15 Usc 3301-3432

TITLE 15-COMMERCE AND TRADE

§ 3210

(Pub. L. 95-617, title III, § 309, Nov. 9, 1978, 92
Stat. 3153.)

Sec.

3315.

DEFINITIONS

For definition of Secretary applicable to this section.
see section 2602 of Title 16, Conservation.

3316.

§ 3210. Prior and pending proceedings
For purposes of this chapter. proceedings
commenced by any State regulatory authority
(with respect to gas utilities for which it has
ratemaking authority) and any nonregulated
gas utility before November 9, 1978, and actions
taken before such date in such proceedings
shall be treated as complying with the require.
ments of this chapter if such proceedings and
actions substantially conform to such requirements. For purposes of this chapter, any such
proceeding or action commenced before November 9, 1978, but not completed before such date
shall comply with the requirements of this
chapter, to the maximum extent practicable,
with respect to so much of such proceeding or
action as takes place after such date.
(Pub. L. 95-617, title III, § 310, Nov. 9, 1978, 92
Stat. 3154.)

3317.

3318.

3319.

3320.

§ 3211. Relationship to other authority
Nothing in this chapter shall be construed to
limit or affect any authority of the Secretary
or the Commission under any other provision
of law.
(Pub. L. 95-617, title III, § 311, Nov. 9, 1978, 92
Stat. 3154.)

3331.

DEFINITIONS

CHAPTER 60-NATURAL GAS POLICY
3301.

3332.

Definitions.
SUBCHAPTER I-WELLHEAD PRICING
PART A-WELLHEAD PRICE CONTROLS

3311.

3312.

3313.

3314.

Inflation adjustment; other general price
ceiling rules.
(a) Annual inflation adjustment factor.
(b) Rules of general application.
Ceiling price for new natural gas and certain
natural gas produced from the Outer Continental Shelf.
(a) Application.
(b) Maximum lawful price.

(c) Definition of new natural gas.
(d) OCS gas qualifying for new natural
gas ceiling price.
(e) Exclusion of certain Alaska natural
gas.
Ceiling price for new, onshore production
wells.
(a) Application.
(b) Maximum lawful price.
(c) Definition of new, onshore production well.
(d) Exclusion of certain Alaska natural
gas.
Ceiling price for sales of natural gas dedicated to interstate commerce.
(a) Application.
(b) Maximum lawful price.

Ceiling price for sales under existing intrastate contracts.
(a) Application.
(b) Maximum lawful price.
(c) Definition of contract price.
Ceiling price for sales under rollover contracts.
(a) Interstate rollover contracts.
(b) Intrastate rollover contracts.
(c) Ceiling price may be increased if just
and reasonable.
Ceiling price for high-cost natural gas.
(a) Wells completed below 15,000 feet.
(b) Commission authority to prescribe
higher incentive prices.
(c) Definition of high-cost natural gas.
(d) Provisions for high-cost natural gas
to be elective.
Ceiling price for stripper well natural gas.
(a) General rule.
(b) Definition of stripper well natural
gas.
Ceiling price for other categories of natural
gas.
(a) Application.
(b) Maximum lawful price.
Treatment of State severance taxes and certain production-related costs.
(a) Allowance for State severance taxes
and
certain
production-related
costs.
(b) Limitation on State severance taxes.
(c) Definition of State severance tax.

PART B-DECONTROL OF CERTAIN NATURAL GAS PRICES

For definition of Secretary and Commission applicable to this section, see section 2602 of Title 16, Conservation.

Sec.

Page 1180

3333,

Elimination of price controls for certain natural gas sales.
(a) General rule.
(b) High-cost natural gas.
(c) Natural gas produced from 5,000 or
less.
(d) Exclusion of certain Alaska natural
gas.
(e) Limitation on indefinite price escalators.
Standby price control authority.
(a) Reimposition of price controls.
(b) Limitations.
(c) Procedure for reimposing price controls.
(d) Maximum lawful prices applicable
under reimposition of price control.
(e) Allowance for State severance taxes
and certain
production-related
costs.
(f) Limitation.
Report to the Congress.
(a) Reports.
(b) Public comment.

SUBCHAPTER I1-INCREMENTAL PRICING
3341.

3342.

3343.

Industrial boiler fuel use.
(a) In general.
(b) Initial application.
(c) Definitions.
Amendment expanding application for other
industrial uses.
(a)In general.
(b) Expanded application.
(c) Congressional review.
Acquisition costs subject to passthrough.
(a) In general.
(b) First sale acquisition costs.
(c) Incremental pricing threshold.
(d) Classification to be based on provisions under which sale price is determined.

Page 1181

TITLE 15-COMMERCE AND TRADE

Sec.

3344.

Method of passthrough.
(a) Establishment of incremental pricing
account.
(b) Credits to account.
(e) Requirement for direct passthrough.
(d) Deductions from account.
(e) Determination of alternative fuel
cost.
(f) Determination ef appropriate accounting period.
(g) Incrementally priced industrial facility defined.
(h) Industrial use defined.
3345.
Local distribution company passthrough requirements.
(a) General rule.
(b) Prohibition on offsetting modifications in rates and charges.
(c) Special enforcement authority of Attorney General.
(d) Preemption of State or local law.
(e) State commission defined.
3346.
Exemptions.
(a) Small existing industrial boiler fuel
users.
(b) Agricultural users of natural gas.
(c) Schools, hospitals, and certain other
facilities.
(d) Other exemptions.
3347.
Treatment of certain Imports.
(a) Certain LNG imports.
(b) Certain natural gas imports (other
than LNG).
(c) Authority with respect to incremental pricing of natural gas or LNG
imports.
3348.
Alaska natural gas.
SUBCHAPTER III-ADDITIONAL AUTHORITIES
AND REQUIREMENTS

Sec.

3372.

3373.

3374.

3375.

3362.

3363.

3364.

Declaration of emergency.
(a) Presidential declaration.
(b) Limitation.
Emergency purchase authority.
(a) Presidential authorization.
(b) Contract duration.
(c) Related transportation and facilities.
(d) Maintenance of adequate records.
(e) Special limitation.
Emergency allocation authority.
(a) In general.
(b) Allocation of certain boiler fuel gas.
(c) Allocation of general pipeline supply.
(d) Allocation of user-owned gas.
(e) Limitation.
(fMIndustry assistance.
(g) Compensation.
(h) Related transportation and facilities.
(1) Monitoring.
(J) Commission study.
(k) Definition of high-priority use.
Miscellaneous provisions.
(a) Information.
(b) Reporting of prices and volumes.
(c) Presidential reports to Congress.
(d) Delegation of authorities.
(e) Antitrust protections.
(f) Effect on certain contractual obligations.
(g) Preemption.

CURTAILMENT POLICIES
3391.

3391a.
3392.

3393.

3394.

Authorization of certain sales and transportation.
(a) Commission approval of transportation.

Natural gas for essential agricultural uses.
(a) General rule.
(b) Curtailment priority not applicable if
alternative fuel available.
(c)Determination of essential agricultural use requirements.
(d) Authority of Secretary of Agriculture to intervene.
(e) Limitation.
-'?) Definitions.
Essential agricultural use defined.
Natural gas for essential industrial process
and feedstock uses.
(a) General rule.
(b) Curtailment priority applicable only
If alternative fuel not available.
(c)Determination of essential industrial
use requirements.
(d)Definitions.
Establishment and implementation of priorities.
(a) Establishment of priorities.
(b) Implementation of priorities.
Limitation on revoking or amending certain
pre-1969 certificates of public convenience
and necessity.
(a) General rule.
(b) Commission curtailment authority.

