setbacks, El Paso managed to sustain long-term growth during the 1970s. Sales dipped following the 1974 divestiture but surged back up to $1.15 billion in 1975, rising to more than $2 billion in 1978. Earnings, however, fluctuated around $50 million to $60 million annually. El Paso's huge revenue gains during the late 1970s reflected turbulence in energy markets. El Paso benefitted from the Natural Gas Policy Act which was passed in 1978. That act basically allowed El Paso to begin competing with other Texas companies for the purchase of natural gas reserves. El Paso greatly increased its reserves after the act was passed, building up a sizable reserve base near its Permian Basin pipeline operations as well as in other regions of the country. It simultaneously boosted its output capacity to meet the expected surge in demand during the 1980s. As a result of strong natural gas markets and El Paso's increased output capacity, sales topped $2 billion in 1978, rose past $3 billion in 1980, and then increased to nearly $4 billion in 1981. In 1981, El Paso reported record earnings of $147 million. Unfortunately, El Paso's profit gains were short-lived. During the late 1970s and early 1980s, industry competitors had hustled to boost natural gas output capacity with expectations of strong demand. But a weak economy and a newfound emphasis on energy conservation slowed market growth. Supply outstripped demand in 1982 and natural gas prices dropped. Furthermore, El Paso's chemical businesses suffered major setbacks in 1982. Although El Paso's sales rose to $4.3 billion in 1982, its net income dropped to $53 million. The El Paso Company, as it became known in the 1970s, ceased to exist as an independent corporation in 1983. The company was purchased by Burlington Northern Inc. and became a 100-percent-owned subsidiary. Burlington was a $9 billion conglomerate active in mineral development, timber and forest products, and rail carrier systems. Although El Paso was experiencing some problems at the time, Burlington viewed the company as an excellent complement to its existing mineral development operations. The acquisition seemed like a good move, particularly in light of new federal legislation scheduled to take effect during the mid-1980s. The legislation had effectively deregulated certain aspects of the natural gas industry. Prior to the mid-1980s, El Paso, in accordance with the Natural Gas Act of 1938 and the Natural Gas Policy Act of 1978, was in the business