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Title: Increasing competition in the natural gas market. Second report required by Section 123 of the Natural Gas Policy Act of 1978. Summary

Technical Report ·
OSTI ID:6260718

In this second report, the major recent market adjustments examined are growth in domestic spot market transactions, lower prices for Canadian gas imports, and lower projected prices for alternative oil supplies. With respect to current market conditions, the report concludes that natural gas prices are being held at artificially high levels by NGPA wellhead price controls, restricted access to available interstate pipeline capacity, rising transmission margins, and regulatory restrictions on gas-on-gas competition. Although the Federal Energy Regulatory Commission's (FERC) minimum bill rule (Order 380) and special marketing programs have increased competition, regulatory restrictions on spot sales programs and discriminatory behavior by gas pipelines limit competition, impede contract renegotiation, and deny residential and commercial consumers access to lower cost supplies. Therefore, the report recommends that regulatory restrictions on spot sales programs be removed and that steps be taken to increase access to available pipeline capacity. The report also recommends implementation of new rate designs encouraging pipeline companies to operate efficiently and to transmit accurate price signals. In assessing future market prospects under alternative policies, the report concludes that partial wellhead decontrol under the current law will increase competition and market flexibility resulting in further real price declines from 1985 through 1987.

Research Organization:
USDOE Assistant Secretary for Policy, Safety and Environment, Washington, DC
OSTI ID:
6260718
Report Number(s):
DOE/PE-0069-Summ.; ON: DE85004926
Country of Publication:
United States
Language:
English