Invisible Fuel: Manufactured and Natural Gas in America, 1800-2000 (review)

Invisible Fuel: Manufactured and Natural Gas in America, 1800-2000. By Christopher J. Castaneda. New York: Twayne, 1999. Pp. xx+250. $33.

Invisible Fuel is a fine addition to a growing list of histories of the gas industry. Even though some of the topics addressed here have been discussed by other authors, Christopher J. Castaneda's presentation is significant in that it concludes with the present. That is an important point, as this appears to be an industry worthy (perhaps in need) of continued scrutiny. Castaneda sets out to place the gas industry in historical context and in the process admirably elaborates the essential topics of production, transportation, and distribution.

The gas industry has provided two distinct products: manufactured gas, which is extracted from coal, and natural gas, which exists trapped within the earth's surface. The two differ in composition. The former burns brighter, the latter burns hotter--a critical factor in the survival of the industry as it moved from being a supplier of light in the nineteenth century to being a supplier of heat in the twentieth.

In Invisible Fuel, Castaneda follows a brief reprise of the history of manufactured gas with an exacting account of the natural gas business, by far the major part of the book. And while he breaks no new ground, he brings together such a range of material that the reader will readily comprehend the confluence of technology, business, and government in shaping this public utility.

Natural gas consumption burgeoned in the 1880s, but it was a particularly unsettled time for the industry. A growing demand for recently introduced electric lighting and an overabundance of gas suppliers resulted in rate wars and chronic instability. Stabilization came through consolidation and mergers between local gas suppliers and the new electric light companies. As the number of suppliers shrank, those that remained gained influence, and by the early 1900s they constituted a powerful energy trust.

Then, during the 1920s, improvements in compressing equipment and pipe manufacture, as well as the discovery of vast new natural gas fields, led to dramatic increases in the number of long-distance pipelines. By the end of the decade ownership of the lines was in the hands of a few holding companies who could dictate prices. This situation attracted the interest of the federal government. After investigations revealed an industry fraught with abuses, New Deal-era legislation designed to protect consumers put oversight in the hands of government regulators.

Accelerated consumption during World War II and explosive postwar economic growth found the gas industry barely able to meet demand. New pipelines were added to an already extensive national grid. This expansion again caught the attention of the federal government, which imposed additional regulations whose costs, Castaneda writes, "would soon buffet the industry" (p. 162). By the end of the 1960s, growth of the industry and demand for its product had both slowed. Consumer-oriented federal controls regulating the price of gas supplied for interstate commerce discouraged new exploration and production.

During the 1970s, the specter of fuel shortages and a growing public awareness of environmental concerns prompted yet another federal response. Though subsidies were offered for investigations into sources of alternative energy, these had little impact on the overall energy picture. Only when the remaining regulations on the gas industry were lifted in the mid-1980s did production increase. An even more significant change followed in the 1990s, as the once powerful pipeline companies were transformed into contract carriers. They were no longer buyers and sellers of gas; users were free to seek and purchase gas at the best price, with the market itself now functioning as the regulator. One unintended side effect of deregulation was the reemergence of large public utility combines. The question now is whether these will follow the same path as their predecessors, repeating the same mistakes and eliciting the same responses.

The reader looking for a detailed technical history...