Natural Gas And Natural Macroeconomics In The Natural Gas Industry

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In the oil and gas industry today around the world, some natural gas industries are what we call a natural monopoly (i.e. a natural monopoly is when a natural gas industry is the only supplier of gas at a lower cost than a combination of two or three small natural gas industries), while others are perfect competitors (i.e. some few natural gas industries that choose the price to produce but not how much to sell the gas). However, they are factors that determine how a Natural gas industry can develop into a natural monopoly. These factors are, when the industry has control over the gas resources, economic barriers and government action/intervention. The possible problems that are likely to occur during the development are when the Natural Gas industry price of gas is higher than the market price. The first factor is for the natural gas industry to have control over the resource: The control over the gas resource is a prime source of monopoly power that is critical to the production of the final gas. If the natural gas industry can be the single owner of the gas resources, its gives the natural gas industry the power to raise the market price of gas over marginal cost without losing customers to the competitors. A classic example of a natural monopoly is De Beers, De Beers is a cartel that controls the diamond, diamond shops, diamond trading and mining and the industry sector that manufacture diamond and is well known throughout the 20th century where its uses its influencing position to manipulate the diamond international market. For the company to achieve these, its uses several method to control the diamond market: Firstly, the company succeed in convincing other independent producers of diamond to join its single monopoly. Sec... ... middle of paper ... ...ded transportation for trains and powered the industry. In the early 90’s, hydrocarbon became the primary source of fuel used in aircraft, ships and was refined into diesel and gasoline. It’s provided cheap energy that was responsible for the rapid expansion of modern civilization all over the world. The US reached their peak of oil production decades back, the reserves in both conventional natural gas and oil was rapidly decreasing because of the large consumption every day. A small oil and gas company in Texas was able to figure out how to produce the natural gas from the Barrett shale formation. In North Dakota border, the technology was used in the oil shale wells. These two events solved the energy problem in the United State, made the United States the largest producer of natural gas and are now changing the economics and politics of the natural gas industry.

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