Macroeconomic consequences of natural gas decontrol. Appendix C to a study of alternatives to the Natural Gas Policy Act of 1978

Technical Report · Sun Nov 01 04:00:00 EST 1981

OSTI ID:5863969

This report examines the various economic consequences of the decontrol of natural gas prices. It compares macroeconomic conditions arising under three alternative policy scenarios-full and immediate deregulation in 1982, phased decontrol by 1985, and deregulation in 1985 per the Natural Gas Policy Act of 1978. The approach used in this analysis distinguishes between the various effects of natural gas decontrol on the supply-side and demand-side of the economy. Econometric models of the US economy were used as part of this analysis to estimate quantitatively the direction, magnitude, and timing of the major effects. A major finding of this analysis is that full decontrol would yield a net addition of $41.1 billion (1980 $) to potential output of the economy over the 1982 to 1995 period. Similarly, phased decontrol would increase potential output by $38.8 billion (1980 $). However, in later periods the efficiency gains, lower energy resource costs, and expanded supplies of factor inputs resulting from decontrol are estimated to raise the output potential of the economy. Full and immediate decontrol deregulation may increase the rate of inflation, lower total real spending (real GNP), and raise the rate of unemployment. The impacts of phased decontrol are likely to be smaller in magnitude and different in timing compared to full decontrol.

• Research Organization: ICF, Inc., Washington, DC (USA)
• DOE Contract Number: AC01-81PE70274; AC01-79PE70046
• OSTI ID: 5863969
• Report Number(s): DOE/PE-0035; ON: DE82003214
• Country of Publication: United States
• Language: English

Related Subjects

03 NATURAL GAS
030600* -- Natural Gas-- Economic
Industrial
& Business Aspects
031000 -- Natural Gas-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
293000 -- Energy Planning & Policy-- Policy
Legislation
& Regulation
294003 -- Energy Planning & Policy-- Natural Gas
DEREGULATION
ECONOMETRICS
ECONOMIC IMPACT
ECONOMICS
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
LAWS
NATIONAL ENERGY ACT
NATURAL GAS
NATURAL GAS POLICY ACT
PRICING REGULATIONS
REGULATIONS
SUPPLY AND DEMAND