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OSP-76-11 1 (1976-01-14)

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REPORT TO THE COMMITTEE

ON GOVERNMENT OPERATIONS

HOUSE OF REPRESENTATIVES


BY THE COMPTROLLER GENERAL


   S T.
C)


OF THE UNITED STATES


LM099980


Impli-cations of Deregulating

The Price of Natural Gas



Higher prices would bring some additional
supplies of natural gas over what would other-
wise occur. However, supplies are constrained
by factors in addition to price, such as the
ability to discover new reserves at a sustained,
high rate. These factors indicate that the
Nation will probably never again attain recent
production levels.

Even with deregulation, natural gas produc-
tion would be likely to continue to decline.
Deregulation, however, could slow the rate of
decline.

The price of natural gas will continue to rise,
under either regulation or deregulation. How-
ever, with deregulation, price rises would be
more rapid, except in the unlikely event that
regulated prices were deliberately raised to
intrastate levels and held there.

Therefore while additional gas supplies are
likely from the higher deregulated prices, this
advantage must be weighed against higher
prices to consumers.


.AN. 14,1976


OSP-76-11


~7~' 2

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