Putting a price on energy: oil and gas markets in Europe and the US 

The report covers a series of questions:

• Will the fast-increasing trade in liquefied natural gas lead to the development of gas as a global commodity?
• Will regional differences, especially the role of long-term contracts in continental Europe and Japan/Korea, persist?
• To what extent can the regional differences be narrowed by regulatory action, and how is any such regulatory influence shared between importing and exporting countries?
• Do geology and geography favour certain gas-pricing mechanisms, such as long-term contracts, thereby limiting the potential impact of regulatory action?
• What are the respective benefits of liquid-commodity markets and long-term contracts and what might be an optimal mix of the two?

Among the central conclusions of the paper is that while in the 1980s, the market for oil emerged as a liquid global commodity market, the market for gas did not do so. Only in Norh America and to a lesser extentthe UK has the gas market developed into a liquid-commodity market, in both cases based on domestic resources. In continental Europe and the Pacific region, the development of the gas industry has mainly been based on imported gas (pipeline gas or liquefied natural gas) sold under long-term contracts, according to the findings of the report.