From total regulation in 1970 the market has evolved into partial deregulation, with varying degrees of market opening at the different stages of the industrial process. This has happened in 3 stages; wellhead deregulation, pipeline reform and finally unbundling gas services. At the retail level, reforms and restructuring have occurred on a piecemeal basis. For example, state commissions have allowed LDCs to offer unbundled transportation service to large customers; occasionally to provide flexible pricing in competitive markets; and to engage in other competitive activities.
In 1979 price deregulation was introduced in phases for producers and completed with almost total deregulation by 1989. There are 24 majors and some 8,000 independent producers in the US. 160 gas transmission companies operate 285,000 miles of pipelines and these now provide open access. Over 500 marketers have been established in response to the deregulation of the gas market.
Before the restructuring process in the 1990s, many natural gas processing plants were owned and operated by natural gas and oil companies as a part of the overall energy production. During the 1995 – 2004 the types of companies owning and/or operating processing plants shifted from primarily oil / gas producers to what are now referred to as ‘midstream’ companies or operating divisions. Midstream operating companies such as Duke Energy Field Services, Enterprise Products Operating LP, Targa Resources, and BP dominate the market.
Financial transactions are no longer closely tied to the flow of the commodity. The outcomes of liberalisation of the US natural gas market is that the physical flow of gas remains much the same, from producer to end users, via pipelines and local distribution companies, but more market participants are involved in the financial transactions.
Over the past two decades FERC has encouraged the development of competitive wholesale power trading. Their belief is that competitive markets will lead to more efficient power generation, more technological innovation and eventually to lower retail electricity prices. Since the movement towards wholesale competition started, the number of companies that generate and sell power in competitive markets and the volume of wholesale power trading has increased significantly.
