James Van Blaricum
A Brief History of Regulation
In 1938, the U.S. government first regulated the natural gas industry. At the time, members of the government believed the natural gas industry to be a 'natural monopoly'. Because of the fear of possible abuses, like charging unreasonably high prices, and given the rising importance of natural gas to all consumers, the Natural Gas Act was passed. This Act imposed regulations and restrictions on the price of natural gas to protect consumers. In the 1970's and 1980's, a number of gas shortages and price irregularities indicated that a regulated market was not best for consumers, or the natural gas industry. Into the 1980's and early 90's, the industry gradually moved towards deregulation, allowing for healthy competition and market based prices. These moves led to a strengthening of the natural gas market, lowering prices for consumers and allowing for a great deal more natural gas to be discovered.
Currently, the natural gas industry is regulated to a lesser extent by the Federal Energy Regulatory Commission (FERC). While FERC does not deal exclusively with natural gas issues, it is the primary rule making body with respect to the minimal regulation of the natural gas industry.