Is Further Deregulation of the Natural Gas Industry Beneficial?

Since the commodity price of natural gas in Canada was deregulated in 1987, there has been little change in the amount of economic regulatory oversight of other areas of the natural gas industry. Is Further Deregulation of the Natural Gas Industry Beneficial? examines whether or not a competitive market exists and what opportunities for further deregulation of distribution and storage exist. This discussion paper is part of a five-part series.

Document Highlights

Energy industries are calling for improved regulatory streamlining. The Ontario Energy Board and the National Energy Board are conducting public hearings on natural gas regulation this autumn. The Conference Board of Canada, in conjunction with the Canadian Gas Association, is contributing five discussion papers to the debate on natural gas regulation.

Since the commodity price of natural gas in Canada was deregulated in 1987, there has been little change in the amount of economic regulatory oversight of other areas of the natural gas industry (transmission, distribution and storage). Is Further Deregulation of the Natural Gas Industry Beneficial? examines the issue of whether or not a competitive market exists and therefore, what opportunities there are for further deregulation of the distribution and storage portions of the industry. The industry faces a number of competitive alternatives, including other energy sources, changes to franchise rules, and the practice of allowing end-use customers to bypass distribution and building their own pipelines to service small communities or fuel distributed generators. This discussion paper also focuses on the natural gas storage industry in Ontario. The paper suggests that the Ontario Energy Board will have to make decisions on how it will treat these issues to clarify this aspect of the future business environment.