The Regulation of Gas Field Contracts and the Resulting Gains and Losses from Market Performance
The Regulation of Gas Field Contracts and the Resulting Gains and Losses from Market Performance
This chapter chronicles the foundation of federal regulations and the emergence of the regulatory system of gas field contracts. It discusses the rationale for regulatory controls and the performance of gas field markets. The regulatory commission succeeded in regulating gas prices but created decreased reserve production; reduced production enhanced demand growth and thus created shortage. The chapter further elaborates on the process of partial deregulation that improved the market performance, reduced the gas shortage, and prevented price increases to consumers. Gas demands in the industrial and commercial sectors can be reduced by switching over to other alternative fuels. The gains and losses of producers and consumers by regulating and deregulating gas price controls are also discussed. While deregulation improved market performance by developing more gas reserves and production to eliminate a gas shortage for consumers, reduction in demand and excess supplies became a source for development of a new spot market system for direct sale.
Keywords: regulatory controls, gas field markets, gas price, deregulation, market performance, gas reserves, spot market
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