What Drives Natural Gas Consumption in Europe? Analysis and Projections
AbstractNatural gas is an important fuel source for Europe and it is expected to remain so in the near future. The market power of suppliers is an important structural element of the European natural gas market and long-term investment and contracts necessitate reliable projections of natural gas demand. This research attempts to address this need. It investigates the impact of income, real natural gas prices and the underlying energy demand trend (UEDT) on OECD-Europe natural gas consumption by applying the structural time series technique to annual data over the period 1978 to 2011. The results suggest that, in order of importance, income, the UEDT and natural gas prices all play a role in driving OECD-Europe natural gas consumption with the estimated UEDT having both increasing (gas using) and decreasing (gas saving) periods over the estimation period and the estimated long run income and price elasticities being 1.19 and -0.16 respectively. Furthermore, based upon the estimated relationship, OECD-Europe natural gas consumption is predicted to be somewhere between 572 and 646 bcm (about 472 and 533 mtoe) by 2020.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey in its series Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) with number 143.
Length: 36 pages
Date of creation: Oct 2013
Date of revision:
OECD-Europe Gas Demand; Structural Time Series Model (STSM); Gas Demand Modelling and Future Scenarios.;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
- Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Robert S. Pindyck, 1979. "The Structure of World Energy Demand," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661772, January.
- repec:mop:credwp:09.02.82 is not listed on IDEAS
- Massol, Olivier & Tchung-Ming, Stéphane, 2010.
"Cooperation among liquefied natural gas suppliers: Is rationalization the sole objective?,"
Elsevier, vol. 32(4), pages 933-947, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lester C Hunt).
If references are entirely missing, you can add them using this form.