SUBCHAPTER V-ADMINISTRATION,
ENFORCEMENT, AND REVIEW
3411.

3412.

3413.

PART B-OTHER AUTHORITIES AND REQUIREMENTS

3371.

(a) Authorization of assignments.
(b) Effect of authorization under subsection (a).
c) Surplus natural gas.
Effect of certain natural gas prices on indefinite price escalator clauses.
(a) High-cost natural gas.
(b) Other transactions.
Clauses prohibiting certain sales, transportation, and commingling.
(a) General rule.
(b) Natural gas covered by this chapter.
Contract duration; right of first refusal;
filing of contracts and agreements.
(a) Contract duration.
(b) Offers; right of first refusal.
(c) Filing of contracts and ancillary
agreements.

SUBChAPTER IV-NATURAL GAS

PART A-EMzRGzNcy AUTHORITY

3361.

(b) Commission approval of sales.
(c)Terms and conditions.
Assignment. of contractual rights to receive
surplus natural gas.

3414.

General rulemaking authority.
(a) In general.
(b) Authority to define terms.
(c)Delegation of certain determinations.
Administrative procedure.
(a) Administrative Procedure Act.
(b) Opportunity for oral presentations.
(el Adjustments.
(d) Procedures applicable for incremental pricing determinations respectIng Imports.
Determinations for qualifying under certain
categories of natural gas.
(a) General rule.
(b) Commission review.
(c)State authority.
(d) Effect of determinations.
(e)Interim collection of maximum
lawful price.
Enforcement.
(a) General rule.
(b) Civil enforcement.

§ 3301

TITLE 15-COMMERCE AND TRADE

Sec.

(c) Criminal penalties.
3415.
Intervention.
(a) Authority to intervene.
(b) Access to State courts.
3416.
Judicial review.
(a) Orders.
(b) Review of rules and orders.
(c) Judicial review of emergency orders.
(d) Judicial review of certain incremental pricing determinations.
3417.
Congressional review.
(a) Application.
(b) Determination of calendar days of
continuous session.
(c) Resolution.
(d) Expedited procedure.
3418.
Applicability of other Federal statutory provisions relating to information-gathering.
SUBCHAPTER VI-COORDINATION WITH NATURAL GAS ACT; MISCELLANEOUS PROVISIONS
3431.
Coordination with the Natural Gas Act.
(a) Jurisdiction of the Commission
under the Natural Gas Act.
(b) Charges deemed Just and reasonable.
(c)Guaranteed passthrough.
3432.
Effect on State laws.
(a) Authority to prescribe lower maximum lawful prices.
(b) Common carriers.
CHAPTER REFERRED TO IN OTHER SECTIONS
This chapter is referred to in sections 717x, 717y of
this title; title 26 section 44D; title 42 section 7255.

§ 3301. Definitions
For purposes of this chapter(1) Natural gas
The term "natural gas" means either natural 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 February 19, 1977; or
(B) the depth of which was increased, by
means of drilling on or after February 19,
1977, to a completion locaton 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) New wells
The term "marker well" does not include
any new well under paragraph (3)(A) but includes any new well under paragraph (3)(B)

Page 1182

if such well qualifies as a marker well under
subparagraph (A) of this paragraph.
(6) Reservoir
The term "reservoir" means any producible
natural accumulation of natural gas, crude
oil, or both, confined(A) by impermeable rock or water barriers
and characterized by a single natural pressure system; or
(B) by lithologic 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.
(8) Proration unit
The term "proration unit" means(A) any portion of a reservoir, as designated by 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 Federal 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 regulatory Jurisdiction with respect to production from such reservoir, 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
effectively 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) New contract
The term "new contract" means any contract, entered into on or after November 9,

Page 1183

TITLE 15-COMMERCE AND TRADE

1978, for the first sale of natural gas which
was not previously subject to an existing contract.
(12) Rollover contract
The term "rollover contract" means any
contract, entered into on or after November 9,
1978, for the first sale of natural gas that was
previously subject to an existing contract
which expired at the end of a fixed term (not
including any extension thereof taking effect
on or after November 9, 1978) specified by the
provisions of such existing contract, as such
contract was in effect on November 9, 1978,
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
contract for the first sale of natural gas in
effect on November 8, 1978.
(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 November 9, 1978, for the first sale of natural gas
which was previously subject to an existing
contract, whether or not there is an identity
of parties 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 U.S.C. 717 et
seq.].
(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 [15 U.S.C. 717 et seq.]
(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 U.S.C. 717(c)]).
(17) Local distribution company
The term "local distribution 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 [15 U.S.C. 717 et seq.]) under the
terms of any contract, any certificate
under the Natural Gas Act, or any provision of such Act.

§ 3301

(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 [15 U.S.C. 717 et seq.])(I) under section 6 uf the Emergency
Natural Gas Act of 1977;
(II) under any limited term certificate,
granted pursuant to section 7 of the
Natural Gas Act [15 U.S.C. 717fl, 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 [15 U.S.C.
717f(c)]; or
(IV) to the user by the producer and
transported under any certificate, granted pursuant to section 7(c) of the Natural Gas Act [15 U.S.C. 717f(c)], 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 November 9,
1978, under section 7 of the Natural Gas
Act [15 U.S.C. 717f]; 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 interstate commerce (within the
meaning of the Natural Gas Act [15
U.S.C. 717 et seq.]) for resale (other
than any sale described in clause (i)(I),
(ID), or (IID)).
(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 [15 U.S.C. 717f(c)]. Such
term does not include natural gas sold to the
user by the producer and transported pursuant to a certificate which is specifically issued
under section 7(c) of the Natural Gas Act for
the transportation of that natural gas, for
such user unless such natural gas is used for
the generation of electricity.
(20) 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-

§ 3301

TITLE 15-COMMERCE AND TRADE

(i) to any interstate pipeline or intrastate pipeline;
(i) 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 (1), (I1), (ii), or (iv)
and is defined by the Commission as a
first sale in order to prevent circumvention of any maximum lawful price established under this chapter.
(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 [15 U.S.C. 717 et
seq.], means a certificate of public convenience 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.
(26) Person
The term "person" includes the United
States, any State, and any political subdivision, agency, or instrumentality of the foregoing.
(27) Affiliate
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 electricity
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.

