Court Opinion

ID: 9479501
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:20:14.198078+00
Date Added: 2024-06-11T17:47:04.939443
License: Public Domain

JOHN R. BROWN, Circuit Judge,
dissenting.
Because the Court:
11 Looks upon the question of (i) pricing (ii) good faith negotiation (iii) first refusal (iv) abandonment and (v) mandatory transportation for new customers as separate, individual issues rather than as integrated parts of a comprehensive solution to the problems of the natural gas business
11 Fails to accord to the Federal Energy Regulatory Commission (FERC) the expertise which Congress invests in it for broad ranging operational fact conclusions and policy including replacement costs in lieu of historical costs of service
¶ Undertakes to decide on its own, the factual validity (invalidity) of long range predictions of the Commission
¶ Overlooks specific congressional language giving express legislative authority to raise the price of old gas
¶ Presumes to impose on the Commission responsibilities to consider and, once and for all, to solve the vexing problem of Take-or-Pay
11 Disregards the practical necessities in the Commission's determination to permit abandonment of existing contracts after good faith negotiation
11 Disregards, likewise, the practical necessities of requiring mandatory transportation by “open access” pipelines of gas for new customers after good faith negotiations and right of first refusal to existing customers and in effect
II Substitutes its own judgment for that of the Commission on what Congress has ordained the Commission may do about the grave problems of the natural gas business,
I must respectfully dissent.

A Big Single Package

Following the highest political traditions of this nation, in which the people expect of the President and the Executive Department the initiation of programs and policies affecting matters of great public importance, the action of FERC in the 451 Orders owes much to the Secretary of Energy’s December 1985 statement:
The existing price structure for old gas creates a barrier against the production of tens of trillions of cubic feet of old gas reserves, even though these reserves are easier and less expensive to produce than other gas sources. The artifically low prices imposed on old gas by the existing price structure prevents us from producing all our economically recoverable old gas supplies. As a result, Americans are consuming gas from more expensive sources, as well as imported oil *227and gas, instead of first consuming inexpensive old gas. America should produce all it’s economical gas resources, but it should produce it’s least expensive gas first. The Department estimates that greater recovery of domestic old gas resources would provide the U.S. economy with economic benefits of over $25 billion during the next decade. The benefits would result from greater economic efficiency, higher domestic gas production and lower payments for gas and oil imports. (Emphasis added).
This precipitated FERC’s initiation of extended proceedings on the problems of the natural gas business including gas surplus and reduced demand, but increasing city/gate prices. The Commission held extended hearings and received written comments from all segments of the gas industry. Thereafter, the Commission, exercising its authority under NGPA §§ 104 and 1061 to raise ceiling prices “if just and reasonable within the meaning of the Natural Gas Act,” issued the two hundred seventy-four page Order No. 451. (R. 5390-5664).
Sharply abbreviated, Order 451:
Allows producers (first sellers) of old gas to engage in Good Faith Negotiations (GFN) with pipeline purchasers for a higher price up to the newly created ceilings;
allows sellers to terminate existing contracts in the absence of agreement from GFN;
allows existing sellers to terminate and abandon existing contracts where agreement is reached with a new user/purchaser after notice of first refusal.
Thé result was to collapse the fifteen different “vintage” price categories under NGPA § 104(a) into a single category with the ceiling price pegged to the highest of the vintage rates. Three reasons were expressed. First, valuable supplies of inexpensive old gas were being inadequately developed. The Commission found that raising the ceiling price would have a significant impact allowing “over 11 Tcf [trillion cubic feet] of additional old gas to be recovered.” (R. 5414). Second, the Commission determined that vintage prices kept this old gas priced below a competitive market price. The unequal access to low cost old gas resulted in certain consumers and regions obtaining an unfair competitive advantage.2 Third, in addition to the competitive advantage to some pipelines the rolling-in old gas prices subsidized producers’ sales of high-cost gas or price-deregulated gas.
After first determining that since §§ 104(b)(2) and 106(c) expressly authorized the revision of old gas ceiling prices the Commission need not find existing old gas prices unjust and unreasonable in order to change them, the Commission proceeded to find that the existing old gas price structure was unjust and unreasonable because of these distortions and the reserve replacement it engendered. {See R. 5460). The Commission then reached this profound conclusion:
[T]he current problems being experienced in natural gas markets would *228largely be remedied by collapsing vintages and raising ceiling prices of below-market priced gas.
(R. 5461).

