Natural Gas Policy: The Unresolved Issues

This paper analyzes the restructuring of the natural gas industry which has been going on for several yean. It gives the background to the ament attempts at restructuring and describes Stanford University’s 9th study by the Energy Modeling Forum on North American gas markets which is the analytical basis for this paper. It then describes the tension between the two regulatory objectives, economic efficiency and satisfying public policy concerns regarding the distribution of economic surplus, which must be considered in any analysis of regulatory policy and market structure in the natural gas industry. Ten key natural gas policy issues that remain unresolved are analyzed and a more general discussion of how the gas industry may evolve under several alternative sets of market conditions are presented. Finally, it considers how political pressures may affect gas policies in future.