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Increased Competition on the Supply Side of the Western European Natural Gas Market

Abstract:
This paper analyzes how the supply side of the Western European natural gas market may react if the demand side becomes competitive. We show-using a numerical model of the Western European natural gas market-that once the demand side of the market is liberalized, each gasproducing country has an incentive to break up its gas sellers. The model therefore suggests that there may be numerous producers in a liberalized natural gas market. Hence, in a liberalized market consumers will not be exploited by suppliers.

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Energy Specializations: Natural Gas – Pipelines ; Natural Gas – Markets and Prices

JEL Codes: Q48: Energy: Government Policy, Q41: Energy: Demand and Supply; Prices, L11: Production, Pricing, and Market Structure; Size Distribution of Firms, D42: Market Structure, Pricing, and Design: Monopoly, L13: Oligopoly and Other Imperfect Markets, Q35: Hydrocarbon Resources

Keywords: Natural gas, competition, Liberalization, Natural gas production, Western Europe

DOI: 10.5547/ISSN0195-6574-EJ-Vol19-No3-1

Published in Volume19, Number 3 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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