Historical Milestones of Natural Gas Regulation
The regulation of extracting and transporting natural gas has taken many turns over the course of a century. In such profitable, possibly monopolized industries, the United States government as always paid special attention to preserve civil liberties and freedom. This was also quite true during the first natural gas initiative in the US. The federal government thought it necessary to keep control of natural gas prices to prevent any monopolies on the industry. However, as the industry progressed, these regulations began to choke pipeline companies and prevent adequate production. Over the last century, and various Acts and Commissions have been formed to better regulate, or deregulate, the industry so that it may thrive while keeping the industry competitive. Below is a comprehensive list of major milestones in the US natural gas industry.
-1920: The Federal Water Power Act was passed. Congress established the Federal Power Commission (FPC) to license hydroelectric projects by private companies and state and local government.
-1938: Congress passed the Natural Gas Act, extending FPC jurisdiction to wholesale sales and transportation of natural gas by interstate pipelines.
-1954: In the Phillips decision, the Supreme Court ruled that rates charged by producers for interstate sales of natural gas fall under FPC control.
-1977: The Federal Energy Regulatory Commission (FERC) was created by the Department of Energy Organization Act, which abolished the FPC.
-1978: At the peak of the energy crises, Congress passed the National Energy Act (NEA). Included in the NEA statute was the Natural Gas Policy Act (NGPA) with its pricing provisions.
-1985/1987: The FERC issued Orders 436 and 500, Regulation of Natural Gas Pipelines After Partial Wellhead Deregulation. Order 500 modified Order 436, and is often referred to as the Open Access Order because its purpose was to encourage pipelines to offer open access, nondiscriminatory transportation services so end users could contract directly with producers for gas supply.
-1989: Congress passed the Natural Gas Wellhead Decontrol Act (NGWDA) allowing FERC regulation of producer sales of natural gas to be eliminated gradually until full decontrol in 1993.
-1992: Congress passed the Energy Policy Act, including provisions designed to foster competition through regulatory reform in the oil pipeline and electric utility industries.
-1992: FERC issued Order 636, requiring pipelines to unbundled their sales services from their transportation services and to provide open access transportation service that is equal in quality for all gas supplies whether purchased from the pipeline or some other supplier.
Each of these events was integral to defining the United States natural gas standards. We have the most trafficked and complex network of natural gas pipeline of any country in the world, and produce an enormous supply. Business and common good are difficult things to establish, but the careful assessment of this industry has provided a booming competition (keeping prices low), while continuing a healthy supply.
About the Author: Bob Jent is the CEO of Western Pipeline Corporation. Western Pipeline Corp is a successful, private independent producer of oil and natural gas.
-1920: The Federal Water Power Act was passed. Congress established the Federal Power Commission (FPC) to license hydroelectric projects by private companies and state and local government.
-1938: Congress passed the Natural Gas Act, extending FPC jurisdiction to wholesale sales and transportation of natural gas by interstate pipelines.
-1954: In the Phillips decision, the Supreme Court ruled that rates charged by producers for interstate sales of natural gas fall under FPC control.
-1977: The Federal Energy Regulatory Commission (FERC) was created by the Department of Energy Organization Act, which abolished the FPC.
-1978: At the peak of the energy crises, Congress passed the National Energy Act (NEA). Included in the NEA statute was the Natural Gas Policy Act (NGPA) with its pricing provisions.
-1985/1987: The FERC issued Orders 436 and 500, Regulation of Natural Gas Pipelines After Partial Wellhead Deregulation. Order 500 modified Order 436, and is often referred to as the Open Access Order because its purpose was to encourage pipelines to offer open access, nondiscriminatory transportation services so end users could contract directly with producers for gas supply.
-1989: Congress passed the Natural Gas Wellhead Decontrol Act (NGWDA) allowing FERC regulation of producer sales of natural gas to be eliminated gradually until full decontrol in 1993.
-1992: Congress passed the Energy Policy Act, including provisions designed to foster competition through regulatory reform in the oil pipeline and electric utility industries.
-1992: FERC issued Order 636, requiring pipelines to unbundled their sales services from their transportation services and to provide open access transportation service that is equal in quality for all gas supplies whether purchased from the pipeline or some other supplier.
Each of these events was integral to defining the United States natural gas standards. We have the most trafficked and complex network of natural gas pipeline of any country in the world, and produce an enormous supply. Business and common good are difficult things to establish, but the careful assessment of this industry has provided a booming competition (keeping prices low), while continuing a healthy supply.
About the Author: Bob Jent is the CEO of Western Pipeline Corporation. Western Pipeline Corp is a successful, private independent producer of oil and natural gas.
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