Analysis of Post-NGPA Interstate Pipeline Wellhead Purchases: An Analysis of the Natural Gas Policy Act and Several Alternatives, Part III

摘要

The purpose of this report is to analyze the market for natural gas at the wellhead as seen by major interstate pipeline companies. Among the issues addressed are: (1) what volumes of the various categories of natural gas are being purchased by interstate pipeline companies and what prices are being paid; (2) how much variation is there among companies in their average purchase prices of gas. How has the variation changed during the past year; (3) is there any evidence that old gas supplies are being reclassified to take advantage of higher price ceilings on new gas categories; and (4) what explains the volumes and prices of high-cost gas purchases. The data for the analysis presented here come from the Purchased Gas Adjustment (PGA) filings submited by major interstate pipeline companies to the Federal Energy Regulatory Commission and are presented under the classification: old gas, composed of all gas covered by NGPA Sections 104 (old interstate) and 106 (rollover contracts). Old gas is in general the lowest priced grouping. New gas, composed of all gas covered by NGPA Sections 102 (new gas), 103 (gas from new onshore production wells), 108 (stripper well gas), and 109 (certain other supplies). High-cost gas, composed of all gas covered by NGPA Section 107. The majority of these purchases are not subject to price control, and are priced at levels substantially above those that apply to other groupings. Miscellaneous, composed of small volumes of gas classified as interstate or covered by NGPA Sections 311 and 312. Total projected purchase volumes increased slightly (2%) between mid-1981 and mid-1982, accompanied by a more significant increase (17%) in the average of projected wellhead prices. Most of the increase in average prices was due to a shift of purchases away from the old gas to the more expensive categories, rather than to major price increases with individual gas categories. (ERA citation 08:019758)