Natural Gas Policy Act
PL 95-621 (H.R.5289), enacted 11/09/1978

92 STAT. 3350 
PUBLIC LAW 95-621—NOV. 9, 1978 
Nov. 9, 1978 
[H.R. 5289] 
Natural Gas 
Policy Act of 
1978. 
Joe Cortina. 
Musical 
instruments. 
duty. 
Public Law 95-621 
. 
•• 
95th Congress 
An Act 
For the relief of Joe Cortina of Tampa, Florida. 
Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled, 
TITLE I—FOR THE RELIEF OF JOE CORTINA 
SEC. 101. Notwithstanding the provisions of section 514 of the Tariff 
Act of 1930 (19 U.S.C. 1514) or any other provision of law, the entries 
listed in section 102 of this title, covering certain musical instruments, 
shall be liquidated or reliquidated and, if appropriate, refund of duties 
made. NotwitSistanding the provisions of General Headnote 3(e) of 
the Tariff Schedules of the United States (19 U.S.C. 1202) or any 
other provision of law, for purposes of the liquidations or reliquida-
tions authorized by this title, such entries shall be appraised at invoice 
unit prices net, packed, and shall be subject to duty at the applicable 
rates set forth in column 1 of such schedules. 
SEC. 102. The entries referred to in the first section of this title are as 
follows: 
Entry number: 
Date of entry 
100284 
July 14,1972. 
100607 
July 27,1973. 
101233 
August 18,1972. 
101426 
September 1,1972. 
101756 
September 14,1972. 
102217 
October 15,1973. 
102394 
October 7,1971. 
102483 
October 15,1971. 
102687 
November 15,1971. 
102708 
July 8,1973. 
102711 
November 17,1971. 
102781 
October 20,1972. 
103117 
December 16,1971. 
103252 
November 8,1972. 
103275 
December 28,1971. 
103576 
November 22,1972. 
103638 
November 27,1972. 
104335 
December 21,1972. 
104601 
March 8,1972. 
104920 
January 16,1973. 
105205 
April 10,1972. 
105998 
May 15,1972. 
105998 
March 2,1973. 
106002 
May 15,1972. 
106730 
June 21,1972. 
106731 
June 21,1972. 
106888 
June 29,1972. 
103114 
December 16,1971. 
108444 
June 11,1973. 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3351 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the "Natural Gas Pol- 
15 USC 3301 
icy Act of 1978". 
°«te-
(b) TABLE OF CONTENTS.— 
TABLE OF CONTENTS 
Sec. 1. Short title; table of contents. 
Sec. 2. Definitions. 
TITLE I—WELLHEAD PRICING 
Subtitle A—Wellhead Price Controls 
Sec. 101. Inflation adjustment; other general price ceiling rules. 
Sec. 102. Ceiling price for new natural gas and certain natural gas produced 
from the Outer Continental Shelf. 
Sec. 103. Ceiling price for new, onshore production wells. 
Sec. 104. Ceiling price for sales of natural gas dedicated to interstate commerce. 
Sec. 105. Ceiling price for sales under existing intrastate contracts. 
Sec. 106. Ceiling price for sales under rollover contracts. 
* 
Sec. 107. Ceiling price for high-cost natural gas. 
Sec. 108. Ceiling price for stripper well natural gas. 
Sec. 109. Ceiling price for other categories of natural gas. 
Sec. 110. Treatment of State severance taxes and certain production-related 
costs. 
Subtitle B—Decontrol of Certain Natural Gas Prices 
Sec. 121. Elimination of price controls for certain natural gas sales. 
Sec. 122. Standby price control authority. 
Sec. 123. Report to the Congress. 
TITLE II—INCREMENTAL PRICING 
Sec. 201. Industrial boiler fuel use. 
Sec. 202. Amendment expanding application for other industrial uses. 
Sec. 203. Acquisition costs subject to passthrough. 
Sec. 204. Method of passthrough. 
Sec. 205. Local distribution company passthrough requirements. 
Sec. 206. Exemptions. 
Sec. 207. Treatment of certain imports. 
Sec. 208. Alaska natural gas. 
TITLE III—ADDITIONAL AUTHORITIES AND REQUIREMENTS 
Subtitle A—Emergency Authorities 
Sec. 301. Declaration of Emergency. 
Sec. 302. Emergency purchase authority. 
Sec. 303. Emergency allocation authority. 
Sec. 304. Miscellaneous provisions. 
Subtitle B—Other Authorities and Requirements 
Sec. 311. Authorization of certain sales and transportation. 
Sec. 312. Assignment of contractual rights to receive surplus natural gas. 
Sec. 313. Effect of certain natural gas prices on indefinite price escalator clauses. 
Sec. 314. Clauses prohibiting certain sales, transportation, and commingling. 
See. 315. Contract duration; right of first refusal; filing of contracts and 
agreements. 
TITLE IV—NATURAL GAS CURTAILMENT POLICIES 
Sec. 401. Natural gas for essential agricultural uses. 
Sec. 402. Natural gas for essential industrial process and feedstock uses. 
Sec. 403. Establishment and implementation of agricultural and industrial 
priorities. 
Sec. 404. Limitation on revoking or amending certain pre-1969 certificates of 
public convenience and necessity. 
92 STAT. 3352 
PUBLIC LAW 95-621—NOV. 9, 1978 
TABLE OF CONTENTS—Continued 
- 
' 
"' 
TITLE V—ADMINISTRATION, ENFORCEMENT, AND REVIEW 
Sec. 501. General rulemaking authority. 
- 
, ' -
Sec. 502. Administrative procedure. 
Sec. 503. Determinations for qualifying under certain categories of natural gas. 
Sec. 504. Enforcement. 
Sec. 505. Intervention. 
Sec. 506. Judicial review. 
Sec. 507. Congressional review. 
Sec. 508. Technical amendment. 
TITLE VI—COORDINATION WITH THE NATURAL GAS ACT; EFFECT ON 
STATE LAWS 
Sec. 601. Coordination with the Natural Gas Act. 
Sec. 602. Effect on State laws. 
SEC. 2. DEFINITIONS. 
15 use 3301. 
For purposes of this Act— 
(1) NATURAL, GAS.—^The term "natural gas" means either nat-
ural gas unmixed, or any mixture of natural and artificial gas. 
(2) WELL.—The term "well" means any well for the discovery 
or production of natural gas, crude oil, or both. 
(3) NEW WELL,.—The term "new well" means any well— 
(A) the surface drilling of which began on or after Febru-
ary 19, 1977; or 
^ 
(B) the depth of which was increased, by means of drill-
ing on or after February 19, 1977, to a completion location 
which is located at least 1,000 feet below the depth of the 
deepest completion location of such well attained before 
February 19, 1977. 
(4) OLD WELL.—The term "old well" means any well other than 
a new well. 
(5) MARKER WELL.— 
(A) GENERAL RULE.—The term "marker well" means any 
well from which natural gas was produced in commercial 
quantities at any time after January 1,1970, and before April 
20, 1977. 
(B) N E W WELLS.—The term "marker well" does not 
include any new well under paragraph (3) (A) but includes 
any new well under paragraph (3) (B) if such well qualifies 
as a marker well under subparagraph (A) of this paragraph. 
(6) KESERVOIR.—The term "reservoir" means any producible 
natural accumulation of natural gas, crude oil, or both, confined— 
(A) by impermeable rock or water barriers and charac-
terized by a single natural pressure system; or 
(B) by litholo^c or structural barriers which prevent 
pressure communication. 
(7) COMPLETION LOCATION.— 
(A) GENERAL 
RULE.—The term 
"completion 
location" 
means any subsurface location from which natural gas is 
being or has been produced in commercial quantities. 
(B) MARKER 
WELL.—The term 
"completion 
location", 
when used with reference to any marker well, means any 
subsurface location from which natural gas was produced 
from such well in commercial quantities after January 1, 
1970, and before April 20,1977. ., 
.. 
, 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3353 
(8) PRORATION UNIT.—The term "proration unit" means— 
(A) any portion of a reservoir, as designated b}^ the State 
or Federal agency having regulatory jurisdiction with respect 
to production from such reservoir, which will be effectively 
and efficiently drained by a single well; 
(B) any drilling unit, production unit, or comparable 
arrangement, designated or recognized by the State or Fed-
eral agency having jurisdiction with respect to production 
from the reservoir, to describe that portion of such reservoir 
which will be effectively and efficiently drained by a single 
well; or 
(C) if such portion of a reservoir, unit, or comparable 
arrangement is not specifically provided for by State law or 
by any action of any State or Federal agency having regula-
tory jurisdiction with respect to production from such res-
ervoir, any voluntary unit agreement or other comparable 
arrangement applied, under local custom or practice within 
the locale in which such reservoir is situated, for the purpose 
of describing the portion of a reservoir which may be effec-
tively and efficiently drained by a single well. 
(9) NEW LEASE.—The term "new lease", when used with respect 
to the Outer Continental Shelf, means a lease, entered into on or 
after April 20,1977, of submerged acreage. 
(10) OLD LEASE.—The term "old lease", when used with respect 
•' 
to the Outer Continental Shelf, means any lease other than a new 
lease. 
(11) N E W CONTRACT.—The term "new contract" means any con-
tract, entered into on or after the date of the enactment of this 
Act, for the first sale of natural gas which was not previously sub-
ject to an existing contract. 
(12) ROLLOVER CONTRACT.—The term "rollover contract" means 
any contract, entered into on or after the date of the enactment of 
this Act, for the first sale of natural gas that was previously sub-
ject to an existing contract which expired at the end of a fixed 
term (not including any extension thereof taking effect on or after 
such date of enactment) specified by the provisions of such exist-
ing contract, as such contract was in effect on the date of the enact-
ment of this Act, whether or not there is an identity of parties or 
terms with those of such existing contract. 
(13) EXISTING CONTRACT.—The term "existing contract" means 
any conti-act for the first sale of natural gas in effect on the day 
before the date of the enactment of this Act. 
(14) SUCCESSOR TO AN EXISTING CONTRACT.—The term "successor 
to an existing contract" means any contract, other than a rollover 
contract, entered into on or after the date of the enactment of this 
Act, for the first sale of natural gas which was previously subject 
to an existing contract, whether or not there is an identity of par-
ties or terms with those of such existing contract. 
(15) 
INTERSTATE PIPELINE.—The term "interstate pipeline" 
means any person engaged in natural gas transportation subject 
to the jurisdiction of the Commission under the Natural Gas Act. 15 USC 717w. 
(16) 
INTRASTATE PIPELINE.—The term "intrastate pipeline" 
means any person engaged in natural gas transportation (not 
including gathering) which is not subject to the jurisdiction of 
'-' '"•' 
the Commission under the Natural Gas Act (other than any such 
pipeline which is not subject to the jurisdiction of the Commission 
solely by reason of section 1 (c) of the Natural Gas Act). 
15 USC 717. 
39-194 O—80—pt. 3 
46 : QL3 
92 STAT. 3354 
PUBLIC LAW 95-621—NOV. 9, 1978 
15 use 717w. 
15 use 717 
note. 
15 use 717f. 
15 use 717w. 
15 use 717f. 
(17) LOCAL DISTRIBUTION COMPANY.—The term "local distri-
bution company" means any person, other than any interstate 
pipeline or any intrastate pipeline, engaged in the transportation, 
or local distribution, of natural gas and the sale of natural gas for 
ultimate consumption. 
(18) COMMITTED OR DEDICATED TO INTERSTATE COMMERCE.— 
(A) GENERAL RULE.—The term "committed or dedicated 
to interstate commerce", when used with respect to natural 
gas, means— 
(i) natural gas which is from the Outer Continental 
Shelf; and 
(ii) natural gas which, if sold, would be required to be 
sold in interstate commerce (within the meaning of the 
Natural Gas Act) under the terms of any contract, any 
certificate under the Natural Gas Act, or any provision 
of such Act. 
(B) EXCLUSION.—Such term does not apply with respect 
to— 
(i) natural gas sold in interstate commerce (within 
the meaning of the Natural Gas Act) — 
(I) under section 6 of the Emergency Natural 
Gas Act of 1977; 
(II) under any limited term certificate, granted 
pursuant to section 7 of the Natural Gas Act, which 
contains a pregrant of abandonment of service for 
such natural gas; 
(III) under any emergency regulation under the 
second proviso of section 7(c) of the Natural Gas 
Act; or 
(IV) to the user by the producer and transported 
under any certificate, granted pursuant to section 
7(c) of the Natural Gas Act, if such certificate was 
specifically granted for the transportation of that 
natural gas for such user; 
(ii) natural gas for which abandonment of service was 
granted before the date of enactment of this Act under 
section 7 of the Natural Gas Act; and 
(iii) natural gas which, but for this clause, would be 
committed or dedicated to interstate commerce under 
subparagraph (A) (ii) by reason of the action of any 
person (including any successor in interest thereof, other 
than by means of any reversion of a leasehold interest), 
if on May 31, 1978— 
(I) neither that person, nor any affiliate thereof, 
had any right to explore for, develop, produce, or 
sell such natural gas; and 
(II) such natural gas was not being sold in inter-
state commerce (within the meaning of the Natural 
Gas Act) for resale (other than any sale described 
in clause (i) (I), (II),or (III)). 
(19) CERTIFICATED 
NATURAL GAS.—^The term 
"certificated 
natural gas" means natural gas transported by any interstate 
pipeline in a facility for which there is in effect a certificate issued 
under section 7(c) of the Natural Gas Act. Such term does not 
include natural gas sold to the user hj the producer and trans-
ported pursuant to a certificate which is specifically issued under 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3355 
section 7(c) of the Natural Gas Act for the transportation of that 
15 USC 717f. 
natural gas, for such user unless such natural gas is used for the 
generation of electricity. 
(20j SALE.—The term "sale" means any sale, exchange, or other 
transfer for value. 
(21) FIRST SALE.— 
(A) GENERAL RULE.—The term "first sale" means any sale 
of any volume of natural gas— 
(i) to any interstate pipeline or intrastate pipeline; 
(ii) to any local distribution company; 
(iii) to any person for use by such person; 
(iv) which precedes any sale described in clauses (i), 
(ii),or (iii); and 
(v) which precedes or follows any sale described in 
clauses (i), (ii), (iii), or (iv) and is defined by the Com-
mission as a first sale in order to prevent circumvention 
of any maximum lawful price established under this 
Act. 
(B) CERTAIN SALES NOT INCLUDED.—Clauses (i), (ii), (iii), 
or (iv) of subparagraph (A) shall not include the sale of any 
volume of natural gas by any interstate pipeline, intrastate 
pipeline, or local distribution company, or any affiliate 
thereof, unless such sale is attributable to volumes of natural 
gas produced by such interstate pipeline, intrastate pipeline, 
or local distribution company, or any affiliate thereof. 
(22) DELIVER.—The term "deliver" when used with respect to 
any first sale of natural gas, means the physical delivery from 
the seller; except that in the case of the sale of proven reserves in 
place to any interstate pipeline, any intrastate pipeline, any local 
distribution company, or any user of such natural gas, such term 
means the transfer of title to such reserves. 
(23) CERTIFICATE.—The term "certificate", when used with 
respect to the Natural Gas Act, means a certificate of public con-
venience and necessity issued under such Act. 
(24) COMMISSION.—The term "Commission" means the Federal 
Energy Regulatory Commission. 
(25) FEDERAL AGENCY.—The term "Federal agency" has the 
same meaning as given such term in section 105 of title 5, United 
States Code. 
(26) PERSON.—The term "person" includes the United States, 
any State, and any political subdivision, agency, or instrumental-
ity of the foregoing. 
(27) AJTILIATE.—The term "affiliate", when used in relation to 
any person, means another person which controls, is controlled by, 
or is under common control with, such person. 
(28) ELECTRIC UTILITY.—The term "electric utility" means any 
person to the extent such person is engaged in the business of the 
generation of electricity and sale, directly or indirectly, of elec-
tricity to the public. 
(29) McF.—The term "Mcf", when used with respect to natural 
gas, means 1,000 cubic feet of natural gas measured at a pressure 
of 14.73 pounds per square inch (absolute) and a temperature of 
60 degrees Fahrenheit. 
(30) BTU.—The term "Btu" means British thermal unit. 
(31) MONTH. The term "month" means a calendar month. 
92 STAT. 3356 
PUBLIC LAW 95-621—NOV. 9, 1978 
(32) MILE.—The term "mile" means a statute mile of 5,280 feet. 
(33) UNITED STATES.—The term "United States" means the 
several States and includes the Outer Continental Shelf. 
(34) STATE.—The term "State" means each of the several States 
and the District of Columbia. 
(35) 
OUTER CONTINENTAL SHELF.—The term "Outer Conti-
nental Shelf" has the same meaning as such term has under section 
2(a) of the Outer Continental Shelf Lands Act (43 U.S.C. 1331 
(a)). 
(36) PRUDHOE BAY UNIT or ALASKA.—The term "Pmdhoe Bay 
Unit of Alaska" means the geographic area subject to the vol-
untary unit agreement approved by the Commissioner of the 
Department of Natural Resources of the State of Alaska on 
June 2, 1977, and referred to as the 'affected area" in Conserva-
tion Order No. 145 of the Alaska Oil and Gas Conservation Com-
mittee, Division of Oil and Gas Conservation, Department of 
Natural Resources of the State of Alaska, as such order was in 
effect on June 1, 1977, and determined without regard to any 
adjustments in the description of the affected area permitted to 
be made under such order. 
(37) 
ANTITRUST LAWS.—The term "Federal antitrust laws'" 
means the Sherman Act (15 U.S.C. 1 et seq.), the Clayton Act 
(15 U.S.C. 12, 13, 14-19, 20, 21, 22-27), the Federal Trade Com-
mission Act (15 U.S.C. 41 et seq.), sections 73 and 74 of the Wilson 
Tariff Act (15 U.S.C. 8-9), and the Act of June 19,1936, chapter 
592 (15 U.S.C. 13,13a, 13b, and 21a). 
TITLE I—WELLHEAD PRICING 
Subtitle A—^Wellhead Price Controls 
SEC. 101. INFLATION ADJUSTMENT; OTHER GENERAL PRICE CEILING 
RULES. 
15 use 3311. 
(a) ANNUAL INFLATION ADJUSTMENT FACTOR.— 
(1) GENERAL RULE.—For purposes of this title, the annual 
inflation adjustment factor applicable for any month shall be the 
sum of— 
(A) a factor equal to one hundredth of the quarterly per-
cent change in the G N P implicit price deflator; plus 
(B) a correction factor of 1.002. 
(2) 
QUARTERLY PERCENT CHANGE I N THE GNP IMPLICIT PRICE 
DEFLATOR.—For purposes of paragraph (1)— 
(A) I N GENERAL.—The term "quarterly percent change in 
the G N P implicit price deflator", when used with respect to 
any month, means the quarterly percent change in the G N P 
implicit price deflator, computed and published as an annual 
rate by the Department of Commerce, for the most recent 
calendar quarter for which such quarterly percent change 
has been so published at least 8 days before the beginning of 
such month. 
(B) MONTHS BEFORE ENACTMENT.—For purposes of apply-
ing such term with respect to any month in any calendar 
quarter which ends before the date of the enactment of this 
Act and for which a quarterly percent change in the G N P 
implicit price deflator has been published by the Department 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3357 
of Commerce as of such date of enactment, the quarterly per-
cent change in the G N P implicit price deflator for the calen-
dar quarter in which such month occurs shall be used in lieu 
of the quarterly percent change in the G N P implicit price 
deflator for a preceding calendar quarter. 
(3) G N P IMPLICIT PRICE DErLATOR.—For purposcs of para-
graph (2) — 
(A) I N GENERAL.—The term "GNP implicit price deflator" 
means, except as provided in subparagraph ( B ) , the pre-
liminary estimate of the implicit price deflator, seasonally 
adjusted, for the gross national product, as computed and 
published by the Department of Commerce for the calendar 
quarter involved. 
(B) 
MOST RECENT DATA AVAILABLE ON ENACTMENT.—^The 
most recent revision, if any, of such implicit price deflator 
which has been so published before the date of the enactment 
of this Act, shall be used in lieu of the preliminary estimate 
of such implicit price deflator. 
(b) RULES OF GENERAL APPLICATION.— 
(1) DEPTH.—Except where otherwise provided, the depth of 
the completion location of any well shall be the true vertical depth, 
measured from the surface location of the well. 
(2) 
COMMERCIAL QUANTITIES.—In determining whether pro-
duction of natural gas has occurred in commercial quantities, 
quantities of natural gas produced from a well and used for the 
testing of such well or for other field uses which are production 
related shall not be taken into account. 
(3) COMPUTATION OF MONTHLY EQUIVALENT,—For purposes of 
computing any price under this title, the monthly equivalent of 
any factor shall be the twelfth root of such factor. 
(4) APPLICATION OF CEILING PRICES.—The maximum lawful ceil-
ing prices under this title— 
(A) shall only apply to natural gas produced in the United 
States; 
(B) shall apply to the month of delivery without regard 
to the date of the sale or the date of the contract under 
which the sale occurs; and 
(C) shall not apply to deliveries occurring before the first 
day of the first month beginning after the date of the enact-
ment of this Act. 
(5) SALES QUALIFYING UNDER MORE THAN ONE PROVISION.—If 
any natural gas qualifies under more than one provision of this 
title providing for any maximum lawful price or for any exemp-
tion from such a price with respect to any first sale of such nat-
ural gas, the provision which could result in the highest price 
shall be applicable. 
(6) 
COMPUTATION AND PUBLICATION OF CEILING PRICES.—The 
Commission shall— 
(A) not later than 5 days before the beginning of any 
month, compute and make available the maximum lawful 
prices prescribed under this title for such month and the 
monthly equivalent of the annual inflation adjustment factor 
for such month, and 
(B) as soon as possible thereafter, publish such maximum Publication in 
lawful prices and such factor for such month in the Federal Federal Register. 
Register. 
(7) ROUNDING.—Any maximum lawful price under this title 
shall be computed to the nearest mill (rounding any fraction 
92 STAT. 3358 
PUBLIC LAW 95-621—NOV. 9, 1978 
thereof which is one-half a mill or higher to the next highest 
mill). 
(8) 
COMPUTATION OP INITIAL CEILING PRICES.—^In computing 
any maximum lawful price under the provisions of this title for 
the first month for which such provisions take effect, if the initial 
maximum lawful price is established by reference to any month 
before such month, such maximum lawful price shall be computed 
as if such provisions had been in effect during each such prior 
month. 
(9) EFFECT ON CONTRACT PRICE.—In the case of— 
(A) any price which is established under any contract for 
the first sale of natural gas and which does not exceed the 
applicable maximum lawful price under this title, or 
(B) any price which is established under any contract for 
the first sale of natural gas which is exempted under sub-
title B of this title from the application of a maximum law-
ful price under this title, 
such maximum lawful price, or such exemption from such a 
maximum lawful price, shall not supersede or nullify the effec-
tiveness of the price established under such contract. 
