Lessons from the Origin of the Natural Gas Policy Act

Before Congress passes new legislation to replace the Natural Gas Policy Act (NGPA), it is important to understand the balance of political interest and to achieve an historical perspective of the market-disorder consequences of partial natural-gas deregulation. The failure to recognize the economic concerns of legislative opponents led to the political compromises of the NGPA and discredited the proposed solution of complete deregulation. An alternative to market-ordering is to rely on market forces by deregulating intrastate contracts and, after a transition stage, permitting interstate pipelines to match intrastate prices. (DCK)