Certified Energy Manager Practice Exam

What is the main objective of the Natural Gas Policy Act (NGPA)?

1. Regulate the price of natural gas

2. Deregulate the natural gas market

3. Increase natural gas production

4. Provide subsidies for natural gas consumers

The correct answer is: Deregulate the natural gas market

The main objective of the Natural Gas Policy Act (NGPA) is to promote market deregulation in the natural gas sector. Enacted in 1978, the NGPA aimed to address the issues stemming from previous regulation, which had led to shortages and inefficiencies in the natural gas market. By reducing regulatory constraints, the NGPA facilitated a more competitive market environment, allowing for increased production and distribution of natural gas, ultimately benefiting consumers with lower prices and a more reliable supply. The focus was on creating a market-driven approach rather than a control-based system, which aligns with the overarching goal of deregulation. This shift was important because it encouraged investment in natural gas infrastructure and production by ensuring that prices would be determined by market forces rather than by government regulations. This transition not only helped stabilize and grow the industry but also laid the groundwork for future reforms and policies in energy markets. While regulating prices, increasing production, and providing subsidies can play significant roles in energy policy, they do not encapsulate the primary aim of the NGPA, which was to reduce regulation and promote a more liberalized market structure.