The Replacement Cost Approach

Pursuing its finding that a price increase for “old gas” was necessary, the Commission determined that any ceiling price should, as closely as possible, approximate the replacement cost of that gas.
After explaining that it had previously used replacement costs, see Opinion No. 699-H, 52 FPC 1604, 1631 aff'd, Shell Oil Co. v. FPC, 520 F.2d 1061, 1076-77 (5th Cir.1975), cert. denied, 426 U.S. 941, 96 S.Ct. 2661, 49 L.Ed.2d 394 (1976); and see Opinion No. 770, 56 FPC 509, 521, aff'd, American Public Gas Ass’n. v. FPC, 567 F.2d 1016, 1033 (D.C.Cir.1977), the Commission concluded:
It seems clear based on the above-cited judicial precedents that the issues of replacement costs versus historical costs as well as vintage-based versus uniform rates are matters within the Commission’s reasonably exercised discretion.
* # * * * *
The NGPA provides strong economic support for pricing old gas at the long-run marginal cost of gas, which is equivalent to replacement cost.
(R. 5485).

Good Faith Negotiations

For natural gas sold under existing contracts having an indefinite price escalator clause, the Commission created a good faith negotiation (GFN) procedure, 18 CFR § 270.201 (1988), under which the producer/seller, to obtain any rate increase, must first request a renegotiation (nomination) of the existing contract price. The purchaser (usually a pipeline) may then accept or reject those terms or proposed alternative prices. The existing purchaser is not obligated to purchase gas it cannot market. If the producer invokes GFN the pipeline/purchaser can require the producer to renegotiate any contracts covering the sale of both vintage (old) gas and high-cost (new or deregulated) gas. See 18 CFR § 270.201(b)(2) (1988). The Commission in a reasoned way3 found that this provision was necessary to balance the operation of GFN and to provide pipelines/purchasers with a means to reduce high-cost gas purchases. The upshot is that if the producer and pipeline/purchaser are unable to agree on new price terms, old gas and mixed contracts can be terminated by either party. On the other hand, if a new price is otherwise mutually agreed upon the sale must continue at the agreed upon price.

Abandonment and Transportation Provisions

As an essential ingredient of the GFN rule the Commission added two additional provisions to ensure that the old gas continued to reach the market at a fair, negotiated price. First, if a pipeline purchaser fails to respond to the producer’s new price nominations and rejects4 the producer’s price to terminate the gas purchase agree*229ment, “[t]he first seller (producer) is authorized, upon 30-days written notice to the existing purchaser, to abandon the sale of the gas” if it has contracted to sell the gas to a new purchaser. 18 CFR §§ 270.-201(c)(1), (e)(4) and (f)(5) (1988). Such producer abandonment occurs without further Commission action under § 7(b) of the NGA.5
The second provision requires that if there is an abandonment of the sale to the pipeline and a sale by the producer of the released gas to others, the pipeline, if not an “open access” pipeline, must continue to transport that gas. 18 CFR § 270.201(a) (1988).
The Commission found:
We conclude that this rule [GFN] should establish reasonable procedures by which gas which is released ... can be transported by pipelines not under Order No. 436.... However, without Commission action, there is no assurance that first sellers will be able to market their released gas unless their existing purchasers have accepted the terms and conditions of Order No. 436. We believe it is essential ... to assure the availability of transportation service irrespective of whether a particular purchaser has or has not accepted the open-access obligations of Order No. 436 ...
to formulate reasonable and fair transportation provisions. (R. 5608-09).
Without access to transportation the GFN process would be insulated from competitive benefits and both producers and pipelines would be restricted in their access to gas supplies released under the rule.
Under the good faith negotiation procedure, the existing pipeline purchaser may choose or not choose to terminate purchases of gas under an existing contract with a producer. As a condition on the pipeline’s exercise of these options, the limited transportation authority is reasonably intended to assure that the pipeline’s existing customers, especially firm sales customers, have a practical means of keeping the gas on-system and getting it transported for their use.
* * * * * *
In most instances, first sellers would be unable to market released gas to alternative purchasers unless the existing purchaser agreed to transport the gas or is an Order No. 436 transporter. The existing purchaser would have little if any incentive to do so, however, because in the absence of transportation the first seller would have little alternative but to continue selling to the existing purchaser at the current price. The result would frustrate the purposes of this rule and force the first seller to accept a price which we have found to deny both consumers and producers the full benefits of competition and long-term reliable gas service under the NGPA and NGA. We therefore believe that [GFN] would be ineffective ... unless combined with a transportation provision designed to encourage purchasers to negotiate in good faith and to provide first sellers with reasonable access to an alternative market in the event no agreement on pricing is reached.
(R. 5610, 5611-12).
However, newly priced gas must be keyed to the availability of transportation, or the market-responsive benefit of the rule would be lost, and the public interest benefits of the new ceiling prices also lost. It is in this sense that the new ceiling is only just and reasonable in conjunction with the accompanying transportation provision.
(R. 7428).
The Commission also found that while the price of gas might go up from increased old gas prices it would lower prices and increase supply in the long run.
On rehearing the Commission reaffirmed its finding that producer abandonment was in the overall public interest, (R. 7315), and that over the long haul, customers would have better access to supplies of gas if the old gas could get to a willing purchaser. The Commission also reaffirmed its ruling *230requiring pipelines to continue to provide transportation. (R. 7419).6