Page 1184

(30) Btu
The term "Btu" means British thermal
unit.
(31) Month
The term "month" means a calendar
month.
(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 Continental Shelf" has
the same meaning as such term has under
section 1331(a) of title 43.
(36) Prudhoe Bay Unit of Alaska
The term "Prudhoe Bay Unit of Alaska"
means the geographic area subject to the voluntary 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
Conservation Order No. 145 of the Alaska Oil
and Gas Conservation Committee, 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 Commission 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).
(Pub. L. 95-621, § 2, Nov. 9, 1978, 92 Stat. 3352.)
REFERENCES IN TEXT
The Natural Gas Act, and such Act, referred to in
pars. (16), (16), (18)(A)(ii), (B)(i), (iii)(II), (23), is act
June 21, 1938, ch. 556, 52 Stat. 821, as amended, which
is classified generally to chapter 15B (1 717 et seq.) of
this title. For complete classification of this Act to the
Code, see section 717w of this title and Tables.
Section 6 of the Emergency Natural Gas Act of 1977,
referred to in par. (18)(B)(i)(I), is Pub. L. 95-2, § 6,
Feb, 2, 1977, 91 StRt. 7. which is set out in a note under
section 717 of this title.
The Sherman Act (15 U.S.C. 1 et seq.), referred to in
par. (37), is act July 2,1890, ch. 647, 26 Stat. 209, as
amended, which is classified to sections 1 to 7 of this
title. For complete classification of this Act to the
Code, see Short Title note set out under section 1 of
this title and Tables.
The Clayton Act (15 U.S.C. 12, 13, 14-19, 20, 21.
22-27), referred to in par, (37), is act Oct. 15, 1914, ch.
323, 38 Stat, 730, as amended, which is classified generally to sections 12, 13, 14 to 19, 20, 21, and 22 to 27 of

Page 1185

TITLE 15-COMMERCE AND TRADE

this title, and sections 52 and 53 of Title 29, Labor. For
further details and complete classification of this Act
to the Code, see References in Text note set out under
section 12 of this title and Tables.
The Federal Trade Commission Act (15 U.S.C. 41 et
seq.), referred to in par. (37), is act Sept. 26, 1914, ch.
311, 38 Stat. 717, as amended, which is classified generally to subchapter I (§ 41 et seq.) of chapter 2 of this
title. For complete classification of this Act to the
Code, see section 58 of this title and Tables.
The Act of June 19, 1936, chapter 592, referred to in
par. (37), means act June 19, 1936, ch. 592, 49 Stat.
1526, popularly known as the Robinson-Patman Antidiscrimination Act and also as the Robinson-Patman
Price Discrimination Act, which enacted sections 13a,
13b, and 21a of this title and amended section 13 of
this title. For complete classification of this Act to the
Code, see Short Title note set out under section 13 of
this title and Tables.
SHORT TITLE

Section 1 of Pub. L. 95-621 provided that: "This Act
[enacting this chapter and amending section 7255 of
Title 42, The Public Health and Welfare] may be cited
as the 'Natural Gas Policy Act of 1978'."
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3312, 3363,
3375, 3802 of this title.
SUBCHAPTER I-WELLHEAD PRICING
SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 3343, 3372,
3413, 3431. 3432 of this title.
PART A-WELLHEAD PRICE CONTROLS

PART REFERRED TO IN OTHER SECTIONS
part
is referred to in sections 3331, 3332 of this
This
title.
§ 3311. Inflation adjustment; other general price ceiling rules
(a) Annual inflation adjustment factor
(1) General rule
For purposes of this subchapter, the annual
inflation adjustment factor applicable for any
month shall be the sum of(A) a factor equal to one hundredth of
the quarterly percent change in the GNP
implicit price deflator; plus
(B) a correction factor of 1.002.
(2) Quarterly percent change in the GNP implicit
price deflator
For purposes of paragraph (1)(A) In general
The term "quarterly percent change in
the GNP implicit price deflator", when used
with respect to any month, means the quarterly percent change in the GNP 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.
(11)Months before enactment
For purposes of applying such term with
respect to any month in any calendar quarter which ends before November 9, 1978,
and for which a quarterly percent change in

§ 3311

the GNP implicit price deflator has been
published by the Department of Commerce
as of November 9, 1978, the quarterly percent change in the GNP implicit price deflator for the calendar quarter in which such
month occurs shall be used in lieu of the
quarterly percent change in the GNP implicit price deflator for a preceding calendar
quarter.
(3) GNP implicit price deflator
For purposes of paragraph (2)(A) In general
The term "GNP implicit price deflator"
means, except as provided in subparagraph
(B), the preliminary 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 November 9,
1978
The most recent revision, if any, of such
implicit price deflator which has been so
published before November 9, 1978, 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 production 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 subchapter, the monthly equivalent of
any factor shall be the twelfth root of such
factor.
(4) Application of ceiling prices
The maximum lawful ceiling prices under
this subchapter(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 November 9. 1978.
(5) Sales qualifying under more than one provision
If any natural gas qualifies under more
than one provision of this subchapter providing for any maximum lawful price or for any
exemption from such a price with respect to
any first sale of such natural gas, the provision which could result in the highest price
shall be applicable.

§ 3312

TITLE 15-COMMERCE AND TRADE

(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 subchapter 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 lawful prices and such
factor for such month in the Federal Register.
(7) Rounding
Any maximum lawful price under this subchapter shall be computed to the nearest mill
(rounding any fraction thereof which is onehalf a mill or higher to the next highest mill).
(8) Computation of initial ceiling prices
In computing any maximum lawful price
under the provisions of this subchapter 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 subchapter, or
(B) any price which is established under
any contract for the first sale of natural gas
which is exempted under part B of this subchapter from the application of a maximum
lawful price under this subchapter,
such maximum lawful price, or such exemption from such a maximum lawful price, shall
not supersede or nullify the effectiveness of
the price established under such contract.
(Pub. L. 95-621, title I, § 101, Nov. 9, 1978, 92
Stat. 3356.)
SEcTIoN REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3343 of this
title.
§ 3312. Ceiling price for new natural gas and certain
natural gas produced from the Outer Continental
Shelf
(a) Application
The maximum lawful price computed under
subsection (b) of this section 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 qualify.
ing under subsection (d) of this section for
the new natural gas ceiling price,
(b) Maximum lawful price
The maximum lawful price under this section
for any month shall be-

Page 1186

(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 determinied in accordance
with section 3413 Gf this title to be produced from a new lease on the Outer Continental Shelf.
(B) New onshore wells
Natural gas determined in accordance
with section 3413 of this title to be produced (other than from the Outer Continental Shelf) from(i) any new well which is 2.5 miles or
more (determined in accordance with
paragraph (2)) from the nearest marker
well; or
(ii) any completion location, of any new
well, which is located at a depth at least
1,000 feet below the deepest completion
location of each marker well within 2.5
miles (determined in accordance with
paragraph (2)) of such new well.
(C) New onshore reservoirs
(I) General rule
Except as provided in clauses (ii) and
(iII), natural gas determined in accordance
with section 3413 of this title to be produced (other than from the Outer 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 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
reservoir); and
(II) natural gas could have been produced in commercial quantities from
such reservoir through such old well
before April 20, 1977.
(ill) Withheld gas exclusion
Clause (I) shall not apply to natural gas
produced from any reservoir(I) If such natural gas is produced
through an old well; and

Page 1187

TITLE 15-COMMERCE AND TRADE

(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 (lii)(II) shall not
be considered to be met by reason 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
(II) under the emergency sale authority pursuant to Opinion 699-B issued by
the Federal Power Commission under
section I(c) of the Natural Gas Act [15
U.S.C. 717f(c)].
(2) Determinations of distance
For purposes of determining the distance
from any new well to any marker well(A) Surface location to surface location
The measurement 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 requirements for the nondirectional
drilling of wells prescribed by the appropriate State or Federal agency having regulatory 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 November 9. 1978; and
(III) the drilling of such well was not
subject to any requirement regarding directional or nondirectional drilling, or
the drilling of such well was subject to
requirements regarding directional drilling but such requirements did not necessitate the obtaining of any permit or
other certificate before drilling began.
(B) Completion location to surface iccation
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 natural gas
has not been sold and delivered from such
reservoir before April 20, 1977; and
(B) quantities of natural gas sold in interstate commerce (within the meaning of the

§ 3312

Natural Gas Act [15 U.S.C. 717 et seq.])
shall not be taken into account if such
quantities were sold before November 9.
1978(i) under section 6 of the Emergency
Natural Gas Act of 1977; or
(ii) under the emergency sale authority
pursuant to Opinion 699-B issued by the
Federal Power Commission under section
7(c) of the Natural Gas Act [15 U.S.C.
717f(c)].
(4) New wells which are also marker wells
For purposes of applying subsection
(c)(1)(B)(ii) of this section in the case of any
marker well which is also a new well under
section 3301(3)(B) of this title, the reference
in such subsection (c)(1)(B)(ii) of this section
to the deepest completion location of any
marker well shall be deemed to be a reference
to any subsurface location from which natural gas was produced in commercial quantities
after January 1, 1970, and before February
19, 1977.

