The European Natural Gas Market and Its Regulation

This chapter provides readers unfamiliar with the technical issue of natural gas market regulation the knowledge to follow the analysis of the policy processes leading to the three European Union (EU) natural gas directives in 1998, 2003, and 2009. First, Herweg presents basics of the natural gas market in general (inter alia, its monopolistic market structure, dominance of vertically integrated companies, long-term contracts with take-or-pay clauses, and oil price indexation). Subsequently, she summarizes which regulatory options policy-makers have at their disposal in order to liberalize this sector (focusing on third-party access, approaches to unbundling, and regulatory oversight). Finally, Herweg provides a comparative overview of the key aspects of the three natural gas directives.