Pricing

The Court’s opinion finds FERC’s abandonment of vintaging and establishing the new ceiling prices for old gas is contrary to both NGA and NGPA and beyond the statutory powers of the Commission. Cast in this light, the controversy becomes essentially a rate case “to assure an adequate and reliable supply of gas at reasonable prices.” California v. Southland Royalty Co., 436 U.S. 519, 523, 98 S.Ct. 1955, 1957, 56 L.Ed.2d 505 (1977), citing Sunray Mid-Continent Oil Company v. FPC, 364 U.S. 137, 147, 151-154, 80 S.Ct. 1392, 1398, 1400-1402, 4 L.Ed.2d 1623 (1960) and Atlantic Refining Co. v. Public Service Commission of New York, 360 U.S. 378, 388, 79 S.Ct. 1246, 1253, 3 L.Ed.2d 1312 (1959). Under the just and reasonable standard, § 5, 15 U.S.C. § 717d, the Commission’s approved rate must:
[Reasonably be expected to maintain financial integrity, attract necessary capital, and fairly compensate investors for the risks they have assumed and yet provide appropriate protection to the relevant public interests, both existing and foreseeable.
Permian Basin Area Rate Cases, 390 U.S. 747, 792, 88 S.Ct. 1344, 1373, 20 L.Ed.2d 312 (1968).
In setting “just and reasonable” rates the Commission is not “bound to the service of any single regulatory formula,” Permian, 390 U.S. at 776, 777, 88 S.Ct. at 1364, 1365, and so long as the Commission engages in reasoned decision making under the just and reasonable standard “... it is the result reached not the method employed which is controlling.” FPC v. Hope Natural Gas Co., 320 U.S. 591, 602, 64 S.Ct. 281, 287, 88 L.Ed. 333 (1944). All that is needed is a reasoned basis by the Commission “to assure itself that the Commission has given reasoned consideration” to the relevant factors. Permian Basin Area Rate Cases, 390 U.S. at 792, 88 S.Ct. at 1373.
After enactment of NGPA “[t]he aim of federal regulation remains to assure adequate supplies of natural gas at fair prices.” Transcontinental Gas Pipeline Corp. v. State Oil and Gas Board of Mississippi, 474 U.S. 409, 421, 106 S.Ct. 709, 716, 88 L.Ed.2d 732 (1986).