(d) OCS gas qualifying for new natural gas ceiling
price
For purposes of this section(1) OCS reservoirs discovered on or after July 27,
1976
Natural gas determined in accordance with
section 3413 of this title to be produced 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 purposes 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 producing 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 formation test indicates that, as of the time of such test, the
reservoir is commercially producible.
(3) Effect 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 well before July 27,
1976, if, with respect to such well(A) a production test meeting the requirements of OCS Order No. 4 was performed

§ 3313

TITLE 15-COMMERCE AND TRADE

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 requirements 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 paragraph (2).
(5) Definition of OCS Order No. 4
For purposes of this subsection, 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 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 Gas Transportation Act of 1976 [15 U.S.C. 719 et seq.].
(Pub. L. 95-621, title I, § 102, Nov. 9, 1978, 92
Stat. 3358.)
REFERENCES IN TEXT

Section 6 of the Emergency Natural Gas Act of 1977,
referred to in subsec. (c)(1)(C)(iv)(I), (3)(B)(i), is Pub.
L. 95-2. § 6, Feb. 2, 1977, 91 Stat. 7, which is set out in
a note under section 717 of this title.
The Natural Gas Act, referred to in subsec. (c)(3)(B),
is act June 21, 1938, ch. 556, 52 Stat. 821, as amended,
which is classified generally to chapter 15B (1 717 et
seq.) of this title. For complete classification of this
act to the Code, see section 717w of this title and
Tables.
The Alaska Natural Gas Transportation Act of 1976,
referred to in subsec. (e), is Pub. L. 94-586, Oct. 22,
1976, 90 Stat. 2903, as amended, which is classified
generally to chapter 15C (1 719 et seq.) of this title.
For complete classification of this Act to the Code, see
Short Title note set out under section 719 of this title
and Tables.
TRANSFER OF FUNCTIONS

The Federal Power Commission was terminated and
its functions, personnel, property, funds, etc., were
transferred to the Secretary of Energy (except for certain functions which were transferred to the Federal
Energy Regulatory Commission) by sections 7151(b),
7171(a), 7172(a), 7291, and 7293 of Title 42, The Public
Health and Welfare.
'So In original. Probably should be "reservoir".

Page 1188

SECTION REFERRED TO IN OTHER SECTIONS

This section Is referred to in sections 3313, 3315,
3316, 3317. 3331, 3332, 3343, 3375, 3413, 3431 of this
title.
§ 3313. Ceiling price for new, onshore production
wells
(a) Application
In the case of natural gas determined in accordance with section 3413 of this title to be
produced from any new, onshore production
well, the maximum lawful price computed
under subsection (b) of this section 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 paragraph for
the preceding month multiplied by the
monthly equivalent of the annual inflation
adjustment factor applicable for such
month.
(2) Production after 1984 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, computed for such month under section 3312 of this title (relating to new natural gas); and
(B) the maximum lawful price, per million
Btu's, computed 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 applied to a well (i) which produced natural gas in commercial quantities
or (it) the surface drilling of which was
begun before February 19, 1977, and which

Page 1189

TITLE 15-COMMERCE AND TRADE

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 Gas Transportation Act of 1976 [15 U.S.C. 719 et seq.].
(Pub. L. 95-621, title I, § 103, Nov. 9, 1978, 92
Stat. 3361.)
REFERENCES IN TEXT

The Alaska Natural Gas Transportation Act of 1976,
referred to in subsec. (d), is Pub. L. 94-586, Oct. 22,
1976, 90 Stat. 2903, as amended, which is classified
generally to chapter 15C (Q719 et seq.) of this title.
For complete classification of this Act to the Code, see
Short Title note set out under section 719 of this title
and Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3315, 3331,
3332, 3343, 3375, 3413, 3431 of this title; title 26 section
44D.
§ 3314. Ceiling price for sales of natural gas dedicated
to interstate commerce
(a) Application
In the case of natural gas committed or dedicated to interstate commerce on November 8,
1978, and for which a just and reasonable rate
under the Natural Gas Act [15 U.S.C. 717 et
seq.] was in effect on such date for the first
sale of such natural gas, the maximum lawful
price computed under subsection (b) of this section 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 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
(it) in the case of any month thereafter,
the maximum lawful price, per million
Btu's, prescribed under this subparagraph
for the preceding month multiplied by the
monthly equivalent of the annual inflation
adjustment factor applicable for such
month, or
(B) any just and reasonable rate which
was established by the Commission after
April 27, 1977, and before November 9, 1978,
and which is applicable to such natural gas.
(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

§ 3315

(B) Just and reasonable within the meaning of the Natural Gas Act [15 U.S.C. 717 et
seq.].
(Pub. L. 95-621, title I, § 104, Nov. 9, 1978, 92
Stat. 3362.)
REFERENCES IN TEXT

The Natural Gas Act, referred to in subsecs. (a) and
(b)(2)(B), is act June 21, 1938, ch. 556, 52 Stat. 821, as
amended, which is classified generally to chapter 15B
(1 717 et seq.) of this title. For complete classification
of this act to the Code, see section 717w of this title
and Tables.
§ 3315. Ceiling price for sales under existing intrastate contracts
(a) Application
The maximum lawful price computed under
subsection (b) of this section shall apply to any
first sale of natural gas delivered during any
month in the case of natural gas, sold under
any existing contract or any successor to an existing contract, which was not committed or
dedicated to interstate commerce on November
8, 1978.
(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 terms of the existing contract, to which such natural gas was
subject on November 9, 1978, as such contract was in effect on such date; or
(B) the maximum lawful price, per million
Btu's, computed for such month under section 3312 of this title (relating to new natural gas).
(2) Contract price exceeding'new gas ceiling price
on November 9, 1978
In the case of any natural gas described in
subsection (a) of this section for which the
contract price applicable on November 9,
1978, exceeds the maximum lawful price, per
million Btu's, computed for such date under
section 3312 of this title (relating 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, computed for such month under section 3312 of this title; or
(B)(i) the contact 2 price on November 9,
1978, in the case of November 1978; and
(ii) in the case of any month thereafter,
the maximum lawful price, per million
Btu's, prescribed under this subparagraph
for the preceding month multiplied by the
monthly equivalent of the annual inflation
adjustment factor applicable for such
month.
(3) Price increases resulting from indefinite price
escalator clauses
(A) In general
Effective January 1985, and each month
thereafter, in the case of any first sale of
'So In original. Probably should be "contract".