SEC. 1
0
2
. 
CEILING 
PRICE 
FOR 
NEW NATURAL 
GAS 
AND 
CERTAIN 
NA-
TURAL 
GAS 
PRODUCED FROM 
THE 
OUTER CONTINENTAL 
SHELF. 
15 use 3312. 
(a) APPLICATION.—The maximum lawful price computed under 
subsection (b) shall apply to any first sale of natural gas delivered 
during any month in the case of— 
(1) new natural gas; and 
(2) natural gas produced from any old lease on the Outer 
Continental Shelf and qualifying under subsection (d) for the 
new natural gas ceiling price. 
(b) MAXIMUM LAWFUL PRICE.—The maximum lawful price under 
this section for any month shall be— 
^1) $1.75 per million Btu's, in the case of April 1977; and 
(2) in the case of any month thereafter, the maximum lawful 
price, per million Btu's, prescribed under this subsection for the 
preceding month multiplied by the monthly equivalent of a factor 
equal to the sum of— 
(A) the annual inflation adjustment factor applicable for 
such month; plus 
(B) (i) .035, in the case of any month beginning before 
April 20,1981; or 
(ii) .04, in the case of any month beginning after April 
20,1981. 
(c) DEFINITION OF NEW NATURAL GAS.— 
(1) GENERAL RULE.—For the purposes of this section, the term 
"new natural gas" means each of the following categories of 
natural gas: 
(A) NEW OCS LEASES.—Natural gas determined in accord-
Post, p. 3397. 
ance with section 503 to be produced from a new lease on the 
Outer Continental Shelf. 
(B) NEW ONSHORE WELLS.—Natural gas determined in 
accordance with section 503 to be produced (other than from 
the Outer Continental Shelf) from— 
(i) any new well wnich is 2.5 miles or more (deter-
mined in accordance with paragraph (2)) from the 
nearest marker well; or 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3359 
(ii) any completion location, of any new well, which is 
located at a depth at least 1,000 feet below the deej)est 
completion location of each marker well within 2.5 miles 
(determined in accordance with paragraph (2)) of such 
new well. 
( C ) N E W ONSHORE RESERVOIRS.— 
(i) GENERAL RULE.—Except as provided in clauses (ii) 
and (iii), natural gas determined in accordance with 
section 603 to be produced (other than from the Outer Post, p. 3397. 
Continental Shelf) from a reservoir from which natural 
gas was not produced in commercial quantities before 
April 20,1977. 
(ii) BEHIND-THE-PIPE EXCLUSION.—Clause (i) shall not 
not apply to natural gas produced from any reservoir if— 
(I) the reservoir was penetrated before April 20, 
1977, by an old well from which natural gas or 
crude oil was produced in commercial quantities 
(whether or not such production was from such res-
ervoir) ; and 
(II) natural g^as could have been produced in com-
mercial quantities from such reservoir through such 
old well before April 20,1977. 
(iii) WITHHELD GAS EXCLUSION.—Clause (i) shall not 
apply to natural gas produced from any reservoir— 
j ; . 
(I) if such natural gas is produced through an old 
well; and 
(II) subject to clause (iv), suitable facilities for 
the production and delivery to a pipeline of such 
natural gas were in existence on April 20,1977. 
(iv) 
EMERGENCY SALE FACILITIES.—The criteria of 
clause (iii) (II) shall not be considered to be met by rea-
son of the existence of production and delivery facilities 
which were installed to carry out sales and deliveries of 
natural gas— 
(I) under section 6 of the Emergency Natural 
Gas Act of 1977; or 
15 USC 717 
(II) under the emergency sale authority pursu- "''t®-
ant to Opinion 699-B issued by the Federal Power 
Commission under section 7(c) of the Natural Gas 
Act. 
15 USC 717f. 
(2) DETERMINATIONS OF DISTANCE.—For purposes of determin-
ing the distance from any new well to any marker well— 
(A) SURFACE LOCATION TO SURFACE LOCATION.—The meas-
urement shall be the horizontal distance from the surface 
location of the new well to the surface location of the marker 
well— 
(i) in any case in which the new well meets require-
ments for the nondirectional drilling of wells prescribed 
by the appropriate State or Federal agency having reg-
ulatory jurisdiction over the drilling of such well; or 
(ii) in any case in which— 
(I) the surface drilling of such new well began 
on or after February 19,1977; 
' 
(II) production of natural gas in commercial 
quantities began from such well before the date of 
the enactment of this Act; and 
92 STAT. 3360 
PUBLIC LAW 95-621—NOV. 9, 1978 
( I I I ) the drilling of such well was not subject to 
any requirement regarding directional or nondirec-
tional drilling, or the drilling of such well was sub-
ject to requirements regarding directional drilling 
but such requirements did not necessitate the obtain-
ing of any permit or other certificate before drilling 
began. 
(B) COMPLETION LOCATION TO SURFACE LOCATION.—In the 
case of any new well which is not covered by subparagraph 
(A), the measurements shall be the horizontal distance 
from— 
(i) the closest point of any completion location of the 
new well, vertically projected to the same elevation as 
the surface location of the nearest marker well; to 
(ii) the surface location of such marker well. 
(3) DETERMINATION OF COMMERCIAL QUANTITIES.—For purposes 
of determining whether production of natural gas has occurred 
in commercial quantities under paragraph (1) (C) — 
(A) a rebuttable presumption exists that production from 
a reservoir in commercial quantities has not occurred if nat-
ural gas has not been sold and delivered from such reservoir 
before April 20,1977; and 
(B) quantities of natural gas sold in interstate commerce 
15 use 717w. 
(within the meaning of the Natural Gas Act) shall not be 
taken into account if such quantities were sold before the date 
of the enactment of this Act— 
(i) under section 6 of the Emergency Natural Gas Act 
15 use 717 
of 1977; or 
"ote. 
(ii) under the emergency sale authority pursuant to 
Opinion 699-B issued by the Federal Power Commission 
15 use 717f. 
under section 7 (c) of the Natural Gas Act. 
(4) N E W WELLS WHICH ARE ALSO MARKER WELLS.—For purposes 
of applying paragraph ( c ) ( l ) ( B ) ( i i ) in the case of any marker 
well which is also a new well under section 2(3) (B), the reference 
in such paragraph ( c ) ( l ) ( B ) ( i i ) to the deepest completion loca-
tion of any marker well shall be deemed to be a reference to any 
subsurface location from which natural gas was produced in com-
mercial quantities after January 1,1970, and before February 19, 
1977. 
(d) OCS GAS QUALIFYING FOR N E W NATURAL GAS CEILING PRICE.— 
For purposes of this section— 
(1) O C S RESERVOIRS DISCOVERED ON OR AFTER JULY 2 7, 1976. 
Post, p. 3397. 
Natural gas determined in accordance with section 503 to be pro-
duced from an old lease on the Outer Continental Shelf shall 
qualify for the new natural gas ceiling price if such natural gas is 
produced from a reservoir which was not discovered before 
July 27,1976. 
(2) RESERVOIRS PENETRATED BEFORE JULY 27, 1976.—For pur-
poses of paragraph (1), a reservoir shall be considered as having 
been discovered before July 27,1976, if— 
(A) such reservoir was penetrated by a well before July 
27,1976; and 
(B) with respect to such well— 
(i) the results of any production test meeting the 
requirements of OCS Order No. 4 demonstrate that, as 
of the time of such test, the reservoir is capable of pro-
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3361 
ducing in paying quantities (within the meaning of such 
Order); 
(ii) any production capability evidence meeting the 
requirements of OCS Order No. 4 demonstrates that, as 
of the time such evidence is obtained, the reservoir is 
capable of producing in paying quantities (within the 
meaning of such Order); or 
(iii) subject to paragraph (3), an induction-electric 
log, sidewall cores and core analysis, or a wire line for-
mation test indicates that, as of the time of such test, the 
reservoir is commercially producible. 
(3) EFI^CT OF NEGATIVE PRODUCTION CAPABILITY TESTS.—For 
purposes of paragraph (1), a reservoir shall not be considered as 
having been discovered before July 27,1976, by the penetration of 
such reservoir by a weU before July 27, 1976, if, with respect to 
such well 
(A) a production test meeting the requirements of OCS 
Order No. 4 was performed and the results of such test fail 
to demonstrate that, as of the time of such test, such reservior 
was capable of producing in paying quantities (within the 
meaning of such Order); and 
(B) production capability evidence meeting the require-
ments of OCS Order No. 4 does not exist or, if existing, does 
not demonstrate that, as of the date such evidence was 
obtained, such reservoir was capable of producing in paying 
quantities (within the meaning of such Order). 
(4) BURDEN OF PROOF.—For purposes of paragraph (1), the 
producer shall have the burden of showing that— 
(A) no test described in paragraph (2) (B) (i) or (iii) was 
performed and no evidence described in paragraph (2) (B) 
(ii) or (iii) exists; or 
(B) if any such test was performed or such evidence exists, 
the results of such test or such evidence do not provide the 
applicable demonstration or indication specified under para-
graph (2). 
(5) DEFINITION OF OCS ORDER NO. 4.—For purposes of this sub-
section, the term "OCS Order No. 4" means the order numbered 
4 of the Conservation Division, Geological Survey, Department 
of the Interior, as approved by the Chief of the Conservation 
Division on August 28,1969. 
(e) EXCLUSION OP CERTAIN ALASKA NATURAL GAS.—The preceding 
provisions of this section shall not apply to any natural gas produced 
from the Prudhoe Bay Unit of Alaska and transported through the 
natural gas transportation system approved under the Alaska Natural 
Gas Transportation Act of 1976. 
15 USC 719 
SEC. 103. CEILING PRICE FOR NEW, ONSHORE PRODUCTION WELLS. "^^^ 
(a) APPLICATION.—In the case of natural gas determined in accord- 15 USC 3313. 
ance with section 503 to be produced from any new, onshore production Post, p. 3397. 
well, the maximum lawful price computed under subsection (b) shall 
apply to any first sale of such natural gas delivered during any month. 
(b) MAXIMUM LAWFUL PRICE.— 
(1) GENERAL RULE.—The maximum lawful price under this 
section for any month shall be— 
(A^ $1.75 per million Btu's, in the case of April 1977; and 
(B) in the case of any month thereafter, the maximum 
lawful price, per million Btu's, prescribed under this para-
92 STAT. 3362 
PUBLIC LAW 95-621—NOV. 9, 1978 
graph for the preceding month multiplied by the monthly 
equivalent of the annual inflation adjustment factor appli-
cable for such month. 
(2) PRODUCTION AFTER I9 84 FROM WELLS 5,000 FEET OR LESS IN 
DEPTH.—^Effective beginning with the month of January 1985 and 
in any month thereafter, in the case of any first sale of natural 
gas which was not committed or dedicated to interstate commerce 
on April 20, 1977, and which is produced from a new, onshore 
production well from a completion location located at a depth of 
5,000 feet or less, the maximum lawful price under this section for 
any such natural gas delivered during any month shall be a price 
which is midway between— 
(A) the maximum lawful price, per million Btu's, com-
puted for such month under section 102 (relating to new nat-
ural gas) ; and 
(B) the maximum lawful price, per million Btu's, com-
puted for such month under paragraph (1). 
(c) DEFINITION OF NEW, ONSHORE PRODUCTION WELL.—For purposes 
of this section, the term "new, onshore production well" means any new 
well (other than a well located on the Outer Continental Shelf)— 
(1) the surface drilling of which began on or after February 19, 
1977; 
(2) which satisfies applicable Federal or State well-spacing 
requirements, if any; and 
(3) which is not within a proration unit— 
(A) which was in existence at the time the surface drilling 
of such well began; 
(B) which was applicable to the reservoir from which such 
natural gas is produced; and 
(C) which aj)plied to a well (i) which produced natural 
gas in commercial quantities or (ii) the surface drilling of 
which was begun before February 19, 1977, and which was 
thereafter capable of producing natural gas in commercial 
quantities. 
(d) EXCLUSION OF CERTAIN ALASKA NATURAL GAS.—The preceding 
provisions of this section shall not apply to any natural gas produced 
from the Prudhoe Bay Unit of Alaska and transported through the 
natural gas transportation system approved under the Alaska Natural 
15 use 719 
Gas Transportation Act of 1976. 
°°*^ 
SEC. 104. CEILING PRICE FOR SALES OF NATURAL GAS DEDICATED TO 
INTERSTATE COMMERCE. 
15 use 3314. 
(a) APPLICATION.—In the case of natural gas committed or dedi-
cated to interstate commerce on the day before the date of the enact-
ment of this Act and for which a just and reasonable rate under the 
15 use 717w. 
Natural Gas Act was in effect on such date for the first sale of such 
natural gas, the maximum lawful price computed under subsection 
(b) shall apply to any first sale of sudh natural gas delivered during 
any month. 
(b) MAXIMUM LAWFUL PRICE.— 
(1) GENERAL RULE.—^The maximum lawful price under this 
section for any month shall be the higher of— 
(A) (i) the just and reasonable rate, per million Btu's, 
established by the Commission which was (or would have 
been) applicable to the first sale of such natural gas on 
April 20,1977, in the case of April 1977; and 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3363 
(ii) in the case of any month thereafter, the maximum 
lawful price, per million Btu's, prescribed under this sub-
paragraph for the preceding month multiplied by the monthly 
equivalent of the annual inflation adjustment factor appli-
cable for such month, or 
(B) any just and reasonable rate which was established 
bj'' the Commission after April 27, 1977, and before the date 
of the enactment of this Act and which is applicable to such 
natural gas. 
(2) 
CEILING PRICES MAY BE INCREASED IF JUST AND REASON-
ABLE.—The Commission may, by rule or order, prescribe a maxi-
mum lawful ceiling price, applicable to any first sale of any 
natural gas (or category thereof, as determined by the Commis-
sion) otherwise subject to the preceding provisions of this section, 
if such price is— 
(A) higher than the maximum lawful price which would 
otherwise be applicable under such provisions; and 
(B) just and reasonable within the meaning of the Natural 
Gas Act. 
15 use 717w. 
SEC. 105. CEILING PRICE FOR SALES UNDER EXISTING INTRASTATE 
CONTRACTS. 
(a) APPLICATION.—The maximum lawful price computed under 15 USC 3315. 
subsection (b) shall apply to any first sale of natural gas delivered 
during any month in the case of natural gas, sold under any exist-
ing contract or any successor to an existing contract, which was not 
committed or dedicated to interstate commerce on the day before 
the date of the enactment of this Act. 
(b) 
MAXIMUM LAWFUL PRICE.— 
(1) GENERAL RULE.— Subject to paragraphs (2) and (3), the 
maximum lawful price under this section shall be the lower of— 
(A) the price under the t«rms of the existing contract, to 
which such natural gas was subject on the date of the enact-
ment of this Act, as such contract was in effect on such 
date; or 
(B) the maximum lawful price, per million Btu's, com-
puted for such month under section 102 (relating to new 
natural gas). 
• 
(2) 
CONTRACT PRICE EXCEEDING NEW GAS CEILING PRICE ON 
ENACTMENT.—In the case of any natural gas described in subsec-
tion (a) for which the contract price applicable on the date of 
the enactment of this Act exceeds the maximum lawful price, per 
million Btu's, computed for such date under section 102 (relat-
ing to new natural gas), the maximum lawful price under this 
section shall be the higher of— 
(A) the maximum lawful price, per million Btu's, com-
puted for such month under section 102; or 
(B) (i) the contact price on the date of the enactment of 
this Act, in the case of the month in which this Act is enacted; 
and 
(ii) in the case of any month thereafter, the maximum law-
ful price, per million Btu's, prescribed under this subpara-
graph for the preceding month multiplied by the monthly 
equivalent of the annual inflation adjustment factor appli-
cable for such month. 
a 
(3) 
PRICE INCREASES RESULTING FROM INDEFINITE PRICE ESCALA-
TOR CLAUSES.— 
92 STAT. 3364 
PUBLIC LAW 95-621—NOV. 9, 1978 
(A) I N GENERAL.—Effective January 1985, and each month 
thereafter, in the case of any first sale of natural gas, which 
is sold at a price established under any indefinite price escala-
tor clause of any existing contract or successor to an existing 
contract and for which the contract price on December 31, 
1984, is higher than $1.00 per million Btu's, the maximum 
lawful price under this section for any such natural gas 
delivered during any month shall be the higher of— 
(i) the maximum lawful price, per million Btu's, com-
puted under paragraph (2) (B) ; or 
(ii) (I) in the case of January 1985, the maximum law-
ful price, per million Btu's, computed under section 102 
(relating to new natural gas) for such month; and 
(II) in the case of any month thereafter, the maximum 
lawful price, per million Btu's, prescribed under this 
clause for the immediately preceding month multiplied 
by the monthly equivalent of the sum of a factor equal 
to the annual inflation adjustment factor applicable for 
such month plus .03. 
(B) 
DEFINITION OF INDEFINITE PRICE ESCALATOR CLAUSE.— 
For purposes of this paragraph, the term "indefinite price 
;;;, 
escalator clause" includes any provision of any contract— 
(i) which provides for the establishment or adjust-
ment of the price for natural gas delivered under 
such contract by reference to other prices for natural gas, 
for crude oil, or for refined petroleum products; or 
(ii) which allows for the establishment or adjustment 
of the price of natural gas delivered under such contract 
by negotiation between the parties. 
(C) 
CONTRACT MODIFICATIONS AFTER MAY 3, 197 8, T
O BE DIS-
REGARDED.—In the case of any natural gas which was subject 
to any contract on May 3, 1978, that contained an indefinite 
price escalator clause on such date, no amendment to or modifi-
cation of the operation of such contract made after such date 
may have the effect of limiting or precluding the application 
of this paragraph on or after January 1, 1985, to prices 
allowed with respect to such natural gas. 
(D) EXCLUSION.—Subparagraph (A) shall not apply to 
any first sale of new natural gas (as defined in section 
102 ^c)), stripper well natural gas (as defined in section 
108 ( b ) ) , high-cost natural gas (as defined in section 107(c)), 
natural gas produced from a new, onshore production well 
(as defined m section 103(c)) from a completion location 
located at a depth of more than 5,000 feet, and, beginning 
July 1, 1987, or, if later, the date of expiration of any price 
controls reimposed under section 122, natural gas produced 
from any new, onshore production well (as defined in section 
103(c)) from a completion location located at a depth of 
5,000 feet or less. 
(c) DEFINITION OF CONTRACT PRICE.—For purposes of this section, 
the term "contract price", when used with respect to any specific date, 
means— 
(1) the price paid, per million Btu's, under a contract for 
deliveries of natural gas occurring on such date; or 
(2) if no deliveries of natural gas occurred under such contract 
on such date, the price, per million Btu's, that would have been 
paid had such deliveries occurred on such date. 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3365 
SEC. 106. CEILING PRICE FOR SALES UNDER ROLLOVER CONTRACTS. 
(a) INTERSTATE ROLLOVER CONTRACTS.—In the case of any first sale 15 USC 3316. 
under any rollover contract of natural gas which was committed or 
dedicated to interstate commerce on the day before the date of the 
enactment of this Act, the maximum lawful price under this subsection 
for such natural gas delivered during any month shall be the higher 
of— 
(1) (A) in the case of the month in which the effective date of 
such rollover contract occurs, the just and reasonable rate, if any, 
per million Btu's, established by the Commission and applicable 
on such date to the natural gas subject to the expired contract; and 
(B) in the case of any month thereafter, the maximum lawful 
price, per million Btu's, prescribed under this paragraph for the 
preceding month multiplied by the monthly equivalent of the 
annual inflation adjustment factor applicable for such month; or 
(2) (A) $0.54 per million Btu's, in the case of April 1977; and 
(B) in the case of any month thereafter, the maximum lawful 
price, per million Btu's, prescribed under this paragraph for the 
preceding month multiplied by the monthly equivalent of the 
annual inflation adjustment factor applicable for such month. 
For purposes of this subsection, the term "rollover contract" "Rollover 
includes any contract which would have been a rollover contract contract", 
but for the fact that the expiration of the previous contract 
occurred prior to the day before the date of the enactment of this 
Act. 
(b) 
INTRASTATE ROLLOVER CONTRACTS.— 
(1) GENERAL RULE.—In the case of any first sale under any roll-
over contract of natural gas which was not committed or dedi-
cated to interstate commerce on the day before the date of the 
enactment of this Act, the maximum lawful price under this sub-
section for such natural gas delivered during any month shall be 
the higher of— 
- 
. . 
(A) (i) the maximum price paid under the expired con-
tract, per million Btu's, in the case of the month in which the 
effective date of such rollover contract occurs; and 
(ii) in the case of any month thereafter, the maximum law-
ful price, per million Btu's, prescribed under this subpara-
graph for the preceding month multiplied by the monthly 
equivalent of the annual inflation adjustment factor appli-
cable for such month; or 
(B) (i) $1.00 per million Btu's, in the case of April 1977; 
and 
(ii) in the case of any month thereafter, the maximum 
lawful price, per million Btu's, prescribed under this sub-
paragraph for the preceding month multiplied by the 
monthly equivalent of the annual inflation adjustment factor 
applicable for such month. 
(2) 
C E R T A I N STATE OR INDIAN PRODUCTION OR ROYALTY SHARES.— 
(A) GENERAL RULE.—In the case of any first sale under any 
rollover contract of natural gas which was not committed or 
dedicated to interstate commerce on the day before the date 
of the enactment of this Act and which constitutes a State 
government's or Indian tribe's natural gas production, or 
royalty share or other interest (as of such day) in natural 
gas production, from real property (including subsurface 
mineral interests) owned on the date of the enactment of this 
Act by such State government or Indian tribe (as the case 
92 STAT. 3366 
PUBLIC LAW 95-621—NOV. 9, 1978 
may be), the maximum lawful price under this subsection 
for any such natural gas delivered during any month shall 
be the maximum lawful price, per million Btu's, computed 
for such month under section 102 (relating to new natural 
gas). 
(B) 
INDIAN TRIBAL LANDS.—For purposes of this para-
grapli, land shall be considered to be owned by an Indian 
tribe only if— 
(i) such land is owned directly by such tribe; or 
(ii) such land is held by the United States or any 
State in trust for Indian persons and is located within 
the boundaries of an Indian reservation (as such bound-
aries were in effect on the date of the enactment of this 
Act). 
(C) DEFINITIONS.—For purposes of this paragraph— 
(i) 
STATE GOVERNMENT.—The term "State govern-
ment" means any State or any agency, instrumentality, 
or political subdivision of a State. 
