121 FERC ¶ 61,293 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

18 CFR Part 284 

Docket No. RM08-2-000

Pipeline Posting Requirements under Section 23 of the Natural Gas Act 

(December 21, 2007) 

AGENCY: Federal Energy Regulatory Commission. 

ACTION: Notice of Proposed Rulemaking. 

SUMMARY: In this Notice of Proposed Rulemaking, the Commission proposes to 

require both interstate and certain major non-interstate pipelines to post capacity, daily 

scheduled flow information and daily actual flow information. This proposal 

incorporates one contained in an earlier Notice of Proposed Rulemaking to require the 

posting of capacity and daily actual flow information by some intrastate pipelines, with 

some changes. Under this proposal, interstate pipelines would be required to post daily 

actual flow information in addition to their currently required posting of capacity and 

daily scheduling information. Non-interstate pipelines would be required to post daily 

scheduled flow information in addition to the earlier Notice of Proposed Rulemaking 

proposal to require posting capacity and daily actual flow information. The posting 

proposal would facilitate price transparency in markets for the sale or transportation of 

physical natural gas in interstate commerce to implement section 23 of the Natural Gas 

Act. 
Docket No. RM08-2-000 - 2 - 

DATES: Comments are due [Insert_Date 45 days from publication in the FEDERAL 

REGISTER]. Reply comments are due [Insert_Date 75 days from publication in the 

FEDERAL REGISTER]. 

ADDRESSES: You may submit comments, identified by docket number by any of the 

following methods: 

• Agency Web Site: <http://ferc.gov> Follow the instructions for submitting 

comments via the eFiling link found in the Comment Procedures section of the preamble. 

Documents created electronically using word processing software should be filed in 

native applications or print-to-PDF format and not in a scanned format. 

• MAIL/HAND DELIVERY: Commenters unable to file comments electronically 

must mail or hand deliver an original and 14 copies of their comments to: Federal Energy 

Regulatory Commission, Secretary of the Commission, 888 First Street, N.E., 

Washington, D.C. 20426. Please refer to the Comment Procedures section of the 

preamble for additional information on how to file paper comments. 
Docket No. RM08-2-000 - 3 - 

FOR FURTHER INFORMATION CONTACT: 

Stephen J. Harvey (Technical) 

Office of Enforcement 

Federal Energy Regulatory Commission 

888 First Street NE 

Washington, D.C. 20426 

(202)502-6372 

Stephen.Harvey@ferc.gov 

Charles Whitmore (Technical) 

Office of Enforcement 

Federal Energy Regulatory Commission 

888 First Street NE 

Washington, D.C. 20426 

(202)502-6256 

Charles.Whitmore@ferc.gov 

Eric Ciccoretti (Legal) 

Office of Enforcement 

Federal Energy Regulatory Commission 

888 First Street NE 

Washington, D.C. 20426 

(202)502-8493 

Eric.Ciccoretti@ferc.gov 

SUPPLEMENTARY INFORMATION:
UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Pipeline Posting Requirements under 

Section 23 of the Natural Gas Act 

Docket No. RM08-2-000 

NOTICE OF PROPOSED RULEMAKING 

(December 21, 2007) 

I. Introduction and Summary of Proposal

1. On April 19, 2007, the Commission issued a Notice of Proposed Rulemaking 

(Initial NOPR) to implement section 23 of the Natural Gas Act, which was added to the 

act by the Energy Policy Act of 2005 (EPAct 2005).1

 In the Initial NOPR, the 

Commission proposed an annual reporting requirement for certain natural gas sellers and 

buyers and a daily posting requirement for intrastate pipelines.2 The Commission also 

asked in the Initial NOPR whether posting requirements for interstate pipeline should be 

changed.3

2. Concurrently, the Commission is issuing a Final Rule with respect to the annual 

reporting requirement. With respect to the pipeline posting proposal, based on Staff 

 1 Transparency Provisions of Section 23 of the Natural Gas Act, 72 FR 20791 

(Apr. 26, 2007), FERC Stats. and Regs. ¶ 32,614 (2007). Congress enacted section 23 of 

the Natural Gas Act as part of the Energy Policy Act of 2005. Energy Policy Act of 

2005, Pub. L. No. 109-58, 119 Stat. 594 (2005). 

2

 Initial NOPR at P 1-2. 

3

 Initial NOPR at P 43. 
Docket No. RM08-2-000 - 2 - 

 

experience as well as the comments received, the Commission has determined to issue 

the instant notice of proposed rulemaking (NOPR) to develop the record more fully with 

respect to the posting proposal. The Initial NOPR may not have given sufficient notice to 

interstate pipelines of changes that seem necessary to implement adequately section 23 of 

the Natural Gas Act. In addition, the Commission believes that more information 

regarding the technical implementation of daily posting of actual flow information by 

interstate pipelines is required in order to consider the costs and benefits of such a 

regulatory change. For those purposes, the Commission incorporates by reference the 

Initial NOPR and all comments filed in response to the Initial NOPR in Docket No. 

RM07-10-000 with respect to the pipeline posting proposal. 

3. The Commission intends the instant proposal to make available the information 

needed to track daily flows of natural gas adequately throughout the United States. 

Specifically, the Commission proposes to require both interstate pipelines and major noninterstate pipelines4

 to post daily information regarding their capacity, scheduled flow 

volumes, and actual flow volumes at major points and mainline segments. The proposal 

would result in both interstate and non-interstate pipelines posting the same types of 

information. 

4

 In the Initial NOPR, the Commission used the term “intrastate pipeline;” herein, 

the Commission uses the term “non-interstate pipeline” – a point explained further below. 
Docket No. RM08-2-000 - 3 - 

 

4. For interstate pipelines, this proposal would add to the existing posting 

requirements in § 284.13(d) a requirement to post daily actual flow volume.5

 To bring 

the requirements for major non-interstate pipelines into alignment with the existing and 

proposed posting requirements for interstate pipelines, this proposal adds to the proposal 

in the Initial NOPR a requirement that major non-interstate pipelines post daily scheduled 

flow volumes.6

 For the purposes of this NOPR, a “major non-interstate pipeline” is 

defined as one that is not a “natural gas company” under section 1 of the Natural Gas 

Act7

 and that flows greater than 10 million (10,000,000) MMBtus of natural gas per year, 

with two exceptions.8

 The first exception is non-interstate pipelines that fall entirely 

upstream of a processing plant.9

 The second exception is non-interstate pipelines that 

deliver more than ninety-five percent (95%) of the natural gas volumes they flow directly 

to end-users.10

5. With these proposed additions of flow information from major non-interstate 

pipelines to the information already available from interstate pipelines, market observers, 

5

 Proposed 18 CFR 284.13(d). 

6

 Proposed 18 CFR 284.14(a). 

7

 15 U.S.C. 717. 

8

 Proposed 18 CFR 284.1. 

9

 Proposed 18 CFR 284.14(b)(1). 

10 Proposed 18 CFR 284.14(b)(2). 
Docket No. RM08-2-000 - 4 - 

 

such as the Commission, state commissions and market participants, could develop a 

better understanding of the supply and demand conditions that directly affect the U.S. 

wholesale natural gas markets. Market participants would have a better basis for 

evaluating the prices at which they transact. Consequently, this proposal to increase 

information from non-interstate pipelines and from interstate pipelines would directly 

“facilitate price transparency for the sale... of physical natural gas in interstate 

commerce” as authorized in the natural gas transparency provisions.11

6. The Commission’s proposal would apply to major non-interstate pipelines even 

though section 1 of the Natural Gas Act12 excludes them from the Commission’s 

ratemaking authority under sections 4 and 5 of the Natural Gas Act13 and the 

Commission’s certificate authority under section 7 of the Natural Gas Act.14 As 

discussed below, Congress placed market participants, which include non-interstate 

pipelines, within the Commission’s transparency authority under section 23 of the 

Natural Gas Act to ensure “the dissemination, on a timely basis, of information about the 

11 Section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 717t-2(a)(1) (2000 & Supp. 

V 2005). 

12 15 U.S.C. 717. 

13 15 U.S.C. 717c; 15 U.S.C. 717d. 

14 15 U.S.C. 717f. 
Docket No. RM08-2-000 - 5 - 

 

availability and prices of natural gas sold at wholesale and in interstate commerce.”15 

Aware that the pre-EPAct 2005 limits on the Commission’s authority would have left 

gaps in the transparency of the wholesale, physical natural gas markets, Congress did not 

restrict the Commission’s transparency authority to those same limits in enacting section 

23 of the Natural Gas Act. As we stated in the Initial NOPR: “While distinctions 

between intrastate and interstate natural gas markets may be meaningful from a legal 

perspective, they are not meaningful from the perspective of market price formation.”16 

Congress was aware of the legal distinctions between natural gas markets in enacting 

EPAct 2005 and, in choosing to use the term “any market participant” indicated that these 

distinctions should not apply to the Commission’s transparency authority. At the same 

time, by not amending section 1 of the Natural Gas Act, Congress retained the legal 

distinctions between intrastate and interstate pipelines for the purposes of delineating the 

entities subject to the Commission’s authority over ratemaking in sections 4 and 5 and 

over certification of construction and sales of new facilities and transportation services in 

section 7 of the act. 

7. The Commission issues this NOPR in order to solicit further comment on 

requiring actual flow information from both interstate and non-interstate pipelines and to 

15 Section 23(a)(2) of the Natural Gas Act, 15 U.S.C. 717t-2(a)(2) (2000 & Supp. 

V 2005). 

16 Initial NOPR at P 20. 
Docket No. RM08-2-000 - 6 - 

consider whether the posting requirements for both interstate and non-interstate pipelines 

should be similar. In the Initial NOPR, the Commission did not propose to require the 

posting of actual flow information by interstate pipelines, but it did seek comment on 

such posting.17 Further comment in response to the instant NOPR will allow the 

Commission to give more consideration to requiring actual flow information on interstate 

pipelines, in particular the technical issues associated with quick posting of that 

information. In addition, the Commission seeks further comment regarding how the 

posting requirements should apply to storage facilities and regarding its daily pipeline 

posting proposal for major non-interstate pipelines. 

8. To address implementation issues associated with the posting proposal, such as 

obtaining and posting actual flow information and obtaining and posting information 

from storage facilities, the Commission directs Staff to conduct a technical conference 

before comments on this NOPR are due. 

II. The Commission’s Transparency Authority Over Non-Interstate Pipelines 

under Section 23 of the Natural Gas Act

9. At the outset, the Commission addresses the jurisdictional issues raised by its 

proposal in the Initial NOPR. In the Initial NOPR, the Commission explained how 

section 23 of the Natural Gas Act authorizes the Commission to require an intrastate 

pipeline to post information regarding its transportation of natural gas, even though 

 17 Initial NOPR at P 43. 
Docket No. RM08-2-000 - 7 - 

section 1 of the Natural Gas Act excludes such companies from the Commission’s 

authority to regulate transportation of natural gas under sections 4, 5, and 7 of the Natural 

Gas Act.18

A. Comments

1. Comments: Section 23 of the Natural Gas Act

10. The Texas Pipeline Association (TPA)19 argued that, contrary to the Commission’s 

explanation, the plain language of section 23 of the Natural Gas Act shows that the term 

“market participant” is limited to those entities that participate in wholesale interstate 

natural gas markets and does not include intrastate pipelines.20 TPA concluded that the 

plain language of section 23 of the Natural Gas Act does not support the Commission’s 

assertion of authority to collect information from intrastate pipelines because they do not 

participate in markets for the sale or transportation of natural gas in interstate 

commerce.