§ 3316

TITLE 15-COMMERCE AND TRADE

natural gas, which is sold at a price established under any indefinite price escalator
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, computed under paragraph
(2)(B); or
(ii)(I) in the case of January 1985, the
maximum lawful price, per million Btu's,
computed under section 3312 of this title
(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 adjustment 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, 1978, to
be disregarded
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
modification 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 3312(c) of this title), stripper well
natural gas (as defined in section 3318(b) of
this title), high-cost natural gas (as defined
in section 3317(c) of this title), natural gas
produced from a new, onshore production
well (as defined in section 3313(c) of this
title) 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 3332 of this title, natural gas
produced from any new, onshore production
well (as defined in section 3313(c) of this
title) from a completion location located at
a depth of 5,000 feet or less.

Page 1190

(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.
(Pub. L. 95-621, title I, § 105, Nov. 9, 1978, 92
Stat. 3363.)
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3331, 3373,
3411 of this title.
§ 3316. Ceiling price for sales under rollover contracts
(a) Interstate rollover contracts
In the case of any first sale under any rollover contract of natural gas which was committed or dedicated to interstate commerce on November 8, 1978, 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"
includes any contract which would have been
a rollover contract but for the fact that the
expiration of the previous contract occurred
prior to November 8, 1978.
(b) Intrastate rollover contracts
(1)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 November 8, 1978, the maximum
lawful price under this subsection for such
natural gas delivered during any month shall
be the higher of(A)(i) the maximum price paid under the
expired contract, per million Btu's, in the
case of the month in which the effecti're
date of such rollover contract occurs; and
(ii) in the case of any month thereafter,
the maximum lawful price, per million
Btu's, prescribed under this subparagraph

Page 1191

TITLE 15-COMMERCE AND TRADE

for the preceding month multiplied by the
monthly equivalent of the annual inflation
adjustment factor applicable 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 subparagraph
for the preceding month multiplied by the
monthly equivalent of the annual inflation
adjustment factor applicable for such
month.
(2) Certain 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 November 8, 1978, 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 November 9, 1978, by such State
government or Indian tribe (as the case
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 3312 of
this title (relating to new natural gas).
(B) Indian tribal lands
For purposes of this paragraph, land shall
be considered to be owned by an Indian
tribe only if(i) such land is owned directly by such
tribe; or
(i) 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
boundaries were in effect on November 9,
1978).
(C) Definitions
For purposes of this paragraph(i) State government
The term "State government" means
any State or any agency, instrumentality,
or political subdivision of a State.
(ill Indian tribe
The term "Indian tribe" means any
Indian tribe recognized as eligible for
services provided by the Secretary of the
Interior to Indians.
(c) Ceiling price may be increased if just and reason.
able
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 otherwise be applicable under
such provisionM; and

§}3317

(2) Just and reasonable within the meaning
of the Natural Gas Act [15 U.S.C. 717 et seq.].
(Pub. L. 95-621, title I, § 106, Nov. 9, 1978, 92
Stat. 3365.)
REFERENCES IN TEXT

The Natural Gas Act, referred to in subsec. (c)(2), is
act June 21. 1938, ch. 556, 52 Stat. 821, as amended,
which is classified generally to chapter 15B (§ 717 et
seq.) of this title. For complete classification of this
act to the Code, see section 717w of this title and
Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3320, 3411 of
this title; title 26 section 4996.
§ 3317. Ceiling price for high-cost natural gas
(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
drilling 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 3312 of this title (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 incentives for the production of such high-cost
natural gas.
(c) Definition of high-cost natural gas
For purposes of this section, the term "highcost natural gas" means natural gas determined
in accordance with section 3413 of this title 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 completion 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.
(d) Provisions for high-cost natural gas to be 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 November 9, 1978, the provisions
of subsections (a) and (b) of this section and
the provisions of part B of this subchapter
shall not apply to such natural gas produced
from any well unless an election to have such

§ 3318

TITLE 15-COMMERCE AND TRADE

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 November 9, 1978,
under which such credit, exemption, deduction, or adjustment is provided; or
(B) the date the surface drilling of such
well began.
(Pub. L. 95-621, title I, § 107, Nov. 9, 1978, 92
Stat. 3366.)
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3315, 3331,
3343, 3373, 3375, 3413, 3431 of this title. title 26 section
44D.
§ 3318. Ceiling price for stripper well natural gas
(a) General rule
In the case of any first sale of stripper well
natural gas the maximum lawful price under
this section for such natural 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
(h) .04, in the case of any month beginning after April 20, 1981.
(b) Definition of stripper well natural gas
(I) General rule
Except as provided in paragraph (2), the
term "stripper well natural gas" means natural gas determined in accordance with section
3413 of this title to be nonassociated natural
gas 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 such 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 in 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 paragraph (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 nonassociated
natural gas produced from such well was the
result of the application of recognized enhanced recovery techniques.
(3) Definitions
For purposes of this subsection-

Page 1192

(A)Production day
The term "production day" means(i) any day during which natural gas is
produced; and
(ii) any day during which natural gas is
not produced if production during such
day Is prohibited by a requirement of
State law or a conservation practice recognized or approved by the State agency
having regulatory Jurisdiction over the
production of natural gas.
(B) 90-day production period
The term "90-day production 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) Nonassoclated natural gas
The term "nonassociated natural gas"
means natural gas which is not produced in
association with crude oil.
(Pub. L. 95-621, title I, § 108, Nov. 9, 1978, 92
Stat. 3367.)
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3315, 3343,
3413 of this title.
§ 3319. Ceiling price for other categories of natural
gas
(a) Application
The maximum lawful price computed under
subsection (b) of this section Eihall 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 part, including(1) natural gas produced from any new well
not otherwise qualifying for a higher maximum lawful price under this subchapter;
(2) natural gas committed or dedicated to
interstate commerce on November 8, 1978,
and for which a Just and reasonable rate
under the Natural Gas Act [15 U.S.C. 717 et
seq.] 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 interstate commerce on November 8, 1978, 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 1976 [15 U.S.C. 719 et seq.].
(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 paragraph for the preceding month multiplied by the monthly equiva-

Page 1193

TITLE 15-COMMERCE AND TRADE

lent of the annual inflation adustment3
factor applicable for such month.
(2) 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. 717 et seq.].
(Pub. L. 95-621, title I, § 109, Nov. 9, 1978, 92
Stat. 3368.)
REFERENCES IN TEXT

The Natural Gas Act, referred to in subsecs. (a)(2)
and (b)(2)(B). is act June 21, 1938, ch. 556. 52 Stat. 821,
as amended, which is classified generally to chapter
15B (1 717 et seq.) of this title. For complete classification of this act to the Code, see section 717w of this
title and Tables.
The Alaska Natural Gas Transportation Act of 1976,
referred to in subsec. (a)(4), is Pub. L. 94-586, Oct. 22,
1976, 90 Stat. 2903, as amended, which is classified
generally to chapter 15C (1 719 et seq.) of this title.
For complete classification of this Act to the Code, see
Short Title note set out under section 719 of this title
and Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3343, 3411,
3413 of this title.
§3320. Treatment of State severance taxes and certain production-related costs
(a) Allowance for State severance taxes and certain
production-related costs
Except as provided in subsection (b) of this
section, a price for the first sale of natural gas
shall not be considered to exceed the maximum
lawful price applicable to the first sale of such
natural gas under this part 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) of this section; and
(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) of this section 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.
'So In original. Probably should be "adjustment".

