Reforming natural gas markets: the antitrust alternative

Although the centerpiece of the Department of Energy's proposed legislation is gradual decontrol of all wellhead natural gas prices by Jan. 1, 1986, it also addresses the structural problems that have contributed to the current market disorder. Intended to promote increased competition in the marketing of natural gas, the provisions are based on fundamental tenets of antitrust law. This review of relevant antitrust principles as they relate to the natural gas industry places the remedial features of the proposed legislation in legal context. These features concern the pipelines' contract carrier obligation, gas purchase contract modifications, and limitations on passthrough of purchase gas costs. Should the legislation fail to pass, private antitrust litigation will remain as an inducement to structural and economic reform in the gas industry.