Gas market liberalization in Britain: Some geographical observations

The paper reviews the evolving regulatory environment of the gas industry since its privatization in 1986, and the consequences of growing competition in an increasingly liberalized market for gas. Particular attention is given to those consequences of a geographical nature, and the public policy issues that they raise. The revised risks and uncertainties of the gas supply system are noted, as is the remarkable impact of gas market liberalization upon the nature and location of electricity generation, with its major implications for the wider energy market in Britain and environmental pollution. Changes in the gas industry's regulatory regime are bringing a significant increase of industry information into the public domain, and an increased transparency in the logic underlying public decision making. The emergence of new relationships within and between the markets for gas and electricity raises questions about the future relationship between their respective regulatory regimes. These and other important issues of public policy arise in the context of a new circumscription of the Government's own ability to respond speedily and directly to some of the environmental and social challenges that stem from changes in the markets for energy.