merged firm with strong market power. The FTC approved the merger, provided Kinder Morgan divest itself of the

overlap area. Tallgrass purchased Kinder Morgan Interstate Gas Transmission, Trailblazer Pipeline Co. LLC, two

processing facilities in Wyoming, and Kinder Morgan’s 50 percent interest in the Rockies Express Pipeline to meet

the FTC requirements. The FTC was attempting to strike a balance between potential cost reductions resulting from

economies of scale and concentration of market power.

Access for free at openstax.org
11.4 • The Great Deregulation Experiment 273

Did the price of natural gas decrease? Yes, rather significantly. In 2010, the wellhead price of natural gas was $4.48

per thousand cubic foot. In 2012 the price had fallen to just $2.66. Was the merger responsible for the large drop in

price? The answer is uncertain. The larger contributor to the sharp drop in price was the overall increase in the
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