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Modularity analysis of the Canadian natural gas sector

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  • Ivanenko, Vlad

Abstract

The paper describes the technological process presented as a chain of tasks that natural gas companies in Canada perform to move natural gas products from the geological formation to the final consumer. Investigating the norms the firms use to establish cooperation with clients and suppliers, it shows that the standardization of tasks facilitate arm's length interactions within the chain. The paper studies the distribution of risks in client–supplier pairs and concludes that their asymmetry in risk-taking may be indicative of relative importance that the risk takers assume within the pairs. Finally, the paper touches on the role that federal and provincial governments play in regulated segments of the chain and suggests that government-sponsored standardization may need to get reconciled with market practices.

Suggested Citation

  • Ivanenko, Vlad, 2012. "Modularity analysis of the Canadian natural gas sector," Energy Economics, Elsevier, vol. 34(4), pages 1196-1207.
    • Handle: RePEc:eee:eneeco:v:34:y:2012:i:4:p:1196-1207
    DOI: 10.1016/j.eneco.2011.10.020
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    References listed on IDEAS

    as
    1. Langlois, Richard N., 2002. "Modularity in technology and organization," Journal of Economic Behavior & Organization, Elsevier, vol. 49(1), pages 19-37, September.
    2. Doucet, Joseph & Littlechild, Stephen, 2009. "Negotiated settlements and the National Energy Board in Canada," Energy Policy, Elsevier, vol. 37(11), pages 4633-4644, November.
    3. Froot, Kenneth A & Scharfstein, David S & Stein, Jeremy C, 1993. "Risk Management: Coordinating Corporate Investment and Financing Policies," Journal of Finance, American Finance Association, vol. 48(5), pages 1629-1658, December.
    4. Carliss Y. Baldwin, 2008. "Where do transactions come from? Modularity, transactions, and the boundaries of firms," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(1), pages 155-195, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Natural gas; Canada; Commodity chain; Modularity; Risk;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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