Abstract: This paper developed a static Computable General Equilibrium(CGE)model under the framework of neoclassical closure,which was used to simulate the impact of natural gas exploitation industry on economic growth,welfare and market performance by removing government regulation. The simulating results showed that removing government regulations could not only boost GDP growth,increase household income and improve the residents' welfare but also effectively reduce the cost of production of natural gas exploitation sector, improve productivity,increase production of natural gas and promote the final consumption of natural gas in the short run and in the long run. Therefore,the government should break the administrative monopoly in the natural gas exploitation industry,reduce the unreasonable intervention of the market and gradually establish a free market.