NGPA Provides Express Authority to Raise Old Gas Ceiling Prices

By §§ 104 and 106 of the NGPA, Congress could not have been more explicit in authorizing the Commission to raise statutory ceiling prices for committed or dedicated gas sales “if such [higher] price is ... just and reasonable within the meaning of the Natural Gas Act.” §§ 104(b)(2)(B) and 106(c), 15 U.S.C. §§ 3314(b)(2)(B) and 3316(c) (1982), see note 1, supra. This authority applies to any first sale of any natural gas subject to § 104(b)(2), 15 U.S.C. § 3314(b)(2) (1982). This means that Congress granted the Commission the express authority to raise the ceiling prices for vintage gas sales. As the Supreme Court described it, “the statute recognizes that the ceiling may be too low and authorizes the Commission to raise it whenever traditional NGA principles would dictate a higher price.” Public Service Comm’n of New York v. Mid-Louisiana Gas Co., 463 U.S. 319, 333, 103 S.Ct. 3024, 3032, 77 L.Ed.2d 668 (1983) (emphasis in original).
The sweeping nature of this legislative grant is reflected by expressly allowing this authority to be exercised “by rule or order.” Exercise of this power is not confined to case-by-case rate making. It is entirely appropriate for it to be used and employed generically.7 Nor is there any *231basis for thinking that Congress intended or demanded that vintage pricing be continued in perpetuity. Subcommittee on Energy and Power, 95th Cong., 1st Sess., Economic Analysis of Natural Gas Policy Alternatives (Comm. Print 31,1977) (“Both House and Senate versions would eliminate vintaging of new natural gas.”).
Whatever the nuances of expressions by individual members of the Congress in the so-called legislative history, the words of Congress are explicit and decisive. They reflect in no uncertain terms that in enacting NGA, Congress did not mean to adopt a self-defeating statutory scheme which would bar the Commission from raising vintage ceilings when to do so was part of a comprehensive effort “to afford consumers a complete, permanent and effective bond of protection from excessive rates and charges.” Atlanta Refining Co. v. Public Services Commission of New York (CAT-CO), 360 U.S. 378, 388, 79 S.Ct. 1246, 1253, 3 L.Ed.2d 1312 (1959).

Commission’s Determinations Just and Reasonable Under NGA

The Commission meets its just and reasonable NGA responsibilities when it sets rates to assure that there is “an adequate and reliable supply of gas at reasonable prices” California v. Southland Royalty Company, 436 U.S. 519, 523, 98 S.Ct. 1955, 1957, 56 L.Ed.2d 505 (1978). The accepted precedents do not require that “just and reasonable” rate making invariably requires rates pegged to recover only historically-based costs.8 The choice whether to adopt replacement cost pricing “to put some of the burden of replacing scarce gas supplies on the consumers of flowing gas” is the Commission’s to make, Tenneco Oil Co. v. FERC, 571 F.2d 834, 840 (5th Cir.1978), cert. dismissed, 439 U.S. 801, 99 S.Ct. 43, 58 L.Ed.2d 94 (1978), and this Court has affirmed the Commission’s choice to do so. Shell Oil Co. v. FERC, 520 F.2d 1061 (5th Cir.1975), cert. denied, 426 U.S. 941, 96 S.Ct. 2661, 49 L.Ed.2d 394 (1976).
Without implying, as the Court’s opinion suggests, that sustaining Order No. 451 would make the Commission omnipotent beyond the powers established by Congress, it is clear beyond question that Congress did not by the NGPA intend to render the Commission impotent in effectuating its statutory responsibility to serve the public interest. Rather, as the Supreme Court has clearly stated, to achieve the regulatory goal, the Commission must be free “to make the pragmatic adjustments which may be called for by particular circumstances.” Permian Basin, 390 U.S. at 777, 88 S.Ct. at 1365, quoting FPC v. Natural Gas Pipeline Co., 315 U.S. 575, 586, 62 S.Ct. 736, 743, 86 L.Ed. 1037 (1942).
Replacement cost pricing does not in any way depart from the NGPA’s regulatory scheme. The NGPA introduced a regime of market-based wellhead pricing. As the Commission explained in considerable detail, (R. 5433-5437, 5443-5449, 7207-7212, 7324-7333), providing for renegotiation of old gas sales prices capped by a replacement cost ceiling properly carries out the free market approach reflected in the congressional enactment of the NGPA.

