Social welfare and optimal depletion: an application to natural gas deregulation

Thesis/Dissertation · Sat Jan 01 04:00:00 EST 1983

OSTI ID:6649671

Schmidt, R H

The optimal depletion of exhaustible resources is usually addressed in the literature as a problem of resource allocation over time. In this thesis, the effects of particular intertemporal consumption paths on the welfare of different households within each period of time are examined. The thesis addresses the issue at two levels. First, at the theoretical level, the standard optimal depletion model is extended to include more than one consumer. It is shown that the often cited equivalence between a socially optimal depletion path and a path generated by unrestricted competition only holds for a particular set of objective functionals. Second, the effects of natural gas deregulation policies in the distribtion of income over time are explored using a simulation model. Experiments were conducted to study the effects of replacing the Natural Gas Policy Act with complete deregulation in 1983 over the period 1980-94. The results indicate that to complete price deregulation would lead to price increases that would adversely affect low income groups in the short run. In the long run, however, gains in economic efficiency lead to improved welfare for all groups and an improvement in the relative welfare of low income groups. In both the central cases and sensitivity experiments, however, the effects on the distribution of income across income groups was found to be relatively small.

• OSTI ID: 6649671
• Country of Publication: United States
• Language: English

Related Subjects

03 NATURAL GAS
030600* -- Natural Gas-- Economic
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290400 -- Energy Planning & Policy-- Energy Resources
293000 -- Energy Planning & Policy-- Policy
Legislation
& Regulation
294003 -- Energy Planning & Policy-- Natural Gas
DEREGULATION
ECONOMIC IMPACT
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
LAWS
NATIONAL ENERGY ACT
NATURAL GAS
NATURAL GAS POLICY ACT
OPTIMIZATION
RESOURCE DEPLETION
SOCIAL IMPACT