NATURAL GAS SUPPLY ASSOCIATION

CONTACT: Charlotte LeGates

PHONE: 202/326-9316

FAX: 202/326-9334

E-MAIL: clegates@ngsa.org

Natural Gas Producers Urge FERC to Maintain Oversight of Interstate Transportation Markets

Noting that the monopolistic nature of interstate pipelines is likely to persist for the foreseeable future, NGSA countered those who argue that loosening federal regulations will promote increased competition. "Competition should be encouraged whenever possible," said NGSA Director of Federal Regulatory Affairs and Technical Analysis Philip M. Budzik. "But loosening existing restrictions on interstate pipelines would have the opposite effect. Future mergers and alliances may, in fact, reduce the limited competition now present in interstate transportation markets," he continued.

"Today, we have a interstate transportation market that works reasonably well," Budzik stated. "This suggests that current regulatory processes are sufficiently flexible to allow pipelines to offer innovative service options while protecting captive pipeline customers."

Regarding proposals that the FERC change its policies toward pipelines located on the outer continental shelf ("OCS"), NGSA's comments state, "the Commission is not empowered to abandon its [Natural Gas Act] jurisdiction over interstate transmission facilities, whether on the OCS or not."

"Regulatory oversight should be relaxed when workable competition exists. When, as here, workable competition does not exist, FERC must protect against the exercise of market power," said Budzik. "Changes must be made only when there is a compelling need based on current market conditions."

Copies of the NGSA filing are available from the NGSA receptionist 202/326-9300, or by clicking here.

This page was last updated August 31, 1997.