The dynamic and regional effects of wellhead price regulation in the US natural gas industry

Thesis/Dissertation · Fri Jan 01 04:00:00 EST 1988

OSTI ID:7262931

Miller, B A

Federal wellhead price ceilings under the Natural Gas Policy Act (NGPA) restrict the prices natural gas producers in the US can receive from pipeline companies for some of their gas supplies. Wellhead price regulation, along with average cost pricing rules used by regulators to set pipeline rates, cause distortions in gas markets. These distortions are reflected in past and current market conditions in the industry: shortages and surpluses, widely varying prices, uneconomic extraction of natural gas resources, and significant changes in the roles of market participants and contract agreements between them. This study uses a simulation model, which implements a fixed point algorithm consisting of two nonlinear programming submodels, to simulate the spatial and intertemporal regulated market equilibrium in the US natural gas industry. Three natural gas policy alternative are analyzed: complete wellhead price deregulation, the status quo of the NGPA wellhead price ceiling schedule, and a generally stricter regulatory case in which a uniform nationwide wellhead price ceiling replaces the NGPA price ceilings. The simulation results indicate substantial inefficiencies are incurred under the NGPA wellhead price ceilings and under stricter wellhead price regulation compared to the policy of wellhead price deregulation.

• Research Organization: California Univ., Berkeley, CA (USA)
• OSTI ID: 7262931
• 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
293000 -- Energy Planning & Policy-- Policy
Legislation
& Regulation
294003 -- Energy Planning & Policy-- Natural Gas
COMPUTERIZED SIMULATION
DEREGULATION
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
INDUSTRY
LAWS
MATHEMATICAL MODELS
NATIONAL ENERGY ACT
NATURAL GAS
NATURAL GAS INDUSTRY
NATURAL GAS POLICY ACT
PRICES
PRICING REGULATIONS
REGULATIONS
SIMULATION
WELLHEAD PRICES