21 

 18 Initial NOPR at P 11-18, 21-24, & 37. 

19 Eight entities expressed support for the Texas Pipeline Association’s comments: 

Atmos Energy Corporation, Copano Energy, L.L.C., Crosstex Energy Services, LP, DCP 

Midstream, LLC, Enbridge Energy Co., Inc., Gas Processors Association, Kinder Morgan 

Texas Intrastate Pipeline Group, Targa Resources, Inc.. 

20 Comments of TPA at 16-17. 

21 Id. 
Docket No. RM08-2-000 - 8 - 

 

11. Enterprise Products Partners L.P. (Enterprise) also asserted that an entity must be 

participating in the interstate market to be a “market participant” under section 23 of the 

Natural Gas Act. Enterprise reasoned that an entity subject to the Commission’s 

authority under section 23 but not to its authority under other sections of the Natural Gas 

Act is an entity that “participat[es] in the interstate market (whether by buying, selling, 

shipping or trading physical natural gas) but not already subject to [Natural Gas Act] 

jurisdiction as natural gas companies.”22 According to Enterprise, the Commission’s 

proposal to impose posting requirements on intrastate pipelines bears no relation to 

Congress’s intention to restrict the Commission’s jurisdiction to entities participating in 

the interstate market.23

12. Similarly, the Railroad Commission of Texas argued that the term “market 

participant” does not indicate that Congress contemplated the expansion of Commission 

authority to include intrastate pipelines as asserted by the Commission.24 The Railroad 

Commission of Texas explained that there is no reference at all in the relevant statutory 

provisions or legislative history of EPAct 2005 to intrastate pipelines, the intrastate 

natural gas market or intrastate gas flows and no express indication that the 

22 Comments of Enterprise at 13. 

23 Id.

24 Comments of Railroad Commission of Texas at 6-7; see also Comments of 

Atmos Pipeline-Texas at 6-7. 
Docket No. RM08-2-000 - 9 - 

Commission’s authority was being extended in any manner over “intrastate” market 

participants.25 

13. One commenter, Enterprise, contended that the Commission does not have the 

authority to require posting of information by intrastate pipelines because Congress 

limited the information that may be collected from market participants to “information 

about natural gas sold at wholesale and in interstate commerce.”26 Enterprise interpreted 

Congress’s use of the word “about” as limiting language and asserted that Congress 

deliberately chose the word “about” as opposed to “affect” or “at least impacts” in order 

to stress that the Commission does not have the authority to compel reporting for any 

activity that might have some impact on the interstate wholesale natural gas markets.27

2. Comments: Section 1(b) of the Natural Gas Act

14. TPA argued that section 1(b) of the Natural Gas Act precludes the Commission 

from prescribing rules under its section 23 authority that apply to intrastate transportation 

or sale of natural gas.28 TPA asserted that Congress has consistently respected the 

distinction between interstate and intrastate pipelines which first appeared in section 1(b) 

 25 Comments of Railroad Commission of Texas at 7. 

26 Comments of Enterprise Products Partners, L.P. at 11 (emphasis in original). 

27 Id. at 11-12. 

28 Comments of TPA at 7; see also Comments of Louisiana Office of Conservation 

at 5. 
Docket No. RM08-2-000 - 10 - 

 

of the Natural Gas Act and was recognized by Congress in amendments to the Natural 

Gas Act and in the Natural Gas Policy Act of 1978.29 TPA referred to numerous 

appellate court decisions that recognized this distinction in reviewing the Commission’s 

jurisdiction.30

15. Several commenters argued that if Congress intended the transparency provisions 

to cover intrastate pipelines, it would have amended section 1 of the Natural Gas Act.31 

TPA argued that if Congress intended to expand the Commission’s authority over 

intrastate transportation of natural gas, it would have amended section 1(b) to include 

new posting obligations for intrastate pipelines for all daily flows and capacity at major 

points.32 TPA explained that, in EPAct 2005, Congress amended section 1(b) of the 

Natural Gas Act to include application to the importation or exportation of natural gas in 

foreign commerce and to persons engaged in such importation or exportation.33 TPA 

contended that without a similar amendment to section 1(b) to provide for the posting of 

29 Comments of TPA at 9. 

30 Id. at 11 (citations omitted). 

31 Comments of TPA at 10-11; Comments of Enterprise at 15; Comments of 

Louisiana Office of Conservation at 5; Comments of Railroad Commission of Texas at 6-

7. 

32 Comments of TPA at 10-11. 

33 Id. (citing EPAct 2005 section 311 (amending section 1(b) of the Natural Gas 

Act)). 
Docket No. RM08-2-000 - 11 - 

information Congress cannot “cross the jurisdictional line” by imposing a posting 

requirement on intrastate pipelines.34

3. Comments: Section 1(c) of the Natural Gas Act

16. Several commenters, such as the Railroad Commission of Texas, asserted that the 

Commission’s proposal to require intrastate pipelines to post information impermissibly 

intrudes on states’ regulation of natural gas transportation.35 Cranberry Pipeline 

Corporation argued that the Commission cannot have jurisdiction over intrastate 

transactions when those transactions are already subject to the jurisdiction of the state 

regulatory commission.36 Similarly, DCP argued that the Commission ignored section 

1(c) of the Natural Gas Act which exempts intrastate transportation because it is viewed 

as a matter of local concern subject to regulation by the states.37

4. Comments: Other

17. TPA argued that there is no indication in the legislative history of section 23 that 

Congress intended to modify the Commission’s jurisdiction to include intrastate 

 34 Comments of TPA at 11. 

35 Comments of Railroad Commission of Texas at 8-9; see also Reply Comments 

of the RRC of Texas at 8; Reply Comments of the Texas Pipeline Association at 12. 

36 Comments of Cranberry Pipeline Corporation at 8 (internal citations omitted). 

37 Comments of DCP Midstream, LLC at 7 (internal citations omitted). 
Docket No. RM08-2-000 - 12 - 

 

transportation.38 Atmos Energy Corporation (Atmos) and the Railroad Commission of 

Texas similarly stated that there is no reference at all in the relevant statutory provisions 

or legislative history of EPAct 2005 to intrastate pipelines, the intrastate natural gas 

market or intrastate gas flows and certainly no express indication that the FERC’s 

authority was being extended in any manner over “intrastate” market participants.39

18. DCP Midstream, LLC argued that intrastate pipelines should not be held to the 

same reporting burden as interstate pipelines because intrastate pipelines have not 

submitted to the jurisdiction of the Commission. The burdens that an interstate pipeline 

assumes, DCP contended, accompany a certificate of public convenience and necessity 

and should not be imposed on an intrastate pipeline. DCP asserted that the Commission’s 

policy historically has been that only gas pipelines that affirmatively accepted a 

jurisdictional certificate to provide transportation in interstate commerce would be 

subject to Commission regulation, such as daily scheduled volume or pipeline capacity 

reporting.40

19. Atmos argued that the Commission’s interpretation of Natural Gas Act section 23 

is inconsistent with the Commission’s prior analysis of its own jurisdiction in Order No. 

38 Comments of TPA at 21. 

39 Comments of Atmos at 12 (internal citations omitted); Comments of the 

Railroad Commission of Texas at 6-7 (internal citations omitted). 

40 Comments of DCP Midstream, LLC at 9-10. 
Docket No. RM08-2-000 - 13 - 

 

67041 and Order No. 636.42 Atmos pointed to Order No. 670, in which the Commission 

interpreted the phrase “any entity” from section 4A of the Natural Gas Act to encompass 

any person or form of organization, regardless of its legal status, function or activities, 

and further concluded that this language did not specifically exclude entities engaged in 

non-jurisdictional activities.43 Atmos also described the Commission interpreting the 

phrase “in connection with” from section 4A so as to conclude that not every commonlaw fraud that touches a jurisdictional transaction would constitute market 

manipulation.44 According to Atmos, in Order No. 670, the Commission further 

determined, that had Congress intended to expand the Commission’s jurisdiction so 

significantly as to give it anti-manipulation authority over non-jurisdictional transactions 

such as first sales of natural gas, sales of imported natural gas, sales of imported liquefied 

41 Prohibition of Energy Market Manipulation, Order No. 670, 71 FR 4244 

(Jan. 26, 2006), FERC Stats. & Regs. ¶ 31,202 (2006) (Order No. 670).

42 Pipeline Service Obligations and Revisions to Regulations Governing SelfImplementing Transportation; and Regulation of Natural Gas Pipelines After Partial 

Wellhead Decontrol, Order No. 636, 57 FR 13267 (Apr. 16, 1992), FERC Stats. & Regs. 

¶ 30,939 (1992), order on reh’g, Order No. 636-A, 57 FR 36128 (Aug. 12, 1992), FERC 

Stats & Regs. ¶ 30,950 (1992), order on reh’g, Order No. 636-B, 61 FERC ¶ 61,272 

(1992), order on reh’g, 62 FERC ¶ 61,007 (1993), aff’d in part and remanded in part sub 

nom, United Distribution Cos. v. FERC, 88 F.3d 1105 (D.C. Cir. 1996), order on remand, 

Order No. 636-C, 78 FERC ¶ 61,186 (1997) (Order No. 636).

43 Comments of Atmos at 9. 

44 Id. at 9-10. 
Docket No. RM08-2-000 - 14 - 

natural gas, or sales and transportation by entities exempt from Commission regulation 

under Natural Gas Act section 1(b), then it would have done so explicitly.45

20. As to Order No. 636, Atmos argued that the Commission’s assertion of 

transparency authority over intrastate pipelines is contrary to its holdings in that order, in 

which the Commission held that a non-interstate pipeline “providing service under 

section 311 of the [Natural Gas Policy Act of 1978] is not required to meet the service 

requirements of the Commission’s Order No. 636 such as offering firm service, having a 

capacity release program, posting available capacity electronically, offering flexible 

receipt and delivery points, or unbundling distinct services.”46 By contrast, the pipeline 

posting proposal, asserted Atmos, would not only extend daily posting requirements to 

section 311 transportation by intrastate pipelines, but also to transportation that is purely 

intrastate in nature.47

 45 Id. at 9 (internal citations omitted). 

46 Id. at 15 (emphasis in original). 

47 Id. at 12 (internal citations omitted). Atmos stated that it would not object if the 

Commission limits the posting requirements applicable to intrastate pipelines to section 

311 transportation or other activity regulated under the Natural Gas Policy Act of 1978. 

Id.
Docket No. RM08-2-000 - 15 - 

21. Some commenters, such as the Railroad Commission of Texas, expressed concern 

that a requirement for intrastate pipelines to post information would lead to further 

regulation of those intrastate pipelines.48 

B. Discussion

22. The Commission proposes here to require major non-interstate pipelines to post 

information regarding capacity, scheduled flow volumes, and actual flow volumes.49 

This proposal would impose posting requirements on major non-interstate pipelines in a 

limited way. The Commission does not intend to regulate the intrastate operations of 

those non-interstate pipelines; nor do we intend to regulate the rates or terms and 

conditions of intrastate service for those non-interstate pipelines. The Commission 

proposes to require those non-interstate pipelines only to post information. 

23. In the Initial NOPR, the Commission used the term “intrastate pipeline.” In this 

proposal, the Commission uses the term “non-interstate pipeline.” The latter term more 

accurately describes the scope of the proposed rule, which is issued pursuant to section 

23 of the Natural Gas Act.50 This section applies to both interstate and non-interstate 

pipelines, a point explained further below, and does not use the term “intrastate pipeline.” 

