Competition in the Natural Gas Pipeline Industry: An economic analysis
The essence of this book is that transportation monopoly power in the natural gas pipeline industry of the United States may be questionable. The author implicity built on the notion of contestable markets, that market power arises more from barriers to entry and exit that economies of scale. To reach these conclusions, the author constructed analyses of the short, medium, and long term potential entry condition for metropolitan statistical areas (MSAs). The author`s analysis show that 123 of 208 relevant MSA were noncompetitive at the present time. In the medium term, the picture changes dramatically as new pipeline projects become feasible and expiring gas contracts begin to entice competitors. Finally, in the long run nearly all potential pipeline entrants, and thus natural gas suppliers, have an impact on markets and the only constraint is the number of bidders. The natural gas industry in the U.S. has been through momentous change, but all indications are that, on the whole, all consumers are likely to benefit from the policy reform and industry restructuring. The goal of deregulation is to encourage competition wherever possible and to efficiently and effectively regulate wherever competition does not exist or may not be feasible.
- OSTI ID:
- 229909
- Country of Publication:
- United States
- Language:
- English
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