Gas

Abstract

Gas in the USA is supplied primarily from wells connected to pipelines which transport the gas to the ‘city gate’ of the local distribution companies, who then supply gas to the retail customer whether residential, commercial or industrial. Other arrangements may exist, such as direct supply to a large customer by the pipeline, bypassing the local distribution company. The process has been subjected to varying degrees of regulation over the years. In this chapter we will examine some of the economic consequences of the regulation of the industry as well as review some of the considerations concerning the nature of efficient pricing in the industry. Section 1 will be concerned with some of the institutional and regulatory background. Section 2 will be concerned with pricing and regulatory problems including the economics of some contractual relationships. In Section 3, as with the other industries examined, the effect of partial deregulation and the impact of competition will be examined, including a concluding discussion of whether further deregulation of the industry is feasible.