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<br />TABLE 2-2 (Continued). <br /> <br />NATURAL GAS CATEGORIES UNDER NGPA <br /> <br />Cate!=lorY of Gas <br /> <br />Hiqh Cost Natural Gas <br /> <br />production from below 15,000 feet from wells <br />drilled after 2/19/77 <br /> <br />Date of DereQulation <br /> <br />deregulated on <br />effective date <br />of FERC incre- <br />mental pricing <br />rule called for <br />by the Act <br /> <br />gas produced from geopressurized brine, coal <br />seams, Devonian shale <br /> <br />(approximately <br />one year after <br />enactment) <br /> <br />gas produced under other conditions that <br />FERC determines to present "extraordinary <br />risks or costs" <br /> <br />- not deregulated <br /> <br />Stripper Well Natural Gas <br /> <br />- not deregulated <br /> <br />(natural gas not produced in association with crude <br />oil, which is produced at an average rate less than <br />or equal to 60,000 cubic feet per day over a gO-day <br />period) <br /> <br />Other Cateqories of Natural Gas <br /> <br />. not deregulated <br /> <br />- any natural gas not covered under any other section <br />of the bill <br /> <br />natural gas produced from the Prudhoe Bay area of <br />Alaska <br /> <br />Price Per Million Btu'sa <br /> <br /> <br />$1.75 oj. inflation oj. <br />escalationc d <br />(12.07) <br /> <br />applicable rate under <br />the Act or higher in- <br />centive rate as set by <br />FERC <br /> <br />FERC <br /> <br />$2.09 + inflation <br />(after 5/78) oj. <br />escalation d <br />(12.21) <br /> <br />$1,45, or other "just <br />and reasonable" rate <br />set by FERC'doj. inflation <br />(ll.53) <br /> <br />aUnder the NGPA, if natural gas qualifies under more than one price category the seller may be <br />permitted to collect the higher price. The ceiling prices set by the NGPA do not include state severance <br />taxes. <br /> <br />bThese prices include an "annual inflation adjustment factor" in order to adjust prices for inflation, <br />The price for a given month is arrived at by mUltiplying the price for the previous month by the monthly <br />equivalent of the annual inflation factor. Since most of the prices set by the NGPA are as of April 20, <br />1977, the adjustment for inflation begins In May 1977. <br /> <br />cThese prices will escalate monthly, in addition to the inflation adjustment factor, by an annual rate <br />of 3.5 per cent until April 1981, after which they will escalate by 4 per cent. <br /> <br />dThe estimated maximum ceiling price as of October 1978, due to operation of inflation and escalation <br />adjusters. <br /> <br />eA marker well is any welf from which natural gas was produced in commercial quantities after <br />January 1, 1970, and before April 20, 1977, with the exception of wells the surface drilling of which <br />began after February 19, 1977. <br /> <br />fThe average price reported to the FERC for intrastate gas sales contracted for during the second <br />quarter of 1978 was approximately $1.90. <br /> <br />2-23 <br />