Unnatural monopoly: natural gas industry

Journal Article · Sun Jul 01 04:00:00 EDT 1984 · Inquiry (Chicago); (United States)

OSTI ID:6710559

Copulos, M

There appears to be no change in position despite the annual congressional debate over natural gas issues. A fresh look is needed, particularly at the idea that interstate gas pipelines are a natural monopoly that require a government franchise. The Natural Gas Act of 1938 giving the Federal Power Commission jurisdiction over gas pipelines was intended to correct abuses, but resulted in encouraging the pipelines to assume a monopolistic behavior. This was not a serous problem until natural gas prices began rising and shortages appeared due to uneven distribution. The Natural Gas Policy Act reinforced the monopolistic behavior by extending federal controls to the intrastate market. Contract carriage is a remedy that would allow firms and utilities to contract for gas on their own. They would pay pipelines for transport costs only. Competition would increase because there would be new buyers and sellers, and pipelines would have an incentive to seek lower wellhead prices for their contract gas.

• Research Organization: Heritage Foundation, Washington, DC
• OSTI ID: 6710559
• Journal Information: Inquiry (Chicago); (United States), Journal Name: Inquiry (Chicago); (United States); ISSN INQYA
• Country of Publication: United States
• Language: English

Related Subjects

03 NATURAL GAS
031000* -- Natural Gas-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
294003 -- Energy Planning & Policy-- Natural Gas
CONTRACTS
ENERGY SYSTEMS
GOVERNMENT POLICIES
HISTORICAL ASPECTS
INDUSTRY
LAWS
MONOPOLIES
NATIONAL ENERGY ACT
NATURAL GAS DISTRIBUTION SYSTEMS
NATURAL GAS INDUSTRY
NATURAL GAS POLICY ACT
PIPELINES
TRANSPORT