The Role of Natural Gas in the European Gas Market and East-West Energy Trade

Abstract

Abstract The importance of energy for economic growth and regional co-operation has held a promiment role in the activities pursued by the Economic Commission for Europe (ECE). The ECE was created by the United Nations in 1947 for the purpose of promoting co-operation and strengthening relations among member countries, with varying economic and political systems, in virtually every economic activity. Over the years, the Energy Division of the ECE has been intimately involved in analyzing and evaluating energy developments and markets in the ECE region; and in serving the needs of member governments in their endeavour to promote regional co-operation. In the context of east-west relations, energy trade has played a prominent role in the economic interchange that has prevailed in the recent decades, and natural gas has become an increasingly important fuel commodity in the development of trade relations across most member states, and in trade relations between east and west. Drawing upon the experience and knowledge available in the ECE Energy Division in these matters, this paper provides an insight on the importance attached to natural gas in the energy markets of Europe, and the reliance placed on gas trade to sustain increased demand for natural gas in European gas markets. The ECE consists of thirty-four member countries (Table 1), of western and eastern Europe, including the USSR, Canada and the United States. Unless otherwise noted, reference to Europe in this paper excludes North America.