In this NOPR, the Commission proposes to collect important information about the 

 48 Comments of the Railroad Commission of Texas at 8-9. 

49 Proposed 18 CFR 284.14(a). 

50 15 U.S.C. 717t-2 (2000 & Supp. V 2005). 
Docket No. RM08-2-000 - 16 - 

 

physical, natural gas market from certain pipelines in the continental United States 

regardless of whether the pipeline is an intrastate pipeline, a Hinshaw pipeline, or any 

other type of pipeline that is not an interstate pipeline under the Natural Gas Act. The 

subjects of the posting requirement proposed herein are set by their participation in the 

physical, natural gas market not by their legal status under section 1 of the Natural Gas 

Act.51

24. The proposed posting requirements for non-interstate pipelines are consistent with 

Congress’s intent as expressed in section 23 of the Natural Gas Act. There, Congress 

permitted the Commission to impose on a broad set of market participants requirements 

for a limited purpose, i.e., to obtain and disseminate “information about the availability 

and prices of natural gas at wholesale and in interstate commerce.”52 At the same time, 

as the Commission explicitly acknowledges, Congress did not expand the Commission’s 

authority to impose on the same set of market participants requirements related to the 

Commission’s traditional regulatory activities, e.g., ratemaking under sections 4 and 5 of 

the Natural Gas Act and certification of construction and sales and transportation services 

under section 7 of the Natural Gas Act. 

51 15 U.S.C. 717. 

52 Section 23(a)(2) of the Natural Gas Act, 15 U.S.C. 717t-2(a)(2) (2000 & Supp. 

V 2005). 
Docket No. RM08-2-000 - 17 - 

 

25. Congress placed non-interstate pipelines within the Commission’s transparency 

authority under section 23 of the Natural Gas Act in order to ensure – for the entirety of 

the wholesale, physical natural gas market – transparency of price and availability, 

including transparency of market price formation. Aware that the pre-EPAct 2005 limits 

on the Commission’s authority would have left gaps in the transparency of the wholesale, 

physical natural gas markets, Congress did not restrict the Commission’s transparency 

authority to those same limits in enacting section 23 of the Natural Gas Act. As we stated 

in the Initial NOPR, “While distinctions between intrastate and interstate markets may be 

meaningful from a legal perspective, they are not meaningful from the perspective of 

market price formation.”53 Congress was aware of the legal distinctions between noninterstate and interstate natural gas markets in enacting EPAct 2005. In choosing to use 

the term “any market participant” and focusing section 23 on “information about the 

availability and prices of natural gas at wholesale and in interstate commerce,” Congress 

indicated that these distinctions should not apply to the Commission’s transparency 

authority. At the same time, by not amending section 1, Congress retained the legal 

distinctions between intrastate and interstate markets for the purposes of delineating the 

entities subject to the Commission’s authority over ratemaking in sections 4 and 5 and 

over construction of natural gas facilities in section 7 of the Natural Gas Act. 

53 Initial NOPR at P 20. 
Docket No. RM08-2-000 - 18 - 

1. Discussion: Section 23 of the Natural Gas Act

26. The language in section 23 of the Natural Gas Act supports the Commission’s 

authority to require non-interstate pipelines to post information about capacity, scheduled 

flow volumes and actual flow volumes. In section 23(a)(1), Congress directed the 

Commission to “facilitate price transparency in markets for the sale or transportation of 

physical natural gas in interstate commerce....”54 In section 23(a)(2), Congress 

authorized the Commission to “provide for the dissemination, on a timely basis, of 

information about the availability and prices of natural gas sold at wholesale and in 

interstate commerce....”55 Congress expressly delegated to the Commission the task of 

adopting rules to give life to this provision56 and, in section 23(a)(3), provided that the 

Commission may “obtain the information” about the availability and prices of natural gas 

sold at wholesale and in interstate commerce from “any market participant.”57

27. Congress could have limited the Commission’s transparency authority to obtaining 

information from any “natural gas company” subject to the Commission’s traditional 

regulatory authority. It did not do so. Instead, in using the broad new term “any market 

participant,” Congress deliberately expanded the universe subject to the Commission’s 

 54 15 U.S.C. 717t-2(a)(1) (2000 & Supp. V 2005). 

55 15 U.S.C. 717t-2(a)(2) (2000 & Supp. V 2005). 

56 Id.

57 15 U.S.C. 717t-2(a)(3) (2000 & Supp. V 2005). 
Docket No. RM08-2-000 - 19 - 

 

transparency authority beyond “natural gas compan[ies].”58 The term “any market 

participant” is not defined in the Natural Gas Act; however, it is not on its face limited to 

entities made subject to the Natural Gas Act under section 1.59 Indeed, the language of 

section 23 indicates that entities excluded from the Commission’s authority under section 

1 of the Natural Gas Act would be included in section 23. First, in section 23, Congress 

did not reference the limitations of section 1 explicitly (discussed further below). 

Second, in section 23, Congress did not use the term “natural gas company” from section 

2(6), which is defined as “a person engaged in the transportation of natural gas in 

interstate commerce, or the sale in interstate commerce of such gas for resale.”60 This 

limiting term is used in section 1 of the Natural Gas Act to limit the Commission’s 

authority, for instance, under sections 4, 5, and 7 of the Natural Gas Act.61 These 

approaches would have been the simplest ways for Congress to have indicated an intent 

to limit the Commission’s transparency authority in the same manner it limited the 

Commission’s comprehensive regulatory authority in other sections of the Natural Gas 

Act. Thus, commenters’ arguments that the Commission has authority to obtain 

58 Contrary to the assertions of Bridgeline Holdings, L.P. (Bridgeline), Comments 

of Bridgeline at 6, this grant of transparency authority is not an implied grant. 

59 Initial NOPR at P 12. 

60 15 U.S.C. 717a(6). 

61 15 U.S.C. 717c, 717d & 717f. 
Docket No. RM08-2-000 - 20 - 

information only from those subject to the Commission’s authority under section 1 of the 

Natural Gas Act are inconsistent with the language of the statute. 

28. In granting the Commission broad authority to obtain information, the Congress 

not only used the new term “market participant” but it also specifically referred to “any” 

market participant, instead of limiting the Commission’s authority to obtain information 

from market participants subject to the Commission’s traditional Natural Gas Act 

jurisdiction. The word “any” gives the term it modifies (in this case, “market 

participant”) an expansive meaning.62

29. In addition, in section 23(d)(2), Congress created a de minimis exception to the 

other provisions in section 23. Specifically, Congress instructed the Commission to 

create a de minimis exception for gatherers and producers, which section 1(b) of the 

Natural Gas Act explicitly excludes from Commission’s traditional regulation. If, as 

some commenters asserted, Congress did not intend to give the Commission authority 

over any entity excluded by section 1(b) of the Natural Gas Act, a de minimis exception 

 62 Norfolk S. Rwy. Co. v. Kirby, 543 U.S. 14, 31-32 (2004) (the word “any” gives 

the word it modifies an expansive reading); Department of Housing and Urban Dev. v. 

Rucker, 535 U.S. 125, 130-31 (2002); TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001) 

(one must give effect to each word in a statute so that none is rendered superfluous); 

United States v. Gonzales, 520 U.S. 1, 5 (1997) (“any” is an expansive term, meaning 

“one or some indiscriminately of whatever kind,”); New York v. EPA, 443 F.3d 880, 

885-87 (D.C. Cir. 2006) (the word “any” is broadly construed to reflect Congress’ intent 

that all types of physical changes are subject to the Clean Air Act’s New Source Review 

program). 
Docket No. RM08-2-000 - 21 - 

would have been unnecessary; in other words, section 23(d)(2) would have been 

surplusage. Congress is not presumed to enact surplus language.63 To avoid this 

improper result, the Commission interprets section 23 of the Natural Gas Act to give 

effect to the de minimis language by interpreting the term “any market participant” to 

include those entities otherwise excluded from the Commission’s Natural Gas Act 

jurisdiction by section 1(b) of the act. 

30. The Commission disagrees that the term “about” in section 23 is a limiting term as 

asserted by Enterprise. In the Initial NOPR, the Commission described the information 

proposed to be collected from intrastate pipelines as information “about” interstate, 

wholesale natural gas markets because the flows on intrastate pipelines affect interstate, 

wholesale natural gas markets.64 The Commission used the term “pertains” as a 

synonym for “about.” Indeed, contrary to Enterprise’s reading, we read the term “about” 

as broader than the terms “affect” or “impacts.” Information may be “about” a subject 

without “affecting” it; hence, flow information may be “about natural gas sold at 

wholesale and in interstate commerce” even if it does not “affect” such natural gas (even 

though it normally does). 

 63 City of Roseville v. Norton, 348 F.3d 1020, 1028 (D.C. Cir. 2003) (citing 

Babbitt v. Sweet Home Chapter of Community for a Great Oregon, 515 U.S. 687, 698 

(1995)). 

64 Initial NOPR at P 15. 
Docket No. RM08-2-000 - 22 - 

 

31. More specifically, as explained below, the information that would be posted by 

major non-interstate pipelines is “information about the availability and prices of natural 

gas sold at wholesale and in interstate commerce.”65 There is a relationship between 

capacity and flow information on non-interstate pipelines and the interstate, natural gas 

market because non-interstate flows affect the supply and demand fundamentals that 

underlie the market. As explained below, posted flow information from only interstate 

pipelines cannot provide a complete picture of natural gas flows in the United States – or 

even of those flows directly relevant to the pricing of natural gas flowing in interstate 

commerce.66 To avoid such incompleteness, the Commission sets forth the proposal to 

require major non-interstate pipelines to post flow information. This proposal would 

provide a complete picture of natural gas supply and demand fundamentals without the 

gaps that would appear were the non-interstate pipelines excluded by section 1 of the 

Natural Gas Act also excluded by section 23 of the Natural Gas Act. In enacting section 

23 of the Natural Gas Act, Congress sought to avoid any such gaps in the transparency of 

the physical natural gas markets by avoiding the legal distinctions set forth in section 1 of 

the Natural Gas Act. 

65 Section 23(a)(2) of the Natural Gas Act, 15 U.S.C. 717t-2(a)(2) (2000 & Supp. 

V 2005). 

66 See below at P 50-59. 
Docket No. RM08-2-000 - 23 - 

2. Discussion: Section 1(b) of the Natural Gas Act.

32. The Commission disagrees with commenters who argued that section 1(b) of the 

Natural Gas Act precludes the Commission from imposing the daily posting requirement 

on intrastate pipelines. Section 1(b) of the Natural Gas Act provides that the “provisions 

of this chapter . . . shall apply to the transportation of natural gas in interstate commerce, 

to the sale in interstate commerce of natural gas for resale . . .” and that such provisions 

“shall not apply to any other transportation or sale of natural gas.”67 These arguments 

ignore the fact that, in section 23, Congress provided the Commission a new and broad 

grant of authority that goes beyond prior Commission jurisdiction over natural gas 

companies to facilitate transparency in the wholesale natural gas markets. 

33. In stating that the Commission may obtain information from “any market 

participant,”68 Congress contemplated that the transparency provisions would differ from 

other provisions of the Natural Gas Act as to the entities covered by the Commission’s 

authority. Commenters’ reliance on section 1 of the Natural Gas Act, therefore, 

improperly ignores the intent of Congress to subject a different set of entities to the 

Commission’s transparency authority as evidenced by Congress’s use of the term “any 

market participant.” In light of this intent, commenters’ reliance on case law setting forth 

 67 Section 1(b) of the Natural Gas Act, 15 U.S.C. 717(b). 

68 Section 23(a)(3) of the Natural Gas Act, 15 U.S.C. 717t-2(a)(3) (2000 & Supp. 

V 2005). 
Docket No. RM08-2-000 - 24 - 

the limits on the Commission’s authority under section 1 of the Natural Gas Act is 

misplaced. 

