Evolution of the Regulation of High Cost Gas Supplies

by W. F. Hederman

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This analysis examines the impasse that has developed in the formulation of a federal regulatory policy for facilities to manufacture synthetic natural gas (SNG) from coal. No policy presented to date is acceptable to both regulators and private parties whose support is needed to build and operate such facilities. The regulatory approaches taken by the Federal Power Commission and its successor, the Federal Energy Regulatory Commission (FERC), in considering proposals for liquefied natural gas import and coal gasification projects provide the basis for this analysis. By pursuing opportunities for compromise, federal regulators could, without any major economic inefficiencies, provide insights to both the FERC and the Department of Energy about whether or not coal gasification represents a desirable way to achieve either agency's goals.

This report is part of the RAND Corporation note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

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