Gas deregulation is a form of utilities deregulation in which regulations on gas suppliers and purveyors are lifted. The practice of removing regulations is known as “liberalization,” and it is viewed by many proponents of the free market as key to the operation of a fully free market. With regulations in place, the market may be restricted to a degree which some critics do not find acceptable. These critics feel that regulation tends to hamper innovation in the industry.
Gas, of several different forms, is used in a wide array of applications. Gas deregulation can include natural gas as well as propane and other gases. One of the most common uses of gas is in the production of heat for heating, cooking, and industrial processes. Gas can also be used to generate electricity which can be used to power refrigerators, washers, and other appliances.
In gas regulation, the government has regulations in place which limit things like pricing, transport activities, and so forth. The stated goal of regulation is to keep gas prices reasonable and fair for consumers, and to maintain certain safety standards in the interest of society as a whole. Gas regulation may also be used as a tool to address utility monopolies and price fixing, by overseeing the gas industry so that it has some accountability and is expected to conform with certain rules. Regulation can also involve business practices, requiring certain disclosures from members of the gas industry, for example.
In gas deregulation, these restrictions are lifted. “Deregulation” is a bit of a misnomer, because every single regulation which governs the industry is not lifted when gas deregulation occurs. Specifically, gas deregulation usually refers to lifting price restrictions and other barriers to market activity. Regulations such as safety and labeling requirements remain in place, in the interests of protecting consumer safety and ensuring that safety procedures remain uniform across the industry in the interests of protecting gas workers, first responders, and other people who may have reason to interact with gases in their work.
Energy deregulation in general became very popular in many regions of the world at the close of the 20th century. In some regions, deregulation actually created problems in the market which led to irregular supplies, skyrocketing prices, and other issues. Supporters of deregulation argued that such problems were the result of pushback, and that eventually the industry would settle back onto an even keel, with the market regulating itself.