34. The Commission does not find persuasive the argument that Congress could have 

expressed its intent to subject intrastate pipelines to the Commission’s transparency 

authority only by amending section 1 of the Natural Gas Act. First, altering the 

exceptions in section 1, as commenters suggested, is not the only way to alter the statute 

to give the Commission transparency authority. Indeed, it would have been more 

cumbersome for the Congress to take that approach. Instead of that approach, the 

Commission interprets the addition of section 23 as providing the Commission 

transparency authority over non-interstate pipelines. This latter interpretation is the more 

reasonable interpretation of section 23 and reflects Congress’s intent to subject noninterstate pipelines to only the Commission’s transparency authority. Second, it could be 

stated equally that if Congress intended to exclude intrastate (or non-interstate) pipelines 

from the Commission’s authority under section 23 of the Natural Gas Act, it would have 

used the term “natural gas company” in section 23, instead of the term “any market 

participant.” 

35. Commenters’ arguments that section 23 should be interpreted consistent with preEPAct 2005 case law are likewise misplaced. Those cases apply the jurisdictional limits 

set forth in section 1 of the Natural Gas Act. These arguments run afoul of the principle 

of statutory construction that “Congress is presumed to be aware of an administrative or 
Docket No. RM08-2-000 - 25 - 

judicial interpretation of a statute.”69 Thus, Congress was presumably aware that prior to 

the enactment of section 23, the Natural Gas Act, as explained by TPA, “limit[ed] the 

gathering of intrastate data to gathering it from companies falling under the 

Commission’s jurisdiction.”70 In using the term “any market participant,” Congress 

signaled its intent to expand the Commission’s transparency authority beyond the 

universe of natural gas companies to which it would otherwise be limited.71

3. Discussion: Section 1(c) of the Natural Gas Act

36. Several commenters, including a state commission, contended that the pipeline 

posting proposal as applied to intrastate pipelines would improperly interfere with states’ 

regulation of intrastate pipelines as set forth in section 1(c) of the Natural Gas Act, 

commonly known as the Hinshaw amendment. Section 1(c) of the Natural Gas Act 

reads: 

 69 Lorillard v. Pons, 434 U.S. 575, 580 (1978) (internal citations omitted); accord

2A Norman J. Singer, Sutherland Statutory Construction sec. 45.12 (5th ed. 1992) 

(“legislative language will be interpreted on the assumption that the legislature was aware 

of . . . judicial decisions”). 

70 Comments of Texas Pipeline Association at 13 (citing Union Oil v. FPC, 

542 F.2d 1036, 1039 (9th Cir. 1976)). 

71 TPA observed that courts have held that the Commission cannot exceed its 

statutory authority. Reply Comments of TPA at 16-17 (citing Transmission Agency of 

Northern California v. FERC, 495 F.3d 663 (D.C. Cir. 2007) and United Distribution 

Cos. v. FERC, 88 F.3d 1105 (D.C. Cir. 1996)). This is an unremarkable and unassailable 

conclusion, but one that provides no guidance where the issue is not whether the 

Commission may exceed its statutory authority but what is the extent of the 

Commission’s transparency authority. 
Docket No. RM08-2-000 - 26 - 

The provisions of this chapter shall not apply to any person engaged in or 

legally authorized to engage in the transportation in interstate commerce or 

the sale in interstate commerce for resale, of natural gas received by such 

person from another person within or at the boundary of a State if all the 

natural gas so received is ultimately consumed within such State, or to any 

facilities used by such person for such transportation or sale, provided that 

the rates and service of such person and facilities be subject to regulation 

by a State commission.72

The Commission’s proposal does not impermissibly interfere with states’ regulation of 

Hinshaw pipelines. Under the Commission’s proposal, states will continue to regulate 

the rates and services of those companies. As stated, section 23 of the Natural Gas Act 

does not authorize the Commission to undertake such comprehensive regulation and the 

Commission does not propose to do so. The Commission would require only that noninterstate pipelines, including Hinshaw pipelines, post information regarding their flows. 

Section 1(c) of the Natural Gas Act, in light of the later enacted EPAct 2005, does not 

preclude such a posting requirement. 

4. Discussion: Other

37. The Commission disagrees with DCP’s argument that the burden of a posting 

requirement is related to the Commission’s grant of a certificate of convenience and 

necessity under section 7 of the Natural Gas Act. DCP’s argument ignores the mandate 

Congress set forth in the transparency provisions for the Commission to facilitate 

transparency. Nothing in section 23 indicates or even implies that the Commission’s 

 72 15 U.S.C. 717(c). 
Docket No. RM08-2-000 - 27 - 

 

transparency authority depends on whether a market participant has a certificate of public 

convenience and necessity. Indeed, the use of the modifier “any,” as discussed above, 

demonstrates that Congress had not intention to limit the Commission authority to 

disseminate adequate information about the natural gas market. 

38. Contrary to commenters’ assertions, the Commission’s interpretation of section 23 

is consistent with the Commission’s interpretation of section 4A of the Natural Gas Act, 

which Congress also enacted in EPAct 2005. In Order No. 670, the Commission stated 

that Congress chose the undefined term “any entity” in section 4A as a broader term than 

the existing defined term of “natural gas company.”73 Similarly, in interpreting section 

23, Congress chose the undefined term “any market participant” in section 23 as a 

broader term than the existing defined term “natural gas company.” Also, in Order No. 

670, to determine the transactions subject to the Commission’s market manipulation 

authority, the Commission interpreted the section 4A phrase “in connection with” 

broadly.74 To delineate what type of information the Commission could obtain and 

disseminate, in section 23 of the Natural Gas Act, Congress used the term “about,” which 

73 Order No. 670 at P 18. 

74 Section 4A of the Natural Gas Act reads: 

It shall be unlawful for any entity, directly or indirectly, to use or employ, 

in connection with the purchase or sale of natural gas or the purchase or 

sale of transportation services subject to the jurisdiction of the Commission, 

 (continued...) 
Docket No. RM08-2-000 - 28 - 

 

is a concept similarly as broad as the concept described by the phrase “in connection 

with.” 

39. The Commission’s interpretation of section 23 is also consistent with its holdings 

in Order No. 636.75 As described in subsequent orders, the Commission has not 

“requir[ed] intrastate pipelines to introduce all the features of open-access service that we 

have required of interstate pipelines” because requiring intrastate pipelines to do so 

“could make it unduly burdensome to participate in interstate markets, contrary to the 

intent of the [Natural Gas Policy Act of 1978].”76 Here, the Commission proposes to 

impose only a posting burden on non-interstate pipelines that is equivalent to the posting 

requirements of interstate pipelines. In other respects, the burden on non-interstate 

pipelines remains far less than that on interstate pipelines in keeping with the Natural Gas 

any manipulative or deceptive device or contrivance...in contravention of 

[Commission] rules and regulations. 

15 U.S.C. 717t-2c-1 (2000 & Supp. V 2005). In Order No. 670, the Commission 

observed that the Supreme Court interpreted the phrase “in connection with” 

broadly in interpreting section 10(b) of the Securities Exchange Act. As noted in 

that order, section 4A “closely track[s] the prohibited conduct language in section 

10(b) of the Securities Exchange Act of 1934, Securities Exchange Act of 1934, 

15 U.S.C. 78j(b), and specifically dictate[s] that the terms ‘manipulative or 

deceptive device or contrivance’ are to be used “as those terms are used in section 

10(b) of the Securities Exchange Act of 1934.” Order No. 670 at P 6. 

75 See, e.g., Order No. 636, FERC Stats. & Regs. ¶ 30,939, at 30,406 (permitting, 

but not requiring intrastate pipelines, to offer open-access, contract storage). 

76 EPGT Texas Pipeline, L.P., 99 FERC ¶ 61,295, at 62,252 (2002).
Docket No. RM08-2-000 - 29 - 

Policy Act of 1978. While in the past, the Commission exempted intrastate pipelines 

from open-access requirements, such as electronic bulletin boards,77 any change in that 

exemption would be justified in order to further the Commission’s transparency goals as 

set forth in section 23 of the Natural Gas Act. 

40. Finally, the Commission recognizes commenters’ concern that the Commission’s 

proposal could appear to lead to further regulation. As explained above, however, the 

Commission’s transparency authority over non-interstate pipelines is limited to obtaining 

and disseminating information. The Commission has no interest in comprehensive 

regulation of non-interstate pipelines. The Commission reiterates, section 1 of the 

Natural Gas Act continues to exclude non-interstate pipelines from such comprehensive 

regulation.78

III. Interstate Pipeline Posting Requirements

41. In the Initial NOPR, the Commission sought comment on whether it should revise 

its posting requirements applicable to interstate pipelines to require posting actual flow 

information.79 The Commission raised the question because we proposed to require 

intrastate pipelines to post actual flow information, a requirement beyond that applied to 

interstate pipelines under § 284.13(d)(1) of the Commission’s regulations, and because 

 77 Order No. 636-B, 61 FERC ¶ 61,272, at 61,992, n.26.

78 15 U.S.C. 717. 

79 Initial NOPR at P 43. 
Docket No. RM08-2-000 - 30 - 

 

posting of actual flow information could provide useful information regarding actual 

capacity use, for instance, by giving insight into the use of no-notice service.80 In this 

regard, Commission Staff observed that its ability to monitor flows in the interstate 

pipeline system is limited in certain locations, by the lack of actual flow information. In 

the case of “no-notice” service,81 specifically, interstate pipeline schedules do not reflect 

actual flows. Consequently, information about interstate flows in areas using no-notice 

service is less useful. In its comments on the Initial NOPR, the Natural Gas Supply 

Association (NGSA) observed that, “[o]n heating season peak days or days with wide 

intra-day weather swings, no-notice volumes can be significant; therefore, scheduled flow 

volumes are not a proxy for physical flow and, thus, do not necessarily provide an 

accurate picture of underlying market fundamentals.”82 Similarly, Commission Staff 

observed that the gap between scheduled and actual flows occurs most commonly in the 

northern tier of the country, particularly, where a pipeline serves a local distribution 

company with significant space heating demand. In such circumstances, market 

observers find it more difficult to ascribe price behavior to physical changes in flows. 

42. Public posting of information reflecting no-notice service could also prevent other 

forms of misconduct with direct effects on natural gas in interstate commerce. 

80 Initial NOPR at P 43. 

81 See 18 CFR 284.7(a)(4). 

82 NGSA Comments at 10. 
Docket No. RM08-2-000 - 31 - 

 

Commission investigations of interstate and intrastate pipeline activity resulted in two 

settlements in which the settling party admitted it sought to obtain and exploit non-public 

storage inventory information to gain a competitive advantage in wholesale gas 

markets.83 Though this proposal would make public flow information, not storage 

information, the importance of the non-public information is analogous. These 

admissions indicate that the lack of public flow information provides the opportunity for 

parties to engage in manipulative or unduly discriminatory behavior. By making major 

non-interstate pipeline flow information public, such transparency could discourage 

market participants from engaging in such manipulative or unduly discriminatory 

activity. 

