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OLE GUNNAR AUSTVIK:
v
The Norwegian State as Oil and Gas Entrepreneur
The Impact of the EEA Agreement and EU Gas Market Liberalization


Saarbrücken 2009: VDM Verlag   ISBN  978-3-639-17725-1   432 pages. 

Dissseration for the degree of dr.philos at University of Oslo, Norway  2009. 

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Reference:   Austvik, Ole Gunnar, 2009: The Norwegian State as Oil and Gas Entrepreneur.
The Impact of the EEA Agreement and EU Gas Market Liberalization
. Saarbrücken: VDM Verlag.

NB: Proper reference to author, title and publisher must be made if you use the material in your own writings, being in your
organization or in public. However, the documents cannot, partially or fully, be used for commercial purposes without a written permit.


This book analyzes how Norway's integration with the European Union has contributed to change the Norwegian state's oil and natural gas entrepreneurship. The point of departure is that the Norwegian state was succesfully engaged in her petroleum industry from the 1970s as producer, regulator, law-maker and political and economic risk-taker. As a political entrepreneur the state could define social goals for activities and use regulative, legal and political measures to reach goals that private entrepreneurs do not have at their disposal. The European Economic Area (EEA) agreement from the 1990s challenged and changed the way the Norwegian state could continue the control and innovation of her comprehensive petroleum model. Norway adapted eventually de jure to EU directives and competition law. At the same time she gave their contents and interpretations a de facto Norwegian flavor. The analysis explains the unique mixture of state and private actitivites in the Norwegian petroleum sector, and sheds some light on European integration and variations in regulatory reform. It should be useful to people in academia, governments and regulatory authorities, professionals in the energy industry, as well as the society at large.

Book review Nov 2009: "Mild i form, sterk i innhold" (Norwegian only)

Table of contents
List of figures..................................................................................................  9

List of tables.................................................................................................... 11

Abbreviations .................................................................................................. 12

Introduction.....................................................................................................  15
Aim and scope of the study
A multidisciplinary approach
Relations to other studies
Study propositions

1 Economic integration and political entrepreneurship.................................  35
1.1 Endogenous growth and the political entrepreneur
1.2 Welfare effects from economic integration
1.3 Integration levels and theories
1.4 The dynamics of economic integration processes
1.5 Exogenous change and domestic policy change
1.6 The interaction between external and domestic agents
1.7 Economic integration and political entrepreneurship

2 The Norwegian state as oil and gas entrepreneur..................................... 101
2.1 The establishment and development of the petroleum industry
2.2 Statoil as political instrument
2.3 Exogenous change and Norwegian gas policy in the 1980s.
2.4 Petroleum fund and production levels
2.5 Exogenous change caused by integration with the EU
2.6 The state as regulator and capitalist
2.7 The Norwegian state as petroleum entrepreneur

3 The EEA agreement changes the natural gas entrepreneurship...............  137
3.1 The EEA agreement in a multi-speed Europe
3.2 EU pressures for changing Norwegian natural gas policy
3.3 Strategy, conflict and cooperation with the EU
3.4 New solutions for natural gas activities on the NCS
3.5 The EEA agreement and Norwegian petroleum policy.
3.6 The EEA agreement and the state’s natural gas entrepreneurship

4 Market liberalization and the entrepreneurial role of the state ................  191
4.1 Main features of the European gas market
4.2 The boundaries between regulation and competition
4.3 The design of a fully liberalized European gas market
4.4 Market liberalization and prices
4.5 Effects on contractual forms and modulation
4.6 EU efforts to liberalize her natural gas markets
4.7 Taxation of natural gas usage
4.8 Market liberalization and the entrepreneurial role of the state

5 Constraints to market liberalization and the political entrepreneurship...  257
5.1 Energy challenges for the EU
5.2 Intra-EU political constraints to market liberalization
5.3 External political constraints to market liberalization
5.4 Constraints from the non-renewable nature of natural gas supplies
5.5 Regulatory constraints to full market liberalization
5.6 Limits to market liberalization and the natural gas entrepreneurship

6 Conclusions ....................................................................................................  359
6.1 Empirical findings
6.2 Evaluation of the theoretical approach
6.3 Contributions to understanding Norwegian petroleum policy
6.4 Contribution to understanding the Norwegian – EU relationship
6.5 Theoretical implications

References......................................................................................................... 393
 

