Natural gas industry faces more uncertainty in the upcoming decade
Journal Article
·
· Strategic Planning for Energy and the Environment; (United States)
OSTI ID:6593926
- Planning and Forecasting Consultants, Houston, TX (United States)
The monumental discontinuity of the past decade in the natural gas industry was the change of the interstate gas pipeline industry from serving as a merchant function to a common carrier function. The main reason this change could come about was a past strategic error on the part of the interstate pipeline companies. In the early 1980s, they misread the gas supply signals and entered into uneconomical take or pay contracts at unreasonably high prices. This strategic mistake essentially bankrupted all of the pipeline companies. Their submittal to the Federal Energy Regulatory Commission (FERC) forced them to allow open access on their pipelines. The FERC then allowed them to buy their way out of their bad take or pay contracts. The method of pricing natural gas at the wellhead was the other big change. Instead of the major interstate pipeline continuing with a form of mandating area rates, each producer can now deal directly with anyone wanting to purchase the gas. The transportation is available due to these pipelines becoming common carriers. These two discontinuities allowed new paper interstate pipelines to come into existence.
- OSTI ID:
- 6593926
- Journal Information:
- Strategic Planning for Energy and the Environment; (United States), Journal Name: Strategic Planning for Energy and the Environment; (United States) Vol. 14:3; ISSN 1048-5236; ISSN SEENEJ
- Country of Publication:
- United States
- Language:
- English
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·
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·
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·
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·
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·
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030600* -- Natural Gas-- Economic
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032000 -- Natural Gas-- Transport
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29 ENERGY PLANNING, POLICY, AND ECONOMY
294003 -- Energy Planning & Policy-- Natural Gas
COST
ECONOMICS
ENERGY CONSUMPTION
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
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MARKET
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PUBLIC UTILITIES
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030600* -- Natural Gas-- Economic
Industrial
& Business Aspects
032000 -- Natural Gas-- Transport
Handling
& Storage
29 ENERGY PLANNING, POLICY, AND ECONOMY
294003 -- Energy Planning & Policy-- Natural Gas
COST
ECONOMICS
ENERGY CONSUMPTION
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GAS UTILITIES
GASES
MARKET
NATURAL GAS
PLANNING
PUBLIC UTILITIES
TRANSPORT