§ 3331

(c) Definition of State severance tax
For purposes of this section, the term "State
severance tax" means any severance, production, 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 3316(b)(2)(B)(ii) of this title); and
(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.
(Pub. L. 95-621, title I, § 11.0, Nov. 9, 1978, 92
Stat. 3368.)
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 3332, 3343 of
this title.
PART B-DECONTROL OF CERTAIN NATURAL GAS
PRICES
PART REFERRED TO IN OTHER SECTIONS

This part is referred to in sections 3311, 3317, 3431 of
this title; title 26 section 44D.
§ 3331. Elimination of price controls for certain natural gas sales
(a) General rule
Subject to the reimposition of price controls
as provided in section 3332 of this title, the provisions of part A of this subchapter respecting
the maximum lawful price for the first sale of
each of the following categories of natural gas
shall, except as provided in subsections (d) and
(e) of this section, cease to apply effective January 1, 1985:
(I) New natural gas
New natural gas (as defined in section
3312(c) of the title).
(2) New, onshore production wells
Natural gas produced from any new, onshore production well (as defined in section
3313(c) of this title), if such natural gas(A) was not committed or dedicated to interstate commerce on April 20, 1977; and
(B) is produced from a completion location which is located at a depth of more
than 5,000 feet.
(3) Intrastate contracts in excess of $1.00
Natural gas sold under an existing contract,
any successor to an ex!sting contract, or any
rollover contract, if(A) such natural gas was not committed
or dedicated to interstate commerce on November 8, 1978; and
(B) the price paid for the last deliveries of
such natural gas occurring on December 31,
1984, or, if no deliveries occurred on such
date, the price would have been paid had
deliveries occurred on such date is higher
than $1.U0 per million Btu's.
(b) tigh-cost natural gas
Effective beginning on the effective date of
the incremental pricing rule required under section 3341 of this title, the provisions of part A
of this subchapter respecting the maximum
lawful price for the first sale of natural gas

§ 3332

TITLE 15-COMMERCE AND TRADE

shall cease to apply to the first sale of high-cost
natural gas which is described in section
3317(c)(1), (2), (3), or (4) of this title.
(c) Natural gas produced from 5,000 or less
Effective beginning July 1, 1987, or, if later,
the date of expiration of any price controls
reimposed under section 3332 of this title, the
provisions of part A of this subchapter respecting the maximum lawful price for any first sale
of natural gas shall, except as provided in subsection (d) of this section, cease to apply to any
first sale of natural gas produced from any new,
onshore production well (as defined in section
3313(c) of this title), 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 of certain Alaska natural gas
The provisions of subsections (a) and (c) 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
U.S.C. 719 et seq.].
(e) Limitation on indefinite price escalators
Natural gas which is not subject to maximum
lawful prices under part A of this subchapter
solely by reason of subsection (a)(3) of this section 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 3315(b)(3)(B)
of this title) shall be subject to the provisions
of section 3315(b)(3) of this title.
(Pub. L. 95-621, title I, § 121, Nov. 9, 1978, 92
Stat. 3369.)
REFERENCES IN TEXT

The Alaska Natural Gas Transportation Act of 1976,
referred to in subsec. (d), is Pub. L. 94-586, Oct. 22,
1976, 90 Stat. 2903, as amended, which is classified
generally to chapter 15C (1 719 et seq.) of this title.
For complete classification of this Act to the Code, see
Short Title note set out under section 719 of this title
and Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3332 of this
title.
§ 3332. Standby price control authority
(a) Reimposition of price controls
The President, in accordance with subsection
(c)(1) of this section, or the Congress, in accordance with subsection (c)(2) of this section, may
reimpose maximum lawful prices for first sales
of natural gas to which section 3331(a) of this
title 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 June 30, 1987; and

Page 1194

(2) shall remain in effect for a period of 18
months.
(c) Procedure for reimposing price controls
For purposes of this section(I) Presidential reimposition
Any exercise of authority by the President
under subsection (a) of this section shall be
by written order issued after May 31, 1985,
and, subject to subsection (b) of this section,
shall take effect for the first month beginning after the first 30 calendar days of continuous session of Congress (as determined in
accordance with section 3417(b) of this title)
after a copy of such order has been submitted
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 3417(c)(1) of this title.
(2) Congressional reimposition
Any exercise of authority by the Congress
under subsection (a) of this section shall be
by the adoption of a concurrent resolution
after May 31, 1985, described in section
3417(c)(2) of this title and, subject to subsection (b) of this section, shall take effect for
the 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 3331(a) of this title 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 3312
of this title (relating to new natural gas); and
(2) the maximum lawful price, per million
Btu's, computed for such month under section 3313(b)(2) of this title (relating to new,
onshore 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 3313(c) of this title) if such
natural gas(A) was not committed or dedicated to interstate commerce 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
productIon-related costs
A price may exceed the maximum lawful
price applicable for such natural gas under this
section to the same extent as is provided under
section 3320 of this title with respect to maximum lawful prices under part A of this subchapter.
(f) Limitation
Maximum lawful prices may be reimposed
only once under this section.
(Pub. L. 95-621, title I, § 122, Nov. 9, 1978, 92
Stat. 3370.)

Page 1195

TITLE 15-COMMERCE AND TRADE

§3342

SECTION REFERRED TO IN OTHER SECTIONS

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3315, 3331,
3417 of this title.

This section is referred to in sections 3331, 3342,
3343. 3344, 3346 of this title.

§ 3333. Report to the Congress

§ 3342. Amendment expanding application for other
industrial uses

(a) Reports
On or before July 1, 1984, and on or before
January 1, 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) of this section, the Department of
Energy shall provide an opportunity for public
comment with respect to matters required
under subsection (a) of this section to be included in such report.
(Pub. L. 95-621, title I, § 123, Nov. 9, 1978, 92
Stat. 3371.)
SUBCHAPTER II-INCREMENTAL
PRICING
SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in title 42 Section
8235e.
§ 3341. Industrial boiler fuel use
(a) In general
Not later than 12 months after November 9,
1978, the Commission shall prescribe and make
effective (and may from time to time amend) a
rule designed to provide for the passthrough, in
accordance with the provisions of this subchapter, of the costs of natural gas which are(1) described in section 3343 of this title;
and
(2) incurred by any interstate pipeline.
(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.
(W)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 3346 of this title.
(2) Boiler fuel use
The term "boiler fuel use" means the use of
any fuel for the generation of steam or electricity.
(Pub. L. 95-621, title II, § 201, Nov. 9, 1978, 92
Stat. 3371.)

(a) In general
(1) Commission rule
Not later than 18 months after November 9,
1978, the Commission shall, by rule, prescribe
an amendment to the rule required under section 3341 of this title designed to provide for
the passthrough, in accordance with the provisions of this subchapter, of the costs of natural gas which are(A) described in section 3343 of this title;
and
(B) incurred by any interstate pipeline.
(2) Effectiveness
The amendment required by this section,
and any amendment to the rule under section
3341 of this title which is applicable to facilities to which the amendment required by this
section applies (other than a technical or
clerical amendment), shall take effect only as
provided under subsection (c) of this section.
(b) Expanded application
The requirements of the rule under section
3341 of this title, as amended under subsection
(a) of this section, 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
3341(c)(2) of this title) by(1) any industrial boiler fuel facility (as defined in section 3341(c)(1) of this title); and
(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 3346 of this title.
(c) Congressional review
(1)in 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 with section 3417(b) of
this title I 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
amendment unless, during such 30 day period
of continuous session of Congress, either
House of the Congress adopts a resolution of
disapproval described in section 3417(c)(3) of
this title with respect to such amendment.
(2) Authority in the event of Congressional disapproval
(A) Authority to resubmit
If either House of the Congress adopts a
resolution of disapproval with respect to
'So in original. Probably should be followed by a closing parenthesis.

