Gas surplus that's heating up a pricing controversy
The author notes that government controls over natural gas prices continue to keep prices below market-clearing levels and, until 1981, kept newly added reserves below production levels. The temporary gas bubble has provided a steady surplus for four years that may exceed two trillion cubic feet, or 10% of US marketed production. Mr. Lichtblau says it acts as a disincentive to drilling even though it is not an excessive surplus. The lower demand due to rising prices, government regulations, and the recession are responsible for most of the surplus, which could turn around with economic recovery. Residual fuel oil is the principal competitor for industries using alternative or interruptible fuel systems. Controversy over the Natural Gas Policy Act centers on the continuation of a multi-tier pricing system which creates inequities among producers, transporters, distributors, and consumers, and which will have regional impacts for individual pipelines. (DCK)
- Research Organization:
- Petroleum Industry Research Foundation, New York, NY
- OSTI ID:
- 6360984
- Journal Information:
- Energy User News; (United States), Journal Name: Energy User News; (United States) Vol. 8:1; ISSN EUSND
- Country of Publication:
- United States
- Language:
- English
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030600 -- Natural Gas-- Economic
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29 ENERGY PLANNING, POLICY, AND ECONOMY
294003* -- Energy Planning & Policy-- Natural Gas
COMPETITION
ECONOMIC IMPACT
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
LAWS
MARKET
NATIONAL ENERGY ACT
NATURAL GAS
NATURAL GAS POLICY ACT
PRICING REGULATIONS
REGULATIONS
SUPPLY AND DEMAND