September 22, 1988
Aboard Air Force One this morning, en route to Texas, the President signed into law H.R. 2701, to repeal two anticompetitive restrictions on the sale of natural gas imposed by the Natural Gas Policy Act of 1978. With the support of the Reagan administration and Vice President George Bush's administration task force on regulatory relief, the legislation passed Congress with substantial support.
The bill repeals the requirement that the duration of any first-sale contract for new Outer Continental Shelf natural gas be at least 15 years. The bill also repeals a requirement that producers of certain decontrolled natural gas offer their present purchaser a right of first refusal when the producer received another offer for the gas. Repeal of the contract duration and right-of-first-refusal requirements will increase the flexibility of natural gas producers and purchasers to enter into agreement that accurately reflect market conditions. It will also benefit consumers by increasing the responsiveness of interstate gas prices to a more competitive market. The enactment of H.R. 2701 represents another step in the administration's effort to eliminate counterproductive regulation of the economy by the Federal Government.
Note: H.R. 2701, approved September 22, was assigned Public Law No. 100 - 439.