(ii) INDIAN TRIBE.—^The term "Indian tribe" means 
any Indian tribe recognized as eligible for services pro-
_. 
vided by the Secretary of the Interior to Indians. 
(c) CEILING PRICES MAY B E INCREASED I F J U S T AND REASONABLE.— 
The Commission may, by rule or order, prescribe a maximum lawful 
price, applicable to any first sale of any natural gas (or category 
thereof, as determined by the Commission) otherwise subject to the 
preceding provisions of this section, if such price is— 
(1) higher than the maximum lawful price which would other-
wise be applicable under such provisions; and 
(2) just and reasonable within the meaning of the Natural 
15 use 7i7w. 
Gas Act. 
SEC. 107. CEILING PRICE FOR HIGH-COST NATURAL GAS. 
15 use 3317. 
(a) WELLS COMPLETED BELOW 15,000 FEET.—In the case of any first 
sale of high-cost natural gas produced from any well the surface drill-
ing of which began on or after February 19, 1977, if such production 
is from any completion location which is located at a depth of more 
than 15,000 feet, the maximum lawful price under this section for such 
natural gas delivered during any month shall be the maximum lawful 
price, per million Btu's, computed for such month under section 102 
(relating to new natural gas). 
(b) 
COMMISSION AUTHORITY TO PRESCRIBE 
HIGHER INCENTIVE 
PRICES.—The Commission may, by rule or order, prescribe a maximum 
lawful price, applicable to any first sale of any high-cost natural gas, 
which exceeds the otherwise applicable maximum lawful price to the 
extent that such special price is necessary to provide reasonable incen-
tives for the production of such high-cost natural gas. 
(c) DEFINITION OF HIGH-COST NATURAL GAS.—For purposes of this 
section, the term "high-cost natural gas" means natural gas deter-
Post, p. 3397. 
mined in accordance with section 503 to be— 
(1) produced from any well the surface drilling of which began 
on or after February 19, 1977, if such production is from a com-
pletion location which is located at a depth of more than 15,000 
feet; 
(2) produced from geopressured brine; 
(3) occluded natural gas produced from coal seams; 
(4) produced from Devonian shale; and 
(5) produced under such other conditions as the Commission 
determines to present extraordinary risks or costs. 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3367 
(d) PROVISIONS FOR HIGH-COST NATURAL GAS T O B E ELECTIVE.—If 
any credit, exemption, deduction, or comparable adjustment applicable 
to the computation of any Federal tax is specifically allowable with 
respect to any high-cost natural gas (or category thereof) under any 
provision of law enacted after the date of the enactment of this Act, 
the provisions of subsections (a) and (b) of this section and the provi-
sions of subtitle B shall not apply to such natural gas produced from 
any well unless an election to have such provisions apply (in lieu of 
such credit, exemption, deduction, or adjustment) with respect to such 
natural gas produced from such well is filed with the Commission on 
or before the later of— 
(A) the 30th day after the date of the enactment of the Act 
under which such credit, exemption, deduction, or adjustment is 
provided; or 
(B) the date the surface drilling of such well began. 
, f 
, ;,; 
SEC. 108. CEILING PRICE FOR STRIPPER WELL NATURAL GAS. 
(a) GENERAL RULE.—In the case of any first sale of stripper well 15 USC 3318. 
natural gas the maximum lawful price under this section for such nat-
ural gas delivered during any month shall be— 
(1) $2.09 per million Btu's, in the case of May 1978; and 
(2) in the case of any month thereafter, the maximum lawful 
price, per million Btu's, prescribed under this subsection for the 
preceding month multiplied by the monthly equivalent of a factor 
equal to the sum of— 
^ ? 
(A) the annual inflation adjustment factor applicable for 
such month; plus 
(B) (i) .035, in the case of any month beginning before 
April 20,1981; or 
(ii) .04, in the case of any month beginning after April 20, 
1981. 
(b) DEFINITION OF STRIPPER W E L L NATURAL GAS.— 
(1) GENERAL RULE.—Except as provided in paragraph (2), the 
term "stripper well natural gas" means natural gas determined 
in accordajice vsdth section 503 to be nonassociated natural gas Post, p. 3397. 
produced during any month from a well if— 
(A) during the preceding 90-day production period, such 
well produced nonassociated natural gas at a rate which did 
not exceed an average of 60 Mcf per production day during 
sudh period; and 
(B) during such period such well produced at its maximum 
efficient rate of flow, determined in accordance with recognized 
conservation practices designed to maximize the ultimate 
recovery of natural gas. 
(2) PRODUCTION I N EXCESS OF 60 MCF.—The Commission shall, 
by rule, provide that, if nonassociated natural gas produced from 
a well which previously qualified as a stripper well under para-
graph (1) exceeds an average of 60 Mcf per production day during 
any 90-day production period, such natural gas may continue to 
qualify as stripper well natural gas if the increase in nonassoci-
ated natural gas produced from such well was the result of the 
application of recognized enhanced recovery techniques. 
(3) DEFINITIONS.—For purposes of this subsection— 
(A) 
PRODUCTION 
DAY.—The 
term 
"production 
day" 
means— 
(i) any day during which natural gas is produced; 
and 
92 STAT. 3368 
PUBLIC LAW 95-621—NOV. 9, 1978 
(ii) any day during which natural gas is not produced 
if production during such day is prohibited by a require-
ment of State law or a conservation practice recognized 
or approved by the State agency having regulatory juris-
diction over the production of natural gas. 
(B) 90-DAY PRODUCTION PERIOD.—^The term "90-day produc-
tion period" means any period of 90 consecutive calendar days 
excluding any day during which natural gas is not produced 
for reasons other than voluntary action of any person with 
the right to control production of natural gas from such well. 
(C) NoNAssociATED NATURAL GAS.—The term "nonassoci-
ated natural gas" means natural gas which is not produced in 
association with crude oil. 
SEC. 109. CEILING PRICE FOR OTHER CATEGORIES OF NATURAL GAS. 
15 use 3319. 
(a) APPLICATION.—The maximum lawful price computed under 
subsection (b) shall apply to any first sale of any natural gas delivered 
during any month, in the case of any natural gas which is not covered 
by any maximum lawful price under any other section of this subtitle, 
including— 
(1) natural gas produced from any new well not otherwise qual-
ifying for a higher maximum lawful price under this title; 
(2) natural gas committed or dedicated to interstate commerce 
on the day before the date of the enactment of this Act and for 
15 use 717w. 
which a just and reasonable rate under the Natural Gas Act was 
not in effect on such date for the first sale of such natural gas; 
(3) natural gas which was not committed or dedicated to inter-
state commerce on the day before the date of the enactment of this 
Act and which was not subject to an existing contract on such day; 
and 
(4) natural gas produced from the Prudhoe Bay Unit of Alaska 
and transported through the natural gas transportation system 
approved under the Alaska Natural Gas Transportation Act of 
15 use 719 
1976. 
note. 
(b) MAXIMUM LAWFUL PRICE.— 
(1) The maximum lawful price under this section for any month 
shall be— 
(A) $1.45 per million Btu's, in the case of April 1977; and 
(B) in the case of any month thereafter, the maximum 
lawful price, per million Btu's, prescribed under this para-
graph for the preceding month multiplied by the monthly 
equivalent of the annual inflation adustment factor a^ppli-
cable for such month. 
(2) CEILING PRICES MAY BE INCREASED IF JUST AND REASONABLE.— 
The Commission may, by rule or order, prescribe a maximum 
lawful ceiling price, applicable to any first sale of any natural gas 
(or category thereof, as determined by the Commission) otherwise 
subject to the preceding provisions of this section, if such price 
is—• 
(A) higher than the maximum lawful price which would 
otherwise be applicable under such provisions; and 
(B) just and reasonable within the meaning of the Natural 
15USe717w. 
Gas Act. 
SEC. 110. TREATMENT OF STATE SEVERANCE TAXES AND CERTAIN 
PRODUCTION-RELATED COSTS. 
15 use 3320. 
(a) ALLOWANCE FOR STATE SEVERANCE TAXES AND CERTAIN PRODUC-
TION-RELATED COSTS.—Except as provided in subsection (b), a price 
for the first sale of natural gas shall not be considered to exceed the 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3369 
maximum lawful price applicable to the first sale of such natural gas 
under this subtitle if such first sale price exceeds the maximum lawful 
price to the extent necessary to recover— 
(1) State severance taxes attributable to the production of such 
natural gas and borne by the seller, but only to the extent the 
amount of such taxes does not exceed the limitation of subsection 
( b ) ; a n d 
(2) any costs of compressing, gathering, processing, treating, 
liquefying, or transporting such natural gas, or other similar 
costs, borne by the seller and allowed for, by rule or order, by the 
Commission. 
(b) LIMITATION ON STATE SEVERANCE TAXES.—The State severance 
tax allowable under subsection (a) (1) with respect to the production 
of any natural gas may not include any amount of State severance 
taxes borne by the seller which results from a provision of State law 
enacted on or after December 1, 1977, unless such provision of law is 
equally applicable to natural gas produced in such State and delivered 
in interstate commerce and to natural gas produced in such State and 
not so delivered. 
(c) DEFINITION or STATE SEVERANCE TAX.—For purposes of this 
section, the term "State severance tax" means any severance, produc-
tion, or similar tax, fee, or other levy imposed on the production of 
natural gas— 
(1) by any State or Indian tribe (as defined in section 106 
( b ) ( 2 ) ( B ) ( i i ) ) ; a n d 
(2) by any political subdivision of a State if the authority to 
impose such tax, fee, or other levy is granted to such political 
subdivision under State law. 
Subtitle B—Decontrol of Certain Natural Gas 
Prices 
SEC. 1
2
1
. 
ELIMINATION 
OF 
PRICE 
CONTROLS 
FOR 
CERTAIN 
NATURAL 
GAS SALES. 
(a) GENERAL, RULE.—^Subject to the reimposition of price controls 15 USC 3331.. 
as provided in section 122, the provisions of subtitle A respecting the 
maximum lawful price for the first sale of each of the following cate-
gories of natural gas shall, except as provided in subsections (d) and 
(e), cease to apply effective January 1,1985: 
(1) NEW NATURAL GAS.—New natural gas (as defined in section 
102(c)). 
(2) N E W , ONSHORE PRODUCTION WELLS.—Natural gas produced 
from any new, onshore production well (as defined in section 
103 (c)), if such natural gas—• 
(A) was not committed or dedicated to interstate com-
merce on April 20,1977; and 
(B) is produced from a completion location which is 
located at a depth of more than 6,000 feet. 
(3) INTRASTATE CONTRACTS IN EXCESS OF $I.OO.—Natural gas sold 
under an existing contract, any successor to an existing contract, 
or any rollover contract, if— 
(A) such natural gas was not committed or dedicated to 
interstate commerce on the day before the date of the enact-
ment of this Act; and 
(B) the price paid for the last deliveries of such natural 
gas occurring on December 31, 1984, or, if no deliveries 
39-194 O—80—pt. 3 
47 : QL3 
92 STAT. 3370 
PUBLIC LAW 95-621—NOV. 9, 1978 
O - 
occurred on such date, the price would have been paid had 
li 
i 
deliveries occurred on such date is higher than $1.00 per 
million Btu's. 
(b) HIGH-COST NATURAL GAS.—Effective beginning on the effective 
date of the incremental pricing rule required under section 201, the 
provisions of subtitle A respecting the maximum lawful price for the 
first sale of natural gas shall cease to apply to the first sale of high-
cost natural gas which is described in section 107(c) (1), (2), (3), 
or (4). 
(c) NATURAL GAS PRODUCED FROM 5,000 OR LESS.—Effective begin-
ning July 1, 1987, or, if later, the date of expiration of any price 
controls reimposed under section 122, the provisions of subtitle A 
respecting the maximum lawful price for any first sale of natural gas 
shall, except as provided in subsection (d), cease to apply to any first 
sale of natural gas produced from any new, onshore production well 
(as defined in section 103 (c)), if such natural gas— 
(1) was not committed or dedicated to interstate commerce on 
April 20, 1977; and 
(2) is produced from a completion location which is located at 
"' 
a depth of 5,000 feet or less. 
(d) EXCLUSION or CERTAIN ALASKA NATURAL GAS.—The provisions 
of subsections (a) and (c) shall not apply to any natural gas produced 
from the Prudhoe Bay Unit of Alaska and transported through the 
natural gas transportation system approved under the Alaska Natural 
15 use 719 
Gas Transportation Act of 1976. 
"o*®- 
(e) 
LIMITATION ON INDEFINITE PRICE ESCALATORS.—Natural gas 
which is not subject to maximum lawful prices under subtitle A solely 
by reason of subsection (a) (3) and which is sold under any existing 
contract or successor to an existing contract at a price established 
under an indefinite price escalator clause (as defined in section 105(b) 
(3) (B)) shall be subject to the provisions of section 105(b) (3). 
SEC. 
1
2
2
. 
STANDBY 
PRICE 
CONTROL 
AUTHORITY. 
15 use 3332. 
(a) E-EIMPOSITION OF PRICE CONTROLS.—The President, in accord-
ance with subsection (c) (1), or the Congress, in accordance with sub-
j,.r, •, 
section (c) (2), may reimpose maximum lawful prices for first sales of 
natural gas to which section 121(a) applies and delivery of which 
occurs after the effective date of the reimposition of such maximum 
lawful prices. 
(b) LIMITATIONS.—A reimposition of maximum lawful prices under 
this section— 
(1) may not take effect earlier than July 1,1985, nor later than 
June30,1987; and 
(2) shall remain in effect for a period of 18 months. 
(c) PROCEDURE FOR REIMPOSING PRICE CONTROLS.—For purposes of 
this section— 
(1) PRESIDENTIAL REIMPOSITION.—^Any exercise of authority by 
^. 
the President under subsection (a) shall be by written order 
' 
issued after May 31, 1985, and, subject to subsection (b), shall 
take effect for the first month beginning after the first 30 calendar 
*' 
days of continuous session of Congress (as determined in accord-
Post, p. 3406. 
ance with section 507(b)) after a copy of such order has been sub-
mitted to each House of the Congress unless during such 30 
calendar days of continuous session of Congress, the Congress 
adopts a concurrent resolution of disapproval described in section 
, 
507(c)(1). 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3371 
(2) CONGRESSIONAL REIMPOSITION.—Any exercise of authority 
by tne Congress under subsection (a) shall be by the adoption of 
a concurrent resolution after May 31, 1985, described in section 
507(c) (2) and, subject to subsection (b), shall take effect for the Post, p. 3406. 
first month beginning after the date of the adoption of such 
resolution. 
(d) MAXIMUM LAWFUL PRICES APPLICABLE UNDER REIMPOSITION OF 
PRICE CONTROL.—If maximum lawful prices are reimposed under this 
section on first sales of natural gas to which section 121 (a) applies, the 
maximum lawful price under this section for any first sale of such 
natural gas delivered during any month shall be— 
(1) except as provided in paragraph (2), the maximum lawful 
price, per million Btu's, computed for such month under section 
•: • ; j 
102 (relating to new natural gas); and 
(2) the maximum lawful price, per million Btu's, computed 
for such month under section 103(b) (2j (relating to new, on-
shore production wells 5,000 feet or less in depth), in the case of 
natural gas produced from any new, onshore production well (as 
defined in section 103 (c)) if such natural gas— 
(A) was not committed or dedicated to interstate com-
merce on April 20,1977; and 
(B) is produced from a completion location which is located 
at a depth of 5,000 feet or more. 
(e) ALLOWANCE FOR STATE SEVERANCE TAXES AND CERTAIN PRODUC-
TION-RELATED COSTS.—A price may exceed the maximum lawful price 
apj)licable for such natural gas under this section to the same extent 
as is provided under section 110 with respect to maximum lawful 
prices under subtitle A. 
(f) LIMITATION.—Maximum lawful prices may be reimposed only 
once under this section. 
SEC. 123. REPORT TO THE CONGRESS. 
(a) REPORTS.—On or before July 1,1984, and on or before January 1, 15 USC 3333. 
1985, the Department of Energy shall prepare and transmit to the 
President and to each House of the Congress a report on natural gas 
prices, supplies, and demand, and the competitive conditions and 
market forces in the natural gas industry in the United States. Each 
such report shall include an evaluation by the Department of Energy 
whether equilibrium exists between supply and demand for natural 
gas. 
(b) PUBLIC COMMENT.—In preparing each report required under 
subsection (a), the Department of Energy shall provide an oppor-
tunity for public comment with respect to matters required under 
' 
subsection (a) to be included in such report. 
TITLE II—INCREMENTAL PRICING 
SEC. 201. INDUSTRIAL BOILER FUEL USE. 
(a) I N GENERAL.—Not later than 12 months after the date of the 15 USC 3341. 
enactment of this Act, the Commission shall prescribe and make effec-
tive (and may from time to time amend) a rule designed to provide for 
the passthrough, in accordance with the provisions of this title, of the 
costs of natural gas which are— 
(1) described in section 203; and 
(2) incurred by any interstate pipeline. 
92 STAT. 3372 
PUBLIC LAW 95-621—NOV. 9, 1978 
(b) INITIAL APPLICATION.—The requirements of the rule under this 
section shall apply with respect to the boiler fuel use of natural gas 
by any industrial boiler fuel facility. 
(c) DEFINITIONS.—For purposes of this section— 
(1) INDUSTRIAL BOILER FUEL FACILITY.—The term "industrial 
boiler fuel facility" means any industrial facility, as defined by 
the Commission, which uses natural gas as a boiler fuel and which 
is not exempt under section 206. 
(2) BOILER FUEL USE.—The term "boiler fuel use" means the use 
of any fuel for the generation of steam or electricity. 
SEC. 202. AMENDMENT EXPANDING APPLICATION FOR OTHER INDUS-
TRIAL USES. 
15 use 3342. 
(a) I N GENERAL.— 
(1) COMMISSION RULE.—Not later than 18 months after the date 
of the enactment of this iVct, the Commission shall, by rule, pre-
scribe an amendment to the rule required under section 201 
designed to provide for the passthrough, in accordance with the 
provisions of this title, of the costs of natural gas which are— 
(A) described in section 203; and 
(B) incurred by any interstate pipeline. 
(2) EFFECTIVENESS.—The amendment required by this section, 
and any amendment to the rule under section 201 which is applica-
ble to facilities to which the amendment required by this section 
applies (other than a technical or clerical amendment), shall take 
eli'ect only as provided under subsection (c). 
(b) EXPANDED APPLICATION.—The requirements of the rule under 
section 201, as amended under subsection (a), shall apply with respect 
to the industrial use of natural gas (as defined by the Commission in 
such rule), including boiler fuel use of natural gas (as defined in 
section 201(C)(2)) by— 
(1) any industrial boiler fuel facility (as defined in section 201 
. > . . ; . 
( c ) ( 1 ) ) ; arid 
(2) any industrial facility which is within a category defined 
by the Commission in such amendment as subject thereunder to 
the requirements of such rule which is not exempt under section 
206. 
(c) CONGRESSIONAL REVIEW.— 
(1) I N GENERAL.—^Any amendment, the effectiveness of which is 
subject to this subsection, shall take effect beginning with the first 
month which begins more than 30 days after the first 30 calendar 
days of continuous session of Congress (determined in accordance 
Post, p. 3406. 
with section 507(b) after a copy of such amendment has been 
submitted to each House of the Congress or on such later date, not 
more than 90 days thereafter, as may be provided in such amend-
ment unless, during such 30 day period of continuous session of 
Congress, either House of the Congress adopts a resolution of dis-
approval described in section 507(c)(3) with respect to such 
^, 
, , .^ 
amendment. 
(2) AUTHORITY I N THE EVENT or CONGRESSIONAL DISAPPROVAL.— 
(A) AUTHORITY TO RESUBMIT.—If either House of the Con-
gress adopts a resolution of disapproval with respect to the 
amendment required under subsection (a) (or any amend-
ment proposed and submitted under this subparagraph), the 
Commission may thereafter submit to each House of the Con-
gress an amendment, satisfying the requirements of subsec-
tions (a) and (b), which amendment shall take effect as 
provided under paragraph (1). 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3373 
&f 
(B) LIMITATION-.—The authority of subparagraph (A) 
may not be exercised— 
(i) earlier than 6 months after the date of the adop-
tion of the most recent resolution of disapproval with 
respect to any such amendment under this section; and 
(ii) later than 2 years after the date of the adoption 
of any resolution of disapproval described in section 
507(c)(3) 
with respect to the amendment required /'osf, p. 3406. 
under subsection (a). 
SEC. 203. ACQUISITION COSTS SUBJECT TO PASSTHROUGH. 
(a) I N GENERAL.—The following costs shall be subject to the pass- 15 USC 3343. 
through requirements of the rule prescribed under section 201 (includ-
ing any amendment under section 202) : 
(1) N E W NATURAL GAS.—In the case of new natural gas (as 
denned in section 102 (c)), any portion of the first sale acquisition 
cost of such natural gas which exceeds the incremental pricing 
threshold applicable for the month in which the delivery of such 
natural gas occurs. 
(2) NATURAL GAS UNDER INTRASTATE ROLLOVER CONTRACT.—In 
the case of natural gas, delivered under a rollover contract, which 
was not committed or dedicated to interstate commerce on the 
day before the date of the enactment of this Act, any portion of 
the first sale acquisition cost of such natural gas which exceeds 
the incremental pricing threshold applicable for the month in 
which such delivery occurs. 
(3) NEW, ONSHORE PRODUCTION WELL GAS.—In the case of natural 
gas produced from any new, onshore production well (as defined 
m section 103 (c)), any portion of the first sale acquisition cost of 
such natural gas which exceeds the incremental pricing threshold 
applicable for the month in which the delivery of such natural 
gas occurs. 
(4) LNG IMPORTS.—Subject to section 207, in the case of lique-
fied natural gas imported into the United States, any portion of the 
first sale acquisition cost of such natural gas (whether or not 
liquefied when acquired) which exceeds the incremental pricing 
threshold applicable for the month in which such liquefied natural 
gas enters the United States. 
(5) NATURAL GAS (OTHER THAN LNG) IMPORTS.—Subject to sec-
tion 207, in the case of natural gas (other than liquefied natural 
gas) imported into the United States, any portion of the first 
sale acquisition cost of such imported natural gas which exceeds 
the maximum lawful price, per million Btu's, computed under 
section 102 (relating to new natural gas) for the month in which 
such natural gas enters the United States, without regard to sec-
tion 110. 
(6) STRIPPER WELL NATURAL GAS.—In the case of stripper well 
natural gas (as defined in section 108 (b)), any portion of the first 
sale acquisition cost of such natural gas which exceeds the maxi-
mum lawful price, per million Btu's, computed under section 102 
(relating to new natural gas) for the month in which the delivery 
of such natural gas occurs, without regard to section 110. 