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Norsk gass, naturgass, gassdirektiv, EU, Europeiske Union, regulering, regulator, transmisjon, liberalisering, liberalisme, energiskatter, avgifter, Gassforhandlingsutvalget, GFU, Forsyningsutvalget, FU, Naturlig monopol, Oljedirektoratet, OD, Olje- og energidepartementet, OED, Ministry of Petroleum and energy, MPE, Statoil, Norsk Hydro, Petoro, Gassco, GasLed, Norge, Russland, Tyskland, Ruhrgas, Gaz de France, E?S, leveringssikkerhet, ressursrente, grunnrente, naturgass, monopolrente, rente, ?konomisk teori, reguleringsteori, regulerings?konomi, ikke-fornybare ressurser.  Abbreviations: ATC  Average total cost BCM  Billion cubic metres BG   British Gas BNOK  Billion Norwegian kroner BP   British Petroleum CAP  Common Agricultural Policy CPI   Consumer Price Index CC   Common Carriage CEGB  Central Electricity Generating Board (U.K.) CHP  Combined heat and power CIS   Commonwealth of Independent States CME  Coordinated market economies Coreper  Committee of Permanent Representatives (EU) DG   Directorate General (EU) DOE  Department of Energy (U.S.) DOP  Deliver or pay EC   European Community ECB  European Central Bank ECSC  European Coal and Steel Community EEA  European Economic Area EEC  European Economic Community EFTA  European Free Trade Association EIA   Energy Information Agency (DOE statistical division) EIP   Entrepreneurship Indicators Project ESA  EFTA Surveillance Authority EU    European Union EU-6  Belgium, France Germany, Italy, Luxembourg and  the Netherlands EU-10  Cyprus, Czech Republic, Estland, Hungary, Latvia, Litauen, Malta, Poland, Slovakia and Slovenia EU-12   EU-10 + Romania and Bulgaria EU-15  EU-6 + Austria, Denmark, Finland, Greece, Ireland, Portugal, Spain, Sweden and the  U.K. EU-25  EU-15 + EU-10 EU-27  EU-15 + EU-12 FERC  Federal Energy Regulatory Commission (U.S.) FIN   Ministry of Finance (Norway) FPC  Federal Power Commission (U.S.) FTA  Free Trade Area FU   Forsyningsutvalget (Gas Supply Committee) GATT  General Agreement on Trade and Tariffs GDP  Gross domestic product GEMA  Gas and Electricity Markets Authority (U.K.) GFU  Gassforhandlingsutvalget (Gas Negotiation Committee) IEA   International Energy Agency INTSOK Internasjonalisering av norsk sokkel (”Norwegian oil and gas partners”) IPE   International political economy LDC  Local Distribution Company LME  Liberal market economies LNG  Liquified Natural Gas LPG  Liquified Petroleum Gases LRMC  Long run marginal cost MBD  Million barrels per day MC   Marginal cost MFA  Ministry of Foreign Affairs (Norway) MFN  Most favoured nation MMBTU Million British termal units MMC  Monopolies and Mergers Commission (U.K.) MOA  Mandatory Open Access (IEA) MPE  Ministry of Peteroleum and Energy (Norway) MITI  Ministry of Industry and Trade (Japan) MTOE  Million tons of oil equivalents NATO  North Atlantic Treaty Organization NBIM   Norges Bank Investment Management NCA  Norwegian Competition Authority (Konkurransetilsynet) NCS  Norwegian Continental Shelf) NGA  Natural Gas Act (U.S.) NGF  The “Norwegian Gas Factory” NGPA  Natural Gas Policy Act (U.S.) NGL  Natural Gas Liquids NGU  Norges geologiske unders?keler (Norwegian Geological Survey) NOK  Norwegian Krone NORSOK Norsk sokkels konkurranseposisjon      (Norwegian shelf competitive position) NPD  Norwegian Petroleum Directorate (Oljedirektoratet) NPM  New Public Management OECD  Organization for Economic Cooperation and Development OFFER  Office of Electricity Regulation (U.K.) OFGAS  Office of Gas Supply (U.K.) OFGEM Office of Gas and Electricity Markets (U.K.) OPEC  Organization of Petroleum Exporting Countries OA   Open Access PSA  Production Sharing Agreements PV   Present value QMV  Qualified majority voting SDC  Shtokman Developing Company SDFI  State Direct Financial Interests (Norwegian: SD?E) SD?E  Statens direkte ?konomiske engasjement, see SDFI SGR  Strategic Gas Reserves SMP  Special Market Programs (U.S.) SO   Statement of Objections (EU) SPR  Strategic Petroleum Reserves SRMC  Short run marginal cost SWF  Sovereign Wealth Funds TOP  Take-or-pay (contracts) TPA  Third Party Access TSO  Transmission System Operator USD  U.S. Dollar VAT  Value Added Tax WTO  World Trade Organization WTP  Willingness to pay WWI  World War I WWII  World War II Liberalisation