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Regulatory reform options to revitalize the US natural gas value chain

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  • Weijermars, Ruud

Abstract

The key question addressed here is whether US utilities can sustain their current natural gas deliveries, and fund growth, as strategically required for the clean energy transition. A case is made here for adjusting regulatory policy, as past and current policies have led to a steady profit decline for mid- and downstream US energy companies. Capital markets have rated several major energy companies as ‘junk bonds’, which means default risk is substantial from an investor perspective. Arguably, overly tight price regulation and declining credit ratings have pushed the industry into a decade-long downward business cycle, which started even before the Great Recession provided additional challenges. Recommendations are formulated for improving the US energy regulation of the mid and downstream natural gas segments in order to revitalize these key pillars of the energy transition program. Insights developed here based on the regulatory development and business performance of energy utilities in the US may provide a useful reference for liberalized and liberalizing energy markets elsewhere in the world.

Suggested Citation

  • Weijermars, Ruud, 2012. "Regulatory reform options to revitalize the US natural gas value chain," Utilities Policy, Elsevier, vol. 21(C), pages 50-58.
    • Handle: RePEc:eee:juipol:v:21:y:2012:i:c:p:50-58
    DOI: 10.1016/j.jup.2011.12.003
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    References listed on IDEAS

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    1. Weijermars, Ruud, 2010. "Guidelines for clockspeed acceleration in the US natural gas transmission industry," Applied Energy, Elsevier, vol. 87(8), pages 2455-2466, August.
    2. Gert Jan Kramer & Martin Haigh, 2009. "No quick switch to low-carbon energy," Nature, Nature, vol. 462(7273), pages 568-569, December.
    3. Spiller, Pablo T, 1996. "Institutions and Commitment," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 5(2), pages 421-452.
    4. Crocker, Keith J & Masten, Scott E, 1996. "Regulation and Administered Contracts Revisited: Lessons from Transaction-Cost Economics for Public Utility Regulation," Journal of Regulatory Economics, Springer, vol. 9(1), pages 5-39, January.
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    1. Winston Pontoh, 2016. "The Motives behind Dividend Policy," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 29-40.
    2. Suleman, Shafic, 2020. "Natural Gas Industry Restructuring for Value Optimisation: A Case Study of Ghana," MPRA Paper 99155, University Library of Munich, Germany.

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