(7) HIGH-COST NATURAL GAS.—In the case of high-cost natural 
gas (as defined in section 107(c)), any portion of the first sale 
acquisition cost of such natural gas which exceeds 130 percent of 
the amount the Commission determines represents— 
(A) the weighted average per barrel cost of Number 2 fuel 
oil landed in the greater New York City metropolitan area, 
92 STAT. 3374 
PUBLIC LAW 95-621—NOV. 9, 1978 
( A) 
during an appropriate period preceding the month during 
which delivery of such natural gas occurs; divided by 
(B) a Btu conversion factor of 5.8 mililon Btu's per barreL 
• 
(8) ALASKA NATURAL GAS TRANSPORTATION SYSTEM.—In the case 
I 
of natural gas produced from the Prudhoe Bay Unit of Alaska 
i 
and transported through the natural gas transportation system 
approved under the Alaska Natural Gas Transportation Act of 
15 use 719 
1976— 
note. 
(A) any portion of the first sale acquisition cost of such nat-
ural gas which is not described in subparagraph (B) and 
, 
; 
which exceeds the maximum lawful price, per million Btu's, 
computed under section 109 (relating to other categories of 
natural gas) for the month in which delivery of such natural 
,; 
gas occurs, without regard to section 110; and 
(B) any amount paid to any person (other than the 
producer of such natural gas or an affiliate of such producer) 
r 
for, or attributable to, any compressing, gathering, process-
ing, treating, liquefying, or transporting such natural gas, 
or any similar service provided with respect to such natural 
gas, before the delivery of such natural gas to such system. 
(9) INCREASED STATE SEVERANCE TAXES.— 
(A) 
INCREASES INCLUDED.—^Any portion of the cost of 
natural gas at any first sale attributable to any increase in 
the amount of State severance taxes (as defined in section 
110 (c)) which results from a provision of State law enacted 
on or after December 1, 1977. 
% 
(B) CERTAIN CHANGES ALLOWED I N METHOD OF COMPUTING 
TAX.—Subparagraph (A) shall not apply to any increase in 
. 
State severance taxes resulting from a change in the method 
of computation of such tax by reason of any provision of 
State law enacted on or after December 1, 1977, if— 
(i) as of the effective date of such change in method 
of computation, such increase does not result in an 
increase in the level of such tax, expressed as a percentage 
of the weighted average first sale price of natural gas 
J 
produced in such State, above the percentage of such 
average first sale price which such tax constituted on the 
-,„ , .., ,„, 
day before such effective date; and 
(ii) such provision of law is equally applicable to 
natural gas produced in such State and delivered in 
interstate commerce and to natural gas produced in such 
State and not so delivered. 
(C) DETERMINATION or AVERAGE PRICE.—The price to be 
^ 
used in determining the weighted average first sale price for 
purposes of clause (i) shall be the price paid at the first sale 
J. . 
which is used by such State in administering such tax (or an 
',., 
imputed value, if the State uses an event other than a first 
sale in administering such tax). 
(10) PURCHASES UNDER SECTION 311.-—^In the case of any sale 
; 
of natural gas authorized under section 311, any portion of any 
amount paid, per million Btu's, in the acquisition of such natural 
, 
gas in any such sale which exceeds the incremental pricing 
threshold applicable for the month in which such acquisition 
occurs. 
(11) SURCHARGES PAID TO OTHER PIPELINES.—The amount of any 
surcharge (described in section 204(c) (3)) paid by any interstate 
pipeline for natural gas acquired by such pipeline from another 
interstate pipeline. 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3375 
(b) FIRST SALE ACQUISITION COSTS.— 
(1) GENERAL RULE.—For purposes of this section, the first sale 
acquisition cost of natural gas is— 
(A) the price paid, per million Btu's, in any first sale of 
such natural gas, in the case of any natural gas produced in 
the United States and acquired in such first sale; and 
(B) the price paid for such natural gas, per million Btu's, 
' 
. • 
at the point of entry to the United States, in the case of 
natural gas or liquefied natural gas imported into the United 
States. 
Any amount of State severance taxes paid at any first sale shall 
not be included under subparagraph (A) or (B). 
(2) INTERSTATE PIPELINE PRODUCTION.—For purposes of this 
section, in the case of any natural gas produced by any interstate 
pipeline or any affiliate of such pipeline, the first sale acquisition 
cost of such natural gas shall be determined in accordance with 
rules prescribed by the Commission. 
(c) INCREMENTAL PRICING THRESHOLD.—For purposes of this sec-
tion, the incremental pricing threshold applicable for any month 
shall be— 
(1) $1.48 per million Btu's, in the case of March 1978; and 
(2) in the case of any month thereafter, the amount, per mil-
lion Btu's, determined under this subsection for the preceding 
month multiplied by the monthly equivalent of the annual infla-
tion adjustment factor (as defined in section 101(a)) applicable 
for such month. 
(d) CLASSIFICATION T O B E BASED ON PROVISIONS UNDER W H I C H SALE 
PRICE I S DETERMINED.—In the case of natural gas which is described in 
more than one paragraph of paragraphs (1) through (8) of subsec-
tion (a), the Commission shall, by rule, prescribe the method for 
determining under which such paragraph the first sale acquisition 
costs of such natural gas shall be subject to the passthrough require-
ments of this title, based upon the classification of such natural gas 
under which the price of such national gas is determined under title I. 
SEC. 204. METHOD OF PASSTHROUGH. 
(a) ESTABLISHMENT OF INCREMENTAL PRICING ACCOUNT.—The rule 15 USC 3344. 
required under section 201 (including any amendment under section 
202 to such rule) shall provide that any interstate pipeline subject to 
such rule shall establish and maintain an incremental pricing account 
(hereinafter in this title referred to as the "account"). 
(b) CREDITS TO ACCOUNT.—The rule required under section 201 
(including any amendment under section 202 to such rule) shall pro-
vide that any costs subject to the passthrough requirements of this 
title under section 203 (and any carrying charges permitted by the 
Commission) shall be credited to the account of such pipeline. Amounts 
so credited may not be allocated to the rates and charges of such pipe-
line except to the extent provided under this section. 
(c) REQUIREMENT FOR DIRECT PASSTHROUGH.— 
(1) I N GENERAL.—The rule required under section 201 (includ-
ing any amendment under section 202 to such rule) shall be 
designed to provide that any amounts in any interstate pipeline's 
account will be passed through, in accordance with a method 
prescribed under paragraph (2), by means of a surcharge deter-
mined in accordance with a method prescribed under paragraph 
92 STAT. 3376 
PUBLIC LAW 95-621—NOV. 9, 1978 
(2) SimcHARGE PASSTHROUGH.—The rule required under sec-
tion 201 (including any amendment under section 202) shall 
provide— 
(A) that any surcharge calculated under paragraph (3) 
may not be imposed by any interstate pipeline except in 
accordance with a method prescribed under subparagraph 
(B);and 
(B) one or more methods for imposing such surcharge on 
the rates and charges of such pipeline applicable to any vol-
ume of natural gas delivered, during the calendar period 
involved, for industrial use to any incrementally priced indus-
trial facilities served directly by such interstate pipeline and 
to incrementally priced industrial facilities served indirectly 
through any other interstate pipeline or any local distribu-
tion company. 
(3) SURCHARGE.— 
(A) 
CALCULATION OF SURCHARGE.—Subject to subpara-
graphs (B) and (C), the amount of any surcharge imposed 
by any interstate pipeline under this subsection on deliveries 
or natural gas during the calendar period involved shall be 
based on the dollar amount in such pipeline's account at the 
beginning of such period and on the volume of natural gas 
delivered directly or indirectly by such pipeline during such 
period or a preceding calendar period to incrementally priced 
industrial facilities for industrial use with such adjustments 
as the Commission determines necessary to carry out'the 
purposes of this title. 
(B) ELIMINATION OR REDUCTION OP SURCHARGE APPLICABLE 
T
O A FACILITY.—The rule under section 201 (including any 
amendment under section 202 to such rule) shall provide one 
or more methods which have the effect of eliminating or 
reducing the amount of the surcharge determined under sub-
paragraph (A) to be passed through under paragraph (2) 
with respect to volumes of natural gas to be delivered directly 
or indirectly to any incrementally priced industrial facility 
.!> 
for industrial use to the extent that such surcharge, in the 
absence of such elimination or reduction, would cause the 
rates and charges, per million Btu's, paid for such volumes of 
natural gas by that incrementally priced industrial facility 
to exceed the appropriate alternative fuel cost. 
(C) INCREASE IN GENERAL SURCHARGE TO REFLECT AN ADJUST-
MENT U
N
D
E
R SUBPARAGRAPH (B).—^Thc rule under section 201 
(including any amendment under section 202 to such rule) 
shall provide one or more methods by which, in any case in 
which the surcharge is eliminated or reduced under subpara-
graph (5) with respect to certain deliveries of natural gas, 
the interstate pipeline involved may recover from incremen-
tally priced industrial facilities which are not subject to any 
surcharge elimination or reduction under subparagraph (B) 
the dollar amount which would have been so passed through 
if the elimination or reduction under subparagraph (B) had 
not occurred. 
(D) EXCEPTION.—The methods prescribed under subpara-
graphs (B) and (C) need not require— 
(i) elimination or reduction under subparagraph (B) 
of the surcharge with respect to any specific deliveries 
of natural gas; or 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3377 
(ii) the increase under subparagraph (C) of the sur-
charge generally applicable due to any adjustment under 
subparagraph ( B ) , 
if the Commission determines that to do so would be imprac-
ticable or unnecessary to carry out the purposes of this title. 
(4) 
LOCAL DISTRIBUTION COMPANY DIRECT PTIRCHASES.—In 
any 
case in which a local distribution company directly incurs any 
first sale acquisition cost subject to the passthrough require-
ments of this title under section 203 or otherwise directly incur' 
any other cost subject to such requirements under sections 203(a) 
(8) ( B ) , (9), or (10), such local distribution company shall, with 
respect to the natural gas involved, be treated for purposes of this 
title as if it were an interstate pipeline. 
(5) 
PIPELINES AND LOCAL DISTRIBUTION COMPANIES WITH MORE 
THAN ONE SOURCE OF NATURAL GAS.—The Tule undcr section 201 
(including any amendment under section 202 to such rule) shall 
prescribe one or more methods for determining, for purposes of 
paragraph (2) (B) and paragraph (3) (A), the volume of natural 
gas delivered indirectly by any interstate pipeline to any incre-
mentally priced industrial facility through any other interstate 
pipeline or local distribution company for purposes of applying 
subsection (d) (2). 
(d) DEDUCTIONS FROM ACCOUNT.— 
(1) I N GENERAL.—Amounts passed through by any interstate 
pipeline by means of any surcharge under this section shall be 
deducted from such pipeline's account. 
(2) 
NORMAL ALLOCATION TO OCCUR WHERE BTU EQUIVALENCY 
IS REACHED FOR ALL FACILITIES SERVED BY A PTPELINK.^—^In any case 
in which the rates and charges to incrementally priced industrial 
facilities for natural gas delivered, directly or indirectly, by any 
interstate pipeline for industrial use to incrementally priced 
industrial facilities subject to the rule required under section 201 
(including any amendment under section 202 to such rule), are not 
less than the appropriate alternative fuel cost, such rule shall pre-
scribe one or more methods by which amounts in excess of that 
reasonably necessary to maintain such rates and charges appli-
cable to such industrial facilities at the appropriate alternative 
j. ,,; .« ,,.^1 
fuel cost may be deducted from such pipeline's account and may be 
allocated to the rates and charges of such interstate pipeline in any 
manner which would be permitted in the absence of this title. 
(e) DETERMINATION OF ALTERNATIVE F U E L COST.— 
(1) I N GENERAL.—Except as provided in paragraph (2), the 
appropriate alternative fuel cost for any region (as designated by 
the Commission) shall be the price, per million Btu's, for Number 
2 fuel oil determined by the Commission to be paid in such region 
by industrial users of such fuel. 
(2) 
REDUCTION 
OF 
APPROPRIATE 
ALTERNATIVE 
FUEL 
COST 
ALLOWED.—^The Commission may, by rule or order, reduce the 
appropriate alternative fuel cost— 
(A) for any category of incrementally priced industrial 
facilities, subject to the rule required under section 201 
(including any amendment under section 202 to such rule) 
located within any region and served by the same interstate 
pipeline; or 
(B) for any specific incrementally priced industrial facil-
ity which is subject to such requirements and which is 
located in any region; 
92 STAT. 3378 
PUBLIC LAW 95-621—NOV. 9, 1978 
to an amount not lower than the price, per million Btu's, for 
Number 6 fuel oil determined by the Commission to be paid in 
such region by industrial users of such fuel, if and to the extent 
the Commission determines, after an opportunity for written 
and oral presentation of views, data, and arguments, that such 
reduction is necessary to prevent increases in the rates and charges 
to residential, small commercial, and other high-priority users of 
natural gas which would result from a reallocation of costs caused 
by the conversion of such industrial facility or facilities from 
natural gas to other fuels, which conversion is likely to occur if 
the level of the appropriate alternative fuel cost were not so 
reduced, 
(f 
] DETERMINATION OF APPROPRIATE ACCOUNTING PERIOD.—^The rule 
required to be prescribed in section 201 shall specify the appropriate 
calendar periods used for purposes of such rule (including any amend-
ment under section 202 to such rule). 
(g) 
INCREMENTAIXY PRICED INDUSTRIAL FACILITY DEFINED.—For 
purposes of this section, the term "incrementally priced industrial 
facility" means any industrial facility subject to the requirements of 
the rule under section 201 (including any amendment under section 
202 to such rule). 
(h) INDUSTRIAL USE DEFINED.—For purposes of this section, the 
term "industrial use", when used with respect to natural gas, means 
the boiler fuel use of natural gas (as defined in section 201 (c) (2)) and 
any other use defined, by rule, by the Commission as an industrial use. 
SEC. 205. LOCAL DISTRIBUTION COMPANY PASSTHROUGH REQUIRE-
MENTS. 
15 use 3345. 
(a) GENERAL RULE.—Any surcharge under this title, paid by any 
local distribution company with respect to natural gas which is 
indirectly delivered by any interstate pipeline to incrementally priced 
industrial facilities which are served by such local distribution com-
pany, shall be directly passed through to such industrial facilities. 
(b) 
PROHIBITION ON OFFSETTING MODIFICATIONS IN RATES AND 
CHARGES.—Any modification of the method of allocating costs to the 
rates and charges of such local distribution company in effect on the 
date of the enactment of this Act is prohibited if a court, in any action 
Post, p. 3401. 
brought under section 504(b) (3), determines that such modification 
has the effect of creating any offset, in the rates and charges for 
natural gas applicable to any incrementally priced industrial facility 
served by such company, for the amount of any surcharge under this 
title paid by such local distribution company with respect to natural 
gas delivered by any interstate pipeline indirectly to that incrementally 
priced industrial facility. 
(c) 
SPECIAL ENFORCEMENT AUTHORITY OF ATTORNEY GENERAL.— 
In addition to such enforcement authority as may be available to the 
Commission or any person, the Attorney General may enforce the 
requirements of this subsection in accordance with the provisions of 
section 504(b) (3). 
(d) PREEMPTION OF STATE OR LOCAL LAW.—The requirements of this 
title shall preempt and supersede any provision of State or local law 
to the extent such provision of law would preclude the passthrough 
of any surcharge under this title or prevent the application of the 
requirements of this section. 
(e) STATE COMMISSION DEFINED.—For the purposes of this sub-
section, the term "State commission" means the State, political sub-
division, or an agency of either, having jurisdiction with respect to 
the rates and charges of any local distribution company. 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3379 
SEC. 206. EXEMPTIONS. 
(a) SMALL EXISTING INDUSTRIAL BOILER FUEL USERS.— 
(1) 
INTERIM EXEMPTION.—During the period preceding the 
15 USC 3346. 
effective date of any permanent exemption under paragraph (2), 
the rule required under section 201 shall not apply with respect to 
any boiler fuel use of natural gas by any industrial boiler fuel 
facility in existence on the date of the enactment of this Act if 
such use of natural gas by such facility does not exceed an aver-
age of 300 Mcf per day during any month of a base period deter-
mined appropriate by the Commission. 
(2) PERMANENT EXEMPTION.— 
(A) GENERAL RULE.—Not later than 18 months after the 
date of the enactment of this Act, the Commission shall 
prescribe and make effective a rule providing for the exemp-
tion of any small industrial boiler fuel facility from the 
'' 
rule required under section 201 (including any amendment 
under section 202 to such rule). 
(B) DEFINITION.—For purposes of this paragraph, the 
term "small industrial boiler fuel facility" means any indus- 
oOlt - , i 
trial boiler fuel facility in existence on the date of the enact-
ment of this Act that had an average per day use of natural 
gas as a boiler fuel during the month of peak use during 
calendar year 1977 which did not exceed the lesser of— 
(i) 300 Mcf; or 
(ii) such average daily rate of use during a month 
of peak use as the Commission determines in such rulp 
is necessary to assure that the volume of natural gas 
estimated by the Commission to have been used for 
boiler fuel during calendar year 1977 by facilities which 
are exempted under this paragraph does not exceed 
5 percent of the total volume of natui'al gas estimated 
. - 
,. , 
by the Commission to have been used for boiler fuel 
., 
.f 
transported by interstate pipelines and used during cal-
endar year 1977 as a boiler fuel. 
(b) AGRICULTURAL USERS OF NATURAL GAS.— 
(1) INTERIM EXEMPTION.—During the period preceding the 
, 
., 
effective date of any permanent exemption under paragraph (2), 
the rule prescribed under section 201 shall not apply to any 
• 
, 
-. 
facility to the extent of any agricultural use of natural gas. 
,,,.: 
(2) EXEMPTION BY RULE.—Not later than 18 months after the 
date of the enactment of this Act, the Commission shall pre-
scribe and make effective a rule providing for the exemption 
from the rule required under section 201 (including any amend-
ment under section 202 to such rule) any facility with respect 
to any agricultural use of natural gas for which the Commission 
determines that an alternative fuel or feedstock is not— 
(A) economically practicable; or 
(B) reasonably available. 
(3) AGRICULTURAL USE DEFINED.—For purposes of this subsec-
tion, the term "agricultural use", when used with respect to nat-
ural gas, means the use of natural gas to the extent such use is— 
(A) for agricultural production, natural fiber production, 
natural fiber processing, food processing, food quality main-
tenance, irrigation pumping, or crop drying; or 
(B) as a process fuel or feedstock in the production of 
fertilizer, agricultural chemicals, animal feed, or food. 
92 STAT. 3380 
PUBLIC LAW 95-621—NOV. 9, 1978 
(c) 
SCHOOLS, HOSPITALS, AND CERTAIN OTHER FACILITIES.—The 
rule under section 201 (including any amendment to such rule under 
section 202) shall not apply to— 
(1) any school, hospital, or other similar institution; 
(2) the generation of electricity by any electric utility; or 
(3) to the extent provided by the Commission by rule, any 
qualifying cogenerator (as defined in section 3(18) (B) of the 
16 use 796. 
Federal Power Act, as amended by the Public Utility Regula-
Ante, p. 3134. 
tory Policies Act of 1978). 
(d) 
OTHER EXEMPTIONS.— 
(1) I N GENERAL.—The Commission may, by rule or order, pro-
vide for the exemption, in whole or in part, of any other incre-
mentally priced industrial facility or category thereof from the 
rule prescribed under section 201 (including any amendment under 
section 202 to such rule). 
(2) CONGRESSIONAL REVIEW.—Any rule which provides for any 
exemption under this subsection may take effect after the expira-
tion of the first 30 calendar days of continuous session of Congress 
Post, p. 3406. 
(determined in accordance with section 507(b)) after a copy of 
such rule has been submitted to each House of the Congress, unless, 
during such 30 day period of continuous session of Congress, 
either House of the Congress adopts a resolution of disapproval 
described in section 507(c) (3), with respect to such rule. 
SEC. 207. TREATMENT OF CERTAIN IMPORTS. 
15 use 3347. 
(a) CERTAIN L N G IMPORTS.—Except to the extent of a determina-
tion otherwise under subsection (c) (1), the provisions of section 203 
(a) (4) shall not apply to the passthrough of the first sale acquisition 
costs of liquefied natural gas (or natural gas vaporized from liquefied 
natural gas) imported into the United States if— 
(1) the importation of such liquefied natural gas has been 
15 use 717b. 
authorized under section 3 of the Natural Gas Act on or before 
May 1,1978; 
(2) an application for such authority was pending under such 
section on such date; or 
(3) in connection with the granting of any authority under the 
15 use 717w. 
Natural Gas Act to import such liquefied natural ^as, the Secre-
tary of the Department of Energy or the Commission, in accord-
42 use 7101 
ance with the Department of Energy Organization Act (or any 
°ote. 
delegation or assignment thereunder), determines that a contract 
binding on the importer or other substantial financial commit-
ment of the importer has been made on or before such date, 
(b) CERTAIN NATURAL GAS IMPORTS (OTHER THAN LNG).—Subject 
to subsection (c) (2), the provisions of section 203(a) (5) shall only 
apply to the passthrough of the first sale acquisition costs of volumes 
of natural gas (other than liquefied natural gas) imported into the 
United States which exceeds both— 
(1) the maximum delivery obligations, for the month in which 
such delivery of such natural gas occurs, which is specified in con-
tracts entered into on or before May 1, 1978, and in effect when 
such delivery occurs; and 
(2) the volume of natural gas imported into the United States 
• 
by the interstate pipeline involved during any corresponding 
period (determined appropriate by the Commission) of calendar 
year 1977. 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3381 
(c) AUTHORITY W I T H RESPECT TO INCREMENTAL PRICING OF NATURAL 
GAS OR JUNG IMPORTS.— 
(1) LNG IMPORTS.—Subsection (a) (2) and (3) shall not apply 
with respect to any liquefied natural gas imports if, in connection 
with the granting of any authority under the Natural Gas Act 15 USC 717w. 
to import such liquefied natural gas, the Secretary of the Depart-
ment of Energy or the Commission, in accordance with the 
assignment of functions under the Department of Energy Organi-
zation Act, determines that the provisions of section 203(a) (4) 
42 USC 7101 
shall apply with respect to such liquefied natural gas imports. 
"ote. 