Overall Impact of Commission’s Orders Just and Reasonable

The GFN is in no sense an “across-the-board rate increase.” Rather, it affords the purchaser the option to pay or not to pay a higher price, to renegotiate some high-cost (“new”) gas prices, and to have the opportunity to cancel gas purchase contracts thus paying no increased rates. GFN is a fundamental part of the 451 Orders assuring, in line with the NGPA pricing approach, that prices reflect the market’s needs and that the rates are “just and reasonable.”
There is no basis for the contention by protestants that increased lower gas prices will result. The Commission’s extended ex*232planation, (see R. 5529-5568 and 7283-7306), fully supports the Commission’s judgmental conclusion that while prices to some consumers might rise in the short term under the hew rules, overall and in the long term prices would be lower than otherwise because of the increased supply of relatively lower-priced old gas into the open market competing with the more expensive, incentive-priced and deregulated gas.9 This is the sort of expert prediction —“[t]hat ‘the increased incentive to compete vigorously in the market would eventually lead to lower prices for all consumers’ ” — which should be given deference by the courts. Associated Gas Distributors v. FERC, 824 F.2d 981, 1008 (D.C.Cir.1987) (citations omitted).
An essential ingredient in this analysis is that wellhead gas is now practically competitive. The Commission affirms:
The Commission believes, however, that the market for wellhead natural gas sales is workably competitive. In the first place, Congress so found when it enacted the NGPA. Implicit in the removal of the Commission’s authority to regulate the price of new gas is a finding that the wellhead market for natural gas is competitive.
{See R. 5532).
As this Court stated in Pennzoil v. FERC, 645 F.2d 360, 378-79 (5th Cir.1981):
Contrary to the Supreme Court’s assumption in Phillips Petroleum Company v. Wisconsin, 347 U.S. 672 [74 S.Ct. 794, 98 L.Ed. 1035] (1954), which subjected gas producers to utility-type regulation under the NGA, Congress apparently decided that gas producers do not have “natural” monopoly power.
Similarly, in Transcontinental Gas Pipeline Corp. v. State Oil and Gas Board of Mississippi, 474 U.S. 409, 421, 106 S.Ct. 709, 716, 88 L.Ed.2d 732 (1986), the Supreme Court stated, “the NGPA reflects .a congressional belief that a new system of natural gas pricing was needed to balance supply and demand ... [t]he new federal role is to ‘oversee a national market price regulatory scheme.’ ” (Emphasis added).
Nor is there any basis for the contention that the Commission “assumed” away the problem of uneconomical contracts or the existence of a present gas market surplus. The Commission in a reasoned way reached the view that the 451 Orders, by increasing the competition for low-cost gas and by providing pipelines, through the GFN, with the power to require producers seeking higher old gas prices to renegotiate high-cost gas sales in mixed contracts, would blunt the force of uneconomic contracts.

Producer Abandonment and Mandatory Transportation: Proper Exercise of Statutory Authority

This is really at the heart of the goals of Order No. 451. As the Commission explains, Order No. 451 would be a meaningless exercise if, despite the Commission’s finding that the vintage pricing system was unjust and unreasonable, pipelines with dominant market power could nevertheless effectively nullify GFN and shut in the gas or otherwise prevent increased supplies from reaching the market at a competitive price.10
*233The GFN does not, as claimed, empower a producer unilaterally to abandon old gas sales. A producer may abandon only if: (1) the GFN process does not work and the pipeline signals its intent not to purchase the gas at a mutually agreed price; and (2) the producer has contracted to sell the gas to a new purchaser. 18 CFR §§ 270.-201(c)(1); (e)(3) and (4); and (f)(5) (1988).
The rule, circumscribed as it is with protective conditions, reflects the Commission’s determination that it is in the overall public interest that the old gas continue to flow to a willing purchaser. (R. 7314-7320).
Nor, as this Court’s opinion asserts, does § 7(b) of the NGA condemn this streamlined abandonment procedure so obviously demanded by practical necessities. The language of § 7(b) does not require that the Commission act on such matters only case-by-case. Nor does any such right arise by implication from the “due hearing” requirement of § 7(b). See Kansas Power and Light Co. v. FERC, 851 F.2d 1479 (D.C.Cir.1988). And, as the D.C. Circuit declared in its monumental Associated Gas Distributors v. FERC, 824 F.2d 981, 1015, n. 17 (D.C.Cir.1987), case, there is “no procedural objection to the Commission’s identification of circumstances ... which automatically trigger its approval of abandonment” since the law has long recognized that the Commission may act generically when the situation warrants. See, e.g., Permian Basin Area Rate Cases, 390 U.S. at 774-77, 88 S.Ct. at 1365.11
The public interest is clearly served by these hedged-in conditions. First, the Commission found “generally a purchaser’s loss of gas under abandonment provisions of the good faith negotiation rule should not cause it, or the market it serves, to experience a shortage of supply.” (R. 7318). (Emphasis added). With open access pipeline transportation and mandated transportation by non-“open access” pipelines and the right of first refusal accorded the purchaser’s firm customers over any released gas, customers are assured access to sufficient supplies at reasonable prices now and into the future. (R. 7318-19).12 To this is added the significant requirement that abandonment under GFN is permissible only when there is a particular new customer who has contracted to take the gas at a market responsive price which assures that the gas will get to the market.

