Simulation Study Of The Natural Gas Market Development Model And The Mechanism Of Competition

Recently, there is surge advocating market-oriented reform of energy resources in China, especially natural gas after the national wide gas shortage in the winter of 2009.Unlike the former research work with ex-post analysis in a single country, this paper scrutinizes the development patterns of gas industry in several representative countries to give implication on gas-to-gas competition with ex-ante perspective. The author gets the conclusion that complete competitive market with de-integration and de-regulation is not easily achieved due to its inherent monopoly natural in pipeline transportation and regulatory policies. China's market-oriented reform should start from small-sized market with "duel prices" and the open-access service to pipeline network.Low price elasticity of gas demand in china verifies low sensitivity to price signals incurred by lack of market. Unlike the former research work Appling single model in simulating the gas market without paying attention to the period effect, we take into account the elasticity difference in the two periods of the market, applying Cournot oligopolistic and Bertrand bid model respectively. We get the conclusion that the small-sized market is of endogenous expansion and "high growth first and low growth after" could reduce potential welfare loss.