(2) NATURAL GAS IMPORTS (OTHER THAN LNG).—The provisions 
of section 203(a) (5) shall apply to the passthrough of the first 
sale acquisition costs of volumes of natural gas (other than lique-
fied natural gas) imported into the United States which exceed the 
volume of natural gas imported into the United States by the 
interstate pipeline involved during any corresponding period 
. , 
(determined appropriate by the Commission) of calendar year 
1977 if, in connection with the granting of any authority under 
the Natural Gas Act to import such natural gas, the Secretary 
15 USC 717w. 
of the Department of Energy or the Commission, in accordance 
with the assignment of functions under the Department of 
Energy Organization Act, determines that the provisions of 
42 USC 7101 
section 203(a)(5) shall apply with respect to such natural gas ""t^-
imports. 
SEC. 208. ALASKA NATURAL GAS. 
In the case of natural gas produced from the Prudhoe Bay Unit of 
15 USC 3348. 
Alaska and transported through the natural gas transportation system 
approved under the Alaska Natural Gas Transportation Act of 1976^— 15 USC 719 
(1) any portion of the first sale acquisition cost of such natural 
"ote. 
gas incurred by any interstate pipeline which is not required to be 
mcrementally priced under this title, and 
(2) any amount incurred by any interstate pipeline, for trans-
portation of such natural gas after delivery of such natural gas to 
such system, 
shall be allocated to the rates and charges of such interstate pipeline 
in accordance with the general principles applicable on the date of the 
enactment of this Act for establishing rates in connection with the 
issuing of certificates under the Natural Gas Act for interstate pipe- 
15 USC 717w. 
lines. 
TITLE III—ADDITIONAL AUTHORITIES 
AND REQUIREMENTS 
Subtitle A—Emergency Authority 
SEC. 301. DECLARATION OF EMERGENCY. 
(a) PRESIDENTIAL DECLARATION.—The President may declare a nat- 
15 USC 3361. 
ural gas supply emergency (or extend a previously declared emer-
gency) if he finds that— 
(1) a severe natural gas shortage, endangering the supply of 
natural gas for high-priority uses, exists or is imminent in the 
United States or in any region thereof; and 
(2) the exercise of authorities under section 302 or section 303 
is reasonably necessary, having exhausted other alternatives to the 
maximum extent practicable, to assist in meeting natural gas 
requirements for such high-priority uses. 
92 STAT. 3382 
PUBLIC LAW 95-621—NOV. 9, 1978 
(b) LIMITATION.— 
(1) EXPIRATION.—Any declaration of a natural gas supply 
emergency (or extension thereof) under subsection (a), shall 
terminate at the earlier of— 
'' • 
' ^ 
(A) the date on which the President finds that any shortage 
described in subsection (a) does not exist or is not imminent; 
or 
(B) 120 days after the date of such declaration of emer-
'•-' 
» 
gency (or extension thereof). 
(2]i EXTENSIONS.—Nothing in this subsection shall prohibit the 
President from extending, under subsection (a), any emergency 
(or extension thereof), previously declared under subsection (a), 
upon the expiration of such declaration of emergency (or exten-
sion thereof) under paragraph (1) (B). 
SEC. 302. EMERGENCY PURCHASE AUTHORITY. 
15 use 3362. 
(a) PRESIDENTIAL AUTHORIZATION.—During any natural gas supply 
emergency declared under section 301, the President may, by rule or 
order, authorize any interstate pipeline or local distribution company 
served by any interstate pipeline to contract, upon such terms and con-
ditions as the President determines to be appropriate (including 
liH . 
provisions respecting fair and equitable prices), for the purchase of 
emergency supplies of natural gas— 
(1) from any producer of natural gas (other than a producer 
who is affiliated with the purchaser, as determined by the Presi-
dent) if— 
(A) such natural gas is not produced from the Outer Con-
tinental Shelf; and 
15 use 717w. 
(B) the sale or transportation of such natural gas was not 
pursuant to a certificate issued under the Natural Gas Act 
immediately before the date on which such contract was 
entered into; or 
(2) from any intrastate pipeline, local distribution company, or 
other person (other than an interstate pipeline or a producer of 
natural gas). 
(b) CONTRACT DURATION.—The duration of any contract authorized 
under subsection (a) may not exceed 4 months. The preceding sen-
tence shall not prohibit the President from authorizing under subsec-
tion (a) a renewal of any contract, previously authorized under such 
subsection, following the expiration of such contract. 
(c) RELATED TRANSPORTATION AND FACILITIES.—The President may, 
by order, require any pipeline to transport natural gas, and to construct 
and operate such facilities for the transportation of natural gas, as he 
determines necessary to carry out any contract authorized under sub-
section (a). The costs of any construction or transportation ordered 
under this subsection shall be paid by the purchaser of natural gas 
under the contract with respect to which such order is issued. No order 
to transport natural gas under this subsection shall require any pipe-
^d&f.: 
line to transport natural gas in excess of such pipeline's available 
capacity. 
(d) MAINTENANCE or ADEQUATE RECORDS.—The Commission shall 
require any interstate pipeline or local distribution company con-
tracting under the authority of this section for natural gas to 
maintain and make available full and adequate records concerning 
transactions under this section, including records of the volumes of 
natural gas purchased under the authority of this section and the 
rates and charges for purchase and receipt of such natural gas. 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3383 
(e) SPECIAL LIMITATION.—No sale under any emergency purchase 
contract under this section for emergency supplies of natural gas for 
sale and delivery from any intrastate pipeline which is operating under 
court supervision as of January 1, 1977, may take effect unless the 
court approves. 
SEC. 303. EMERGENCY ALLOCATION AUTHORITY. 
(a) I N GENERAL.—In order to assist in meeting natural gas require- 15 USC 3363. 
ments for high-priority uses of natural gas during any natural gas 
supply emergency declared under section 301, the President may, by 
order, allocate supplies of natural gas under subsections (b), (c), and 
(d) t c ^ 
(1) any interstate pipe!ine; 
(2) any local distribution company— 
(A) which is served by any interstate pipeline; 
(B) which is providing natural gas only for high-priority 
uses; and 
(C) which is in need of deliveries of natural gas to assist 
in meeting natural gas requirements for high-priority uses of 
natural gas; and 
(3) any person for meeting requirements of high-priority 
uses of natural gas. 
(b) 
ALLOCATION or CERTAIN BOILER FUEL GAS.— 
(1) REQUIRED FINDING.—The President shall not allocate sup-
plies of natural gas under this subsection imless he finds that— 
, 
(A) to the maximum extent practicable, emergency pur-
; 
chase authority under section 302 has been utilized to assist 
in meeting natural gas requirements for high-priority uses 
of natural gas; 
(B) emergency purchases of natural gas supplies under 
section 302 are not likely to satisfy the natural gas require-
ments for such hi^h-priority uses; 
(C) the exercise of authority under this subsection is 
reasonably necessary to assist in meeting natural gas require-
ments for such high-priority uses; and 
(D) any interstate pipeline or local distribution company 
receiving such natural gas has ordered the termination of 
all deliveries of natural gas for other than high-priority 
uses and attempted to to the maximum extent practicable to 
terminate such deliveries. 
(2) 
ALLOCATION AUTHORITY.—Subject to paragraph 
(1), 
in 
order to assist in meeting natural gas requirements for high-
priority uses of natural gas, the President may, by order, allocate 
supplies of natural gas the use of which has been prohibited by 
the President pursuant to authority under section 607 of the Pub-
lic Utility Regulatory Policies Act of 1978 (relating to the use Ante, p. 3171. 
of natural gas as a boiler fuel during any natui-al gas supply 
emergency). 
(c) ALLOCATION OF GENERAL PIPELINE SUPPLY.— 
(1) REQUIRED FINDINGS.—The President shall not allocate sup-
plies of natural gas under this subsection unless he finds that— 
(A) to the maximum extent practicable, allocation of sup-
plies of natural gas under subsection (b) has been utilized to 
assist in meeting natural gas requirements for high-priority 
uses of natural gas; 
(B) the exercise of such authority is not likely to satisfy 
the natural gas requirements for such high-priority uses; 
92 STAT. 3384 
PUBLIC LAW 95-621—NOV. 9, 1978 
(C) the exercise of authority under this subsection is rea-
sonably necessary to assist in meeting natural gas require-
ments for such high-priority uses; 
(D) any interstate pipeline or local distribution company 
receiving such natural gas has ordered the termination of all 
deliveries of natural gas for other than high-priority uses and 
attempted to the maximum extent practicable to terminate 
such deliveries; 
(E) such allocation will not create, for the interstate pipe-
line delivering certificated natural gas, a supply shortage 
which will cause such pipeline to be unable to meet the natural 
gas requirements for high-priority uses of natural gas served, 
directly or indirectly, by such pipeline; and 
(F) such allocation will not result in a disproportionate 
share of deliveries and resulting curtailments of natural gas 
being experienced by such interstate pipeline when compared 
to deliveries and resulting curtailments which are experienced 
as a result of orders issued under this subsection applicable 
to other interstate pipelines (as determined by the President). 
(2) REQUIRED NOTIFICATION FROM STATE.— 
(A) NOTIFICATION.—The President shall not allocate sup-
plies of natural gas under this subsection unless he is notified 
by the Governor of any State that— 
(i) a shortage of natural gas supplies available to such 
State exists or is imminent; 
(ii) such shortage or imminent shortage endangers the 
supply of natural gas for high-priority uses m such 
State; and 
(iii) the exercise of authority under Stat© law is inade-
quate to protect high-priority uses of natural gas in such 
State from an interruption in natural gas supplies. 
(3) BASIS OF FINDING.—To the maximum extent practicable, the 
Governor shall submit, together with any notification under sub-
paragraph (A), information upon which he has based his finding 
under such subparagraph, including— 
(i) volumes of natural gas required to meet the natural 
gas requirements for high-priority uses of natural gas in 
such State; 
(ii) information received from persons in the business 
of producing, selling, transporting, or delivering natural 
gas in such State as to the volumes of natural gas sup-
plies available to such State; 
(iii) information on the authority under State law 
which will be exercised to protect high-priority uses; and 
(iv) such other information which the President 
requests or which the Governor determines appropriate 
to apprise the President of emergency deliveries and 
transportation of interstate natural gas needed by such 
State. 
(4) ALLOCATION AUTHORITY.—Subject to paragraphs (1), (2), 
and (5), in order to assist in meeting natural gas requirements for 
high-priority uses of natural gas, the President may, by order, 
allocate supplies of certificated natural gas from any interstate 
pipeline. 
(5) CONSIDERATION OF ALTERNATIVE FUEL AVAILABILITY.—In issu-
ing any order under this subsection the President shall consider 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3385 
the relative availability of alternative fuel to natural gas users 
supplied by the interstate pipeline ordered to make deliveries 
pursuant to this subsection. 
(d) AixocATiON OF USER-OWNED GAS.— 
(1) REQUIRED FINDING.—^The President shall not allocate sup-
plies of natural gas under this subsection unless he finds that— 
(A) to the maximum extent practicable, allocation of sup-
plies of natural gas under subsection (c) has been utilized to 
assist in meeting natural gas requirements for high-priority 
uses of natural gas; 
(B) the exercise of such authority is not likely to satisfy 
the natural gas requirements for such high-priority uses; 
(C) the exercise of authority under this subsection is rea-
sonably necessary to assist in meeting natural gas require-
ments for such high-priority uses; 
(D) any interstate pipeline or local distribution company 
receiving such natural gas has ordered the termination of all 
deliveries of natural gas for other than high-priority uses and 
attempted to the maximum extent practicable to terminate 
such deliveries; and 
(E) such allocation will not create, for the person who 
owns and would otherwise use such natural gas, a supply 
shortage which will cause such person to be unable to satisfy 
such person's natural gas requirements for high-priority uses. 
(2) ALLOCATION AUTHORITY.—Subject to paragraphs (1) and 
(3), in order to assist in meeting natural gas requirements for 
high-priority uses of natural gas, the President may, by order, 
allocate supplies of natural gas which would be certificated nat-
ural gas but for the second sentence of section 2 (19). 
(3) CONSIDERATION OF ECONOMIC FEASIBILITY OF ALTERNATIVE 
FUELS.—In issuing any order under this subsection, the President 
shall consider the economic feasibility of alternative fuels avail-
able to the user which owned the natural gas subject to an order 
under this subsection. 
(e) LIMITATION.—No order may be issued under this section unless 
the President determines that such order will not require transporta-
tion of natural gas by any pipeline in excess of its available transpor-
tation capacity. 
(f) INDUSTRY ASSISTANCE.—The President may request that repre-
sentatives of pipelines, local distribution companies, and other persons 
meet and provide assistance to the President in carrying out his 
authority under this section. 
(g) COMPENSATION.— 
(1) I N GENERAL.—If the parties to any order issued under sub-
section (b), (c), (d), or (h) fail to agree upon the terms of com-
pensation for natural gas deliveries or transportation required 
pursuant to such order, the President, after a hearing held either 
before or after such order takes effect, shall, by supplemental 
order, prescribe the amount of compensation to be paid for such 
deliveries or transportation and for any other expenses incurred 
in delivering or transporting natural gas. 
(2) CALCULATION OF COMPENSATION FOR CERTAIN BOILER FUEL 
NATURAL GAS.—For purposes of any supplemental order under 
paragraph (1) with respect to emergency deliveries pursuant to 
subsection (b), the President shall calculate the amount of 
compensation— 
(A) for supplies of natural gas based upon the amount 
required to make whole the user subject to the prohibition 
39-194 O—80—pt. 3 
48 : QL3 
92 STAT. 3386 
PUBLIC LAW 95-621—NOV. 9, 1978 
:'•;«; 
order, but in no event may such compensation exceed just 
;>'';; •; compensation prescribed in section 607 of the Public Utility 
Ante, p. 3171. 
Regulatory Policies Act of 1978; and 
(B) for transportation, storage, delivery, and other serv-
ices, based upon reasonable costs, as determined by the 
'• 
President. 
(3) COMPENSATION FOR OTHER NATURAL GAS ALLOCATED.—For 
the purpose of any supplemental order under paragraph (1), if 
the party making emergency deliveries pursuant to subsection (c) 
o r ( d ) — 
(A) indicates a preference for compensation in kind, the 
President shall direct that compensation in kind be provided 
as expeditiously as practicable; 
(B) indicates a preference for compensation, or the Presi-
dent determines that, notwithstanding paragraph (A) of this 
subsection, any portion thereof cannot practicably be com-
pensated in kind, the President shall calculate the amount 
of compensation— 
-' • 
(i) for supplies of natural gas, based upon the amount 
required to make the pipeline and its local distribution 
companies whole, in the case of any order under subsec-
tion (o), or to make the user from whom natural gas is 
allocated whole, in the case of any order under subsec-
tion (d), including any amount actually paid by such 
' • 
pipeline and its local distribution companies or such user 
for volumes of natural gas or higher cost synthetic gas 
acquired to replace natural gas subject to an order under 
subsection (c) or (d) ; and 
(ii) for transportation, storage, delivery, and other 
services, based upon reasonable costs, as determined by 
the President. Compensation received by an interstate 
pipeline under this subsection shall be credited to the 
account of any local distribution company served by that 
pipeline to the extent ordered by the President to make 
such local distribution company w^hole. 
(h) RELATED TRANSPORTATION AND FACILITIES.—The President may, 
by order, require any pipeline to transport natural gas, and to con-
struct and operate such facilities for the transportation of natual gas, 
as he determines necessary to carry out any order under subsection (b), 
(c), or (d). Compensation for the costs of any construction or trans-
portation ordered under this subsection shall be determined under 
subsection (g) and shall be paid by the person to whom supplies of 
natural gas are ordered allocated under this section. 
(i) MONITORING.—In order to effect the purposes of this subtitle, the 
President shall monitor the operation of any order made pursuant to 
this section to assure that natural gas delivered pursuant to tliis section 
is applied to high-priority uses only. 
Report to 
(j) COMMISSION STUDY.—Not later than June 1, 1979, the Commis-
Congress. 
gion shall prepare and submit to the Congress a report regarding 
whether authority, to allocate natural gas, which is not otherwise sub-
ject to allocation under this subtitle, is likely to be necessary to meet 
high-priority uses. 
(k) DEFINITION or HIGH-PRIORITY USE.—For purposes of this sec-
tion, the term "high-priority use" means any— 
(1) use of natural gas in a residence; 
(2) use of natural gas in a commercial establishment in amounts 
less than 50 Mcf on a peak day; or 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3387 
(3) any use of natural gas the curtailment of which the Presi-
dent determines would endanger life, health, or maintenance of 
physical property. 
SEC. 304. MISCELLANEOUS PROVISIONS. 
(a) INFORMATION.— 
15 USC 3364. 
(1) OBTAINING OF INFORMATION.—In order to obtain informa-
tion to carry out his authority under this subtitle, the President 
may— 
(A) sign and issue subpenas for the attendance and testi-
mony of witnesses and the production of books, records, 
papers, and other documents; 
(B) require any person, by general or special order, to sub-
mit answers in writing to interrogatories, requests for reports 
or for other information, and such answers shall be made 
within such reasonable period, and under oath or otherwise, 
as the President may determine; and 
(c) secure, upon request, any information from any Fed-
eral agency. 
(2) ENFORCEMENT OF SUBPENAS AND ORDERS.—The appropriate 
United States district court may, upon petition of the Attorney 
General at the request of the President, in the case of refusal to 
, 
obey a subpena or order of the President issued under this sub-
section, issue an order requiring compliance therewith, and any 
failure to obey an order of the court may be punished by the court 
as a contempt thereof. 
(b) REPORTING OF PRICES AND VOLUMES.—In issuing any order under 
section 302 or 303, the President shall require that the prices and vol-
umes of natural gas delivered, transported, or contracted for pursuant 
to such order shall be reported to him on a weekly basis. Such reports 
shall be made available to the Congress. 
(c) 
PRESIDENTIAL REPORTS TO CONGRESS.—The President 
shall 
report to the Congress, not later than 90 days following the termina-
tion under section 301(b) of any declaration of a natural gas supply 
emergency (or extension thereof) under section 301(a), respecting 
the exercise of authority under section 301, 302, 303, or this section. 
(d) DELEGATION OF AUTHORITIES.—The President may delegate all 
or any portion of the authority granted to him under section 301, 302, 
303, or this section to such Federal oiRcers or agencies as he determines 
appropriate, and may authorize such redelegation as may be appro-
}:)riate. Except with respect to section 552 of title 5 of the United 
States Code, any Federal officer or agency to which authority is dele-
gated or redelegated under this subsection shall be subject only to such 
procedural requirements respecting the exercise of such authority as 
the President would be subject to if such authority were not so 
delegated. 
(e) ANTITRUST PROTECTIONS.— 
' 
- • 
(1) DEFENSES.—There shall be available as a defense for anj' 
person to civil or criminal action brought for violation of the 
Federal antitrust laws (or any similar law of any State) with 
respect to any action taken, or meeting held, pursuant to any order 
of the President under section 303 (b), (c), (d), or (i), or any 
meeting held pursuant to a request of the President under section 
303(g), i f -
(A) such action was taken or meeting held solely for the 
purpose of complying with the President's request or order; 
92 STAT. 3388 
PUBLIC LAW 95-621—NOV. 9, 1978 
(B) such action was not taken for the purpose of injuring 
! 
competition; and 
(C) any such meeting complied with the requirements of 
paragraph (2). 
i-,,, • ); ; 
Persons interposing the defense provided by this subsection shall 
have the burden of proof, except that the burden shall be on the 
person against whom the defense is asserted with respect to 
whether the actions were taken for the purpose of injuring com-
petition. 
(2) REQUIREMENTS or MEETINGS.—^With respect to any meeting 
held pursuant to a request by the President under section 303(g) 
or pursuant to an order under section 303— 
, 
(A) there shall be present at such meeting a full-time 
Federal employee designated for such purposes by the Attor-
ney General; 
(B) a full and complete record of such meeting shall be 
; '. 
taken and deposited, together with any agreements resulting 
therefrom, with the Attorney General, who shall make it 
,-j 
available for public inspection and copying; 
(G) the Attorney General and the Federal Trade Com-
mission shall have the opportunity to participate from the 
beginning in the development and carrying out of agreements 
and actions under section 303, in order to propose any alter-
native which would avoid or overcome, to the greatest extent 
practicable, possible anticompetitive effects while achieving 
substantially the purposes of section 303 and any order there-
under ; and 
(D) such other procedures as may be specified by the 
President in such request or order shall be complied with. 
(f) EFFECT ON CERTAIN CONTRACTUAL OBLIGATIONS.—There shall be 
available as a defense to any action brought for breach of contract 
imder Federal or State Law arising out of any act or omission that 
such act was taken or that such omission occurred for purposes of com-
plying with any order issued under section 303. 
(g) PREEIVIPTION.—Any order issued pursuant to this title shall pre-
empt any provision of any program for the allocation, emergency 
delivery, transportation, or purchase of natural gas established by any 
State or local government if such program is in conflict with any such 
order. 
Subtitle B—Other Authorities and 
Requirements 
SEC. 311. AUTHORIZATION OF CERTAIN SALES AND TRANSPORTA-
TION. 
15 use 3371. 
(a) COMMISSION APPROVAL OF TRANSPORTATION.— 
(1) INTERSTATE PIPELINES.— 
(A) I N GENERAL,—The Commission may, by rule or order, 
authorize any interstate pipeline to transport natural gas on 
behalf of— 
(i) any intrastate pipeline; and 
' ;• •. 1 
(ii) any local distribution company. 
(B) J U S T AND REASONABLE RATES.—^The rates and charges 
of any interstate pipeline with respect to any transportation 
authorized under subparagraph (A) shall be just and reason-
15 use 717w. 
able (within the meaning of the Natural Gas Act). 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3389 
(2) INTRASTATE PIPELINES.— 
(A) I N GENERAL.—The Commission may, by rule or order, 
authorize any intrastate pipeline to transport natural gas on 
behalf of—• 
(i^ any interstate pipeline; and 
(ii) any local distribution company served by any 
'; 
interstate pipeline. 
(B) RATES AND CHARGES.— 
(i) MAXIMUM FAIR AND EQUITABLE PRICE.—^The rates 
and charges of any intrastate pipeline with respect to 
any transportation authorized under subparagraph ( A ) , 
including any amount computed in accordance with the 
rule prescribed under clause (ii), shall be fair and equi-
table and may not exceed an amount which is reasonably 
comparable to the rates and charges which interstate 
pipelines would be permitted to charge for providing 
similar transportation service. 
(ii) 
COMMISSION RULE.—The Commission shall, by 
rule, establish the method for calculating an amount nec-
essary to— 
(I) reasonably compensate any intrastate pipe-
line for expenses incurred by the pipeline and 
associated with the providing of any gathering, 
treatment, processing, transportation, delivery, or 
similar service provided by such pipeline in connec-
tion with any transportation of natural gas author-
ized under subparagraph ( A ) ; and 
(II) provide an opportunity for such pipeline to 
earn a reasonable profit on such services. 
