Ownership Separation of the Gas Transportation Network: Theory and Practice
AbstractThis article analyzes the pros and cons of ownership separation of the gas transportation network. This analysis is made with a specific test that confronts two pairs of different theoretical approaches on vertical integration. The result of this test shows that no uncontroversial solution can be offered to this problem, since all arguments (be them in favour or against) can be comfortably contrasted by a counterargument. In our view, an effective regulation would solve the problem, even though it has to be highlighted that ownership separation of the gas transportation network is not the key aspect of the gas industry. EU directives, in fact, cannot be applied where the biggest part of the value chain is produced, that is to say beyond the European borders, where an oligopoly operates. Due to its bargaining power, this oligopoly captures almost all the scarcity rent, reducing the scope for market liberalization.
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Bibliographic InfoArticle provided by FrancoAngeli Editore in its journal ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT.
Volume (Year): html10.3280/efe2010-002003 (2010)
Issue (Month): 2 ()
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Web page: http://www.francoangeli.it/riviste/sommario.asp?IDRivista=10
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
- L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
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