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. Well-head 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 down-stream 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.