(b) COMMISSION APPROVAL or SALES.— 
(1) I N GENERAL.—The Commission may, by rule or order, 
authorize any intrastate pipeline to sell natural gas to— 
(A) any interstate pipeline; and 
(B) any local distribution company served by any inter-
state pipeline. 
(2) R A T E S AND CHARGES.— 
(A) MAXIMUM FAIR AND EQUITABLE PRICE.—The rates and 
charges of any intrastate pipeline with respect to any sale of 
natural gas authorized under paragraph (1) shall be fair and 
equitable and may not exceed the sum of— 
(i) such intrastate pipeline's weighted average acqui-
sition cost of natural gas; 
(ii) an amount, computed in accordance with the rule 
prescribed under subparagraph ( B ) ; and 
(iii) any adjustment permitted under subparagraph 
(C). 
(B) 
COMMISSION RULE.—The Commission shall, by rule, 
establish the method for calculating an amount necessary to— 
(i) reasonably compensate any intrastate pipeline for 
expenses incurred by the pipeline and associated with 
the providing of any gathering, treatment, processing, 
•' 
transportation, or delivery service provided by such 
pipeline in connection with any sale of natural gas 
authorized under paragraph ( 1 ) ; and 
(ii) provide an opportunity for such pipeline to earn 
a reasonable profit on such services. 
92 STAT. 3390 
PUBLIC LAW 95-621—NOV. 9, 1978 
(C) ADJUSTMENT.— 
»• • 
(i) APPLICATION.—This subparagraph shall apply in 
any case in which, in order to deliver any volume of 
natural gas pursuant to any sale authorized under para-
graph (1), any intrastate pipeline acquires quantities of 
V 
- 
natural gas under any existing contract, if— 
(I) such intrastate pipeline acquires any volume 
of natural gas under such contract in excess of that 
' ' 
' 
which such pipeline would otherwise have acquired; 
and 
(II) the price paid for such additional volume of 
natural gas acquired under such contract is greater 
than such pipeline's weighted average acquisition 
cost of natural gas, computed without regard to the 
acquisition of such additional volume of natural gas. 
^ 
(ii) COMMISSION ADJUSTMENT.—In any case to which 
this subparagraph applies, the Commission shall permit 
,; 
: . 
an adjustment to the maximum fair and equitable price 
• ' ^ '. 
provided under subparagraph (A) to increase the reve-
nue to the intrastate pipeline under such sale by an 
amount determined by the Commission to be adequate 
to offset the additional cost incurred by such pipeline due 
to any increase in such pipeline's weighted average 
acquisition cost of natural gas. 
(3) LIMITATION.— 
(A) TWO-YEAR DURATION.—No authorization of any sale 
(or any extension thereof) under paragraph (1) may be for 
s 
a period exceeding two years. 
(B) EXTENSION.—Any authorization of any sale under 
paragraph (1), and any extension of any such authorization 
under this subparagraph, may be extended by the Commis-
sion if such extension satisfies the requirements of this sub-
section. 
(4) ADEQUACY or SERVICE TO INTRASTATE CUSTOMERS.—Any sale 
authorized under paragraph (1) shall be subject to interruption 
to the extent that natural gas subject to such sale is required to 
enable the intrastate pipeline involved to provide adequate service 
to such pipeline's customers at the time of such sale. 
(5) PROCEDURAL REQUIREMENTS.— 
(A) AFFIDAVIT.—Any application for authorization of any 
sale under paragraph (1) shall be accompanied by an affidavit 
filed by the intrastate pipeline involved and setting forth— 
(i) the identity of the interstate pipeline or local dis-
tribution company involved; 
(ii) each point of delivery of the natural gas from the 
intrastate pipeline; 
(iii) the estimated total and daily volumes of natural 
gas subject to such sale; 
(iv) the price or prices of such volumes; and 
(v) such other information as the Commission may, by 
rule, require. 
(B) VERIFICATION OF COMPLIANCE.—Any application for 
authorization of any sale under paragraph (1) shall be accom-
panied by a statement by the intrastate pipeline involved veri-
,,. ^ 
fying by oath or affirmation that such sale, if authorized, 
would comply with all requirements applicable to such sale 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3391 
* 
under this subsection and all terms and conditions established, 
by rule or order, by the Commission and applicable to such 
sale. 
-.:;:;:;.':'"" <,r 
(6) 
T E R M I N A T I O N OF SALES.— 
(A) HEARING.—Upon complaint of any interested person, 
or upon the Commission's own motion, the Commission shall, 
after affording an opportunity for oral presentation of views 
and arguments, terminate any sale authorized under para-
graph (1) if the Commission determines— 
(i) such termination is required to enable the intra-
state pipeline involved to provide adequate service to the 
r re 
customers of such pipeline at the time of such sale; 
(ii) such sale involves the sale of natural gas acquired 
. i ;. 
by the intrastate pipeline involved solely or primarily for 
the purpose of resale of such natural gas pursuant to a 
sale authorized under paragraph (1) ; 
(iii) such sale violates any requirement of this subsec- 
•; .
% 
' 
tion or any term or condition established, by rule or order, 
by the Commission and applicable to such sale; or 
(iv) such sale circumvents or violates any provision 
of this Act. 
;
= 
(B) SUSPENSION PENDING HEARING.—Prior to any hearing 
or determination required under subparagraph ( A ) , upon 
. 
complaint of any interested person or upon the Commission's 
own motion, the Commission may suspend any sale author-
ized under paragraph (1) if the Commission finds that it is 
likely that the determinations described in subparagraph (A) 
.>;« 
will be made following the hearing required under subpara-
graph (A). 
(C) DETERMINATION.—^The determination of whether any 
/ 
interruption of any sale authorized under paragraph (1) is 
required under subparagraph (A) (i) shall be made by the 
Commission without regard to the character of the use of 
natural gas by any customer of the intrastate pipeline 
involved. 
•'•' 
(D) STATE 
INTERVENTION.—Any 
interested 
State 
may 
intervene as a matter of right in any proceeding before the 
' 
Commission relating to any determination under this section. 
(7) DISAPPROVAL or APPLICATION.—^The Commission shall dis-
approve any application for authorization of any sale under 
paragraph (1) if the Commission determines— 
(A) such sale would impair the ability of the intrastate 
pipeline involved to provide adequate service to its customers 
at the time of such sale (without regard to the character of 
the use of natural gas by such customer); 
(B) such sale would involve the sale of natural gas 
acquired by the intrastate pipeline involved solely or pri-
marily for the purpose of resale of such natural gas pursuant 
' 
to a sale authorized under paragraph (1); 
(C) such sale would violate any requirement of this sub-
section or any term or condition established, by rule or order, 
by the Commission and applicable to such sale; or 
(D) such sale would circumvent or violate any provision 
of this Act. 
(c) TERMS AND CONDITIONS.—Any authorization granted under this 
section shall be under such terms and conditions as the Commission 
may prescribe. 
92 STAT. 3392 
PUBLIC LAW 95-621—NOV. 9, 1978 
SEC. 312. ASSIGNMENT OF CONTRACTUAL RIGHTS TO RECEIVE SUR-
PLUS NATURAL GAS. 
15 use 3372.. 
(a) AUTHORIZATION OF ASSIGNMENTS.—^The Commission may, by-
rule or order, authorize any intrastate pipeline to assi^, without com-
pensation, to any interstate pipeline or local distribution company all 
or any portion of such intrastate pipeline's right to receive surplus 
natural ^as at any first sale, upon such terms and conditions as the 
Commission determines appropriate. 
(b) EFFECT OF AUTHORIZATION UNDER SUBSECTION (a).—For the 
eflfect of an authorization under subsection (a), see section 601 (relat-
15 use 717w. 
ing to the coordination of this Act with the Natural Gas Act). 
(c) SURPLUS NATURAL GAS.—^For purposes of this section, the term 
"surplus natural gas" means any natural gas— 
(1) which is not committed or dedicated to interstate com-
merce on the day before the date of the enactment of this Act; 
(2) the first sale of which is subject to a maximum lawful price 
Ante, p. 3356. 
established under title I of this Act; and 
(3) which is determined, by the State agency having regulatory 
jurisdiction over the intrastate pipeline which would be entitled 
to receive such natural gas in the absence of any assignment to 
exceed the then current demands on such pipeline for natural gas. 
SEC. 313. EFFECT OF CERTAIN NATURAL GAS PRICES ON INDEFINITE 
PRICE ESCALATOR CLAUSES. 
15 use 3373. 
(a) HIGH-COST NATURAL GAS.—No price paid in any first sale of 
Ante, p. 3366. 
high-cost natural gas (as defined in section 107(c)) may be taken into 
account in applving any indefinite price escalator clause (as defined in 
Ante, p. 3363. 
section 105(b) (3) (B)) with respect to any first sale of any natural 
gas other than high-cost natural gas (as defined in section 107(c)). 
(b) OTHER TRANSACTIONS.—No price paid— 
(1) in any sale authorized under section 302 (a), or 
(2) pursuant to any order issued under section 303 (b), (c), 
(d),or(g}, 
may be taken into account in applying any indefinite price escalator 
clause (as defined in section 105 (b) (3) (B)). 
SEC. 314. CLAUSES PROHIBITING CERTAIN SALES, TRANSPORTATION, 
AND COMMINGLING. 
15 use 3374. 
(a) GENERAL RULE.—Any provision of any contract for the first 
sale of natural gas is hereby declared against public policy and unen-
forceable with respect to any natural gas covered by this Act if such 
provision— 
(1) prohibits the commingling of natural gas subject to such 
contract with natural gas subject to the jurisdiction of the Com-
15 use 717w. 
mission under the provisions of the Natural Gas Act; 
(2) prohibits the sale of any natural gas subject to such con-
tract to, or transportation of any such natural gas by, any person 
subject to the jurisdiction of the Commission under the Natural 
Gas Act, or otherwise prohibits the sale or transportation in inter-
state commerce (within the meaning of the Natural Gas Act) of 
natural gas subject to such contract; or 
(3) terminates, or grants any party the option to terminate, any 
obligation under any such contract as a result of such commin-
gling, sale, or transportation. 
(b) NATURAL GAS COVERED BY THIS ACT.—For purposes of subsec-
tion (a), the term "natural gas covered by this Act" means— 
(1) natural gas which is not committed or dedicated to inter-
state commerce as of the day before the date of the enactment of 
this Act; 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3393 
(2) natural gas, the sale in interstate commerce of which— 
(A) is authorized under section 302(a) or 311(b); or 
(B) is pursuant to an assignment under section 312(a); 
-•"•• • -
T i '
• 
and 
(3) natural gas, the transportation in interstate commerce of 
which i^— 
(A) pursuant to any order under section 302(c) or section 
3 0 3 ( b ) , ( c ) , ( d ) , o r ( h ) ; o r 
(B) authorized by the Commission under section 311(a). 
SEC. 315. CONTRACT DURATION; RIGHT OF FIRST REFUSAL; FILING 
OF CONTRACTS AND AGREEMENTS. 
(a) CONTRACT DURATION.— 
^^ ^ ^ ^ 3375. 
(1) GENERAL RULE.—The Commission may, by rule or order, 
specify the minimum duration of any contract (other than any 
existing contract) for the purchase of natural gas to which sec-
tion 601(a)(1) (A) or (B) is applicable. In no case may the 
minimum contract duration specified under this 
paragraph 
applicable to natural gas produced from any reservoir exceed 15 
years or, if less, the commercially producible life of such reser-
voir. The provisions of this paragraph shall not apply to con-
tracts of natural gas subject to the requirements of paragraph 
(3). 
(2) NONDISCRIMINATORY APPLICATION.— 
(A) I N GENERAL.—Except as provided in subparagraph 
(B), the Commission may not exercise the authority provided 
under paragraph (1) in a manner which— 
(i) provides an advantage to interstate pipelines by 
diverting supplies of natural gas to interstate pipelines 
and thereby denying adequate supplies of natural gas to 
intrastate pipelines; or 
(ii) otherwise discriminates between purchases by 
interstate pipelines and intrastate pipelines of natural 
gas. 
(B) SPECIAL CIRCUMSTANCES.—The Commission may vary 
any requirement established under paragraph 
(1) with 
respect to anv contract by an interstate pipeline or intrastate 
pipeline to the extent necessary to respond to special circum-
stances. 
(3) CONTRACTS FOR PURCHASE OF OCS NATURAL GAS.—The Com-
mission shall prescribe a rule which shall require that any first 
sale contract (other than any existing contract) for the purchase 
of natural gas which is produced from any reservoir on the Outer 
Continental Shelf and which is new natural gas (as defined in 
section 102(b)) or high-cost natural gas (as defined in section Ante, p. 3358. 
107(c) (1), (2), (3), or (4)) shall be for a duration of not less Ante, p. 3366. 
than 15 years or, if less, the commercially producible life of the 
reservoir. 
(b) OFFERS ; E I G H T OF FIRST REFUSAL.— 
(1) APPLICATION.—This subsection shall apply with respect to 
any natural gas which is committed or dedicated to interstate 
commerce on the day before the date of the enactment of this Act 
and which is— 
(A) high-cost natural gas (as defined in section 107(c) (1), 
( 2 ) , ( 3 ) , o r ( 4 ) ) ; 
(B) new natural gas (as defined in section 102(c)); or 
(C) natural gas produced from any new, onshore produc-
tion well (as defined in section 103 (c)). 
Ante, p. 3361. 
92 STAT. 3394 
PUBLIC LAW 95-621—NOV. 9, 1978 
This subsection shall not apply to any natural gas committed or 
dedicated to interstate commerce solely by reason of section 2(18) 
Ante, p. 3352. 
(A) (i). 
(2) OFFER OF SALE.—The Commission shall, by rule, require 
that if natural gas subject to the requirements of this subsection 
is produced on or after the first day of the first month beginning 
after the date of the enactment of this Act, a bona fide offer to sell 
such natural gas must be made to the person who, but for the pro-
visions of section 601 (a) (1) (B) (relating to deregulation), would 
have been entitled pursuant to the commitment or dedication of 
such natural gas to interstate commerce to receive such natural 
. ,,"' V » ci 
gas if such natural gas were sold (or any successor in interest to 
such person). 
(3) RIGHT OF FIRST REFUSAL.—The Commission shall, by rule, 
require that following— 
(A) the expiration or termination of any contract with 
respect to the first sale of natural gas subject to the require-
ments of this subsection to the person who, but for the provi-
sions of section 601(a)(1)(B) 
(relating to deregulation), 
would have been entitled pursuant to the commitment or dedi-
cation of such natural gas to interstate commerce to receive 
such natural gas if such natural gas were sold (or any suc-
cessor in interest to such person), or 
(B) any rejection of any bona fide offer, described in para-
graph (2), to sell natural gas subject to the requirements of 
this subsection, 
such person who would have been entitled to receive such natural 
gas shall be granted a right of first refusal of the first offer to sell 
such natural gas which, subject to the exercise of any right of first 
refusal under this paragraph, has been substantially accepted 
in principle by another person in an arms-length transaction, 
(c) FILING OF CONTRACTS AND ANCILLARY AGREEMENTS.—The Com-
mission may, by rule or order, require any first sale purchaser of natural 
gas under a new contract, a successor to an existing contract, or a roll-
over contract to file with the Commission a copy of such contract, 
together with all ancillary agreements and any existing contract ap-
plicable to such natural gas. 
TITLE IV—NATURAL GAS CURTAILMENT 
POLICIES 
SEC. 401. NATURAL GAS FOR ESSENTIAL AGRICULTURAL USES. 
15 use 3391. 
(a) GENERAL RULE.—Not later than 120 days after the date of the 
ij ,^, 
enactment of this Act, the Secretary of Energy shall prescribe and 
make effective a rule, which may be amended from time to time, which 
provides that, notwithstanding any other provision of law (other than 
subsection (b)) and to the maximum extent practicable, no curtail-
ment plan of an interstate pipeline may provide for curtailment of 
deliveries of natural gas for any essential agricultural use, unless such 
curtailment— 
(1) does not reduce the (quantity of natural gas delivered for 
, : such use below the use requirement specified in subsection (c); or 
(2) is necessary in order to meet the requirements of high-
priority users. 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3395 
(b) CUTRTAILMENT P R I O R I T T N O T APPLICABLE IF ALTERNATIVB FtJEL 
AVAILABLE.—If the Commission, in consultation with the Secretary of 
Agriculture, determines, by rule or order, that use of a fuel (other 
than natural gas) is economically practicable and that the fuel is rea-
sonably available as an alternative for any agricultural use of natural 
gas, the provisions of subsection (a) shall not apply with respect to 
any curtailment of deliveries for such use. 
(c) 
DETERMINATION OP ESSENTIAL AGRICULTURAL USE REQUIRE-
MENTS.—The Secretary of Agriculture shall certify to the Secretary of 
Energy and the Commission the natural gas requirements (expressed 
either as volumes or percentages of use) of persons (or classes thereof) 
for essential agricultural uses in order to meet the requirements of full 
food and fiber production. 
(d) AUTHORITY OP SECRETARY OF AGRICULTURE TO INTERVENE.—^The 
Secretary of Agriculture may intervene as a matter of right in any 
proceeding before the Commission which is conducted in connection 
with implementing the requirements of the rule prescribed under sub-
section (a). 
(e) LIMITATION.—The Secretary of Agriculture may not exercise 
any authority under this section for the purpose of restricting the pro-
duction of any crop. 
} 
(f) DEFINITIONS.—For purposes of this section— 
(1) ESSENTIAL AGRICULTURAL USE.—The term "essential agricul-
tural use", when used with respect to natural gas, means any use 
. . 
of natural gas— 
(A) for agricultural production, natural fiber production, 
natural fiber processing, food processing, food quality main-
tenance, irrigation pumping, crop drying, or 
(B) as a process fuel or feedstock in the production of fer-
tilizer, agricultural chemicals, animal feed, or food, 
which the Secretary of Agriculture determines is necessary for full 
food and fiber production. 
(2) HIGH-PRIORITY USER.—The term "high-priority user" means 
any person who— 
(A) uses natural gas in a residence; 
, ? 
(B) uses natural gas in a commercial establishment in 
amounts of less than 50 Mcf on a peak day; 
(C) uses natural gas in any school, hospital, or similar insti-
tution ; or 
(D) uses natural gas in any other use the curtailment of 
which the Secretary of Energy determines would endanger 
life, health, or maintenance of physical property. 
SEC. 402. NATURAL GAS FOR ESSENTIAL INDUSTRIAL PROCESS AND 
FEEDSTOCK USES. 
(a) GENERAL RULE.—The Secretary of Energy shall prescribe and 15 USC 3392. 
make effective a rule which provides that, notwithstanding any other 
provision of law (other than subsection (b)) and to the maximum 
extent practicable, no interstate pipeline may curtail deliveries of natu- 
. , 
- 
.. 
ral gas for any essential industrial process or feedstock use, unless such 
curtailment—• 
(1) does not reduce the quantity of natural gas delivered for 
such use below the use requirement specified in subsection (c); 
(2) is necessary in order to meet the requirements of high-prior-
ity users; or 
(3) is necessary in order to meet the requirements for essential 
agricultural uses of natural gas for which curtailment priority is 
established under section 401. 
92 STAT. 3396 
PUBLIC LAW 95-621—NOV. 9, 1978 
(b) CURTAILMENT PRIORITY APPLICABLE ONLY IF ALTERNATIVE F U E L 
NOT AVAILABLE.—The provisions of subsection (a) shall apply with 
respect to any curtailment of deliveries for any essential industrial 
process or feedstock use only if the Commission determines that use of 
a fuel (other than natural gas) is not economically practicable and that 
no fuel is reasonably available as an alternative for such use. 
(c) DETERMINATION or ESSENTLA.L INDUSTRIAL U S E REQUIREMENTS.— 
The Secretary of Energy shall determine and certify to the Commis-
sion the natural gas requirements (expressed either as volumes or per-
centages of use) of persons (or classes thereof) for essential industrial 
process and feedstock uses (other than those referred to in section 401 
( f ) ( 1 ) ( B ) ) . 
(d) DEFINITIONS.—For purposes of this section— 
(1) ESSENTIAL INDUSTRIAL PROCESS OR FEEDSTOCK USE.—^The term 
"essential industrial process or feedstock use" means any use of 
natural gas in an industrial process or as a feedstock which the 
Secretary determines is essential. 
(2) HIGH-PRIORITY USER.—The term "high-priority user" has 
the same meaning as given such term in section 401 (f) (2). 
SEC. 403. ESTABLISHMENT AND IMPLEMENTATION OF PRIORITIES. 
15 use 3393. 
(a) ESTABLISHMENT OF PRIORITIES.—The Secretary of Energy shall 
prescribe the rules under sections 401 and 402 pursuant to his authority 
42 use 7101 
under the Department of Energy Organization Act to establish and 
note. 
review priorities for curtailments under the Natural Gas Act. 
15 use 717w. 
^IJ) IMPLEMENTATION OF PRIORITIES.—The Commission shall imple-
ment the rules prescribed under sections 401 and 402 pursuant to its 
authority under the Department of Energy Organization Act to estab-
lish, review, and enforce curtailments under the Natural Gas Act. 
SEC. 404. LIMITATION ON REVOKING OR AMENDING CERTAIN PRE-
1969 CERTIFICATES OF PUBLIC CONVENIENCE AND NECES-
SITY. 
15 use 3394. 
(a) GENERAL RULE.—The Commission may not, during the 10-year 
period beginning on the date of the enactment of this Act, revoke or 
amend any certificate of public convenience and necessity issued before 
15 use 717f. 
January 1,1969, under section 7 of the Natural Gas Act for the trans-
portation of natural gas owned by any electric utility except upon the 
application of the person to whom such certificate was issued. 
(b) COMMISSION CURTAILMENT AUTHORITY.—The limitation under 
subsection (a) shall not affect the authority of the Commission to 
enforce any curtailment of deliveries of natural gas under the Natural 
15 use 717w. 
Gas Act. 
TITLE V—ADMINISTRATION, ENFORCE-
MENT, AND REVIEW 
SEC. 501. GENERAL RULEMAKING AUTHORITY. 
15 use 3411. 
(a) I N GENERAL.—Except where expressly provided otherwise, the 
Commission shall administer this Act. The Commission, or any other 
Federal officer or agency in which any function under this Act is 
vested or delegated, is authorized to perform any and all acts (includ-
ing any appropriate enforcement activity), and to prescribe, issue, 
amend, and rescind such rules and orders as it may find necessary or 
appropriate to carry out its functions under this Act. 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3397 
(b) AUTHORITY 
T O DEFINE 
TERMS.—Except 
where 
otherwise 
expressly provided, the Commission is authorized to define, by rule, 
accounting, technical, and trade terms used in this Act. Any such defini-
tion shall be consistent with the definitions set forth in this Act. 
