Explaining the Regulatory Shift in the European Natural Gas Market Through the Multiple Streams Lens

Building on theoretical enhancements of the multiple streams approach (MSA), the present paper analyses the regulatory shift in the European natural gas market beginning with the first gas directive. From a public policy perspective this shift is surprising as almost all member states opposed the directive, and could have easily stopped it by blocking it in the Council. Furthermore, the European Commission depended on the predominantly monopolistic and state-owned industry for information and knowledge in order to table sensible legislation for this highly technical area. In addition, the introduction of common rules for this sector requires the handling of trade-offs between competition issues, environmental protection and security of supply. Facing these challenges, how could the first directive be passed at all? Which factors can explain the immense regulatory activity that resulted in two more gas directives after the passing of the first one? Finally, what led to the shortening of the legislative process from six and a half years for the first directive compared to two and a quarter years for the second and less than two years for the third directive?

To explain the passing of the first directive, the MSA is (a) expanded from agenda-setting to the actual decision-making by introducing a second coupling process, and (b) adapted to the European level. The first coupling process explains how the liberalization issue could gain agenda-status although almost all veto players opposed this idea. The second coupling process with a focus on the actual decision-making allows to analyze precisely the strategies applied by policy entrepreneurs in order to gain the majorities needed for passing the directive. As the main explanation for the subsequent regulatory activity and shortened legislative process lies in the inception and dynamics of the policy community, a refinement of this concept within the MSA is introduced that facilitates analysis. Empirically, the analysis is based on primary materials, in particular legislative documents, and secondary sources such as media reporting and information gathered from the European Public Affairs Directory. Thereby the establishment of the policy community is illustrated with particular emphasis on its main centerpiece, the European Gas Regulatory Forum. The analysis of its achievements is followed by a discussion of the success of this forum in fostering consensus. The paper closes with a discussion of the lessons that can be learned for solving coordination problems in the European context.