May You Live in Interesting Times

David Pruner and Dagney Devlin Pruner

Energy is the lifeblood of every economy, and, as these economies grow, energy demand continues to increase worldwide. As energy usage has increased, traded markets have developed in lockstep with this growth. The path to establishing any traded market that operates efficiently is rarely straight or without constantly changing issues, and the energy market is no exception. Often, the evolution of these markets requires the government to intervene in order to break up entrenched monopolies, thus fragmenting market share and levelling the playing field by allowing more participants.

The logical next step in encouraging more equal access to the market is to lower the barriers to entry and deregulate the marketplace. These steps not only allow more participants into the market, but also aid the invisible hand of capitalism to create the fairest marketplace possible. When unimpeded by regulation, the players are able to be creative in their business practices; however, left unattended, there are times things can go awry and rules need to be adjusted or new regulations written. The energy industry has developed a rich history of settling into these “normal” conditions, which are then