Is energy security really too important to leave to markets?

Involvement by governments in the area of energy has historically been one of the most extensive and continuous area of policy making. Whether through regulating the private sector or through ownership of assets, governments across the world have been involved in how energy in its primary forms, such as coal or petroleum are produced, how it is transformed and distributed and how it is consumed. In Europe, North America and elsewhere, through either state-owned monopolies or through regulation, government has played key roles in the generation, transmission and distribution of electricity, the transportation of natural gas and petroleum via pipelines. While generally refraining from the ownership and operation of upstream primary energy sources such coal and petroleum, because of concerns over supply security, governments of the developed world have long been involved in strategic storage of petroleum. Security of supply alongside aspirations with regard to affordability and reliability together figure strongly as explanations for government involvement in the energy sector and underscore the premise that markets, sui generis, cannot be trusted to meet policy objectives.