Summary: GAO evaluated the future prospects for natural gas supply in this country and abroad. Even with deregulation, GAO concluded that the natural gas production is likely to continue its decline. Deregulation could, however, slow, and possibly arrest the rate of decline. Without it, production would decline even more steeply. It is not likely that the Nation will ever again achieve production in the amounts currently being experienced. Even with continued regulation the price of natural gas will increase, but with deregulation the increase would be more rapid. The additional supplies of gas likely to result from deregulation must be weighed against the additional costs to consumers. The undesirable implications of continuing a regulatory framework which creates separate interstate and intrastate markets also must be considered. Deregulation must be carefully weighed against other alternatives which include continuing regulation, but at higher prices, and bringing intrastate supplies under Federal regulation. The implications of deregulating natural gas and allowing it to rise to the equivalent price of imported oil also must be carefully considered. In the final analysis, deregulation requires a political judgement based on a careful weighing of the tradeoffs involved in alternative courses of action.