(c) DELEGATION or CERTAIN DETERMINATIONS.—The Commission 
may delegate to any State agency (with the consent of such agency) 
any of its functions with respect to sections 105, 106(b), and 109(a) 
( l ) a n d ( 3 ) . 
SEC. 502. ADMINISTRATIVE PROCEDURE. 
(a) ADMINISTRATIVE PROCEDURE ACT.—Subject to subsection (b), 
the provisions of subchapter I I of chapter 5 of title 5, United States 
Code, shall apply to any rule or order issued under this Act having the 
applicability and effect of a rule as defined in section 551(4) of title 5, 
United States Code; except that sections 554, 556, and 557 of such 
title 5 shall not apply to any order under such section 301, 302, or 303. 
(b) OPPORTUNITY FOR ORAL PRESENTATIONS.—To the maximum 
extent practicable, an opportunity for oral presentation of data, views, 
and arguments shall be afforded with respect to any proposed rule or 
order described in subsection (a) (other than an order under section 
301, 302, or 303). To the maximum extent practica'ble, such opportunity 
shall be afforded before the effective date of such rule or order. Such 
opportunity shall be afforded no later than 30 days after such date in 
the case of a waiver of the entire comment period under section 553 
(d) (3) of title 5, United States Code, and no later than 45 days after 
such date in all other cases. A transcript shall be made of any such oral 
presentation. 
(c) ADJUSTMENTS.—The Commission or any other Federal officer or 
agency authorized to issue rules or orders described in subsection (a) 
(other than an order under section 301, 302, or 303) shall, by rule, 
provide for the making of such adjustments, consistent with the other 
purposes of this Act, as may be necessary to prevent special hardship, 
inequity, or an unfair distribution of burdens. Such rule shall establish 
procedures which are available to any person for the purpose of seek-
ing an interpretation, modification, or rescission of, exception to, or 
exemption from, such applicable rules or orders. If any person is 
aggrieved or adversely affected by the denial of a request for adjust-
ment under the preceding sentence, such person may request a review 
of such denial by the officer or agency and may obtain judicial review 
in accordance with section 506 when such denial becomes final. The 
officer or agency shall, by rule, establish procedures, including an 
opportunity for oral presentation of data, views, and arguments, for 
considering requests for adjustment under this subsection. 
(d) PROCEDURES APPLICABLE FOR INCREMENTAL PRICING DETERMINA-
TIONS RESPECTING IMPORTS.—^Notwithstanding the preceding provi-
sions of this section, any determination made under section 207(c) 
shall be made in accordance with the procedures applicable to the 
granting of any authority under the Natural Gas Act to import 
natural gas or liquefied natural gas (as the case may be). 
SEC. 503. DETERMINATIONS FOR QUALIFYING UNDER CERTAIN CATE-
GORIES OF NATURAL GAS. 
(a) GENERAL R U L E . — 
(1) DETERMINATION.—If any State or Federal agency makes 
any final determination which it is authorized to make under sub-
section (c) for purposes of— 
(A) applying the definition of new natural gas under sec-
tion 102(c); 
Ante, pp. 3363, 
3365, 3368. 
15 use 3412. 
5 use 551. 
Transcript. 
Review. 
15 use 717w. 
15 use 3413. 
Ante, p. 3358. 
92 STAT. 3398 
PUBLIC LAW 95-621—NOV. 9, 1978 
- . .. r. .. ^-g^ deciding if certain natural gas produced from the 
Ante, p. 3358. 
Outer Continental Shelf qualifies under section 102(d) for 
the new natural gas ceiling price; 
(C) applying the definition of new, onshore production 
Ante, p. 3361. 
well under section 103(c) ; 
. 
oq/:z; 
(D) applying the definition of high-cost natural gas under 
'^ 
section 107(c); or 
(E) applying the definition of stripper well natural gas 
Ante, p. 3367. 
under section 108(b); 
such determination shall be applicable under this Act for such 
purposes unless such determination is reversed under the provi-
i ; 
sions of subsection (b) or unless such State or Federal agency has 
waived its authority under the provisions of subsection (c). 
(2) 
NOTICE TO COMMISSION.—Any Federal or State agency 
making a determination under paragraph (1) shall provide timely 
notice m writing of such determination to the Commission. Such 
notice shall include such substantiation and be in such a manner 
as the Commission may, by rule, require, 
(b) COMMISSION REVIEW.— 
(1) AUTHORITY TO REVIEW AND REVERSE.—The Commission shall 
reverse any final State or Federal agency determination described 
in subsection (a) if— 
(A) it makes a finding that such determination is not 
supported by substantial evidence in the record upon which 
j<rrp« !. i 
such determination was made; and 
(B) such preliminary finding and notice thereof under 
paragraph (3) is made within 45 days after the date on which 
the Commission received notice of such determination under 
subsection (a) (2) and the final such finding is made within 
120 days after the date of the preliminary 
finding. 
(2) REMAND ON BASIS OF COMMISSION INFORMATION.—If— 
(A) the Commission finds that a State or Federal agency 
determination is not consistent with information contained 
in the public records of the Commission, and which is not 
^
-
f
, ,H 
part of the record upon which such determination was made; 
and 
(B) such preliminary finding and notice thereof under 
paragraph (3) is made within 45 days after the date on which 
the Commission received notice of such determination under 
5 
subsection (a) (2) and the final such finding is made within 
120 days after the date of the preliminary finding, 
it may remand the matter to such State or Federal agency for 
consideration of such information. If such agency, after consid-
eration of the information transmitted to it by the Commission, 
affirms its previous determination, such determination, as so 
affirmed, shall be subject to review in accordance with this sub-
.« i. 
} ^: 
section (other than this paragraph). 
(3) NOTICE.—The Commission shall provide notice of any 
proposed finding under this subsection to the State or Federal 
agency which made such determination and those parties identi-
. . . 
fied 
in the notice to the Commission of such determination. 
' ' 
(4) JUDICIAL REVIEW OF COMMISSION ACTIONS.— 
(A) REMANDS.—Any party identified in the notice to the 
Commission of a determination by a State or Federal agency 
may obtain review of any final decision by the Commission 
^,, 
' 
to remand under paragraph (2) in the United States Court 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3399 
of Appeals for any circuit in which such party is located or 
has its principal place of business, or in the United States 
Court of Appeals for the District of Columbia circuit. The 
reviewing court shall reverse any such decision if it finds such 
decision is arbitrary or capricious. 
(B) 
FINDINGS.—Any 
person 
aggrieved or 
adversely 
affected by a final finding of the Commission under para-
graph (1) may within 60 days thereafter file a petition for 
review of such finding in the United States Court of Appeals 
for any circuit in which the party involved in such deter-
mination is located or has its principal place of business, or 
in the United States Court of Appeals for the District of 
Columbia circuit. The reviewing court shall reverse any such 
finding 
of the Commission if the State or Federal agency 
determination involved is supported by substantial evidence. 
(c) STATE AUTHORITY.— 
(1) GENERAL RULE.—A Federal or State agency having regula-
tory jurisdiction with respect to the production of natural gas is 
authorized to make determinations referred to in subsection (a). 
(2) WAIVER.— 
(A) I N GENERAL.—Any Federal or State agency may, in 
whole or in part, waive its authority to make determinations 
referred to in subsection (a) (1) by entering into an agree-
N 
ment in accordance with subparagraph ( B ) . If such agency 
executes such a waiver, the Commission shall, consistent with 
the agreement, make the determinations which would other-
wise be made by such Federal or State agency until the 
earlier of— 
(i) the expiration of the period specified in the agree- 
. ' ••*• AII 
ment; or 
(ii) the date such agency transmits to the Commission 
written notice that it terminates such waiver and assumes 
. 
the authority to make determinations referred to in 
subsection (a) (1). 
Any waiver, or termination of any waiver, shall not apply to 
any determination with respect to any petition therefor 
which is pending before such agency or the Commission (as 
the case may be) on the date on which such a waiver or revo-
cation is made. 
(B) AGREEMENTS.—Any waiver under subparagraph (A) 
may be made only by a written agreement between the Fed-
eral or State agency involved and the Commission. Any such 
agreement shall set forth the terms and conditions applicable 
to such waiver. 
(3) PROCEDURES APPLICABLE.—Determinations of a Federal or 
State agency referred to in subsection (a) (1) shall be made in 
accordance with the procedures generally applicable to such 
agency for the making of such determinations or comparable 
determinations under the provisions of Federal or State law, as 
the case may be, pursuant to which they exercise their regulatory 
jurisdiction. The Commission may prescribe the form and content 
of filings with a Federal or State agency in connection with 
determinations made under this section. 
(4) JUDICIAL REVIEW.—Any such determination referred to in 
subsection (a) (1) made in accordance with procedures described 
in paragraph (3) shall not be subject to judicial review under any 
Federal or State law except as provided under subsection (b). 
92 STAT. 3400 
PUBLIC LAW 95-621—NOV. 9, 1978 
(d) EFFECT OF DETERMINATIONS.—For purposes of this Act— 
(1) GENERAL RULE.—^Any final determination referred to in 
subsection (a) (1) made by a Federal or State agency (or by the 
Commission under subsection (c)(2)) which relates to any natural 
gas and which is no longer subject to review by the Commission 
under this section or to judicial review shall thereafter be binding 
with respect to such natural ^as. The preceding sentence shall not 
apply to any final determination— 
(A) if in making such determination the Commission or 
such Federal or State agency relied on any untrue statement 
of a material fact; or 
(B) if there was omitted a statement of material fact 
necessary in order to make the statements made not mislead-
ing, in light of the circumstances under which they were 
made, to the Federal or State agency in making such final 
determination or to the Commission in reviewing such 
determination. 
(2) APPLICATION OF TITLE 18.—^Any untrue statement or omission 
of material fact to a Federal or State agency upon which the 
Commission relied shall be deemed to be statement or entry under 
section 1001 of title 18, United States Code. 
(e) INTERIM COLLECTION or MAXIMUM I^AWFUL PRICE.— 
(1) COLLECTION OF SECTION 109 PRICE.— 
(A) GENERAL RULE.—Effective beginning on the first day 
of the first month beginning after the date of the enactment 
of this Act, a seller of natural gas which is produced from 
a new well may, in accordance with subparagraph ( B ) , 
charge and collect the appropriate maximum lawful price 
Ante, p. 3368. 
under section 109 for any first sale of such natural gas. 
(B) REQUIREMENTS.—^A seller may charge and make col-
lections under subparagraph (A) only in accordance with the 
following requirements: 
(i) SWORN STATEMENT.—Before any suoh collection 
is made, the seller shall file with the Commission, and 
any Federal or State agency having authority to make 
determinations referred to in subsection (a) (1), a writ-
ten sworn statement that such natural gas is produced 
from a new well and that such seller believes in good faith 
that such natural gas is eligible under this Act to be sold 
at a price not less than the appropriate maximimi law-
ful j)rice under section 109. 
(li) PETITION FOR DETERMINATION.—^Within 90 days 
after the date of the enactment of this Act, the seller 
files a petition to such Federal or State agency for a 
determination under this section. 
(iii) COLLECTION SUBJECT TO REFUND.—Any such col-
lection made by the seller pending a determination under 
this section shall be collected subject to a condition of 
refund, with interest, in the event it is determined by 
such Federal or State agency that the applicable maxi-
mum lawful price is lower than that provided under 
section 109. 
(2) ALTERNATE INTERIM COLLECTION AUTHORITY.— 
(A) GENERAL RULE.—^Promptly after the date of the enact-
ment of this Act, the Commission shall, by rule or order, pro-
vide one or more methods under which a seller of natural 
gas may, in accordance with requirements established, and 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3401 
for such period as may be prescribed, under such rule or 
order, charge and collect for any first sale of such natural 
gas the maximum lawful price under title I for which a peti- ^".te, p. 3356. 
tion is filed for a determination under this section in any case 
in which such price exceeds the appropriate maximum law-
ful price under section 109. 
Ante, p. 3368. 
(B) COLLECTION SUBJECT TO REFUND.—^Any such collec-
tion made by the seller pending a determination under sec-
tion 603 shall be collected subject to a condition of refund, 
with interest. Such refund with interest shall be paid, in 
accordance with the rule under subparagraph (A), unless 
it is determined under this Act that the applicable maximum 
lawful price is equal to or greater than that collected. In addi-
tion, such seller shall comply with such requirements as the 
Commission shall prescribe in the applicable rule or order 
to provide adequate assurance that funds, to the extent at-
tributable to a price in excess of the appropriate maximum 
lawful price under title I are available in the event of such 
refund. 
(3) 
COLLECTION AFTER INITIAL DETERMINATION.— 
(A) GENERAL RULE.—Effective beginning on the date of 
the notice of a determination under subsection (a) (2), a seller 
of natural gas covered by such determination may, in accord-
ance with subparagraph (B), charge and collect the appro-
priate maximum lawful price applicable under such determi-
nation. 
(B) REQUIREMENTS.—A seller may charge and make collec-
tions under subparagraph (A) if such collection is subject to 
conditions prescribed by the Commission to assure refund, 
with interest, in the event it is determined under this Act that 
the applicable maximum lawful price is lower than that pro-
vided under section 109. 
SEC. 504. ENFORCEMENT. 
(a) GENERAL RULE.—It shall be unlawful for any person— 
15 USC 3414. 
(1) to sell natural gas at a first sale price in excess of any 
applicable maximum lawful price under this Act; or 
(2) to otherwise violate any provision of this Act or any rule 
or order under this Act. 
(b) 
CIVIL ENFORCEMENT.^— 
(1) I N GENERAL,—Except as provided in paragraphs (2) and 
(3), whenever it appears to the Commission that any person is 
engaged or about to engage in any act or practice which consti-
tutes or will constitute a violation of any provision of this Act, or 
of any rule or order thereunder, the Commission may bring an 
action in the District Court of the United States for the District 
of Columbia or any other appropriate district court of the United 
States to enjoin such act or practice and to enforce compliance 
with this Act, or any rule or order thereunder. 
(2) 
ENFORCEMENT OF EMERGENCY ORDERS.—"Whenever it appears 
to the President that any person has engaged, is engaged, or is 
about to engage in acts or practices constituting a violation of any 
order under section 302 or any order or supplemental order issued 
under section 303, the President may bring a civil action in any 
appropriate district court of the United States to enjoin such acts 
or practices. 
39-194 O—80—pt. 3 
49 : QL3 
92 STAT. 3402 
PUBLIC LAW 95-621—NOV. 9, 1978 
(3) ENFORCEMENT OF INCREMENTAL PRICING.—The Secretary, 
the Commission, or, on the request of the Secretary of Energy 
or the Commission, the Attorney General, may institute a civil 
action for injunctive or other equitable relief as may be appro-
Ante, p. 3378. 
priate to assure compliance with the provisions of section 205 
Ante, p. 3375. 
requiring the passthrough of surcharges paid under section 204 by 
any local distribution company with respect to nautral gas deliv-
ered to incrementally priced industrial facilities served by such 
company. Such action may be instituted in any district court of 
the United States in the State in which such local distribution 
company conducts business or in the District Court of the United 
States for the District of Columbia. 
(4) RELIEF AVAILABLE.—In any action under paragraph (1), 
(2), or (3), the court shall, upon a proper showing, issue a tem-
porary restraining order or preliminary or permanent injunc-
tion without bond. I n any such action, the court may also issue a 
mandatory injunction commanding any person to comply with 
any applicable provision of law, rule, or order, or ordering such 
other legal or equitable relief as the court determines appropriate, 
including refund or restitution. 
(5) CRIMINAL REFERRAL.—The Commission may transmit such 
J
. 
evidence as may be available concerning any acts or practices con-
stituting any possible violations of the Federal antitrust laws to 
• 
the Attorney General who may institute appropriate criminal 
proceedings. 
(6) C I V I L PENALTIES.— 
(A) I N GENERAL.—Any person who knowingly violates any 
provision of this Act, or any provision of any rule or order 
under this Act, shall be subject to— 
< 
(i) except as provided in clause (ii) a civil penalty, 
which the Commission may assess, of not more than 
$5,000 for any one violation; and 
(ii) a civil penalty, which the President may assess, 
of not more than $25,000, in the case of any violation of 
Ante, p. 3382. 
^ 
,
^ ^ 
a^j^ order under section 302 or an order or supplemental 
Ante, p. 3383. 
order under section 303. 
(B) DEFINITION OF KNOWING.—For purposes of subpara-
graph (A), the term "knowing" means the having of— 
(i) actual knowledge; or 
(ii) the constructive knowledge deemed to be possessed 
by a reasonable individual who acts under similar 
circumstances. 
(C) 
E A C H DAT SEPARATE VIOLATION.—For purposes of this 
paragraph, in the case of a continuing violation, each day of 
violation shall constitute a separate violation. 
(D) STATUTE OF LIMITATIONS.—No person shall be subject 
to any civil penalty under this paragraph with respect to any 
violation occurring more than 3 years before the date on 
which such person is provided notice of the proposed penalty 
ii . , 
under subparagraph ( E ) . The preceding sentence shall not 
; . • • 
apply in any case in which an untrue statement of material 
fact was made to the Commission or a State or Federal 
agency by, or acquiesced to by, the violator with respect to 
i 
the acts or omissions constituting such violation, or if there 
was omitted a material fact necessary in order to make any 
statement made by, or acquiesced to by, the violator with 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3403 
respect to such acts or omissions not misleading in light of 
circumstances under such statement was made. 
(E) ASSESSED BY COMMISSION.—Before assessing any civil 
penalty under this paragraph, the Commission shall provide 
to such person notice of the proposed penalty. Following 
receipt of notice of the proposed penalty by such person, 
the Commission shall, by order, asssess such penalty. 
(F) JUDICIAL REVIEW.—If the civil penalty has not been 
paid within 60 calendar days after the assessment order has 
been made imder subparagraph (E), the Commission shall 
institute an action in the appropriate district court of the 
United States for an order affirming the assessment of the 
civil penalty. The court shall have authority to review de 
novo the law and the facts involved, and shall have juris-
diction to enter a judgment enforcing, modifying, and 
enforcing as so modified, or setting aside in whole or in part, 
such assessment. 
(c) CRIMINAL PENALTIES.— 
(1) VIOLATIONS OF ACT.—Except in the case of violations 
covered under paragraph (3), any person who knowingly and 
willfully violates any provision of this Act shall be subject to— 
(A) a fine of not more than $5,000; or 
(B) imprisonment for not more than two years; or 
(C) both such fine and such imprisonment. 
(2) VIOLATION OF RULES OR ORDERS GENERALLY.—Except in the 
case of violations covered under paragraph (3), any person who 
knowingly and willfully violates any rule or order under this 
Act (other than an order of the Commission assessing a civil 
penalty under subsection (b) (4) (E)), shall be subject to a fine 
of not more than $500 for each violation. 
(3) VIOLATIONS OF EMERGENCY ORDERS.—Any person who know-
ingly and willfully violates an order under section 302 or an order Ante, p. 3382. 
or supplemental order under section 303 shall be fined not more Ante, p. 3383. 
than $50,000 for each violation. 
(4) EACH DAY SEPARATE VIOLATION.—For purposes of this sub-
section, each day of violation shall constitute a separate violation. 
(5) DEFINITION OF KNOWINGLY.—For purposes of this subsec-
tion, the term "knowingly", when used with respect to any act 
or omission by any person, means such person— 
(A^ had actual knowledge; or 
(B) had constructive knowledge deemed to be possessed 
by a reasonable individual who acts under similar circum-
stances. 
SEC. 505. INTERVENTION. 
(a) AUTHORITY To INTERVENE.— 
15 USC 3415. 
(1) INTERVENTION AS MATTER OF RIGHT.—The Secretary of 
Energy may intervene as a matter of right in any proceeding 
relating to the prorationing of, or other limitations upon, natur^U 
gas production which "is conducted by any State agency having 
regulatory jurisdiction over the production of natural gas. 
(2) ENFORCEMENT OF RIGHT TO INTERVENE.—The Secretary may 
bring an action in any appropriate court of the United States to 
enforce his right to intervene under paragraph (1). 
(3) ACCESS TO INFORMATION.—^As an intervenor in a proceed-
ing described in subsection (a), the Secretary shall have access to 
information available to other parties to the proceeding if such 
92 STAT. 3404 
PUBLIC LAW 95-621—NOV. 9, 1978 
information is relevant to the issues to which his participation in 
such proceeding relates. Such information may be obtained 
through reasonable rules relating to discovery of information 
prescribed by the State agency, 
(b) ACCESS TO STATE COURTS.— 
(1) REVIEW IN STATE COURTS.—The Secretary may obtain 
review of any determination made in any proceeding described in 
subsection (a) (1) in the appropriate State court if the Secretary 
intervened or otherwise participated in the original proceeding 
or if State law otherwise permits such review. 
(2) PARTICIPATION AS AMICUS CURIAE.—In addition to his 
authority to obtain review under paragraph (1), the Secretary 
may also participate an amicus curiae in any judicial review of 
any proceeding described in subsection (a)(1). 
SBC. 506. JUDICIAL REVIEW. 
15 use 3416. 
(a) ORDERS.— 
(1) IN GENERAL.—The provisious of this subsection shall apply 
to judicial review of any order, within the meaning of section 
551(6) of title 5, United States Code (other than an order assess-
ing a civil penalty under section 504(b) (4) or any order under 
Ante, pp.3382, 
section 302 or any order under section 303), issued under this 
3383. 
^ct and to any final agency action under this Act required to 
be made on the record after an opportunity for an agency hearing. 
(2) REHEARING.—Any person aggrieved by any order issu^ 
by the Commission in a proceeding under this Act to which such 
person is a party may apply for a rehearing within 30 days after 
the issuance of such order. Any application for rehearing shall 
set forth the specific ground upon which such application is based. 
Upon the filing of such application, the Commission may grant or 
deny the requested rehearing or modify the original order without 
further hearing. Unless the Commission acts upon such applica-
tion for rehearing within 30 days after it is filed, such application 
shall be deemed to have been denied. No person may bring an 
action under this section to obtain judicial review of any order 
of the Commission unless— 
(A) such person shall have made application to the Com-
mission for a rehearing under this subsection; and 
(B) the Commission shall have finally acted with respect to 
such application. 
For purposes of this section, if the Commission fails to act within 
30 days after the filing of such application, such failure to act 
shall be deemed final agency action with respect to such 
application. 
(3) AUTHORITY TO MODIFY ORDERS.—At any time before the filing 
of the record of a proceeding in a United States Court of Appeals, 
pursuant to paragraph (4), the Commission may, after providing 
notice it determines reasonable and proper, modify or set aside, 
in whole or in part, any order issued under the provisions of 
this Act. 
