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Structure and Organization of the Natural Gas Industry: Differences between the United States and the Federal Republic of Germany and Implications for the Carrier Status of Pipelines

This paper explores various ways to organize the natural gas industry. In particular, it examines the function of merchant pipelines and explores how mandatory carriage has come to be introduced into the United States. The applicability of the US experience to the European Community is questioned because of the very different regulatory histories of the United States and Europe. The paper concludes that the "open access" trend in the United States has stemmed from the need to patch up the results of previous regulatory errors; and though the Federal Energy Regulatory Commission (FERC) may have helped relieve certain short-term problems by championing open access, it may have created long-term problems that are disguised by the current gas glut. The American regulatory experience in natural gas over the past two decades is seen as most unfortunate, and the benefits available to Europe from imitating recent FERC regulatory strategies are found to be illusory.

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Energy Specializations: Natural Gas – Pipelines ; Natural Gas – Markets and Prices; Natural Gas – Policy and Regulation

JEL Codes:
N5 -
L13 - Oligopoly and Other Imperfect Markets
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: Natural gas industry, US, Germany, Pipelines, Integration, Regulation

DOI: 10.5547/ISSN0195-6574-EJ-Vol11-No3-1

Published in Volume 11, Number 3 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.