An Unsympathetic Lecture on Economic Theory and the Deregulation of Natural Gas

Ferdinand E. Banks
Additional contact information
Ferdinand E. Banks: Department of Economics, Uppsala University, Sweden

Energy & Environment, 2005, vol. 16, issue 2, 303-319

Abstract: Just as electricity deregulation has failed in many countries or regions, it will eventually fail in many more. The reason is simple, and is generally recognized everywhere: Deregulation increases uncertainty, and uncertainty inevitably depresses physical investment. Any success experienced by electricity or gas deregulation will be exclusively due to the initial presence of excess capacity. Moreover, in Europe, ‘restructuring’ means that a competitive or partially-competitive gas-purchasing structure will find itself confronted by powerful external suppliers. Thus the already high price of gas could go higher, to the detriment of large firms as well as households and small businesses. In the US both Energy Secretary Abraham and the Chairman of the Federal Reserve System (Alan Greenspan) have expressed grave concern about the present development of the natural gas price, which they evidently regard as a threat to the US macroeconomy that is on the same plane as an escalation in oil prices.

Keywords: deregulation; storage; risk management; stock-flow models (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1260/0958305053749552 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:engenv:v:16:y:2005:i:2:p:303-319

DOI: 10.1260/0958305053749552

Access Statistics for this article

More articles in Energy & Environment
Bibliographic data for series maintained by SAGE Publications ().