Efficiency and Equity in the Transition to a New Natural Gas Market
Through a series of regulatory decisions and legislative actions, the natural gas industry has undergone a radical transformation. Wellhead prices have been deregulated; interstate pipelines have been recast from merchants of bundled sales and transportation service to sellers of transportation and storage capacity; and supply procurement responsibilities have been shifted downstream to local distribution companies and end users. The transformation was made to foster efficiency improvements from wellhead to burner-tip. This paper reviews the policies that fostered the transition, examines the likely outcomes of those policies, and questions whether the transition has resulted in net benefits to all marketplace segments.