Mandatory Transportation Lawful

Under the rules established in the 451 Orders, an interstate pipeline not subject to “open access” regulations that stops purchasing the producer’s gas “must transport any gas released due to termination or abandonment” under the GFN procedures. 18 CFR § 270.201(h) (1988). To facilitate this change of service — from interstate transportation and sale to transportation only — the Commission provides a “blanket” certificate. This Court’s opinion holds this to be unauthorized as imposing “common carrier” responsibilities on the unwilling or reluctant pipeline. Essentially these same arguments were presented and rejected by the D.C. Circuit in the attack on the Commission’s “open access” rules in its celebrated Associated Gas Distributors case.13 After first discussing the pertinence of §§ 5, 7, and 16 of the NGA that Court continued, there is “no language in the *234NGA barring the Commission from imposing common carrier status on natural gas pipelines, ánd certainly none barring it from imposing on the pipelines a specific duty that happens to be a typical or even core component of such status.” 824 F.2d at 997. That Court found no basis for the attacks on “open access” under either the provisions of NGA or its legislative history, 824 F.2d at 997-1001, or under either the NGPA, 824 F.2d at 1001-03, or the Fifth Circuit’s decision in Florida Power and Light v. FERC, 660 F.2d 668 (5th Cir.1981).14 See 824 F.2d at 998-99.
Quite apart from the arguments on common carrier status, the Court’s opinion errs in disapproving the Commission’s order.
First, there seems to be a major misconception. The Commission imposed no new “mandatory” transportation obligation at all. Rather, the Commission required only “a continuation of the. pipeline’s existing service obligation to move gas to market.” 15 Theretofore, the pipeline may have been a merchant purchasing gas at the wellhead and a transporter carrying the gas to its customers. Now, once GFN procedures have failed to result in agreement upon a new price for old gas under existing contracts, the pipeline becomes a transporter moving essentially the same gas but now purchased by someone else. The critical fact is that the essential transportation service for the same gas to the interstate market remains exactly the same. (R. 7429-30).
Following traditional lines so stressed by the protestants and this Court’s opinion, § 7 of the NGA imposes “a continuing regulatory obligation, irrespective of private contractual arrangements, not to abandon any certificated obligations before obtaining authorization from the Commission to do so.” Panhandle Eastern Pipe Line Co. v. FERC, 803 F.2d 726, 728 (D.C.Cir.1986), citing United Gas Pipe Line Co. v. McCombs, 442 U.S. 529, 99 S.Ct. 2461, 61 L.Ed.2d 54 (1979). In the light of this, what the Commission requires is nothing more than that the pipeline, choosing to terminate its gas merchant function under GFN, must nevertheless continue to provide its critical transport service.
Finally, as the Commission explains so vividly, (R. 7428-7430), there are practical necessities sustaining the administrative reasonableness of the Commission’s action. Not to require the pipeline to continue its transportation service would seriously impair, if not completely undercut, the availability of market-priced gas to the market. It would also offset the consequences of the GFN. Significantly the only interstate pipelines subject to this mandatory transportation are those few non-“open access” pipelines. Whatever the rights of these very few16 non-“open access” pipelines— none involved here — their rights ought not to pull down the whole house of cards as to those already bound17 to transport under “open access” requirements.

