NGPA (Natural Gas Policy Act) helping balance U. S. gas supply/demand

The U.S. petroleum industry's opposition to the NPGA of 1978 has diminished because the Act, which is administered by the U.S. Federal Energy Regulatory Commission, has permitted significant increases in natural gas prices and has eliminated the differential in intra- and interstate gas prices. Natural gas prospecting and production have increased after passage of the NGPA, presumably because of higher prices for natural gas, although crude oil development might offer a higher rate of return. The industry has criticized some aspects of the NGPA, including the complexity of the Act, which established more than 30 price categories for gas; the low average price of gas, hardly 20% of the price of competing fuels; the complexities of well categorization; and incremental pricing, which, by increasing the price paid by some large industrial users, reduces their natural gas consumption. Fuel prices have increased more rapidly than had been anticipated with the NGPA, and the petroleum industry would favor a more rapid decontrol of prices than the NGPA allows, as well as an end of incremental pricing. The operation and effects of the act, incentive gas prices, and winter gas supplies for major U.S. interstate pipelines are discussed.