Book Description

Public policy towards natural gas has swung first towards, and then away from regulation in this century. In 1906, the Congress specifically excluded natural gas from the jurisdiction of the Interstate Commerce Commission. Three decades later, a New Deal Congress passed the Natural Gas Act of 1938 bringing pipelines under the control of the Federal Power Commission (FDC). Forty years thereafter, the Congress passed a phased decontrol bill, the Natural Gas Policy Act (NGPA) of 1978, as part of the Carter Administration's National Energy Plan. Recently, the Congress has backed off from New Deal legislation in other markets - notably aviation and trucking. In this study, the rise and fall of economic regulation in the natural gas industry are examined to understand: (1) why public policy has followed a pendulum's path, and (2) the economic consequences of regulation and deregulation. The main part of the analysis is directed toward the Natural Gas Policy Act of 1978. Widely viewed as a deregulation measure, the author finds that the Act is more restrictive and burdensome than the pricing policies it superceded. The path toward deregulation in natural gas and perhaps other markets is not as direct or simple as might be expected.