The market for natural gas was poor in most of the Texas Gulf Coast prior to World War II. The quantity of gas available exceeded the transportation facilities to areas of potential demand. However, the end of World War II and the building of numerous long transmission lines to new markets in other parts of the United States led to greatly accelerated demand for natural gas. The FPC regulates well-head prices, sales of natural gas by producers, building (certification) of long transmission lines, and purchases of gas sold in interstate commerce. Such regulation may decrease or increase demand artificially and, hence, the price for the product.

The Texas Gulf Coast is the most important source of natural gas in the United States. Texas Railroad Commission Districts No. 2, 3, and 4, which constitute the Texas Gulf Coast gas-producing area, have the largest reserves, produce the greatest quantity of gas yearly, have the largest number of gas fields, and contain the greatest number of huge gas fields with reserves of 1 trillion cu ft or more. Revenue from natural gas is very important to the petroleum industry in the Gulf Coast area and to the entire economy of the State of Texas.

The major exploration for natural gas along the Gulf Coast has been of Miocene-Oligocene sandstone, and of lower Eocene sandstone beds and the Cretaceous in the upper part of the Lower Gulf Coast. Exploration for Cretaceous and pre-Cretaceous natural gas deposits has been very slow because of high costs and disappointing results. These pre-Tertiary zones appear very promising, but more economic incentive is necessary before adequate exploration will be conducted. The results of exploration for gas in the Texas offshore have been discouraging, particularly in comparison to the rich discoveries in the Louisiana offshore. It is believed that reasonably good prospects for gas discovery still exist in the Texas offshore, but incentive is needed for further exploration and exploratory drill ng.