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The Environmental Consequences of Price Regulation: Lessons from the US Natural Gas Market

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  • Alexander Hill

Abstract

The imposition of a US wellhead natural gas price ceiling from 1954 to 1989 distorted household heating choices from cleaner natural gas to heating oil. Using a microdata-based approach to estimate counterfactual residential energy consumption from 1960 to 2019, this study shows that the price ceiling led to an average of $9.13 billion annually in emissions damage through 2019. This amount more than doubles previous estimates of the cost of the price ceiling. Losses were highest in the Northeast and Mid-Atlantic and peaked from 1968 to 1977 at $21.2 billion annually.

Suggested Citation

  • Alexander Hill, 2025. "The Environmental Consequences of Price Regulation: Lessons from the US Natural Gas Market," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 12(4), pages 881-909.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/732201
    DOI: 10.1086/732201
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