U.S. Acts to Spur Gas Industry Competition

The federal government ordered increased competition Wednesday in the natural gas industry, issuing rules that substantially change the way gas pipeline companies do business.

The action by the Federal Energy Regulatory Commission immediately was praised by President Bush as a major step toward allowing competitive market forces to dictate natural gas prices and supplies.

The new requirements “will help to create a competitive, nationwide gas market . . . that will provide ample supplies of clean-burning natural gas for heating homes, running factories and powering cars and trucks,” Bush said in a statement.

The new rules, which had been eagerly awaited by the natural gas industry, would for the first time allow pipeline companies not only to transport natural gas, but also to sell gas at negotiated rates, competing with unregulated gas suppliers. The pipeline companies must provide transportation services equal in quality to all gas supplies, whether a customer purchases from the pipeline company or another supplier.

“This ensures that gas buyers have greater access to the competitive wellhead market,” commission Chairman Martin Allday said.

The new regulations, which are expected to substantially restructure the natural gas distribution and marketing industry, have been in the works for many months. Allday said general agreement on the rules was reached late Tuesday and it was given final approval by commission members Wednesday.

Bush called the action a major step toward removing “unnecessary regulatory barriers.”