Analysis of price fly-up under the Natural Gas Policy Act

Journal Article · Sun Apr 01 04:00:00 EST 1984 · Policy Anal.; (United States)

OSTI ID:7071882

In the absence of significant contract renegotiations or a legislative solution, non-market-sensitive price and take provisions in existing natural gas contracts will push the average wellhead price up by 9 to 12% above inflation in 1985. Price increases of this magnitude could cause hardship to consumers and create serious additional load loss. The primary causes of the fly-up are take and pricing provisions, entered into during a time of shortage, which are not sensitive to market forces. This study finds that the Interstate Natural Gas Association of America's proposal to place a cap on indefinite price escalators and to reduce take-or-pay minimum to 50% of contract levels for three years would mitigate the fly-up for the entire interstate market. Consumers would benefit because gas prices throughout the industry would be reduced relative to current law. Producers would receive an incentive to keep up exploration and development of new gas supplies. 21 references, 20 figures, 8 tables.

• OSTI ID: 7071882
• Journal Information: Policy Anal.; (United States), Journal Name: Policy Anal.; (United States) Vol. 84P-2; ISSN PANAD
• 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
294003 -- Energy Planning & Policy-- Natural Gas
CONTRACTS
DEREGULATION
ECONOMIC IMPACT
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
INDUSTRY
LAWS
NATIONAL ENERGY ACT
NATURAL GAS
NATURAL GAS INDUSTRY
NATURAL GAS POLICY ACT