality rates increased by 19 deaths per 100,000 (95% CI [-12-49]) but were not significant. For historically high-income countries, changes in IHD and stroke mortality rates from palm oil consumption were smaller (IHD: 17 deaths per 100,000 (95% CI [5.3-29]); stroke: 5.1 deaths per 100,000 (95% CI [-1.2-11.0])). Inclusion of other major saturated fat sources including beef, pork, chicken, coconut oil, milk cheese, and butter did not substantially change the differentially higher relationship between palm oil and IHD mortality in developing countries.

Conclusions

Increased palm oil consumption is related to higher IHD mortality rates in developing countries. Palm oil consumption represents a saturated fat source relevant for policies aimed at reducing cardiovascular disease burdens.