Open Access and the Evolution of the U.S. Spot Market for Natural Gas
Federal regulations promoting open-access transportation dramatically altered the organizational structure of the U.S. market for natural gas in the 1980s, generally unbundling the merchant and transport functions of interstate pipelines. An empirical analysis of wellhead spot prices is undertaken to examine the effect of open access on the geographic scope of the spot market. Using monthly spot price data from 1984-91, three statistical tests are applied and compared: price correlations, Granger causality, and cointegration. We find that open access integrated the regional wellhead markets into a national competitive market for natural gas. The effects of unbundling on contracts for natural gas are then investigated. Incentives for long-term contracts between pipelines and producers are shown to be effectively removed by the introduction of competitive buying and selling of gas at the wellhead through open access. Copyright 1994 by the University of Chicago.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:v:37:y:1994:i:2:p:477-517. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If references are entirely missing, you can add them using this form.