Natural gas deregulation has an extensive history in the United States. In fact, wholesale energy markets were first to form in the natural gas sector making the buying, selling and transportation of natural gas more seamless. Read on to learn more about how natural gas first became deregulated and what it might mean to you as a commercial customer in a deregulated energy state.
What Is Natural Gas Deregulation?
Natural gas deregulation is the passage of legislation that broke up natural gas utility companies in order to allow third-party natural gas suppliers to compete. Gas deregulation created both wholesale and retail natural gas markets, which were non-existent in regulated markets where utility companies controlled the entire gas supply chain.
When Did Natural Gas Become Deregulated?
Natural gas first began to be deregulated in 1978 under the Natural Gas Policy Act of 1978. This Act ended federal control over natural gas prices at drilling sites and began a process of customer choice in certain U.S. states. Often in the shadow of the more popular electricity deregulation, natural gas deregulation actually came before power deregulation and there are many more deregulated gas states compared to deregulated electricity states.
And finally, in 1992, FERC passed Order 636, known as “The Final Restructuring Rule”. This called for the complete deregulation of natural gas by separating natural gas supply charges from natural gas delivery charges on a customer’s bill.
Why Was Natural Gas Deregulated?
The federal government helped to facilitate natural gas deregulation by putting price caps on natural gas pipelines in an effort to make natural gas more accessible and affordable for commercial and industrial customers. This allowed for competition to be able to offer affordable gas rates in the market. Eventually by the early 90’s many states and utilities began to adopt deregulated natural gas markets.
Pros And Cons Of Natural Gas Deregulation
There are several pros and cons of natural gas deregulation including lower prices and unscrupulous suppliers, respectively. Let’s explore some of the pros and cons of gas deregulation in more detail below.
Pros Of Natural Gas Deregulation
- Supplier competition and consumer choice
- Flexible rate plans to match customer needs
- Lower prices for consumers
- Consumer access to futures markets and long-term fixed rates
Cons Of Natural Gas Deregulation
What States Are Deregulated For Gas?
In total, there are 26 U.S. states with deregulated natural gas markets. Here is a list of states that are deregulated for gas in the U.S.:
- New Mexico
- West Virginia
- New Jersey
- New York
- Rhode Island
- New Hampshire
The Biggest Natural Gas Companies
There are many different companies involved in the natural gas sector. From natural gas exploration to drilling to transportation to sales, natural gas companies earn billions of dollars in revenue each year. Here are the top 10 biggest natural gas companies in the world by annual revenue:
Annual revenue: $164.19 Billion
Number of employees: 65,900
Headquarters: London, UK
Annual revenue: $3.06 Billion
Number of employees: 693
Headquarters: Pittsburg, Pennsylvania
3. Southwestern Energy Company
Annual revenue: $6.67 Billion
Number of employees: 938
Headquarters: Spring, Texas
4. Antero Resources
Annual revenue: $4.62 Billion
Number of employees: 519
Headquarters: Denver, Colorado
5. Exxon Mobil
Annual revenue: $285.64 Billion
Number of employees: 63,000
Headquarters: Irving, Texas
6. Ascent Resources
Annual revenue: $1.20 Billion
Number of employees: 398
Headquarters: Oklahoma City, Oklahoma
7. Range Resources
Annual revenue: $2.93 Billion
Number of employees: 527
Headquarters: Fort Worth, Texas
Annual revenue: $162.47 Billion
Number of employees: 42,595
Headquarters: San Ramon, California
9. CNX Resources
Headquarters: Cannonsburg, Pennsylvania
Number of employees: 440
Annual revenue: $756 Million
Annual revenue: $272.66 Billion
Number of employees: 82,000
Headquarters: London, England
Retail Gas Suppliers
While these companies are mostly involved in the exploration and production of natural gas, here are the ten largest retail natural gas suppliers:
- EDF – $84.5 Billion
- ENGIE – $60 Billion
- NRG – $26.99 Billion
- Constellation – $19.6 Billion
- AEP – $17.54 Billion
- NextEra – $17 Billion
- Vistra Energy- $11.4 Billion
- Calpine Energy – $10 Billion
- WGL Energy – $2.66 Billion
- Energy Harbor – $2 Billion