214 Buying Natural

To buy natural gas for either small or large operations, a thorough knowledge of the structure of the natural gas marketing system is essential. Again, this is the big change from the days when the industry was under price regulation by the federal government. Gas sales to consumers were through only one route—producers to pipeline transporter and merchant to local distributor to consumer. In the beginning of the transition to open marketing, this was referred to as "system gas." In localities where LDC are still the merchants, this is still the case. In a very small number of occasions, the chain was shortened to producer to pipeline to major consumer. Now—even with states in general still having control over the local distribution, the chain can be as short as producers to consumer or more generally, producers to marketers to consumers for relatively large users and producers to marketers to distributors for residential and most commercial and small industrial applications. This is the free market for natural gas. Buyers are free to pick any marketer or seller to supply gas. Open transportation is available to everyone—at least it should be!

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