§ 33-13

TITLE 15-COMMERCE AND TRADE

the amendment required under subsection
(a) of this section (or any amendment proposed and submitted under this subparagraph), the Commission may thereafter
submit to each House of the Congress an
amendment, satisfying the requirements of
subsections (a) and (b) of this section,
which amendment shall take effect as provided under paragraph (1).
(B) Limitation
The authority of subparagraph (A) may
not be exercised(I) earlier than 6 months after the date
of the adoption 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 3417(c)(3) of
this title with respect to the amendment
required under subsection (a) of this section.
(Pub. L. 95-621, title II, § 202, Nov. 9, 1978, 92
Stat. 3372.)
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3343, 3344,
3346, 3417 of this title.
§ 3343. Acquisition costs subject to passthrough
(a) In general
The following costs shall be subject to the
passthrough requirements of the rule prescribed under section 3341 of this title (including any amendment under section 3342 of this
title):
(1) New natural gas
In the case of new natural gas (as defined in
section 3312(c) of this title), 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 November 8, 1978, any portion of the first sale acquisition cost of such natural gas which exceeds
the incremental pricing threshold av'plicable
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
in section 3313(c) of this title), 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 3347 of this title, in the
case of liquefied 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

Page 1196

such liquefied natural gas enters the United
States.
(5) Natural gas (other than LNG) imports
Subject to section 3347 of this title, 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 3312 of this title (relating to new natural gas) for the month in
which such natural gas enters the United
States, without regard to section 3320 of this
title.
(6) Stripper well natural gas
In the case of stripper well natural gas (as
defined in section 3318(b) of this title), any
portion of the first sale acquisition cost of
such natural gas which exceeds the maximum
lawful price, per million Btu's, computed
under section 3312 of this title (relating to
new natural gas) for the month in which the
delivery of such natural gas occurs, without
regard to section 3320 of this title.
(7) tligh-cost natural gas
In the case of high-cost natural gas (as defined in section 3317(c) of this title), 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 metropoiltan area, 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 million 2
Btu's per barrel.
(8) Alaska natural gas transportation system
In the case of 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 U.S.C.
719 et seq.2(A) any portion of the first sale acquisition cost of such natural gas which is not
described in subparagraph (B) and which
exceeds the maximum lawful price, per million Btu's, computed under section 3319 of
this title (relating to other categories of
natural gas) for the month in which delivery of such natural gas occurs, without
regard to section 3320 of this title; and
(B) any amount paid to any person (other
than the producer of such natural gas or an
affiliate of such producer) for, or attributable to, any compressing, gathering, processing, 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.
'So In original. Probably should be "million'.

Page 1197

TITLE 15-COMMERCE A

(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 3320(c) of this title) which
results from a provision of State law enacted on or after December 1, 1977.
(B) Certain changes allowed in 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 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 of 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 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 3371 of this title
In the case of any sale of natural gas authorized under section 3371 of this title, 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 3344(c)(3) of this title) paid by any interstate pipeline for natural gas acquired by
such pipeline from another interstate pipeline.
(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.

T)

TRADE

§ 3344

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 section, 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 million Btu's, determined under
this subsection for the preceding month multiplied by the monthly equivalent of the
annual inflation adjustment factor (as defined in section 3311(a) of this title) applicable for such month.
(d) Classification to be based on provisions under
which sale price is determined
In the case of natural gas which is described
in more than one paragraph of paragraphs (1)
through (8) of subsection (a) of this section, 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 requirements of this subchapter, based
upon the classification of such natural gas
under which the price of such national 3 gas is
determined under subchapter I of this chapter.
(Pub. L. 95-621, title II, § 203, Nov. 9, 1978, 92
Stat. 3373.)
REFERENCES IN TEXT

The Alaska Natural Gas Transportation Act of 1976,
referred to in subsec. (a)(8), is Pub. L. 94-586, Oct. 22,
1976, 90 Stat. 2903, as amended, which is classified
generally to chapter 15C (§ 719 et seq.) of this title.
For complete classification of this Act to the Code, see
Short Title note set out under section 719 of this title
and Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section Is referred to in sections 3341, 3342,
3344, 3347 of this title.
§ 33.1-1. Method of passthrough
(a) Establishment of incremental pricing account
The rule required under section 3341 of this
title (including any amendment under section
3342 of this title to such rule) shall provide
that any interstate pipeline subject to such rule
shall establish and maintain an incremental
pricing account (hereinafter in this subchapter
referred to as the "account").
() Credits to account
The rule required under section 3341 of this
title (including any amendment under section
3342 of this title to such rule) shall provide
'So In original, Probably should be "natural".

§ 3344

TITLE 15-COMMERCE AND TRADE

that any costs subject to the passthrough requirements of this subchapter under section
3343 of this title (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 pipeline except to the extent
provided under this section.
(W)Requirement for direct passthrough
(1) In general
The rule required under section 3341 of this
title (including any amendment under section
3342 of this title 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 determined in accordance with a
method prescribed under paragraph (3).
(2) Surcharge passthrough
The rule required under section 3341 of this
title (including any amendment under section
3342 of this title) 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 volume of
natural gas delivered, during the calendar
period involved, for industrial use to any incrementally priced industrial facilities
served directly by such interstate pipeline
and to incrementally priced industrial facilities served indirectly through any other interstate pipeline or any local distribution
company.
(3) Surcharge
(A) Calculation of surcharge
Subject to subparagraphs (B) and (C), the
amount of any surcharge imposed by any
interstate pipeline under this subsection on
deliveries of 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 subchapter.
(B) Elimination or reduction of surcharge appli.
cable to a facility
The rule under section 3341 of this title
(including any amendment under section
3342 of this title to such rule) shall provide
one or more methods which have the effect
of eliminating or reducing the amount of
the surcharge determined under subpara.
graph (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

Page 1198

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
adjustment under subparagraph (B)
The rule under section 3341 of this title
(including any amendment under section
3342 of this title to such rule) shall provide
one or more methods by which, in any case
in which the surcharge is eliminated or reduced under subparagraph (5) with respect
to certain deliveries of natural gas, the interstate pipeline involved may recover from
incrementally 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 subparagraphs (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
(i) the increase under subparagraph (C)
of the surcharge generally applicable due
to any adjustment under subparagraph
(B),
if the Commission determines that to do so
would be impracticable or unnecessary to
carry out the purposes of this subchapter.
(4) Local distribution company direct purchases
In any case in which a local distribution
company directly incurs any first sale acquisition cost subject to the passthrough requirements of this subchapter under section 3343
of this title or otherwise directly incurs any
other cost subject to such requirements under
sections I 3343(a)(8)(B), (9), or (10) of this
title, such local distribution company shall,
with respect to the natural gas involved, be
treated for purposes of this subchapter as if it
were an interstate pipeline.
(5) Pipelines and local distribution companies with
more than one source of natural gas
The rule under section 3341 of this title (including any amendment under section 3342 of
this title 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 incrementally
priced industrial facility through any other
interstate pipeline or local distribution company for purposes of applying subsection
(d)(2) of this section.
'So In original. Probably should oe "section".