43. In this NOPR, the Commission proposes to require interstate pipelines to post 

actual flow information in addition to the capacity and scheduled flow information that 

interstate pipelines are currently required to post. Accordingly, the Commission proposes 

adding to § 284.13(d) this requirement: “An interstate pipeline must also provide in the 

83 Dominion Resources, Inc., 108 FERC ¶ 61,110 (2004) (Dominion Resources, 

DTI and DEC admit that DTI violated section 161.3(f) of the Commission’s regulations, 

former 18 CFR 161.3(f) (2003)); The Williams Companies, Inc., 111 FERC ¶ 61,392 

(2005) (Transco admits that it violated section 161.3(f) of the Commission’s regulations, 

former 18 CFR 161.3(f) (2002)). 
Docket No. RM08-2-000 - 32 - 

 

same manner [as other information is provided] access to information on actual flowing 

volumes at receipt points, on the mainline, at delivery points, and in storage fields.”84

44. In response to the Initial NOPR, several commenters supported requiring interstate 

pipelines to post actual flow volumes.85 The NGSA asserted that posting of actual flow 

data “could lead to even more accurate and near real-time indication of underlying 

market supply and demand fundamentals”86 The National Association of Royalty 

Owners (NARO) contended that requiring interstate pipelines to post actual flow volumes 

would allow an “apples to apples” comparison with the postings of intrastate pipelines.87 

45. The Interstate Natural Gas Association of America (INGAA) opposed any 

proposal for interstate pipelines to post actual flows. INGAA contended that: (1) 

scheduled flows are adequate for market participants to estimate demand and supply 

conditions in order to price market transactions; (2) actual flows include operational data 

that is not relevant and may be counterproductive, such as flows reflecting maintenance 

activities, storage injection and withdrawal schedules, line pack management, balancing 

at interconnects, and blending to meet quality specifications not related to commercial 

flows and (3) the no-notice activity that would be captured by posting actual flows does 

84 Proposed 18 CFR 284.13(d). 

85 See, e.g., NGSA at 10; and Apache Corp. at 8-9. 

86 NGSA Comments at 10. 

87 NARO Comments at 4. 
Docket No. RM08-2-000 - 33 - 

 

not reflect trading activity, but rather reflects storage withdrawals.88 Williston Basin 

Interstate Pipeline Company (Williston) indicated that scheduled flow volumes were 

adequate and actual volumes not necessary.89

46. In order to effectively balance the benefits of the additional flow information with 

the costs of such a requirement, the Commission seeks further information regarding both 

the benefits of the additional information available if actual flow volumes were posted by 

interstate pipelines, and the costs imposed on interstate pipelines to develop and post that 

information. In providing comments on this proposal, the Commission encourages 

commenters to support their comments by providing specific examples. 

47. Regarding benefits, is information lost by not providing actual flows? What is the 

extent of any such lost information? How extensive is the use of no-notice service? Is 

information regarding operational flows, such as flows reflecting maintenance activities, 

storage injection and withdrawal schedules, line pack management, balancing at 

interconnects, and blending to meet quality specifications, useful to understand supply 

and demand fundamentals? Does the no-notice activity that would be captured by 

posting actual flows reflect trading activity or does it reflect storage withdrawals? Can 

trading activity and storage withdrawals be considered as separate activities? How? 

88 INGAA Comments at 3-4. 

89 Williston Reply Comments at 4. 
Docket No. RM08-2-000 - 34 - 

48. Regarding costs, how is actual flow information collected today for operational, 

balancing, billing or other purposes? What process changes, if any, would be required 

for interstate pipelines to post actual flow information? How much time after flow 

would be required before such information would be available for posting? Would 

posting actual volumes reveal any information that might be harmful to any competitive 

interests? How could it be harmful? 

IV. Postings by Non-Interstate Pipelines

49. In the Initial NOPR, the Commission proposed to require certain intrastate 

pipelines to post daily information regarding the capacity and actual flows at major 

receipt and delivery points and mainline segments. In the instant NOPR, the Commission 

proposes to require non-interstate pipelines to post scheduled flow information in 

addition to capacity and actual flow information.90 Only a “major non-interstate 

pipeline” would be required to post information. For the purposes of this NOPR, a 

“major non-interstate pipeline” is defined as one that is not a “natural gas company” 

under section 1 of the Natural Gas Act and that flows greater than 10 billion cubic feet of 

natural gas per year, with two exceptions.91 The first exception is non-interstate pipelines 

that fall entirely upstream of a processing plant.92 The second exception is non-interstate 

 90 Proposed 18 CFR 284.14(a). 

91 Proposed 18 CFR 284.1. 

92 Proposed 18 CFR 284.14(b)(1). 
Docket No. RM08-2-000 - 35 - 

pipelines that deliver more than ninety-five percent (95%) of the natural gas volumes 

they flow directly to end-users.93

A. Rationale

50. Through the information that would be obtained from the daily posting 

requirement on major non-interstate pipelines, the Commission, market participants, and 

the public could obtain a picture of daily supply and demand conditions that directly 

affect U.S. wholesale natural gas markets – a picture that is currently incomplete without 

information from major non-interstate pipelines.94 Consequently, this proposal to 

increase information from certain major non-interstate pipelines would directly “facilitate 

price transparency for the sale... of physical natural gas in interstate commerce” as 

authorized in the natural gas transparency provisions.95

51. The posted information from major non-interstate pipelines would qualify as, in 

the words of the transparency provisions, “information about the availability and prices 

of natural gas sold at wholesale and in interstate commerce.”96 Notwithstanding their 

 93 Proposed 18 CFR 284.14(b)(2). 

94 In this section, the Commission reiterates its discussion from the Initial NOPR. 

95 Section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 717t-2(a)(1) (2000 & Supp. 

V 2005). 

96 Section 23(a)(2) of the Natural Gas Act, 15 U.S.C.A. 717t-2(a)(2) (2000 & 

Supp. V 2005). 
Docket No. RM08-2-000 - 36 - 

 

status under section 1 of the Natural Gas Act, most major non-interstate pipelines today 

transport or buy and sell wholesale natural gas that eventually enters or at least impacts 

the interstate natural gas market. Further, supply and demand in non-interstate markets 

have a direct effect on prices of gas destined for interstate markets because both intrastate 

and interstate consumers draw on the same sources of supply. This is the case because of 

the statutory, regulatory and market changes that have taken place in the last three 

decades. 

52. In the Natural Gas Policy Act of 1978, Congress allowed an intrastate pipeline to 

transport natural gas in interstate commerce on behalf of any interstate pipeline or local 

distribution company served by an interstate pipeline, without losing its intrastate 

status.97 Congress likewise permitted an intrastate pipeline to sell natural gas to any 

interstate pipeline or any local distribution company served by any interstate pipeline, 

without losing its intrastate status.98 In addition, at the same time that the Commission 

issued Order No. 636 in 1992, it promulgated a new subpart of Part 284 (revised several 

times in the past 15 years) that provides blanket authority to any person who is not an 

interstate pipeline (including intrastate pipelines) to make sales for resale of natural gas in 

97 See section 311(a)(2) of the Natural Gas Policy Act of 1978, 15 U.S.C. 

3371(a)(2); see also 18 CFR part 284, subpart C (Certain Transportation by Intrastate 

Pipelines). 

98 See section 311(b) of the Natural Gas Policy Act of 1978, 15 U.S.C. 3371(b); 

see also 18 CFR part 284, subpart D (Certain Sales by Intrastate Pipelines). 
Docket No. RM08-2-000 - 37 - 

 

interstate commerce.99 This authorization is a limited jurisdiction sales certificate, which 

means that the holder does not become subject to the panoply of Natural Gas Act 

regulation by exercising its rights under the certificate.100

53. The market understandably reacted to these statutory and regulatory changes since 

1978. As relevant here, natural gas sold at or destined to be sold at wholesale in the 

interstate market is frequently exchanged or the transactions consummated at market 

hubs where interstate and non-interstate pipelines interconnect (e.g., Waha, Katy, 

Houston Ship Channel, and Carthage in Texas and at Henry Hub in Louisiana). Prices 

formed at these hubs are, in effect, prices for wholesale transactions in interstate 

commerce, even if a portion of the gas priced at each market hub is consumed intrastate. 

In addition, transfer of natural gas can take place directly between parties who ship gas 

on both interstate and non-interstate pipelines at any pipeline interconnection. 

54. Currently, through the availability of information regarding daily scheduled flows 

of natural gas through interstate pipelines, market participants have an increased, daily 

understanding of natural gas markets, including regional conditions and the pipeline 

capacity available to resolve different geographic supply/demand balances. This is due in 

part to Order No. 637, where the Commission required posting of capacity and scheduled 

99 Order No. 636 FERC Stats. & Regs. ¶ 30,939, at 30,391.

100 See 18 CFR part 284, subpart L (Certain Sales for Resale by Non-interstate 

Pipelines). 
Docket No. RM08-2-000 - 38 - 

 

volume information on interstate pipelines with the direct intention of allowing shippers 

to monitor capacity availability.101 Accordingly, interstate pipelines must post available 

capacity information, specifically: 

the availability of capacity at receipt points, on the mainline, at delivery 

points, and in storage fields, whether the capacity is available directly 

from the pipeline or through capacity release, the total design capacity of 

each point or segment on the system; the amount scheduled at each point 

or segment whenever capacity is scheduled, and all planned and actual 

service outages or reductions in service capacity.102

In Order No. 637, the Commission anticipated that such postings would provide useful 

information regarding supply and demand fundamentals:The changes to the 

Commission’s reporting requirements will enhance the reliability of information about 

capacity availability and price that shippers need to make informed decisions in a 

competitive market as well as improve shippers’ and the Commission’s ability to monitor 

marketplace behavior to detect, and remedy anticompetitive behavior.103

101 Regulation of Short-Term Natural Gas Transportation Services, and Regulation 

of Interstate Natural Gas Transportation Services, Order No. 637, 65 FR 10156, at 10204-

10205, (Feb. 25, 2000), FERC Stats. & Regs. ¶ 31,091, at 31,320-31,321 (2000); order 

on reh’g, Order No. 637-A, 65 FR 35706 (June 5, 2000), FERC Stats. & Regs. ¶ 31,099 

(2000); order on reh’g, Order No. 637-B, 65 FR 47284 (Aug. 2, 2000), affirmed in 

relevant part, Interstate Natural Gas Ass’n of America v. FERC, 285 F.3d 18 (D.C. Cir. 

2002), order on remand, 101 FERC ¶ 61,127 (2002), order on reh’g, 106 FERC ¶ 61,088 

(2004), aff’d sub nom., American Gas Ass’n v. FERC, 428 F.3d 255 (D.C. Cir. 2005) 

(Order No. 637).

102 18 CFR 284.13(d). 

103 Order No. 637, 65 FR at 10169. 
Docket No. RM08-2-000 - 39 - 

 

55. Today, interested market participants as well as commercial vendors retrieve this 

information from the websites of interstate pipelines to obtain schedule information that 

is then used to estimate a variety of supply and demand conditions including geographic 

and industrial sector consumption, storage injections and withdrawals and regional 

production in almost real-time.104 Market participants have come to rely on this 

information to help price transactions. Commission Staff has also come to rely on this 

information to perform its oversight and enforcement functions. In fact, market observers 

believe that posting of this information contributes to market transparency by revealing 

the underlying volumetric (or availability) drivers behind price movements.105

56. Notwithstanding the contribution of posted interstate schedule information to the 

transparency of price and availability of natural gas, this information cannot provide a 

complete picture of natural gas flows in the United States – or even those flows directly 

relevant to the pricing of natural gas flowing in interstate commerce. Several major U.S. 

natural gas pricing points sit at the confluence of multiple interstate and non-interstate 

pipelines. A recent study by the U.S. Department of Energy’s Energy Information 

Administration (EIA) identified twenty-eight national market centers or pricing hubs, of 

104 See, e.g., Comments of Bentek Energy, LLC., Docket No. AD06-11-000 (filed 

Oct. 10, 2006). 

105 See, e.g., Comments of Platt’s, at 11-13, Docket No. AD06-11-000 

(information regarding the supply and demand of natural gas explains prices and such 

information is available from interstate pipelines, but not intrastate pipelines). 
Docket No. RM08-2-000 - 40 - 

which thirteen are served by a combination of interstate and non-interstate pipelines.106 

The table below shows the capacity of interstate and non-interstate pipelines connected to 

each of these thirteen hubs. 