Take or Pay Solution not Mandatorily Required

Probably the most startling part of the Court’s opinion is its presuming to direct the Commission to consider, and once and for all to solve, a matter so perplexing and complex as the issue of take-or-pay contracts.
Granted that it is a serious problem and one which needs a solution if — and the if may be a very big one — it can be solved independently of the ultimate insolvency of major pipeline takers and payers.
*235As this very Court has recognized in rejecting similar arguments, the take-or-pay issue is a discreet matter, “which is being addressed in other proceedings before the Commission and through other means.” Transwestern Pipeline Co. v. FERC, 820 F.2d 733, 744 (5th Cir.1987).18
Indeed, the demand that the Commission — under penalty of forfeiting its judgmental conclusion on increased price for old gas, abandonment and mandatory transportation — consider and then solve this problem of which Congress has been acutely aware, and has similarly ducked, is, most charitably, audacious. So audacious is it that it approaches a similar demand by some court someplace that either Congress or the Department of Defense solve the problem of terrorism as a condition to appropriating funds for the maintenance and upkeep of the prisoner stockade at Fort Sam Houston, Texas.
This is contrary to the demands not only of administrative law, but of the review of legislation, state or federal. The Supreme Court has long recognized that “[ejvils in the same field may be of different dimensions and proportions, requiring different remedies.... [0]r the reform may take one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind.” Williamson v. Lee Optical of Oklahoma, Inc., 348 U.S. 483, 489, 75 S.Ct. 461, 465, 99 L.Ed. 563 (1955); see also Schweiker v. Wilson, 450 U.S. 221, 238, 101 S.Ct. 1074, 1084, 67 L.Ed.2d 186 (1981).
Additionally, the Commission provides pipelines with the means to address take- or-pay problems within the context of its rulemaking. First, pipelines are given something tangible (higher old gas prices) to bargain against take-or-pay liability. Second, when producers, under GFN, seek to raise an old gas price, pipelines can require the direct renegotiation of the sellers’ high-cost gas sales that are being sold under mixed contracts. Third, the pipeline can terminate its contract obligations as to both the old gas and high-cost gas sold under mixed contracts. In short, as the Commission found, the pipelines were given substantial bargaining leverage against producers’ uneconomic contracts.19

Tag Ends

Like the Court in its opinion, I find undeserving of specific comment the other attacks on the Commission’s 451 Orders.

Where it All Ends

Committed, as we are, to the Commission’s necessitous right of experimentation in a matter so complex and nearly beyond congressional solution, this Court’s action in nullifying the 451 Orders is an unauthorized intrusion into a field which neither Article III nor legislation commands.
I therefore, respectfully dissent.

. Section 104(b)(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 Gas Act.
15 U.S.C. § 3314(b)(2) (1982); see also 15 U.S.C. § 3316(c) (1982).

. The Commission found that:
wide variations in pipeline access to old gas have created huge disparities in the prices consumers pay for gas at the burner-tip around the country. For example, in 1984, the average residential price of gas in Washington, D.C. was $8.05 per Mcf, while the average price in Kansas , was $4.49 per Mcf. Kansas is served by KN Energy and Northern Natural, whose old gas "cushions” in 1984 amounted to 65 percent and 47 percent of their wellhead purchases, respectively. On the other hand, Washington, D.C. is served by Transcontinental Gas Pipe Line whose 1984 old gas cushion was only 28 percent of its total purchases.
R. 5414-15.

. See Order No. 451, p. 185:
... the Commission agrees ... that the good faith negotiation rule ... could be unbal-anced_ For example, if a contract included both old and other gas, the producer could seek a higher price for the old gas but the purchaser could not seek a lower price for other gas. If the producer was not satisfied with the price nominated by the purchaser for the old gas, the producer could terminate sales of the old gas to the purchaser, sell that gas to a third party, but require the purchaser to continue purchasing the other gas....
In order to cure these inequities in the operation of the good faith negotiation rule ... the Commission will modify the [GFN] rule ... [to] permit the purchaser to seek a lower price for any gas ... in any contract between the parties which contains some old gas.
(R. 5580-81).

. If the producer rejects the nominated price, the producer would be free to sell all the gas to a new purchaser subject to the right of first refusal on the part of the existing firm customers of the existing purchaser. There would be no required term for the new contract, nor any higher price requirement. Once a new purchaser is found, the producer would be released from all obligations in law and contract to the existing purchaser upon 30 days notice. However, in the interim, the producer would be required to continue to sell the gas to the existing purchaser at the existing contract price. R. 5592, Order No. 451.

. If the pipeline is not “open access” such pipeline’s firm gas customers “would specifically have a ‘right of first refusal’." See 18 CFR 270.201(g) (1988).

. In addition to stressing practical necessities and avoidance of frustration of the objectives of GFN the Commission stated:
By requiring a pipeline to continue to provide transportation for released volumes, the pipeline is prevented from unduly discriminating against the existing seller and harming competition by denying a producer transportation and thereby blocking the benefits of the final rule.
R. 7428.

