Transacting with Private Carriage: The Gas Pipeline Regulations of 1938

in The Political Economy of Pipelines

Published by University of Chicago Press

Published in print April 2012 | ISBN: 9780226502106
Published online March 2013 | e-ISBN: 9780226502120 | DOI:
Transacting with Private Carriage: The Gas Pipeline Regulations of 1938

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This chapter describes how the cumulative victories by groups of gas distributors resulted in the series of conditions that made possible the defining, safeguarding, and trading of property rights. Gas pipeline transport transformed over the course of sixty-five years into an industry that shows true Coasian bargaining in transport entitlements and supports the world's only vigorously competitive and openly transparent gas market with an equally vigorous futures market. The Natural Gas Act of 1938 was an unusual piece of legislation that came about in response to pressure from the states and gas-consuming city coalitions. Phillips Petroleum attempted to argue that only pipeline regulation was the subject of the Natural Gas Act. The end of conflict between shippers and pipeline owners signaled a transformation of the regulator's prime job. In 2000, the Federal Energy Regulatory Commission (FERC) resolved the last outstanding issues, and the competitive pipeline transport market took off.

Keywords: gas distributors; property rights; gas pipeline transport; Coasian bargaining; Natural Gas Act; Phillips Petroleum; FERC

Chapter.  13952 words. 

Subjects: Political Economy

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