European natural gas markets: resource constraints and market power

Gijsbert Zwart

No 116, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: We analyze long-run scenarios for the European natural gas markets in a model, NATGAS, that explicitly includes both resource constraints and producers’ market power. Europa wordt geconfronteerd met afnemende eigen aardgasvoorraden, met name in de van oudsher grote producenten het Verenigd Koninkrijk en Nederland. De Europese afhankelijkheid van een beperkt aantal grote aardgasleveranciers zal toenemen. Daarmee groeit ook de marktmacht van deze producerende landen. We bekijken de invloed van de beschikbaarheid van vloeibaar aardgas, LNG, op de marktaandelen van producenten en de snelheid van uitputting van Europese voorraden. We bestuderen in het bijzonder hoe in de verschilende scenario's de schaduwprijzen van eindige voorraden de productiebeslissingen beïnvloeden. The European natural gas market is characterized by declining indigenous resources, particularly in the UK and the Netherlands, and a growing dependence on a small number of large exporters who, as a consequence, see their market power increasing. We analyze the impact of conditions on the global LNG market on market shares of pipeline gas suppliers, as well as on the speed of depletion of indigenous European resources. We focus on how shadow prices of resource constraints affect substitution patterns in the various scenarios.

JEL-codes: C61 L13 Q31 (search for similar items in EconPapers)
Date: 2008-12
New Economics Papers: this item is included in nep-com, nep-eec and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: European Natural Gas Markets: Resource Constraints and Market Power (2009)
Journal Article: European Natural Gas Markets: Resource Constraints and Market Power (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:116

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