Gas Market Developments in Western Europe

Abstract

Prospects for the European gas markets are excellent because North Sea reserves are extensive, the distance to markets small and the latent domestic demand to replace uneconomic coal gas. Nevertheless, expansion in the gas trade has been modest because the industry has not been sufficiently assertive to dispel misconceptions about the adequecy of supply and to deal with pressures from competing energy interests. Increasing rivalry between suppliers can only lead to greater sales effort and the creation of demand, particularly for non-traditional end-users. Expansion of European gas markets could be drastically increased through greater efforts by the Soviet Union to export. This could only happen with price competitiveness that would significantly expand gas markets. There is every reason to expect that the natural gas share of the European energy market would continue to grow until it was the single most important component of western Europe's supply of energy.