Preliminary Analysis of the Natural Gas Market-Ordering Problem

摘要

Under the terms of the Natural Gas Policy Act of 1978, federal price controls will be removed from more than half of the nation's natural gas supply on January 1, 1985. The present study analyzes the possible consequences of this partial deregulation. One consequence almost certainly will be a large increase in the price paid by natural gas consumers throughout the country. A second will be an especially large increase for customers of pipelines controlling relatively little natural gas still subject to proce controls; these pipelines include the intrastate pipelines that serve the major gas-producing states but also some of the interstate pipelines. The price paid by customers of these pipelines will reflect the full unregulated field price of natural gas, while for customers of some of the interstate pipelines the price of unregulated gas will be averaged with the much lower price of substantial quantities of price regulated gas. This disparity may lead in turn to a third consequence of partial deregulation: a large shift of natural gas supplies from intrastate to interstate pipelines and also between interstate pipelines. (ERA citation 81:025073)