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    The Economist: Gas pricing in Europe

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Summary

A look at the positives and negatives of Europe's gas market focusing on gas pricing, in addition to the lack of increased demand of gas due to the euro crisis, and public fears over shale gas. Coal is still the least costly way to produce power.

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The Economist: Gas pricing in Europe

Careful what you wish for

The pros and cons of a more competitive gas market in Europe

EUROPEAN ENERGY COMPANIES threw lavish parties when they signed new 20-30-year contracts with Russia’s Gazprom around the middle of the past decade. Ensuring security of gas supply for many years ahead seemed cause for celebration. The hangover was to come.

Europe is the main battleground for gas pricing. In America gas prices are set by the fundamentals of supply and demand (known as gas-on-gas competition), which means they are currently low. In Asia gas is mainly bought and sold at prices set by contracts linked directly to (currently high) oil prices. Europe is somewhere in the middle.  MORE

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