The Natural Gas Policy Act of 1978 (NGPA) is federal legislation that had been enacted as a response to US natural gas shortages of 1976–77. It was enacted for the following motivations:
* To create a balance between natural gas supply and demand,
* Create a national gas market, and
* Transition to market-based prices.
The NGPA:
* Authorized the
Federal Energy Regulatory Commission
The Federal Energy Regulatory Commission (FERC) is the United States federal agency that regulates the transmission and wholesale sale of electricity and natural gas in interstate commerce and regulates the transportation of oil by pipeline in ...
(FERC) to regulate interstate and some intrastate natural gas production and transportation.
* Was designed to encourage the development of new natural gas supplies by gradually deregulating
wellhead
A wellhead is the component at the surface of an oil or gas well that provides the structural and pressure-containing interface for the drilling and production equipment.
The primary purpose of a wellhead is to provide the suspension point and ...
gas prices.
* Established maximum lawful prices (
ceilings
A ceiling is an overhead interior surface that covers the upper limits of a room. It is not generally considered a structural element, but a finished surface concealing the underside of the roof structure or the floor of a story above. Ceilings ...
) for the sale of natural gas, which were phased out over a series of years, allowing market forces to set natural gas prices.
The Natural Gas Policy Act (NGPA) was the first building block in a plan from the
Carter Administration
Jimmy Carter's tenure as the 39th president of the United States began with his inauguration on January 20, 1977, and ended on January 20, 1981. A Democrat from Georgia, Carter took office after defeating incumbent Republican President ...
to increase energy supply while reducing domestic consumption of energy. It preceded the
Energy Security Act
The Energy Security Act was signed into law by U.S. President Jimmy Carter on June 30, 1980. Thursday, 19 January 2017
It consisted of six major acts:
* U.S. Synthetic Fuels Corporation Act
* Biomass Energy and Alcohol Fuels Act
* Renewable Ene ...
that
President Carter
James Earl Carter Jr. (born October 1, 1924) is an American politician who served as the 39th president of the United States from 1977 to 1981. A member of the Democratic Party, he previously served as the 76th governor of Georgia from 19 ...
would sign into law in 1980.
In the 1970s, natural gas was persistently in short supply throughout the 1970s, largely because of following:
* Wellhead price regulation
* The 1973 OPEC oil embargo.
Based on this type of energy setting in the 1970s, Congress enacted the NGPA. The act was intended to raise natural gas rates to market clearing levels.
[{{Cite journal , title=Our Experience Under the Natural Gas Policy Act of 1978, and Its Relevance to the Natural Gas Wellhead Decontrol Act of 1989 , journal=University of Arkansas at Little Rock Law Review , volume=12 , issue=2]
References
Natural gas industry
Energy law
Energy policy