Bottlenecks in Regional Markets for Natural Gas Transmission Services

Published in Energy Economics, 2007

Marmer, V., Shapiro, D., & MacAvoy, P. (2007). “Bottlenecks in regional markets for natural gas transmission services.” Energy Economics, 29(1), 37-45.


In this paper, we suggest a simple econometric procedure for identification of bottlenecks in the US natural gas pipelines network. We claim that there is a bottleneck between two nodes of the network if their spot gas prices are not co-integrated. Existence of bottlenecks is attributed to insufficient pipeline capacity between two such nodes. We find that the network is separated into three local markets: Northeast, Midwest and California.