Government involvement in liberalised gas markets; a welfare-economic analysis of Dutch gas-depletion policy
This report analyses the welfare effects of two major components of the Dutch gas-depletion policy: the offtake guarantee for small-fields gas and the cap on production from the Groningen field. We conclude that the benefits of offtake guarantee currently may outweigh the costs, but a further development of the gas market would reverse this picture. The cost of the offtake guarantee is that it gives operators reduced incentives to respond optimally to short-term changes in market conditions compared to a competitive market. Regarding the cap on Groningen (42.5 bcm per year), we find that this measure is inefficient when the cap is binding, i.e. restricting the production from the Groningen field. The costs of capping Groningen production follow from shifting returns to the future. The benefits of this measures consist of slightly positive effects on small-fields production and positive benefits for security of supply. Read the�background documents: CPB Memorandum 143: "Market failures and government policies in gas markets" CPB Memorandum 144: "NATGAS: a model of the European natural gas market" �
|Date of creation:||Feb 2006|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (070) 338 33 80
Fax: (070) 338 33 50
Web page: http://www.cpb.nl/
More information through EDIRC
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.:
- James B. Bushnell & Erin T. Mansur & Celeste Saravia, 2007.
"Vertical Arrangements, Market Structure, and Competition An Analysis of Restructured U.S. Electricity Markets,"
NBER Working Papers
13507, National Bureau of Economic Research, Inc.
- James B. Bushnell & Erin T. Mansur & Celeste Saravia, 2008. "Vertical Arrangements, Market Structure, and Competition: An Analysis of Restructured US Electricity Markets," American Economic Review, American Economic Association, vol. 98(1), pages 237-66, March.
- Bushnell, James & Mansur, Erin T. & Saravia, Celeste, 2008. "Vertical Arrangements, Market Structure and Competition: An Analysis of Restructured U.S. Electricity Markets," Staff General Research Papers 13130, Iowa State University, Department of Economics.
- Chaton, Corrine & Doucet, Joseph A., 1999. "Uncertainty and Investment in Electricity Generation: the Case of Hydro-Québec," Cahiers de recherche 9914, Université Laval - Département d'économique.
- Machiel Mulder & Arie ten Cate & Ali Aouragh & Joeri Gorter, 2004. "Gas exploration and production at the Dutch continental shelf: an assessment of the 'Depreciation at Will'," CPB Document 66, CPB Netherlands Bureau for Economic Policy Analysis.
- M. C. Burda, 1995.
"Migration and the Option Value of Waiting,"
SFB 373 Discussion Papers
1995,58, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- van Damme, E.E.C., 2005.
"Liberalizing the Dutch Electricity Market : 1998-2004,"
2005-009, Tilburg University, Tilburg Law and Economic Center.
- Eric van Damme, 2005. "Liberalizing the Dutch Electricity Market: 1998-2004," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 155-180.
- van Damme, E.E.C., 2005. "Liberalizing the Dutch electricity market : 1998-2004," Other publications TiSEM 864588cb-985a-4add-9225-2, Tilburg University, School of Economics and Management.
- van Damme , E., 2005. "Liberalising the Dutch Electricity Market: 1998-2004," Cambridge Working Papers in Economics 0526, Faculty of Economics, University of Cambridge.
- Kira R. Fabrizio & Nancy L. Rose & Catherine D. Wolfram, 2007.
"Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on US Electric Generation Efficiency,"
American Economic Review,
American Economic Association, vol. 97(4), pages 1250-1277, September.
- Kira Markiewicz & Nancy L. Rose & Catherine Wolfram, 2004. "Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on U.S. Electric Generation Efficiency," NBER Working Papers 11001, National Bureau of Economic Research, Inc.
- Frank Asche & Petter Osmundsen & Ragnar Tveterås, 2000.
"European Market Integration for Gas? Volume Flexibility and Political Risk,"
CESifo Working Paper Series
358, CESifo Group Munich.
- Asche, Frank & Osmundsen, Petter & Tveteras, Ragnar, 2002. "European market integration for gas? Volume flexibility and political risk," Energy Economics, Elsevier, vol. 24(3), pages 249-265, May.
- Green, Richard, 1999. "The Electricity Contract Market in England and Wales," Journal of Industrial Economics, Wiley Blackwell, vol. 47(1), pages 107-24, March.
- Correlje, Aad F. & Odell, Peter R., 2000. "Four decades of Groningen production and pricing policies and a view to the future," Energy Policy, Elsevier, vol. 28(1), pages 19-27, January.
- Johannes Bollen & Machiel Mulder & T. Manders, 2004. "Four futures for energy markets and climate change," CPB Special Publication 52, CPB Netherlands Bureau for Economic Policy Analysis.
- Mahenc, P. & Salanie, F., 2004. "Softening competition through forward trading," Journal of Economic Theory, Elsevier, vol. 116(2), pages 282-293, June.
- Reed, William J., 1993. "The decision to conserve or harvest old-growth forest," Ecological Economics, Elsevier, vol. 8(1), pages 45-69, August.
- Jeroen de Joode & Douwe Kingma & Mark Lijesen, 2004. "Energy policies and risks on energy markets; a cost-benefit analysis," CPB Special Publication 51, CPB Netherlands Bureau for Economic Policy Analysis.
- Robert Wilson, 2002. "Architecture of Power Markets," Econometrica, Econometric Society, vol. 70(4), pages 1299-1340, July.
- Creti, Anna & Villeneuve, Bertrand, 2004. "Long-term contracts and take-or-pay clauses in natural gas Markets," Economics Papers from University Paris Dauphine 123456789/5372, Paris Dauphine University.
- repec:tpr:qjecon:v:103:y:1988:i:3:p:479-508 is not listed on IDEAS
- J. C. Herbert Emery & Kenneth J. McKenzie, 1996. "Damned If You Do, Damned If You Don't: An Option Value Approach to Evaluating the Subsidy of the CPR Mainline," Canadian Journal of Economics, Canadian Economics Association, vol. 29(2), pages 255-70, May.
- Machiel Mulder & Gijsbert Zwart, 2006. "Market failures and government policies in gas markets," CPB Memorandum 143, CPB Netherlands Bureau for Economic Policy Analysis.
When requesting a correction, please mention this item's handle: RePEc:cpb:docmnt:110. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.