(4) JUDICIAL REVIEW.—Any person who is a party to a proceed-
ing under this Act aggrieved by any final order issued by the 
Commission in such proceeding may obtain review of such order 
in the United States Court of Appeals for any circuit in which 
the party to which such order relates is located or has its principal 
place of business, or in the United States Court of Appeals for 
the District of Columbia circuit. Review shall be obtained by 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3405 
filing a written petition, requesting that such order be modified 
or set aside in whole or in part, in such Court of Appeals within 
60 days after the final action of the Commission on the applica-
tion for rehearing required under paragraph (2). A copy of such 
petition shall forthwith be transmitted by the clerk of such court 
to any member of the Commission and thereupon the Commission 
shall file with the court the record upon which the order com-
plained of was entered, as provided in section 2112 of title 28, 
United States Code. Upon the filing of such petition such court 
shall have jurisdiction, which upon the filing of the record with 
it shall be exclusive, to affirm, modify, or set aside such order in 
whole or in part. No objection to such order of the Commission 
shall be considered by the court if such objection was not urged 
before the Commission in the application for rehearing unless 
there was reasonable ground for the failure to do so. The finding 
of the Commission as to the facts, if supported by substantial 
evidence, shall be conclusive. If any party shall apply to the 
court for leave to adduce additional evidence, and shall show to 
the satisfaction of the court that such additional evidence is 
material and that there were reasonable grounds for failure to 
,, 
adduce such evidence in the proceedings before the Commission, 
the court may order such additional evidence to be taken before 
; 
the Commission and to be adduced upon the hearing in such 
manner and upon such terms and conditions as the court deems 
proper. The Commission may modify its findings as to the facts 
by reason of the additional evidence so taken, and shall file with 
the court such modified or new findings, which if supported by 
substantial evidence, shall be conclusive. The Commission shall 
also file with the court its recommendation, if any, for the modifi-
cation or setting aside of the original order. The judgment and 
decree of the court, affirming, modifying, or setting aside, in 
whole or in part, any such order of the Commission, shall be final 
subject to review by the Supreme Court of the United States upon 
certiorari or certification as provided in section 1254 of title 28, 
United States Code. 
(5) ORDERS REMAIN EFFECTIVE.—The filing of an application 
for rehearing under paragraph (2) shall not, unless specifically 
ordered by the Commission, operate as a stay of the Commission's 
order. The commencement of proceedings under paragraph (4) 
shall not, unless specifically ordered by the court, operate as a 
stay of the Commission's order. 
(b) REVIEW OF RULES AND ORDERS.—Except as provided in subsec-
tions (a) and (c), judicial review of any rule or order, within the 
meaning of section 551 (4) of title 5, United States Code, issued under 
this Act may be obtained in the United States Court of Appeals for 
any appropriate circuit pursuant to the provisions of chapter 7 of title 
5, United States Code, except that the second sentence of section 705 
5 USC 701 et seq. 
thereof shall not apply. 
5 USC 705. 
(c) JUDICIAL REVIEW OF EMERGENCY ORDERS.—Except with respect 
to enforcement of orders or subpenas under section 304 (a), the Tempo-
rary Emergency Court of Appeals, established pursuant to section 
211(b) of the Economic Stabilization Act of 1970, as amended, shall 
12 USC 1904 
have exclusive original jurisdiction to review all civil cases and con- 
"*'*®-
troversies under section 301, 302, or 303, including any order issued, or 
Ante, pp. 
other action taken, under such section. The Temporary Emergency 
3381-3383. 
Court of Appeals shall have exclusive jurisdiction of all appeals from 
92 STAT. 3406 
PUBLIC LAW 95-621—NOV. 9, 1978 
the district courts of the United States in cases and controversies aris-
ing under section 304(a) (2) ; such appeals shall be taken by the filing 
of a notice of appeal with the Temporary Emergency Court of Appeals 
within thirty days after the entry of judgment by the district court. 
Prior to a final judgment, no court shall have jurisdiction to grant any 
injunctive relief to stay or defer the implementation of any order 
Ante, pp. 
issued, or action taken, under section 301, 302, or 303. 
3381-3383. 
(^^^ JUDICIAL REVIEW or CERTAIN INCREMENTAL PRICING DETERMI-
NATIONS.—Notwithstanding the preceding provisions of this section, 
Ante, p. 3380. 
any final determination made under section 207(c) shall be subject to 
judicial review in accordance with the provisions of the Natural Gas 
15 use 717w. 
"Act applicable to judicial review of any final determination respecting 
the grant or denial of any authority to import natural gas or liquefied 
natural gas. 
SEC. 507. CONGRESSIONAL REVIEW. 
15 use 3417. 
(a) APPLICATION.—This section applies with respect to— 
(1) any disapproval by concurrent resolution of a Presidential 
Ante, p. 3370. 
reimposition of maximum lawful prices under section 122; 
(2) any congressional reimposition by concurrent resolution of 
maximum lawful prices under section 122; and 
(3) any resolution of disapproval relating to incremental pric-
Ante, pp. 3372, 
ing under section 202(c) or 206(d) (2). 
3379. 
(b) DETERMINATION or CALENDAR DAYS OF CONTINUOUS SESSION.— 
In determining calendar days of continuous session for purposes of 
provisions of this Act providing for disapproval under this section— 
(1) continuity of session is broken only by an adjournment of 
Congress sine die; and 
(2) the days on which either House is not in session because of 
an adjournment of more than 3 days to a day certain are excluded 
in the computation of the 30-calendar-day period involved. 
If both Houses are not in session on the day any submittal subject to 
disapproval is received by the appropriate officers of each House, for 
purposes of this section such submittal shall be deemed to have been 
submitted on the first succeeding day on which both Houses are in 
session. If both Houses of the Congress do not receive a submittal on 
the same day, it shall not be considered to be received by either House 
until the day on which both Houses receive it. 
(c) RESOLUTION.—For purposes of this section, and sections 122,202, 
and 206— 
(1) 
CONCURRENT RESOLUTION DISAPPROVING REIMPOSITION OP 
PRICE CEILINGS.—The term "concurrent resolution of disap-
proval", when used with respect to reimposition of maximum law-
ful prices under section 122(c) (1), means a resolution the matter 
after the resolving clause of which is as follows: "That the Con-
gress does not approve of the reimposition of maximum lawful 
prices for first sales of natural gas under section 122(c) (1) of the 
" 
Natural Gas Policy Act of 1978 pursuant to the transmittal by 
the President to the Congress on 
, 19 .", the blank 
spaces being filled with the appropriate date. 
(2) CONCURRENT RESOLUTION EFFECTING REIMPOSITION OF PRICE 
. 
^ 
CEILINGS.—^The term "concurrent resolution", when used with re-
' 
, .
^ 
spect to reimposition of maximum lawful prices under section 
122(c)(2), means a resolution the matter after the resolving 
. ./'•' . ,, • 
" 
clause of which is as follows: That the Congress favors reimpo-
sition of maximum lawful prices for first sales of natural gas as 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3407 
provided for under section 122(c) (2) of the Natural Gas Policy 
A c t of 1978.". 
^nte, p. 3370. 
(3) 
RESOLUTION or 
DISAPPROVAL OF INCREMENTAL PRICING 
ACTION.—The term "resolution of disapproval", when used with 
respect to incremental pricing rules, means a resolution the 
matter after the resolving clause of which is as follows: "That the 
does not approve the proposed rule under section 
of the Natural Gas Policy Act of 1978 (relating to incremental 
^nte, p. 3350. 
pricing of natural gas) a copy of which was trasnmitted to the 
Congress on 
.", the first blank being filled with the 
House in which such resolution is introduced, the second blank 
space being filled with the section under which proposed rule was 
issued, and the following blank spaces being filled with the 
appropriate date. For purposes of this paragraph, the term "rule" 
means any rule or any amendment thereto (other than a technical 
or clerical amendment). 
(d) EXPEDITED PROCEDURE.— 
(1) 
CONGRESSIONAL RULEMAKING POWER.—This subsection is 
enacted by Congress— 
(A) as an exercise of the rulemaking power of the Senate 
and the House of Representatives, respectively, and as such 
it is deemed a part of the rules of each House, respectively, 
but applicable only with respect to the procedure to be 
followed in that House in the case of resolutions described 
by paragraph (2) of this subsection; and it supersedes other 
rules only to the extent that it is inconsistent therewith; and 
(B) With full recognition of the constitutional right of 
^ ^ either House to change the rules (so far as relating to the pro-
cedure of that House) at any time, in the same manner and 
to the same extent as in the case of any other rule of the 
House. 
(2) REFERRAL.—A resolution described by paragraph (2) once 
introduced with respect to any submittal shall immediately be 
referred to a committee (and all resolutions with respect to the 
same submittal shall be referred to the same committee) by the 
President of the Senate or the Speaker of the House of Represent-
atives, as the case may be. 
(3) DISCHARGE.— 
(A) I N GENERAL.—If the committee to which a resolution 
with respect to a submittal has been referred has not reported 
it at the end of 20 calendar days after its referral, it shall be 
in order to move either to discharge the committee from fur- 
Nr 
ther consideration of such resolution or to discharge the com-
mittee from further consideration of any other resolution 
with respect to such submittal which has tJeen referred to the 
committee. 
(B) MOTIONS.—^A motion to discharge may be made only 
by an individual favoring the resolution, shall be highly 
privileged (except that it may not be made after the com-
mittee has reported a resolution with respect to the same 
submittal) and debate thereon shall be limited to not more 
than one hour, to be divided equally between those favoring 
and those opposing the resolution. An amendment to the 
motion shall not be in order, and it shall not be in order to 
, 
move to reconsider the vote by which the motion was agreed 
to or disagreed to. 
92 STAT. 3408 
PUBLIC LAW 95-621—NOV. 9, 1978 
(C) RENEWAL.—If the motion to discharge is agreed to or 
1 
disagreed to, the motion may not be renewed, nor may another 
motion to discharge the committee be made with respect to 
any other resolution with respect to the same submittal. 
(4) FLOOR CONSIDERATION.— 
(A) 
MOTION TO CONSIDER.—^When the 
committee 
has 
reported, or has been discharged from further consideration 
of, a resolution, it shall be at any time thereafter in order 
(even though a previous motion to the same effect has been 
disagreed to) to move to proceed to the consideration of the 
resolution. The motion shall be highly privileged and shall 
not be debatable. An amendment to the motion shall not be 
in order, and it shall not be in order to move to reconsider 
the vote by which the motion was agreed to or disagreed to. 
(B) DEBATE AND CONSIDERATION.—Debate on the resolution 
referred to in subparagraph (A) of this paragraph shall 
be limited to not more than 10 hours, which shall be divided 
equally between those favoring and those opposing such 
resolution. A motion further to limit debate shall not be 
debatable. An amendment to, or motion to recommit, the 
resolution shall not be in order, and it shall not be in order 
to move to reconsider the vote by which such resolution 
was agreed to or disagreed to. 
(6) DETERMINATION ON MOTIONS.— 
(A) 
MOTIONS TO POSTPONE OR TO PROCEED TO OTHER BUSI-
NESS.—Motions to postpone, made with respect to the dis-
charge from committee, or the consideration of a resolution 
and motions to proceed to the consideration of other business, 
shall be decided without debate. 
(B) 
APPEALS PROM THE DECISION OF THE CHAIR.—Appeals 
from the decision of the Chair relating to the application 
of the rules of the Senate or the House of Representatives, 
as the case may be, to the procedure relating to a resolution 
shall be decided without debate. 
(7) SUBSEQUENT ACTION.—Notwithstanding any of the provi-
sions of this subsection, if a House has approved a resolution 
with respect to a submittal, then it shall not be in order to con-
sider in that House any other resolution with respect to the same 
such submittal. 
SEC. 508. TECHNICAL PROVISIONS. 
(a) 
SECTION 645 OF THE DEPARTMENT OF ENERGY ORGANIZATION 
42 use 7255. 
^(j^.—Section 645 of the Department of Energy Organization Act is 
amended by inserting at the end thereof the following new sentence: 
"For purposes of carrying out its responsibilities under the Natural 
Ante, p. 3351. 
Gas Policy Act of 1978, the Commission shall have the same powers 
and authority as the Secretary has under this section.". 
15 use 3418. 
(b) SECTION 301(a) OF THE DEPARTMENT OF ENERGY ORGANIZATION 
42 use 7151. 
ACT.—In order to obtain information for the purpose of carrying out 
its functions under this Act, the Commission shall have the same 
authority as is vested in the Secretary under section 301(a) of the 
Department of Energy Organization Act with respect to the exercise 
of authority under section 11(b) of the Energy Supply and Environ-
15 use 796. 
mental Coordination Act of 1974 and sections 13 (b), (c), and (d) 
15 use 772. 
of the Federal Energy Administration Act of 1974. 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3409 
TITLE VI—COORDINATION WITH NAT-
URAL GAS ACT; MISCELLANEOUS PRO-
VISIONS 
SEC. 601. COORDINATION WITH THE NATURAL GAS ACT. 
( a ) JUEISDICTION OF THE COMMISSION U N D E R THE NATURAL G A S 
A C T . — 
(1) SALES.— 
(A) NATURAL GAS NOT COMMITTED OR DEDICATED.—For pur-
. poses of section 1(b) of the Natural Gas Act, effective on the 
first day of the first month beginning after the date of the 
enactment of this Act, the provisions of the Natural Gas Act 
and the jurisdiction of the Commission under such Act shall 
not apply to natural gas which was not committed or dedi-
cated to interstate commerce as of the day before the date of 
enactment of this Act solely by reason of any first sale of such 
natural gas. 
(B) 
COMMITTED OR DEDICATED NATURAL GAS.—Effective 
beginning on the first day of the first month beginning after 
the date of the enactment of this Act, for purposes of section 
1 (b) of the Natural Gas Act, the provisions of such Act and 
the jurisdiction of the Commission under such Act shall not 
apply solely by reason of any first sale of natural gas which is 
committed or dedicated to interstate commerce as of the day 
before the date of the enactment of this Act and which is—• 
(i) high-cost natural gas (as defined in section 107(c) 
( 1 ) , ( 2 ) , (3), or (4) of this Act) ; 
(ii) new natural gas (as defined in section 102(c) of 
this A c t ) ; or 
(iii) natural gas produced from any new, onshore pro-
duction well (as defined in section 103(c) of this Act). 
(C) AUTHORIZED SALES OR ASSIGNMENTS.—For purposes of 
section 1(b) of the Natural Gas Act, the provisions of the 
Natural Gas Act and the jurisdiction of the Commission under 
such Act shall not apply by reason of any sale of natural gas^— 
(i) authorized under section 302(a) or 311(b); or 
(ii) pursuant to any assigned authorized under sec-
tion 312(a). 
(D) NATURAL-GAS COMPANY.—For purposes of the Natural 
Gas Act, the term "natural-gas company" (as defined in sec-
tion 2(6) of such Act) shall not include any person by reason 
of, or with respect to, any sale of natural gas if the provisions 
of the Natural Gas Act and the jurisdiction of the Com-
mission do not apply to such sale solely by reason of subpara-
graph ( A ) , ( B ) , or (C) of this paragraph. 
(E) ALASKAN NATUTIAL GAS.—Subparagraph (B) (ii) and 
(iii) shall not apply with respect to natural gas produced 
from the Prudhoe Bay unit of Alaska and transported 
through the transportation system approved under the Alaska 
Natural Gas Transportation Act of 1976. 
(2) TRANSPORTATION.— 
(A) JURISDICTION OF THE COMMISSION.—For purposes of 
section 1(b) of the Natural Gas Act the provisions of such 
Act and the jurisdiction of the Commission under such Act 
shall not apply to any transportation in interstate commerce 
of natural gas if such transportation is— 
15 use 3431. 
15 use 717w. 
15 use 717. 
Ante, p. 3366. 
Ante, p. 3358. 
Ante, p. 3361. 
15 use 717. 
15 use 717w. 
Ante, pp. 3382, 
3388. 
15 use 717w. 
15 use 717a. 
15 use 719 
note. 
15 use 717. 
92 STAT. 3410 
PUBLIC LAW 95-621—NOV. 9, 1978 
(i) pursuant to any order under section 302(c) or sec-
Ante, pp. 3382, 
tion 303 (b), (c), (d), or (h) of this Act; or 
^^^^- 
(ii) authorized by the Commission under section 311 
v4n«e, p. 3388. 
(a) of this Act. 
(B) NATURAL-GAS COMPANY.—For purposes of the Natural 
15 use 717w. 
Gas Act, the term "natural-gas company" (as defined in sec-
15 use 717a. 
^ 
tion 2(6) of such Act) shall not include any person by reason 
of, or with respect to, any transportation of natural gas if the 
provisions of the Natural Gas Act and the jurisdiction of the 
Commission under the Natural Gas Act do not apply to such 
transportation by reason of subparagraph 
(A) of this 
paragraph. 
(b) CHARGES DEEMED J U S T AND REASON ABLE.— 
(1) SALES.— 
(A) FIRST SALES.—Subject to paragraph (4), for purposes 
15 use 717c, 
of sections 4 and 5 of the Natural Gas Act, any amount paid 
'^^'^^- 
in any first sale of natural gas shall be deemed to be just and 
reasonable if— 
I 
(i) such amount does not exceed the applicable maxi-
Ante, p. 3356. 
mum lawful price established under title I of this Act; 
or 
(ii) there is no applicable maximum lawful price solely 
by reason of the elimination of price controls pursuant 
Ante, p. 3369. 
to subtitle B of title I of this Act. 
(B) EMERGENCY SALES.—For purposes of sections 4 and 5 
15 use 717c, 
of the Natural Gas Act, any amount paid in any sale author-
717(1. 
ized under section 302(a) shall be deemed to be just and rea-
Ante, p. 3382. 
sonable if such amount does not exceed the fair and equitable 
f 
price established under such section and applicable to such 
' "
^ 
sale. 
(C) SALES BY INTRASTATE PIPELINES.—For purposes of sec-
15 use 717c, 
tions 4 and 5 of the Natural Gas Act, any amount paid in any 
717(1. 
sale authorized by the Commission under section 311 (b) shall 
Ante, p. 3388. 
j^g deemed to be just and reasonable if such amount does not 
exceed the fair and equitable price established by the Commis-
- 
sion and applicable to such sale. 
(D) ASSIGNMENTS.—For purposes of sections 4 and 5 of the 
15 use 717c, 
Natural Gas Act, any amount paid pursuant to the terms of 
717d. 
any contract with respect to that portion of which the Com-
mission has authorized an assignment authorized under sec-
tion 312(a) shall be deemed to be just and reasonable if such 
amount does not exceed the applicable maximum lawful price 
Ante, p. 3356. 
established under title I of this Act. 
( E ) 
AFFILIATED ENTITIES LIMITATION.—For purposes of 
paragraph (1), in the case of any first sale between any inter-
state pipeline and any affiliate of such pipeline, any amount 
paid in an^ first sale shall be deemed to be just and reasonable 
if, in addition to satisfying the requirements of such para-
graph, such amount does not exceed the amount paid in 
comparable first sales between persons not affiliated with such 
interstate pipeline. 
(2) OTHER CHARGES.— 
(A) ALLOCATION.—For purposes of sections 4 and 5 of the 
15 use 717c, 
Natural Gas Act, any amount paid by any interstate pipeline 
717d. 
for transportation, storage, delivery or other services pro-
vided pursuant to any order under section 303 (b), (c), or 
Ante, p. 3383. 
(d) of this Act shall be deemed to be just and reasonable if 
PUBLIC LAW 95-621—NOV. 9, 1978 
92 STAT. 3411 
such amount is prescribed by the President under section 
303(h)(1). 
Ante, p. 33S3. 
(B) TRANSPORTATION.—For purposes of sections 4 and 5 
of the Natural Gas Act, any amount paid by any interstate 15 USC 717c, 
pipeline for any transportation authorized by the Comrais- ^^^°" 
sion under section 311(a) of this Act shall be deemed to be ^rite, p. 3388. 
just and reasonable if such amount does not exceed that 
approved by the Commission under such section, 
(c) GUARANTEED PASSTHROUGH.— 
(1) 
CERTTFICATE MAY NOT BE DENIED BASED UPON PRICE.—^The 
Commission may not deny, or condition the grant of, any certifi-
cate under section 7 of the Natural Gas Act based upon the 15 USC 717f. 
amount paid in any sale of natural gas, if such amount is deemed 
to be just and reasonable under subsection (b) of this section. 
(2) RECOVERY OF JUST AND REASONABLE PRICES PAID.—For pur-
poses of sections 4 and 5 of the Natural Gas Act, the Commission 15 USC 717c, 
may not deny any interstate pipeline recovery of any amount paid ^1^*^-
with respect to any purchase of natural gas if— 
(A) under subsection (b) of this section, such amount is 
deemed to be just and reasonable for purposes of sections 4 
and 5 of such Act, and 
(B) such recovery is not inconsistent with any requirement 
of any rule under section 201 (including any amendment Ante, p. 3371. 
under section 202), 
^««e, p. 3372. 
except to the extent the Commission determines that the amount 
paid was excessive due to fraud, abuse, or similar grounds. 
SEC. 602. EFFECT ON STATE LAWS. 
(a) AUTHORITY To PRESCRIBE LOWER MAXIMUM LAWFUL. PRICES.— 
Nothing in this Act shall affect the authority of any State to establish 15 USC 3432. 
or enforce any maximum lawful price for the first sale of natural gas 
produced in such State which does not exceed the applicable maximum 
lawful price, if any, under title I of this Act. 
Ante, p. 3356. 
(b) COMMON CARRIERS.—No person shall be subject to regulation 
as a common carrier under any provision of Federal or State law by 
reason of any transportation— 
(1) pursuant to any order under section 302(c) or section 303 
(b), (c), (d),or (i) of this Act; or 
Ante, pp. 3382, 
(2) authorized by the Commission under section 311 (a) of this ^^^^• 
j^ct.' 
-
^ 
^ ^ 
Ante, p. 3388. 
Approved November 9, 1978. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 96-437 (Comm. on Ways and Means) and No. 95-1752 (Comm. 
of Conference). 
SENATE REPORTS: No. 95-423 (Comm. on Finance) and No. 95-1126 (Comm. of 
Conference). 
CONGRESSIONAL RECORD: 
Vol. 123 (1977): July 18, considered and passed House. 
Oct. 4, considered and passed Senate, amended. 
Oct. 13, House agreed to certain Senate amendments; agreed to 
Senate amendment No. 8 with an amendment. 
Vol. 124 (1978): Sept. 12-15, 18, 19, 25, 27, Senate agreed to conference report 
and to House amendment of Senate amendment No. 8. 
Oct. 15, House agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS: 
Vol. 14, No. 45 (1978): Nov. 9, Presidential statement.