. In a related context, see Texas Eastern Transmission Corp. v. FERC, 769 F.2d 1053, 1061 (5th Cir.1985), cert. denied, 476 U.S. 1114, 106 S.Ct. *2311967, 90 L.Ed.2d 652 (1986) "the drafters’ choice of the words ‘rule or order’ ... clearly contemplates the establishment of an industry-wide scheme of reimbursement.”

. Reliance on City of Detroit v. FPC, 230 F.2d 810 (D.C.Cir.1955) and Bell Oil Corp. v. FPC, 255 F.2d 548, 553 (5th Cir.) are misplaced. (See R. 7233-37).

. The Commission found that:
under [the] "good faith” negotiation rule, old gas would actually be priced at the prevailing market price or the new ceiling price, so the practical effect of the proposed rule is to provide a price for old gas equal to the market price or replacement cost, whichever is lower.
R. 5487.
And, as the Commission expressed on rehearing:
The Commission continues to believe that eliminating vintaging will cause a substantial increase in recoverable reserves of old gas. Furthermore, nothing raised on rehearing causes the Commission to modify its belief that DOE's study predicting an approximately 11 Tcf increase is the most convincing analysis in the record of that increase.
R. 7262.

. The Commission said:
As the Commission stated in Order No. 451, abandonment under the good faith negotiation rule is in the public interest, since it is necessary to ensure that the goals of Order No. 451 of increased production of old gas and overall lower prices described ... are achieved. These goals cannot be achieved unless producers can obtain the market-responsive prices permitted by the rule. Without the possibility of abandonment, purchasers under existing contracts could prevent *233producers from obtaining those prices by insisting on continuation of the present price.
R. 7315.

. Nor is the Commission’s rejection of decisions under the Interstate Commerce Act (ICC) faulty.

. In addition, requiring individual producers to file abandonment applications and considering those applications on a case-by-case basis is an inadequate solution. That would cause lengthy delays before abandonments could be granted, given the vast number of producers in the nation and the Commission’s limited resources. Achievement of the goals of increased production and lower overall prices would thereby be substantially delayed. Thus, granting abandonment in the present proceeding, if the conditions set forth in the Good Faith Negotiation rule are met, is in the interest of the natural gas market as a whole and is necessary to bring about market-responsive prices for old gas and overall lower prices.
R. 7351-52.

. 824 F.2d 981 (D.C.Cir.1987).

. This decision if relevantly significant is, of course, binding on me.

. R. 7429 (citation omitted).

. All but two of the twenty-one major pipelines are consensually “open access.” See n. 34, Court’s opinion.

. Ironically, indicating perhaps the simple reflex of opposition by so many to any and every new effort to unscramble natural gas in the fact that joining the Joint Opponents’ briefs are a number of party-pipelines who have accepted “open access.” See, e.g., Transcontinental Gas Pipe Line Corp., 43 FERC ¶ 61,196 (1988); Tennessee Gas Pipeline Co., 39 FERC ¶ 61,337 (1987); Natural Gas Pipeline Co. of America, 39 FERC ¶ 61,153 (1987); Williams’ Natural Gas Co., 43 FERC ¶ 62,171 (1988); and ANR Pipeline Co., 44 FERC ¶ 61,126 (1988).

. The Commission’s brief advises the Court that the Commission is particularly addressing these issues in the proceedings on remand of Associated Gas Distributors, Order No. 500: Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol: Interim Rule and Statement of Policy [Reg. Preambles 1982-1985], III FERC Stats. & Regs. ¶ 30,761 (1987), modified and reh’g denied, Order No. 500-B, III FERC Stats. & Regs. ¶ 30,772, further modified, Order No. 500-C, III FERC Stats. & Regs. ¶ 30,786 (1987), Order No. 500-D, III FERC Stats & Regs. ¶ 30,800 (March 8, 1988), reh’g denied, Order No. 500-E, 43 FERC ¶ 61,234 (May 6, 1988), 53 Fed.Reg. 16,859 (May 12, 1988); petitions for review filed sub nom, American Gas Association v. FERC, (D.C.Cir. No. 87-1588).

. The Commission’s brief advises that to date under the Commission Order No. 500 series, eight pipelines have reached in the aggregate over $3.9 billion in settlements of take-or-pay liability. See Commission's brief, at note 55 (citing specific cases).