ECONOMIC IMPACT ON NEW MEXICO OF THE NATURAL GAS POLICY ACT OF 1978 AND THE NEW MEXICO NATURAL GAS PRICING ACT.

摘要

The Natural Gas Policy Act of 1978 (NGPA) introduced significant changes in the national regulatory system of natural gas; extending for the first time Federal jurisdiction over natural gas in petroleum producing states. This study investigates the longer-term impact--up to the year 2000--of the pricing provisions of the NGPA on New Mexico in terms of a set of policy-relevant economic measures, namely, future natural gas production, State and producer revenues, and direct consumer costs.;The investigation is conducted through the specification of three major scenarios determined by the presence or absence of the pricing provisions of the NGPA and the NMPA. The future consumption of natural gas in the State is determined by an econometric model of natural gas demand. Natural gas supply projections are derived from a structural model which takes into account the effect of price variations on natural gas exploratory and developmental activities in the State. The market allocation of "new" gas is accomplished through the assumption that New Mexico's demand is satisfied first.;The results indicate that the NGPA's impact in New Mexico, relative to the continuation of the status quo, is to increase, both, the production and flow of natural gas to the interstate market, with the latter effect predominating. The two sectors in New Mexico deriving economic benefits from the NGPA are the natural gas producers and the State government. The former experiences an increase in average annual revenues of slightly over ;The direction of response of natural gas production, consumption and interstate sales, as well as the revenue/cost impact, arising from the absence of the NMPA under the NGPA, parallels that resulting from the presence of the NGPA. The State's public revenues, producer revenues, and the costs of intrastate gas to New Mexico consumers, experience an annual average rate of increase of, approximately, ;The 1970's witnessed an active involvement by the State government in New Mexico's natural gas market, to counteract detrimental supply and pricing effects on New Mexico consumers of natural gas arising from national developments. This led to the passage of State legislation that was unprecedented among the major petroleum-producing states. The statutes included the Natural Gas Pricing Act of 1977 (NMPA), which imposed price controls at the wellhead on "old" intrastate natural gas. The study assesses New Mexico's major natural gas-related problems and policy developments during the 1970's, and also analyzes the economic impact of the NMPA.