Reform of the European Natural Gas Market: Current Status, Obstacles and Future Prospects
论欧盟天然气市场改革：现状、障碍和前景

Global demand for natural gas has grown rapidly in the last several years, resulting in a constant increase in natural gas prices. In response, the European Union has introduced market reforms to ensure a secure supply of natural gas and improve industry competitiveness, but the implementation has so far been unsatisfactory. By October 2006, only 7 of the 25 EU members had fully opened up their natural gas markets, and the degree of market openness was below 100% for all ten new members. There has been little progress in the EU's natural gas market reforms, and the industry is monopolized by several large enterprises. This paper describes four main obstacles to further market reform: asymmetrical regulation of upstream and downstream markets, deficient infrastructure capacity, ineffective monitoring and enforcement, and rigidity of trade relations. Finally, this paper considers prospects for the development of the EU natural gas market. First, the natural gas markets in EU member countries will develop at different rates. France and new EU members will develop slowly due to government regulation and infrastructure constraints, while the Netherlands and Belgium will grow more quickly. The UK market is nearly mature as a free market due to its early reforms. Second, improvements in natural gas infrastructure will help to attract increased investment. LNG facilities will grow more rapidly than pipelines due to convenience of storage and transport. Third, the spot market for natural gas will develop rapidly, but long-term contracts will still be important for securing supply. Finally, the development of a spot market will diversify pricing mechanisms, but oil prices will still have a substantial effect on natural gas prices.