Competition in Natural Gas Pipeline Wellhead Supply Purchases

Harry G. Broadman

The Energy Journal, 1987, vol. 8, issue 3, 113-134

Abstract: Throughout most of the last three decades, interstate natural gas pipeline companies-operating mainly as private carriers, buying gas supplies in the field and reselling them downstream'-have competed primarily on the basis of nonprice terms. Under the regime of wellhead regulation stemming from Phillips,' in upstream (field) markets binding price ceilings meant that interpipeline competition in gas purchases was governed principally by the attractiveness of take-or-pay provisions pipelines offer in their contracts with gas producers.' In downstream (city-gate) markets the chronic excess demand induced by wellhead regulation meant that pipelines competed for gas sales to local distribution companies and direct wholesale consumers (large industrial end-users and electric utilities) largely on the basis of the maximum quantity of gas that could be delivered.

Keywords: Natural gas pipelines; wellhead supply purchases; regulation; Completition (search for similar items in EconPapers)
Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:8:y:1987:i:3:p:113-134

DOI: 10.5547/ISSN0195-6574-EJ-Vol8-No3-6

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