The effects of regulation in natural gas markets.

摘要

The dissertation concentrates on the effects of the recent changes in regulation of the natural gas industry of the United States. Some regulatory initiatives imposed distortions on the field and transportation markets which have proven to be extremely harmful; price controls brought shortages in supply, and following phased price decontrols raised prices well above market clearing levels. Important changes in regulation in the early 1990s merit examination to compare effects of the new orders with their declared purposes.;In the second chapter (joint work with Paul W. MacAvoy) a new outlook for the long-term price of natural gas at the wellhead is constructed from a partial equilibrium model of the industry. The empirical framework consists of a simultaneous equations system for production from reserves and for demands for gas split out of energy demands in the residential, commercial and industrial sectors. Our model also controls for different regulatory phases of the industry. We utilize historical data to forecast the evolution of the industry. The key variables—price of natural gas, level of production and underground gas reserves—from these projected are expected to improve from the consumer welfare point of view.;The third chapter analyzes changes in the transportation sector of the natural gas industry. The objective is to quantify the impact of regulatory changes on the degree of rivalry in the gas transportation market. I offer an original, integrated demand/supply model of the natural gas industry that explicitly accounts for pipeline network architecture. The model establishes that post regulation profit margins have significantly declined, following entry into secondary transportation markets facilitated by increased intensity of competition after partial deregulation.;The fourth chapter empirically examines the response of the storage sector to regulatory reform. We hypothesize that the storage segment of the natural gas industry has evolved from a small set of pipeline-owned facilities to a group of competing, dynamically optimizing enterprises. We find that the independent owners of storage facilities located in consuming states faced increasing competition in the 1994–1999 period, but not significantly so, when difference in gas prices between high and low demand periods declined. Data further indicate that the use of storage has increased in producing states, while declined in consuming states.