Pricing and Access under National Competition Policy: The Case of the Natural Gas Pipeline Sector

Roger Lawrey

Australian Economic Review, 1998, vol. 31, issue 2, 91-106

Abstract: This paper reviews the development of open access and deregulation of trunk pipeline natural gas transportation in Australia and the United States. It investigates Australian policy developments in the setting of reference tariffs for firm service, but argues that the institutional arrangements for granting third party access, and the pricing of that access on a spot or interruptible basis, are at least as important as tariffs for firm service. The paper concludes that, in the absence of an established pipeline network, pipelines may have little incentive to price their excess capacity efficiently. In this case, attempts to promote an efficient allocative outcome through privatisation and open access in Australia are unlikely to be as successful as they have been in North America.

Date: 1998
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