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Field Price Deregulation and the Carrier Status of Natural Gas Pipelines

The move to deregulate natural gas field markets is likely to stimulate changes in the way the downstream segments of the industry are regulated. In particular, because the uncertainty endemic to freer upstream markets will emerge for the first time in the contemporary gas industry, the relative merits of having pipelines perform different economic functions will be altered. Producers and distributors will also, in varying degrees, face greater price uncertainty than before. This will lead to changes in the desired allocation of risk and incentives associated with activities traditionally carried out by transmission companies.

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Energy Specializations: Natural Gas – Exploration and Production; Natural Gas – Pipelines

JEL Codes:
D24 - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
N5 -

Keywords: Natural gas, pipelines, field markets, gas industry, transmission companies

DOI: 10.5547/ISSN0195-6574-EJ-Vol6-No2-10

Published in Volume 6, Number 2 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.