me natural gas was considered a useless by product of oil production and was burned off in the oil fields as waste. Coal beds also contain appreciable quantities of methane, the principal component of natural gas. Natural gas is produced on all continents except Antarctica. The world's largest producer is the USSR, with the United States, Canada, and the Netherlands also important producers. The most efficient, least costly means of transporting natural gas is via pipeline. The United States has nearly 2 million miles of natural gas pipeline, much of it built during World War II. The Siberian Western Europe gas pipeline, completed in 1983, was built to exploit the natural gas reserves of the USSR, which are the largest in the world. The gas may also be transported in pressurized tanks. Liquefied natural gas must be kept under very high pressures and at very low temperatures during transport, but it requires far less space than the substance in its gaseous state (The Academic American Encyclopedia, 1993, online edition).
In the past the natural gas industry was regulated as a natural monopoly, but this was changed as a result of the Natural Gas Policy Act of 1978, a political compromise brought about by the need to solve the problems created in the natural gas industry by a quarter of a century of wellhead price regulation. The interstate natural gas industry was vertically regulated in 1978 by federal regulators from the wellhead to the city gate and by state regulators from that point to the burner tip. The most important characteristic of the natural gas industry was the interstate pipelines that provided an integrated merchant function through natural gas was purchased directly from producers, transported (typically many hundreds of miles), and sold to local distribution companies. In turn these companies provided a similar integrated merchant function to their customers. This was all changed with the Natural Gas Poli...