Table 1: Inter- and Intrastate Pipeline Delivery Capacity at 

Selected U.S. Natural Gas Pricing Points 

Receipt and Delivery Capacity

Hub Name State

Interstate Pipelines 

(MMcfd)

Non-interstate 

Pipelines (MMcfd)

Carthage TX 1,120 1,355

Henry Hub LA 2,770 1,215

Katy – Enstor TX 1,370 3,815

Katy – DEFS TX 260 2,360

Mid Continent KS 1,112 627

Moss Bluff TX 1,050 1,800

Nautilus LA 1,200 1,350

Perryville LA 3,652 350

Aqua Dulce TX 855 835

Waha - Lone Star TX 810 1,140

Waha – Encina TX 525 800

Waha - El Paso TX 1,165 1,660

Waha – DEFS TX 300 1,850

Source: Unpublished Energy Information Administration update to March 2005 of information presented in

Natural Gas Market Centers and Hubs: A 2003 Update, October 2003.

 

57. Many of these pricing points are closely connected to other regions of the United 

States, influencing prices across the country. The figure below shows the location and 

 106 Department Of Energy, Energy Information Administration, Natural Gas 

Market Centers And Hubs: A 2003 Update, Oct. 2003, http://www.eia.doe.gov/pub/ 

oil_gas/natural_gas/feature_articles/2003/market_hubs/mkthubs03.pdf 
Docket No. RM08-2-000 - 41 - 

flow patterns of natural gas moving between interstate and non-interstate markets through 

several of these pricing points. 

Figure 1 

Texas and Louisiana Market Hubs and Their Connection to Other Regions in the 

United States 

58. One pricing point directly connected to both interstate and non-interstate pipelines 

is Henry Hub, Louisiana, the location for delivery of natural gas under the New York 

Mercantile Exchange’s (NYMEX) futures contract. Monthly settlement of NYMEX’s 

Henry Hub natural gas future contract has become important in determining a variety of 
Docket No. RM08-2-000 - 42 - 

 

monthly index prices used to set natural gas prices in a variety of transactions, some in 

interstate commerce, particularly along the East Coast and Gulf Coast of the United 

States. The nature of this influence is detailed in Commission Staff’s 2006 State of the 

Markets Report.107

59. Further, purchasers of natural gas in interstate commerce draw on the same 

sources of supply as users and buyers of natural gas in intrastate commerce. For 

example, much of the recent Barnett Shale development in the Fort Worth basin flows 

into intrastate systems before moving into interstate markets. In total, slightly more than 

forty percent of total on-shore production in Texas is connected to interstate pipelines, 

less than sixty percent in Louisiana and less than eighty percent in Oklahoma.108 Though 

daily volume flowing from non-interstate into interstate pipelines can be estimated, the 

supply dynamics that make these volumes available cannot. 

60. The daily posting of flow information by major non-interstate pipelines would 

provide several benefits to the functioning of natural gas markets in ways that would 

protect the integrity of physical, interstate natural gas markets, protect fair competition in 

107 Federal Energy Regulatory Commission, 2006 State of the Markets Report at 

48-50 (Jan. 2007), www.ferc.gov/market-oversight/market-oversight.asp, (follow link to 

the State of the Markets Full Report). 

108 Bentek Energy, LLC analysis of supply scheduled into interstate pipelines 

compared with EIA data from its table Natural Gas Gross Withdrawals and Production 

for Texas and Oklahoma available at 

http://tonto.eia.doe.gov/dnav/ng/ng_prod_sum_dcu_NUS_m.htm. 
Docket No. RM08-2-000 - 43 - 

 

those markets and consequently serve the public interest by better protecting consumers. 

First, by providing a more complete picture of supply and demand fundamentals, these 

postings would improve market participants’ ability to assess supply and demand and to 

price physical natural gas transactions. Second, during periods when the U.S. natural gas 

delivery system is disturbed, for instance due to hurricane damage to facilities in the Gulf 

of Mexico, these postings would provide market participants a clearer view of the effects 

on infrastructure, the industry, and the economy as a whole. Finally, these postings 

would allow the Commission and other market observers to identify and remedy 

potentially manipulative activity. We discuss each of these points in turn. 

61. First, the proposed daily capacity and volume postings by major non-interstate 

pipelines would improve market participants’ ability to assess supply and demand and 

price physical natural gas transactions by providing a more complete picture of supply 

and demand fundamentals.109 As discussed above and noted in comments filed in these 

proceedings, interstate pipeline information does not provide a complete picture of the 

109 See, e.g., Comments of Platt’s at 11, Docket No. AD06-11-000 (filed Nov. 1, 

2006) (explaining that, to understand prices, “the marketplace must look to... information 

on [the] availability of and demand for natural gas....”). 
Docket No. RM08-2-000 - 44 - 

 

supply and demand fundamentals that apply to interstate commerce because much of the 

natural gas in the U.S. is moved through the non-interstate pipeline system.110

62. Second, the proposed daily non-interstate pipeline capacity and volume postings 

would provide market participants – and the Commission in its market oversight efforts – 

a clearer view of the effects on infrastructure, the industry, and the economy as a whole 

during periods when the U.S. natural gas delivery system is disturbed. For example, after 

landfall of hurricanes Katrina and Rita in late 2005, even the most interested of 

governmental and commercial market observers were not able to obtain complete 

information regarding the output by potentially-damaged production facilities.111 By 

monitoring receipt and delivery points for production facilities on interstate pipelines, 

market observers were able to obtain only a limited sense of production facility output.112 

Similarly, market participants, state commissions and other market observers were unable 

110 See Comments of Platt’s at 13, Docket No. AD06-11-000 (filed Nov. 1, 2006) 

(stating that much of the fundamental supply and demand data is missing from natural 

gas markets and advocating for reporting by intrastate pipelines). 

111 See, e.g., Comments of Public Service Commission of New York (NYPSC) at 

2; Comments of Bentek Energy LLC at 15-16 & 21-22; Comments of APGA at 3-4; 

Comments of NARO at 2; Transcript of the Oct. 13, 2006 Technical Conference (Tr.), at 

25, Transparency Provisions of the Energy Policy Act of 2005, Docket No. AD06-11-000 

(Comments of Sheila Rappazzo, Chief of Policy Section of the Office of Gas and Water 

of the New York State Department of Public Service). 

112 Tr. 25 (Comments of Sheila Rappazzo) (describing how after the 2005 

hurricanes data availability differed widely). 
Docket No. RM08-2-000 - 45 - 

 

to assess effects on natural gas consumption in the Gulf Coast, including consumption by 

the petrochemical industry, for some period. The significance and duration of these 

effects on this industry – vulnerable to energy price and availability disruptions – remain 

unclear. This proposal would allow interested governmental and private parties to gain a 

much better picture of disruptions in natural gas flows in the case of future hurricanes in 

the Gulf region.113

63. Third, the proposed daily non-interstate pipeline capacity and volume postings 

would allow the Commission and other market observers to identify and remedy 

potentially manipulative activity more actively by tracking price movement in the context 

of natural gas flows.114 In particular, information regarding availability on non-interstate 

pipelines could be used to track manipulative or unduly discriminatory behavior intended 

113 Along these lines, this proposal is consistent with a recent Commission final 

rule and a proposed survey by EIA. On August 23, 2006, the Commission revised its 

reporting regulations to require jurisdictional natural gas companies to report damage to 

facilities due to a natural disaster or terrorist activity that results in a reduction in pipeline 

throughput or storage deliverability. Revision of Regulations to Require Reporting of 

Damage to Natural Gas Pipeline Facilities, Order No. 682, 71 FR 51098 (Aug. 29, 2006), 

FERC Stats. and Regs. ¶ 31,227 (2006), order on reh’g, 118 FERC ¶ 61,118 (2007). On 

January 30, 2007, EIA proposed to survey natural gas processing plants “to monitor their 

operational status and assess operations of processing plants during a period when natural 

gas supplies are disrupted.” Agency Information Collection Activities, 72 FR 4248 

(Jan. 30, 2007). The purpose of the survey would be to “inform the public, industry, and 

the government about the status of supply and delivery activities in the area affected by 

the disruption.” Id.

114 See Comments of NGSA at 8-10. 
Docket No. RM08-2-000 - 46 - 

 

to cause harm to consumers by distorting market prices in interstate commerce. For 

example, Commission Staff overseeing markets routinely check for unused interstate 

pipeline capacity between geographically distinct markets with substantially different 

prices as a sign that flows may be managed to manipulate prices. Given the importance 

of non-interstate pipeline connections to thirteen major pricing hubs, including Henry 

Hub, as discussed above, the lack of flow information on non-interstate pipelines hinders 

the Commission’s market oversight and enforcement efforts. 

64. This benefit comports with EPAct 2005, in which Congress directed the 

Commission to facilitate price transparency in physical, interstate natural gas markets 

“with due regard for the public interest, the integrity of those markets, fair competition, 

and the protection of consumers.”115 By this language, Congress intended that the 

improvement of Commission market oversight activities is a legitimate justification for 

proposing rules under the natural gas transparency provisions. Monitoring and 

preventing manipulative or unduly discriminatory activity would meet the Commission’s 

responsibility for ensuring the integrity of the physical interstate natural gas markets. 

The proposal to make non-interstate pipeline information available to the public would 

assist the Commission in fulfilling that responsibility. 

115 Section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 717t-2(a)(1) (2000 & Supp. 

V 2005). 
Docket No. RM08-2-000 - 47 - 

B. Revisions to the Proposal Set Forth in the Initial NOPR

65. The Commission has developed a more particular definition of the types of noninterstate pipelines that would be required to post. The Commission is not interested in 

burdening smaller non-interstate pipelines like gathering systems, or individual 

consumers to post daily information regarding capacity, scheduled flow volumes, and 

actual flow volumes at major points and mainline segments. Consequently, the 

Commission has altered its proposal from the initial NOPR that used the term “intrastate 

pipeline” to the current proposal which defines “major non-interstate pipeline” to capture 

directly U.S. wholesale natural gas transportation systems of significant size and 

contribution to overall wholesale gas flows across the United States. The Commission 

seeks comment on this proposal. In providing comments, again, the Commission 

encourages commenters to support their comments by providing specific examples. 

66. The Commission also proposes to limit the daily posting requirement by limiting 

the definition of “major non-interstate pipeline” based on whether the non-interstate 

pipeline flows more than 10 million MMBtus of natural gas per year. The intention is to 

focus on non-interstate pipelines of significant size and that consequently make a 

significant contribution to wholesale U.S. natural gas flows. Too low a limit would pick 

up non-interstate pipelines too small to contribute to wholesale market flows of natural 

gas. Too high a limit would lose information about flows that affect wholesale pricing, 

either directly by losing information at major hubs, or less directly by missing important 
Docket No. RM08-2-000 - 48 - 

 

components of wholesale demand or supply not attached to interstate pipelines. By way 

of contrast, Platts reports that total reporting for its next-month indices at all geographical 

locations across the country over the past 12 months (November 2006 through October 

2007) totaled only a little more than 8 billion cubic feet last year.116 Thus, by rough 

comparison, movements of that size on a pipeline could easily affect wholesale prices in 

any particular location. According to EIA statistics from its 2005 Form 176 filings by 

companies that do business (at least in part) as intrastate pipelines, the 10 million MMBtu 

threshold would capture 102 pipelines.117 The number of these non-interstate pipelines 

qualifying as major non-interstate pipelines required to post information would be further 

reduced by the other criteria, such as excluding non-interstate pipelines that fall entirely 

upstream of processing plants and those that deliver more than ninety-five percent (95%) 

of the natural gas volumes they flow directly to end-users. 

