NERA was engaged by the Victorian Government in Australia to analyze the principles that lie behind North America’s competitive pipeline industry and, building on the lessons learned in North America, make recommendations on the development of pipeline capacity markets that would support a competitive gas industry for Eastern Australia. The authors examine how the United States (and later Canada) created a legislative framework to address America’s gas industry problems, working over many years to implement the principle of “open access” and ultimately the operational and regulatory practices needed to create a deregulated market in the trade of pipeline capacity rights. The report goes on to describe current regional impediments to achieving the same outcome, and includes a set of recommendations for legislators and policymakers on matters ranging from licensing of pipeline capacity to the necessary attributes of an open and competitive gas transport sector.

This report informs the Australian Energy Market Commission’s East Coast Wholesale Gas Market and Pipeline Frameworks Review. Recommendations from the review will be included in a Final Report due in May 2016.