House Panel OKs Decontrol of Natural Gas

A House panel approved legislation Tuesday to end 35 years of federal control of natural gas prices, a step cheered by the energy industry but criticized by some consumer groups even though decontrol could mean slightly cheaper gas for the nation’s consumers.

The House Energy and Commerce Committee, on a voice vote, sent the measure to the full House, where even its strongest critics say approval is likely. A similar measure has been introduced but not yet acted on in the Senate.

The legislation would complete a price decontrol process that began in 1978 with the Natural Gas Policy Act, which removed price limits on certain kinds of gas while also establishing two dozen categories of gas, each with a ceiling price.

Price Hikes Feared

About one-third of U.S. natural gas is subject to federal price controls.

The House bill, sponsored by Rep. Philip R. Sharp (D-Ind.), would lift the remaining price controls as supply contracts expire or are renegotiated, with all such limits to be removed by Jan. 1, 1993. Controls would be ended immediately for gas not subject to a contract on the date the legislation is enacted.

Past efforts by the gas industry to win price-control legislation foundered on fears that prices paid by the 48 million households using natural gas would increase.

Such concerns have faded. The collapse of oil prices in 1986, coupled with the effects of moves by the Federal Energy Regulatory Commission to liberalize the gas industry, led to falling gas prices, excess supplies and increased competition.