British gas buying rights and natural gas depletion

The UK Government has decided to remove the British Gas Corporation's buying rights for natural gas on the UK Continental Shelf. Here P. Lehmann and N. Shaw look at the possible consequences. They suggest that, in the case of the natural resources market forces will not necessarily result in optimal solutions for society as a whole. Thus, the proposed change is likely to result in over-rapid depletion of natural gas reserves, with consequences for the rest of the economy and other energy industries. It will do little to improve the available information about the amount of unused gas reserves in UK waters. It will increase still further the dominant role of the major oil companies in the energy market and will leave more of the economic rent from North Sea gas with the producing companies