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The Natural Gas MarketSixty Years of Regulation and Deregulation$
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Paul MacAvoy

Print publication date: 2001

Print ISBN-13: 9780300083811

Published to Yale Scholarship Online: October 2013

DOI: 10.12987/yale/9780300083811.001.0001

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PRINTED FROM YALE SCHOLARSHIP ONLINE (www.yale.universitypressscholarship.com). (c) Copyright Yale University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in YSO for personal use.date: 13 April 2021

The Partial Deregulation of Transportation and the Creation of a Single North American Gas Market

The Partial Deregulation of Transportation and the Creation of a Single North American Gas Market

Chapter:
(p.76) Chapter 4 The Partial Deregulation of Transportation and the Creation of a Single North American Gas Market
Source:
The Natural Gas Market
Author(s):

Paul W. MacAvoy

Publisher:
Yale University Press
DOI:10.12987/yale/9780300083811.003.0004

This chapter describes the restructuring of the natural gas industry and the emergence of the spot market, and examines the Federal Energy Regulatory Commission orders. The effects of regulation are significant and result in reduction of the capacity of the pipeline system, high gas prices, and low production. The chapter studies the market effects of restructured transportation and the role of capacity increase, concluding that market, not regulatory conditions, determine prices for transportation service. The transitions to unregulated markets add to the improvement of industry performance in terms of increased production. The partial deregulation of the transport market results in no gains and the behavior of spot gas prices on the market indicates that transportation has become competitive enough to warrant the elimination of rate regulation. The chapter also presents the gains and losses from unbundling and partial deregulation, and reveals that the inconsistency leaves both producers and consumers worse off.

Keywords:   natural gas industry, spot market, transportation, industry performance, partial deregulation

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