67. The Commission seeks comment on these criteria. For the volume criterion, are 

average flows of 10 billion cubic feet of natural gas per year too low a threshold for noninterstate pipelines to require posting at major points and mainline segments? Too high? 

116 As reported on the natural gas.org informational website, maintained by the 

Natural Gas Supply Association, http://www.naturalgas.org/business/marketactivity.asp 

(as of November 29, 2007). 

117 See Comments of Bentek Energy, LLC, Attachment A, Docket Nos. RM07-10-

000 and AD06-11-000 (filed Aug. 21, 2006). 
Docket No. RM08-2-000 - 49 - 

 

68. The Commission would exempt from the daily posting requirement two types of 

non-interstate pipelines that meet the volume criterion. First, a major non-interstate 

pipeline that lies entirely upstream of a processing plant would be exempt.118 The 

Commission seeks comment on its proposed exemption of a non-interstate pipeline that 

lies entirely upstream of processing plants. If these non-interstate pipelines were 

excluded from the pipeline posting requirement, would significant information useful for 

determining price and availability of natural gas likely be lost? 

69. Second, the Commission proposes to exempt any major non-interstate pipeline 

that makes greater than ninety-five percent (95%) of its deliveries directly to end-users. 

The Commission seeks comment on this exemption.119 If these non-interstate pipelines 

were excluded from the pipeline posting requirement, would significant information 

useful for determining price and availability of natural gas likely be lost? Overall, are 

there any other categories of major non-interstate pipelines that should be exempt from 

the daily posting requirements? 

70. The comments on the Initial NOPR inform the Commission’s revised proposal to 

limit posting to major non-interstate pipelines. In its comments on the Initial NOPR, 

affiliates Agave Energy Corp. and Yates Petroleum Corp. (Agave-Yates) urged the 

118 Proposed 18 CFR 284.214(b)(1). 

119 Proposed 18 CFR 284.214(b)(2). 
Docket No. RM08-2-000 - 50 - 

 

Commission to limit the requirement for daily posting of flow data to those intrastate 

pipelines with receipt or delivery points connected to the 13 major market hubs served by 

both interstate and intrastate pipelines.120 Bentek Energy LLC (Bentek) proposed 

determining on a case by case basis which intrastate pipelines should post.121 As for this 

approach, Bentek observed that it “would solve the issue of small regional pipelines 

being too small to meet a threshold applied nationally, but would require considerable 

analysis by the Commission to implement [including] ongoing analysis as pricing points 

change periodically.”122 The Commission seeks further comment on which noninterstate pipelines should be subject to the daily posting proposal. 

71. The Commission seeks comment on whether this proposal would meet the three 

purposes discussed above. Specifically, would the proposal: (1) provide a more 

complete picture of supply and demand fundamentals and improve market participants’ 

ability to assess supply and demand and to price physical natural gas transactions; 

(2) provide, during periods when the U.S. natural gas delivery system is disturbed, for 

instance due to hurricane damage to facilities in the Gulf of Mexico, a clearer view of the 

effects on infrastructure, the industry, and the economy as a whole; and (3) allow the 

Commission and other market observers to identify and remedy potentially manipulative 

120 Comments of Agave-Yates at 9-10; Reply Comments of Agave-Yates at 1-2. 

121 Reply Comments of Bentek Energy LLC at 6. 

122 Reply Comments of Bentek Energy LLC at 6. 
Docket No. RM08-2-000 - 51 - 

 

activity?123 Alternatively, would these three purposes be met if the Commission limited 

the pipeline posting proposal to those non-interstate pipelines with receipt or delivery 

points connected to the 13 major market hubs served by both interstate and intrastate 

pipelines? 

72. In the Initial NOPR, the Commission sought comment on how to define “major” 

receipt and delivery points and mainline segments on intrastate pipelines for the purpose 

of any posting requirement. Developing an operational definition of “major” receipt and 

delivery points and mainline segments on major non-interstate pipelines is crucial to 

making the proposal work effectively and reasonably. The Commission stated that it 

“does not wish to include extremely small points connected to one or a few customers, 

which it would consider burdensome and possibly even anti-competitive in certain 

cases.”124 

73. Commenters provided suggestions for which receipt and delivery points on noninterstate pipelines should be subject to the posting requirement. The NARO commented 

that it would like to see as many points posted as possible explaining that more than 

ninety percent of flows in Texas occur in pipelines that move more than 5,000 

123 See, supra, at P 61-64.

124 Initial NOPR at P 39. 
Docket No. RM08-2-000 - 52 - 

 

MMBtu/day.125 The Texas Alliance of Energy Producers (Texas Alliance) said that the 

definition of “major points” should capture flows at locations used to establish market 

prices (i.e., index points), with the definition crafted to capture enough points to reduce 

the opportunity for market manipulation.126 The Petroleum Association of Wyoming 

(PAW) said the definition of “major points” should be limited to those on interstate 

pipelines.127 Copano Energy LLC, in its reply comments, said that (at most) the posting 

requirement should apply to major market hubs and centers identified by the Energy 

Information Administration and other current market hubs or centers for which a daily 

price is published by a nationally recognized industry publication.128 Crosstex Energy 

Services stated that the Commission should, at most, require the posting of available 

capacity and scheduled flow volumes (not actual flow information) at receipt and 

delivery points (not segments) at the 13 major interstate/intrastate pricing hubs identified 

in the NOPR as directly affecting interstate pricing.129 The Kinder Morgan Texas 

Intrastate Pipeline Group (Kinder Morgan) stated that posting of scheduled quantities at 

125 NARO Comments at 2-3. 

126 Texas Alliance Comments at 12. 

127 PAW Comments at 2. 

128 Copano Reply Comments at 3. 

129 Crosstex Reply Comments at 8. 
Docket No. RM08-2-000 - 53 - 

 

major hub points where index prices are published would be less burdensome than the 

NOPR proposal.130 

74. Comments on the Initial NOPR on how to define “major” receipt and delivery 

points and mainline segments, in many cases, focused less on developing effective 

operational definitions than they did on jurisdictional and burden issues. The goal of the 

pipeline posting proposal is to allow the development of a more complete and more 

immediate picture of wholesale natural gas flows across the United States, regardless of 

the traditional regulatory authority under which a particular pipeline operates, at a 

reasonable cost. To accomplish this task, the Commission needs to develop a stronger 

record about the possible measurement points on major non-interstate pipelines that could 

contribute valuable information at a reasonable trade-off with costs of implementation. 

Consequently, the Commission seeks further comment on which points should be posted 

by major non-interstate pipelines. In order to effectively balance the benefits of a better 

understanding of national natural gas flows based on more detailed flow information 

against the costs of the equipment and systems necessary to deliver that information, the 

Commission seeks comment regarding how to determine the points at which it should 

require posting of flow information. Again, the Commission encourages commenters to 

support their assertions with specific examples. 

130 Kinder Morgan Reply Comments at 12. 
Docket No. RM08-2-000 - 54 - 

75. In particular, related to Kinder Morgan’s comments, could sufficient information 

be developed with posting only of flows in and out of major pipeline hubs? In that case, 

how should those hubs be determined? Should they be limited only to those hubs for 

which index prices are produced? By looking only at flows into and out of major 

pipeline hubs for which index prices are produced, would market participants lose 

information important to the assessment of national supply and demand balances lost? 

What other criteria could be used to make the determination of points to be posted? Is a 

volumetric limit sufficient? If a line sees flows in both directions during the day, is a net 

directional flow for the day valuable, or confusing? 

V. Storage Information and Non-Public Postings

76. Prompted by comments of storage providers in response to the Initial NOPR, the 

Commission seeks comment on how its posting proposal herein would affect storage 

providers. By way of background, in its comments, Enstor Operating Company (Enstor), 

an independent gas storage service provider with market-based rates, said it should not be 

required to post information regarding scheduled flows because gas storage information 

is readily available.131 If required to post information, the Commission should provide 

for non-public reporting and analysis of flow data and disseminate such information to 

 131 Comments of Enstor at 4. 
Docket No. RM08-2-000 - 55 - 

 

the public only in aggregated form.132 Enstor stated that if its flow information were 

public, it would lose negotiating strength in the marketplace because its customers with 

multiple service options would know storage capacity available at its facility, even 

though it would have no knowledge of such customers’ needs and limited knowledge 

about capacity levels at competing, regulated storage facilities.133 Enstor cautioned that 

release of flow data from individual storage facilities would lead to the practice of 

reading other market participants’ movements and buying or selling in front of 

anticipated future movements to take advantage of resulting price swings, which would 

raise prices.134 Without non-public treatment of its flow data, Enstor contended that its 

margins would be squeezed and it would make less money.135 Enstor added that 

aggregated information disseminated by the Commission would be more useful to endusers than disaggregated data.136 

77. In order to assess the concerns expressed by Enstor (notably the only storage 

provider to raise this concern), the Commission seeks comments on the following 

questions. Regarding flows of gas in the United States, does existing gas storage 

132 Comments of Enstor at 9.

133 Comments of Enstor at 8; Reply Comments of Enstor at 5. 

134 Reply Comments of Enstor at 6. 

135 Reply Comments of Enstor at 8. 

136 Reply Comments of Enstor at 10. 
Docket No. RM08-2-000 - 56 - 

information provide the same value of the information that would be collected in the 

Commission’s proposal? Interested commenters should compare the benefits of requiring 

storage providers to post flow information publicly with the benefits and costs of 

providing information to the public only in aggregated form. Those address this issue 

should address whether non-public reporting to the Commission would support the goals 

of the natural gas transparency provisions to “facilitate price transparency for the sale... 

of physical natural gas in interstate commerce”?137 Further, commenters addressing the 

application of the pipeline posting proposal to storage facility should answer the 

following questions: Can individual storage facilities lose negotiating strength when its 

customers know the supply of available storage capacity? Would release of flow data 

from individual storage facilities lead to increased prices? How many storage facilities 

would likely face this situation if required to post flow information? Would fewer 

storage facilities face this situation if the pipeline posting proposal were modified to 

reduce the number of points to be posted, for example, by limiting posting to lines 

running into or out of major pipeline hubs? 

VI. Information Collection Statement

78. The Office of Management and Budget (OMB) regulations require it to approve 

certain reporting and recordkeeping (information collection) requirements imposed by an 

 137 Section 23(a)(1) of the Natural Gas Act, 15 U.S.C. 717t-2(a)(1) (2000 & Supp. 

V 2005). 
Docket No. RM08-2-000 - 57 - 

 

agency.138 In this NOPR, the Commission makes two proposals that would require the 

posting or collection of information, one for interstate and one for major non-interstate 

pipelines.139 The Commission is submitting notification of these proposed information 

collection requirements to OMB for its review and approval under section 3507(d) of the 

Paperwork Reduction Act of 1995.140

79. One proposal, to require interstate pipelines to post actual flow information, would 

impose an additional information collection burden on interstate pipelines. The other 

proposal, to require major non-interstate pipelines to post actual flow information, would 

impose an additional information collection burden on major non-interstate pipelines. 

Interstate and major non-interstate pipelines already collect flow information for major 

receipt and delivery points. Certain non-interstate pipelines have asserted in the Initial 

NOPR that costs would be quite high if additional equipment was needed to meet quick 

posting deadlines. However, given that this information is used in their business within 

fairly quick periods, the Commission still believes that the burden that would be imposed 

138 5 CFR 1320.11. 

139 The OMB regulations cover both the collection of information and the posting 

of information. 5 CFR 1320.3(c). Thus, the proposal to post information would create an 

information collection burden. 

140 44 U.S.C. 3507(d).
Docket No. RM08-2-000 - 58 - 

 

by this proposed requirement is largely for the collection and posting of this information 

in the required format.141

80. OMB regulations require OMB to approve certain information collection 

requirements imposed by agency rule. The Commission is submitting notification of this 

proposed rule to OMB. 

