Table of Contents

Building Competitive Gas Markets in the EU

Building Competitive Gas Markets in the EU

Regulation, Supply and Demand

The Loyola de Palacio Series on European Energy Policy

Jean-Michel Glachant, Michelle Hallack and Miguel Vazquez

This highly unique book focuses on market design issues common to most EU gas markets, particularly in the context of closer integration. It explores in detail the characteristics and requirements of national gas markets in Europe which are constructed as virtual hubs based on entry/exit schemes as a requirement of European law.

Chapter 8: An American model for the EU gas market?

Sergio Ascari

Subjects: economics and finance, competition policy, energy economics

Extract

Despite the MECO-S model advocated by Jean-Michel Glachant in Chapter 7 ā€˜A vision for the EU gas target model: MECO-Sā€™, the most natural reference for a target model for the European market is the North American model. Unlike any other theoretical model that may be proposed, this is a working model that has been developed as the result of a long historical process, and is widely regarded as a success story. It has delivered secure supplies at prices that have been generally lower than those found in Europe, despite objective supply costs (in terms of production and transportation distance) that have been roughly the same, at least before the shale gas boom of the last three years, when the gap has indeed deepened (Figure 8.1). The fact that innovation leading to shale development has been more effective in North America is not just chance; it is just another positive feature of the industry. Although it must be partly attributed to the peculiar US upstream regime where any underground production belongs to the land owner (rather than the state as in Europe), it also shows that the private sector is not afraid to undertake substantial investment in North America, as it knows that it will be able to transport the product to the market, and sell it.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information