Abstract

Governments have been heavily involved in the development of the European natural gas industry since the discovery of the Dutch supergiant Groningen field in 1959. Their involvement reflected the prevailing intervntionist approach to economic management, as well as concerns over security of supply. After 1980 they rightly withdrew from active intervention in the oil market. However, their continued presence at an operational level is now an obstacle to the successful development of the natural gas industries in a number of key markets. The British experience over the past ten years has shown that privatisation and the determined introduction of competition leads to greater flexibility of efficiency in energy supply, as well as significantly lower prices. It has also produced for the first time outside North America, a genuine gas price index. The recent European Uniondirectives on gas and electricity have given a gentle shove to the competitive process on the continent. Governments, even those in two minds about competition, should stand aside and the let the market do its work.

Full Text
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