Natural Gas Policy Act (NGPA)

The Natural Gas Policy Act (NGPA) granted the Federal Energy Regulatory Commission (FERC) authority over intrastate as well as interstate natural gas production.  The main goals of the Act are:

  • Creating a single national natural gas market;
  • Equalizing supply with demand; and
  • Allowing market forces to establish the wellhead price of natural gas.

 

Pursuant to 15 USCS § 3391, the Secretary of Energy prescribes and make effective a rule, which may be amended from time to time, which provides that no curtailment plan of an interstate pipeline may provide for curtailment of deliveries of natural gas for any essential agricultural use, unless such curtailment:

  • does not reduce the quantity of natural gas delivered for such use below the specified requirement; or
  • is necessary in order to meet the requirements of high-priority users.

 

Further, the Secretary of Energy prescribes and make effective a rule which provides that no interstate pipeline may curtail deliveries of natural gas for any essential industrial process or feedstock use, unless such curtailment[i]:

  • does not reduce the quantity of natural gas delivered for such use below the specified requirement;
  • is necessary in order to meet the requirements of high-priority users; or
  • is necessary in order to meet the requirements for essential agricultural uses of natural gas for which curtailment priority is established.

 

Pursuant to 15 USCS § 3416, any person aggrieved by any order issued by the Commission in a proceeding to which such person is a party may apply for judicial review.

The President may declare a natural gas supply emergency if he finds that[ii]:

  • a severe natural gas shortage, endangering the supply of natural gas for high-priority uses, exists or is imminent in the U.S. or in any region thereof; and
  • the exercise of authorities is reasonably necessary, having exhausted other alternatives to the maximum extent practicable, to assist in meeting natural gas requirements for such high-priority uses.

 

In order to obtain information to carry out his/her authority, the President may[iii]:

  • sign and issue subpoenas for the attendance and testimony of witnesses and the production of books, records, papers, and other documents;
  • require any person, by general or special order, to submit answers in writing to interrogatories, requests for reports or for other information; and
  • secure, upon request, any information from any Federal agency.

 

[i] 15 USCS § 3392.

[ii] 15 USCS § 3361.

[iii] 15 USCS § 3364.


Inside Natural Gas Policy Act (NGPA)