As a result of the natural gas act of 1938 and subsequent rulings and orders, ferc has been given the authority to grant certificates for the construction and operation of natural gas pipelines. In some cases, there is a mix of forprofit and nonprofit ownership of assets on a single synchronized. Emergency conversion of utilities and other facilities. Ingaa interstate natural gas association of america. In 1938, the federal government became involved directly in the regulation of interstate natural gas with the passage of the natural gas act nga. Section 7 of the nga 15 usc 717f construction, extension. Ferc uses a definition of the public interest taken from a ruling on docket no. Natural gas act of 1938 nga a federal statute enacted in 1938 to provide regulatory control over the interstate sale and transportation of natural gas.
Under the nga, the federal power commission was given two major powers. An act to regulate the transportation and sale of natural gas in. It was focused on regulating the rates charged by interstate natural gas transmission companies. In so doing, a certificate of public convenience and necessity pursuant to section 7 of the natural gas act is issued. The full cost of electricity fce the history and evolution of the u. We would like to show you a description here but the site wont allow us. Under section 7c of the natural gas act of 1938, the federal. Under current law, the federal energy regulatory commissions ferc ability to protect natural gas customers against unjust and.
Together with the federal power act of 1935, the natural gas act of 1938 nga p. Phmsa lng frequently asked questions faq archive records. Under section 7 of the natural gas act of 1938, ferc also issues certificates of public convenience and necessity for lng facilities engaged in interstate natural gas transportation by pipeline. The natural gas act has withstood the test of time and provides a stable and predictable regulatory framework for all parties that does not need to be changed. Delivery structure of natural gas contracts at nymex, 199396 5. Congress in 1938 in order to control the interstate transmission of natural gas. Highlights of legislative history of the federal power act of. Siting, safety, and regulation congressional research service summary liquefied natural gas lng is a hazardous fuel shipped in large tankers to u. The 1938 act authorized the government to regulate the price of gas sold to local. Eminent domain for interstate natural gas pipelines dates back to the natural gas act of 1938 nga. Supply and disposition of natural gas in the united states, 1995 3.
President donald trump is seriously considering waiving the requirement that only u. In these cases, the structure of the grid is similar to those models representing grids with forprofit ownership. Natural gas rates congress enacted the natural gas act nga in 1938 to regulate the sale and transportation of natural gas in interstate commerce. Pdf natural gas pipeline regulation in the united states.
An act entitled oil and gas act 1998, being an act to enact comprehensive legislation governing the exploration for and production of petroleum including oil and gas in papua new guinea, including the offshore area, and the grant to traditional landowners and. The natural gas policy act of 1978 ngpa authorized the federal energy regulatory commission ferc to regulate both intrastate and interstate natural gas production and transmission. In passing epact, congress signaled a strong vote of confidence in the commission. Section 1 of the act declares that the transportation and sale of natural gas is affected with a public interest, and that regulation of the industry is. Voluntary conversion of natural gas users to heavy fuel oil 717z.
What is the natural gas act of 1938, and why is it. This act constitutes the first real involvement of the federal government in the rates charged by interstate gas transmission companies. Section 7 of the nga authorizes the federal energy regulatory commission to issue certificates of public convenience and necessity for an interstate natural gas pipeline project. Trump considering waiving jones act mandate for natural gas. Structure of the interstate pipeline transportation market, 199495 6. For a pipeline company to manage its gas pipeline system efficiently, it must know how much gas is in the system at all times. In 1938, the united states congress passed the natural gas act in order to take control of interstate natural gas transmission.
Get an answer for what is the natural gas act of 1938, and why is it important. It imposes no new legal obligations and grants no additional rights. Transportation including storage and sale for resale of. In addition, the act set price ceilings for wellhead first sales of gas, though these were later repealed. In the years prior to the passage of the act, concern arose about the monopolistic tendencies of the transmission companies and the fact that they were charging higher. Section 7 of the natural gas act congress passed the natural gas act of 1938 to regulate the thenemerging natural gas industry. In 1938, however, with the growing importance of natural gas, concern over the heavy concentration of the natural gas industry, and the monopolistic tendencies of interstate pipelines to charge higher than competitive prices due to their market power, the u. Natural gas act section 7 of the nga 15 usc 717f construction, extension, or abandonment of facilities a extension or improvement of facilities on order of court. Section 1 of the act declares that the transportation and sale of natural gas is affected with a public interest, and that regulation of the industry is therefore necessary in the public interest. Transportation including storage and sale for resale of natural gas in interstate commerce construction, extension, acquisition, and operation of facilities natural gas companies facilities for import and export lng terminals in certain. This publication is a compilation of the text of chapter 556 of the 75th. The compressors compress the natural gas and send it at an average speed of about 1020 mph through the pipeline.
Chapter 556 an act to regulate the transportation and sale of natural gas in interstate commerce, and for other purposes. Ferc failing to consider climate impacts in gas pipeline. Natural gas act legal information institute cornell university. If ferc determines that a given project should proceed, it will issue a certificate of public convenience and necessity. Compressors stations ensure that the gas continues to flow at a constant rate. Through note above and below at the bottom of each page of the pdf version. Section 2 definitions section 3 exportation or importation of natural. While lng has historically made up a small part of u. Division of natural gas regulation department of energy. Under the natural gas act, companies seeking to build interstate natural gas pipelines must first obtain certificates of public convenience and necessity from the federal energy regulatory commission ferc. The natural gas act of 1938, as amended, requires any person who wishes to engage in the import andor export natural gas, including liquefied natural gas, compressed natural gas, compressed gas liquids, etc. What is the natural gas act of 1938, and what did it. Dzvane the electric power and natural gas industries, as we know them today, are relatively new, having been devel oped during the lifetime of many of our citizens still liv ing.
This was the first time the federal government became involved in regulating rates of interstate transmission. Growing role of natural gas national conference of state. Natural gas act united states house of representatives. In passing the natural gas act of 1938, congress acknowledged that interstate natural gas pipelines and other natural gas transmission. All underlined material was added to the natural gas act by the. Be it enacted by the senate and house of representatives of the united states of america in congress assembled, necessity for regulation of naturalgas companies section 1.
Average natural gas prices and price changes, 1988 and 1994 2. Jun 15, 2018 ferc uses a definition of the public interest taken from a ruling on docket no. Pipeline transportation of natural gas and crude oil. In the 1900s, state regulatory commissions controlled the shipments of. Ferc must also give approval to abandon natural gas pipelines. The natural gas act of 1938 was the first occurrence of the united states federal government regulating the natural gas industry. It remains true as it was when the natural gas act was enacted in 1938 that, unlike other energy. Highly reliable organizations in the onshore natural gas. Within the department of energy doe, the office of regulation, analysis, and. The shale gas revolution is a media myth 7312017 2. Congress passed the natural gas act of 1938 to regulate the thenemerging natural gas industry.
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