The restructuring of the natural gas industry began more than 10 years ago. Though the process is far from complete, deregulation and competition are driving the industry toward greater efficiency and increased choice for industry participants. Natural Gas 1996: Issues and Trends, a new report from the Energy Information Administration, examines key trends in production, pricing, storage, distribution, and consumption. Among them:

• Gas prices for some industries and electric utilities fell sharply between 1990 and 1995. However, residential and small commercial customers have seen only modest declines. A number of States are experimenting with giving selected small customers access to competitive gas markets already available to large customers.

• Price volatility in the spot, futures, and wellhead markets (see figure) has increased the financial risks to distributors and others that hold large storage inventories, and many have reduced the amount of gas they hold in reserve. Working gas storage levels reached a 16-year low of 755 billion cubic feet at the end of March 1996.

• Most of the 39 market centers and hubs in the United States and Canada have been operating only since early 1994. They provide interconnections and routes to move gas from production areas to markets. Market centers have access to nearly half of working gas storage capacity in North America and are connected to most high-deliverability storage facilities. Many also offer access to electronic trading or a trading staff.

The report also discusses the effects of the electric power industry restructuring on the natural gas industry. Likely changes include altered demand for natural gas to generate electric power and more mergers and alliances among natural gas companies and electricity companies in an effort to create integrated energy markets.

For more information about this report, contact James Tobin, Office of Oil and Gas, Energy Information Administration, at 202-586-4835 or via internet e-mail at jtobin@eia.doe.gov. To access the report via the internet, go to http://www.eia.doe.gov/fuelnatgas.html. If you are having technical problems with this site, please contact the EIA Webmaster at wmaster@eia.doe.gov or call 202-586-2753. For general information about energy, contact the National Energy Information Center at 202-586-8800 or via internet e-mail infoctr@eia.doe.gov.

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