Towards Transnational Gas Markets

Abstract

An international political economy (IPE) framework provides a very solid basis on which to analyse the correlation between the evolution of the energy sectors, their effect on policies, laws and institutions. Moreover, the evolution of energy infrastructures and markets cannot be viewed in isolation from institutional developments and various practices and regulations. On this basis, this chapter analyses the natural gas markets, which have increasingly become transnational. The oil shock of 1973 provided the initial impetus for the development of natural gas. Interestingly, prior to the 1970s, gas was mainly considered as a substitute for oil.1 The two fuels have mostly competed in the heat and power sectors, while oil has remained almost irreplaceable in transport. By the end of the 20th and early 21st centuries, the importance of natural gas had increased in IPE. By the end of the 20th century, it was the fastest-growing primary energy source in many parts of the world. Therefore, some analysts forecast that it would be the fuel of the 21st century.2 The US shale gas revolution also contributes to this positive assessment of natural gas. Nowadays, gas markets increasingly constitute a separate market. The shale gas revolution has stimulated the development of the market for liquefied natural gas (LNG), and institutional changes in the gas markets have created a new context for international political and economic relations.