Opinion ID: 392942
Heading Depth: 2
Heading Rank: 2

Heading: The Limits of FERC Jurisdiction Over Synthetic Gas Under the Natural Gas Act

Text: 56 FERC asserts jurisdiction for its action under the Natural Gas Act; yet that statute is devoid of any mention of authority to arrange financing for, or to regulate, coal gasification plants. We must therefore turn to an analysis of the text and legislative history of the Act to discern the general limits of FERC's jurisdiction regarding synthetic gas. 57 Section 2 of the Act defines natural gas as either natural gas unmixed, or any mixture of natural and artificial gas, and defines natural-gas company as a person or corporation engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale. 28 15 U.S.C. § 717a. It is only over such gas and such companies that FERC has jurisdiction pursuant to the Act. Section 7 of the Act provides the Commission with authority to issue certificates of public convenience and necessity to natural gas companies who wish to construct or extend facilities to be used in the sale or transportation of natural gas, 15 U.S.C. § 717f(c)(1)(A), while Section 4 of the Act delegates to the Commission authority to regulate all rates and charges relating to transportation or sale of natural gas subject to the jurisdiction of the Commission.... 15 U.S.C. § 717c. The plain meaning of these sections gives no indication that Congress intended FERC to utilize either its Section 4 or Section 7 powers as it has in Opinion No. 69. 29 58 The legislative history of the Act provides evidence of Congressional intent not to vest any authority with the Commission over unmixed synthetic gas. In hearings on a precursor of the bill that became the Natural Gas Act a proposal was made by a witness to delete the word natural throughout the bill and define gas as either natural gas or artificial gas or any mixture of natural and artificial gas. Subcommittee of the House Committee on Interstate and Foreign Commerce, Hearings on H.R. 11662, 74th Cong., 2d Sess. 92, 98 (1936). The proponents of the suggestion were concerned that (1) pipeline companies would attempt to avoid FPC jurisdiction by injecting a small amount of artificial gas into their natural gas line, and that (2) artificial gas unmixed with natural gas would escape the Commission's jurisdiction altogether. In the next session of Congress, an amendment was added to the natural gas regulation bill responding only to the former of these concerns, namely, that regulation not be evaded by mixing artificial with natural gas; the amendment made no attempt to regulate unmixed artificial gas. Subsequently, in Senate debates on the proposed act, a colloquy between Senators Connally and Wheeler made explicit the understanding that the act would not reach artificial gas. 81 Cong.Rec. 9315-16 (1937). 59 In our prior review of the legislative history of the Natural Gas Act, Henry v. FPC, 513 F.2d 395 (D.C.Cir.1975), this court concluded that Congress had made a deliberate decision not to extend Commission jurisdiction to such gas:(The) legislative history gives fair indication that Congress had been made aware of the potential of interstate transmission of artificial gas, but had decided to defer that matter for resolution when the technical future might become an economic reality, rather than deal with it hypothetically. There was nothing to indicate that the Act was intended to become applicable automatically, without further Congressional determination, some time in the future as it happens, almost 40 years later when large-scale interstate transportation of manufactured gas should become both a technical and economic reality. 60 Id. at 401. 30 We agree with this analysis, and conclude that Congress did not intend to vest in the Commission any direct authority over the manufacture of unmixed synthetic gas.