“Congressional meddling so warped the market in 1977 that an emergency law was needed to undo the harm.”
Former Louisiana Sen. Bennett Johnson writes in the WSJ:
… My 24 years on the Senate Energy Committee also involved dealing with the government’s efforts to regulate price and supply. In the early 1970s, the Federal Power Commission sought to protect consumers by regulating the price of natural gas. Instead of hitting a price “sweet spot,” the effort produced massive shortages.
In the record cold winter of 1976-77, hundreds of thousands of workers in the Midwest were laid off for lack of natural gas to power manufacturing plants and other companies. The crisis was such that it took just five days for Congress to introduce and pass the Emergency Natural Gas Act of 1977 authorizing President Jimmy Carter to suspend antitrust laws in the industry to address a shortage in supply. Five days!
The epic fight for the deregulation of natural gas was the most controversial issue of the day. A round-the-clock filibuster with senators sleeping on cots in the cloakroom was finally overcome. The resulting Natural Gas Policy Act of 1978 increased the price of gas in stages until full deregulation on Jan. 1, 1985. The regulatory community predicted a terrible price explosion on this date with a calamity for consumers. Instead, the nation experienced lower prices and an adequate supply.
During this time, Congress also sought to prevent this valuable commodity from being wasted, and it passed the Fuel Use Act of 1978 preventing natural gas from being burned for electricity generation. The law did not cause an emergency but it became clear that electric generation was frequently the best use of the gas. The folly of this attempt at resource allocation was soon evident and repeal ensued…