141 See 5 CFR 1320.3(b)(2) (“The time, effort, and financial resources necessary to 

comply with a collection of information that would be incurred by persons in the normal 

course of their activities (e.g., in compiling and maintaining business records) will be 

excluded from the “burden” if the agency demonstrates that the reporting, recordkeeping, 

or disclosure activities needed to comply are usual and customary.”) 
Docket No. RM08-2-000 - 59 - 

Public Reporting Burden: 

The start-up and annual burden estimates for complying with this proposed rule are as 

follows:

Data 

Collection 

No. Of 

Respondents

142

No. of 

Daily 

Postings 

per 

Respondent

Estimated 

Annual 

Burden 

Hours per 

Respondent 

Total 

Annual 

Hours For 

All 

Respondents 

Estimated 

Start-Up 

Burden Per 

Respondent 

Part 284 

FERC-551 

 

Major NonInterstate Pipeline 

Postings 

102 365 365 37,230 2,080 hours 

Additional 

Interstate Pipeline 

Postings 

109 365 365 39,785 520 hours 

Total 211 - - 77,015 - 

The total annual hours for collection (including recordkeeping) for all respondents is 

estimated to be 77,015 hours. 

 142 The Commission estimated the number of respondents for major non-interstate 

pipelines from EIA information. See Department of Energy, Energy Information 

Administration, U.S. Intrastate Natural Gas Pipeline Systems, 

http://www.eia.doe.gov/pub/oil_gas/natural_gas/analysis_publications/ngpipeline/PIPEin

tra.xls. The Commission estimated the number of respondents that would be interstate 

pipelines also from EIA information. See Department of Energy, Energy Information 

Administration, Thirty Largest U.S. Interstate Natural Gas Pipeline Systems, 2005, 

http://www.eia.doe.gov/pub/oil_gas/natural_gas/analysis_publications/ngpipeline/MajorI

nterstatesTable.html (Listing thirty largest interstate pipelines and referencing seventynine other interstate pipelines). 
Docket No. RM08-2-000 - 60 - 

Information Posting Costs: The average annualized cost for each respondent is projected 

to be the following (savings in parenthesis): 

Annualized 

Capital/Startup Costs 

(10 year amortization) 

Annual Costs Annualized Costs Total

FERC-551 

Major Non-Interstate 

Pipeline Postings $20,800 $36,500 $57,300 

Additional Interstate 

Pipeline Postings $5,200 $36,500 $41,700 

Title: FERC- 551. 

Action: Proposed Information Posting and Information Filing. 

OMB Control No: 1902-0243. 

Respondents: Business or other for profit. 

Frequency of Responses: Daily posting requirements and annual filing requirements. 

Necessity of the Information: The daily posting of additional flow information by 

interstate and major non-interstate pipelines is necessary to provide information regarding 

the price and availability of natural gas to market participants, state commissions, the 

FERC and the public. The posting would contribute to market transparency by aiding the 

understanding of the volumetric/availability drivers behind price movements; it would 

provide a better picture of disruptions in natural gas flows in the case of disturbances to 
Docket No. RM08-2-000 - 61 - 

the pipeline system; and it would allow the monitoring of potentially manipulative or 

unduly discriminatory activity. 

Internal Review: The Commission has reviewed the requirements pertaining to natural 

gas pipelines and determined they are necessary to provide price and availability 

information regarding the sale of natural gas in interstate markets. 

81. These requirements conform to the Commission's plan for efficient information 

collection, communication, and management within the natural gas industry. The 

Commission has assured itself, by means of internal review, that there is specific, 

objective support for the burden estimates associated with the information posting 

requirements. The Commission seeks comment on these estimates. 

82. Interested persons may obtain information on the reporting requirements by 

contacting: Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, 

D.C. 20426, [Attention: Michael Miller, Office of the Chief Information Officer], phone: 

(202) 502-8415, fax: (202) 208-2425, e-mail: Michael.Miller@ferc.gov. Comments on 

the requirements of the proposed rule also may be sent to the Office of Information and 

Regulatory Affairs, Office of Management and Budget, Washington, D.C. 20503 

[Attention: Desk Officer for the Federal Energy Regulatory Commission]. 

83. Comments on the requirements of the proposed rule may also be sent to the Office 

of Information and Regulatory Affairs, Office of Management and Budget, Washington, 
Docket No. RM08-2-000 - 62 - 

D.C. 20503 [Attention: Desk Officer for the Federal Energy Regulatory Commission] 

(202)395-4650 or oira_submission@omb.eop.gov. 

VII. Environmental Analysis

84. The Commission is required to prepare an Environmental Assessment or an 

Environmental Impact Statement for any action that may have a significant adverse effect 

on the human environment.143 The actions taken here fall within categorical exclusions 

in the Commission’s regulations for information gathering, analysis, and dissemination, 

and for sales, exchange, and transportation of natural gas that require no construction of 

facilities.144 Therefore, an environmental assessment is unnecessary and has not been 

prepared in this rulemaking. 

VIII. Regulatory Flexibility Act

85. The Regulatory Flexibility Act of 1980 (RFA)145 generally requires a description 

and analysis of final rules that will have significant economic impact on a substantial 

number of small entities. The RFA requires consideration of regulatory alternatives that 

accomplish the stated objectives of a proposed rule and that minimize any significant 

 

143 Order No. 486, Regulations Implementing the National Environmental Policy 

Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs., Regulations Preambles 1986-

1990 ¶ 30,783 (1987). 

144 18 CFR 380.4(a)(5) and (a)(27). 

145 5 U.S.C. 601-612. 
Docket No. RM08-2-000 - 63 - 

 

economic impact on such entities. The RFA does not, however, mandate any particular 

outcome in a rulemaking. At a minimum, agencies are to consider the following 

alternatives: establishment of different compliance or reporting requirements for small 

entities or timetables that take into account the resources available to small entities; 

clarification, consolidation, or simplification of compliance and reporting requirements 

for small entities; use of performance rather than design standards; and exemption for 

certain or all small entities from coverage of the rule, in whole or in part. The proposal to 

require daily postings by interstate and non-interstate pipelines will not impact small 

entities. Natural gas pipelines are classified under NAICS code, 486210, Pipeline 

Transportation of Natural Gas. 146 A natural gas pipeline is considered a small entity for 

the purposes of the Regulatory Flexibility Act if its average annual receipts are less than 

$6.5 million. 147 The Commission does not believe that any pipeline that would be 

required to post under the proposal in this NOPR has receipts less than $6.5 million. 

Thus, the daily posting proposal will not impact small entities. 

146 This industry comprises establishments primarily engaged in the pipeline 

transportation of natural gas from processing plants to local distribution systems. 2002 

North American Industry Classification System (NAICS) Definitions, 

http://www.census.gov/epcd/naics02/def/ND486210.HTM. 

147 See U.S. Small Business Administration, Table of Small Business Size 

Standards, 

http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf 

(effective July 31, 2006). 
Docket No. RM08-2-000 - 64 - 

IX. Comment Procedures

86. The Commission incorporates by reference the comments filed in Docket No. 

RM07-10-000 into the instant docket and will consider them in this proceeding. In 

addition, the Commission invites interested persons to submit comments on the matters 

and issues proposed in this notice to be adopted, including any related matters or 

alternative proposals that commenters may wish to discuss. Comments are due 

[Insert_Date 45 days from publication in the FEDERAL REGISTER]. Reply 

comments are due [Insert_Date 75 days from publication in the FEDERAL 

REGISTER]. Comments must refer to Docket No. RM08-2-000, and must include the 

commenter's name, the organization they represent, if applicable, and their address in 

their comments. Comments may be filed either in electronic or paper format. 

87. Comments may be filed electronically via the eFiling link on the Commission's 

web site at http://www.ferc.gov. The Commission accepts most standard word 

processing formats. Documents created electronically using word processing software 

should be filed in native applications or print-to-PDF format and not in a scanned format. 

Commenters filing electronically do not need to make a paper filing. Commenters that 

are not able to file comments electronically must send an original and 14 copies of their 

comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 

888 First Street, N.E., Washington, DC, 20426. 
Docket No. RM08-2-000 - 65 - 

88. All comments will be placed in the Commission's public files and may be viewed, 

printed, or downloaded remotely as described in the Document Availability section 

below. Commenters on this proposal are not required to serve copies of their comments 

on other commenters. 

X. Document Availability

89. In addition to publishing the full text of this document in the Federal Register, the 

Commission provides all interested persons an opportunity to view and/or print the 

contents of this document via the Internet through FERC's Home Page 

(http://www.ferc.gov) and in FERC's Public Reference Room during normal business 

hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street, N.E., Room 2A, 

Washington D.C. 20426. 

90. From FERC's Home Page on the Internet, this information is available on 

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Docket No. RM08-2-000 - 66 - 

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List of subjects in 18 CFR Part 284 

Continental Shelf; Incorporation by reference; Natural gas; Reporting and recordkeeping 

requirements. 

By direction of the Commission. 

Nathaniel J. Davis, Sr., 

 Deputy Secretary. 

 

 
Docket No. RM08-2-000 - 67 - 

For the reasons discussed in the preamble, the Federal Energy Regulatory 

Commission proposes to amend 18 CFR chapter I as follows: 

1. The authority citation for part 284 continues to read as follows: 

Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7101-7352; 43 U.S.C. 

1331-1356. 

2. In § 284.1, paragraphs (d) is added to read as follows: 

§ 284.1 Definitions. 

* * * * * 

(d) Major non-interstate pipeline means a pipeline that fits the following 

criteria: 

(1) It is not a “natural gas company” under section 1 of the Natural Gas Act; 

and 

(2) It flows annually more than 10 million (10,000,000) MMBtus of natural gas 

measured in average receipts or in deliveries for the past 3 years. 

3. In § 284.13, paragraph title and paragraph (d)(1) are revised to read as follows: 

§ 284.13 Reporting requirements for interstate pipelines. 

* * * * * 

(d) Capacity and flow information. (1) * * * An interstate pipeline must 

also provide in the same manner access to information on actual flowing volumes at 

receipt points, on the mainline, at delivery points, and in storage fields. This information 

must be posted within 24 hours from the close of the gas day on which gas flows, i.e., on 
Docket No. RM08-2-000 - 68 - 

or before 9:00 a.m. central clock time for flows occurring on the gas day that ended 24 

hours before. 

* * * * * 

4. Section 284.14 is added to read as follows: 

§ 284.14. Flow information of major non-interstate pipelines. 

(a) Daily posting requirement. A major non-interstate pipeline must provide 

on a daily basis on an Internet web site and in downloadable file formats, in conformity 

with § 284.12 of this chapter, equal and timely access to information relevant to the 

capacity of major points and mainline segments and the amount scheduled at each such 

major point or mainline segment whenever capacity is scheduled. A major non-interstate 

pipeline must also provide in the same manner access to information on actual flowing 

volumes at major points and mainline segments. This information must be posted within 

24 hours from the close of the gas day on which gas flows, i.e., on or before 9:00 a.m. 

central clock time for flows occurring on the gas day that ended 24 hours before. 

(b) Exemptions to daily posting requirement. The following categories of 

major non-interstate pipelines are exempt from the reporting requirement of § 284.14(a): 

(1) Those that fall entirely upstream of a processing plant; and 

(2) Those that deliver more than ninety-five percent (95%) of the natural gas 

volumes they flow directly to end-users. 
Docket No. RM08-2-000 - 69 - 

(3) To determine eligibility for the exemption in paragraph 284.14(b)(2), a 

major non-interstate pipeline must measure volumes by average deliveries over the 

preceding three calendar years.