Page 1199

TITLE 15-COMMERCE AND TRADE

(d) Deductions from account
(1) In 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
pipeline
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
3341 of this title (including any amendment
under section 3342 of this title to such rule),
are not less than the appropriate alternative
fuel cost, such rule shall prescribe one or
more methods by which amounts in excess of
that reasonably necessary to maintain such
rates and charges applicable to such industrial facilities at the appropriate alternative 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 subchapter.
(e) Determination of alternative fuel cost
(I) In 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 3341 of this title
(including any amendment under section
3342 of this title to such rule) located
within any region and served by the dame
interstate pipeline; or
(B) for any specific incrementally priced
industrial facility which is subject to such
requirements and which is located in any
region;
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

§ 33,15

appropriate alternative fuel cost were not so
reduced.
(f) Determination of appropriate accounting period
The rule required to be prescribed in section
3341 of this title shall specify the appropriate
calendar periods used for purposes of such rule
(including any amendment under section 3342
of this title to such rule).
(g) Incrementally 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 3341 of this title (including any amendment under section 3342 of
this title 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 serelon 3341(c)(2) of this title) and
any other use defined, by rule, by the Commission as an industrial use.
(Pub. L. 95-621, title II, § 204, Nov. 9, 1978, 92
Stat. 3375.)
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3343, 3414 of
this title.
§ 3345. Local distribution company passthrough requirements
(a) General rule
Any surcharge under this subchapter, 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 company, 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 November 9,
1978, is prohibited if a court, in any action
brought under section 3414(b)(3) of this title,
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 subchapter 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 3414(b)(3) of this
title.

§ 3346

TITLE 15-COMMERCE AND TRADE

(d) Preemption of State or local law
The requirements of this subchapter 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 subchapter or prevent the
application of the requirements of this section.
(e) State commission defined
For the purposes of this subsection, the term
"State commission" means the State, political
subdivision, or any agency of either, having jurisdiction with respect to the rates and charges
of any local distribution company.
(Pub. L. 95-621, ttle II, § 205, Nov. 9, 1978, 92
Stat. 3378.)
SECTION REFERRED TO IN OTHEH SECTIu-NS

This section is referred to in section 3414 of this
title.
§ 3346. Exemptions
(a) Small existing industrial boiler fuel users
(1) Interim exemption
During the period preceding the effective
date of any permanent exemption under
paragraph (2), the rule required under section
3341 of this title shall not apply with respect
to any boiler fuel use of natural gas by any
industrial boiler fuel facility in existence on
November 9, 1978, if such use of natural gas
by such facility does not exceed an average of
300 Mcf per day during any month of a base
period determined appropriate by the Commission.
(2) Permanent exemption
(A) General rule
Not later than 18 months after November
9, 1978, the Commission shall prescribe and
make effective a rule providing for the exemption of any small industrial toiler fuel
facility from the rule required under section 3341 of this title (including any amendment under section 3342 of this title to such
rule).
(B) Definition
For purposes of this paragraph, the terni
"small industrial boiler fuel facility" means
any industrial boiler fuel facility in existence on November 9, 1978, 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 rule is necessary to
assure that the volume of natural gas esti.
mated 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 natural gas
estimated by the Commission to have
been used for boiler fuel transported by
interstate pipelines and used during calendar year 1977 as a boiler fuel.

Page 1200

(b) Agricultural users of natural gas
(I) Interim exemption
During the period preceding the effective
date of any permanent exemption under
paragraph (2). the rule prescribed under section 3341 of this title 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 November 9,
1978, the Commission shall prescribe and
make effective a rule providing for the exemption from the rule required under section
3341 of this title (including any amendment
uikder section 3342 of this title to such rule)
any facility with respect to any agricuitural
use of natural gas for which the Commission
determines that an alternative fuel or fecdstock is not(A) economically practicable; or
(B) reasonably available.
(3) Agricultural use defined
For purposes of this subsection, the term
"agricultural use", when used with respect to
natural 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 maintenance,
irrigation pumping, or crop drying; or
(B) as a process fuel or feedstock in the
production of fertilizer, agricultural chemicals, animal feed, or food.
(c) Schools, hospitals, and certain other facilities
The rule under section 3341 of this title (including any amendment to such rule under section 3342 of this title) 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 796(18)(B) of title 16.
(d) Other exemptions
(1) In general
The Commission may, by rule or order, provide for the exemption, in whole or in part, of
any other incrementally priced industrial facility or category thereof from the rule prescribed under section 3341 of this title (including any amendment under section 3342 of
this title to such rule).
(2) Congressional review
Any rule which provides for any exemption
under this subsection may take effect after
the expiration of the first 30 calendar days of
continuous session of Congress (determined
in accordance with section 3417(b) of this
title) 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 3417(c)(3) of this title, with
respect to such rule.

Page 1201

TITLE 15-COMMERCE AND TRADE

(Pub. L. 95-621, title II, § 206, Nov. 9, 1978, 92
Stat. 3379.)
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3341, 3342,
3417 of this title.

§ 3347. Treatment of certain imports
(a) Certain LNG imports
Except to the extent of a determination otherwise under subsection (c)(1) of this section,
the provisions of section 3343(a)(4) of this title
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 authorized under section 3 of
the Natural Gas Act (15 U.S.C. 717b] 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 Natural Gas Act [15
U.S.C. 717 et seq.] to import such liquefied
natural gas, the Secretary of the Department
of Energy or the Commission, in accordance
with the Department of Energy Organization
Act [42 U.S.C. 7101 et seq.) (or any delegation
or assignment thereunder), determines that a
contract binding on the importer or other
substantial financial commitment of the importer has been made on or before such date.
(b) Certain natural gas imports (other than LNG)
Subject to subsection (c)(2) of this section,
the provisions of section 3343(a)(5) of this title
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 contracts 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.
(c) Authority with respect to incremental pricing of
natural gas or LNG imports
(I) LNG imports
Subsection (a)(2) and (3) of this section
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 U.S.C. 717 et seq.I to import such
liquefied natural gas, the Secretary of the Department of Energy or the Commission, in accordance with the assignment of functions
under the Department of Energy Organization Act [42 U.S.C. 7101 et seq.], determines
that the provisions of section 3343(a)(4) of
this title shall apply with respect to such liquefied natural gas imports.
(2) Natural gas imports (other than LNG)
The provisions of section 3343(a)(5) of this
title shall apply to the passthrough of the

§ 3348

first sale acquisition costs of volumes of natural gas (other than liquefied 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 [15 U.S.C. 717 et seq.] to import such
natural gas, the Secretary of the Department
of Energy or the Commission, in accordance
with the assignrront of functions under the
Department of Energy Organization Act [42
U.S.C. 7101 et seq.], determines that the provisions of section 3343(a)(5) of this title shall
apply with respect to such natural gas imports.
(Pub. L. 95-621, title II, j 207, Nov. 9, 1978, 92
Stat. 3380.)
REFERENCES IN TEXT

The Natural Gas Act, referred to in subsecs. (a)(3)
and (c), is act June 21, 1938, ch. 556, 52 Stat. 821, as
amended, which is classified generally to chapter 15B
(§ 717 et seq.) of this title. For complete classification
of this act to the Code, see section 717w of this title
and Tables.
The Department of Energy Organization Act, referred to in subsecs. (a)(3) and (c), is Pub. L. 95-91,
Aug. 4, 1977, 91 Stat. 565, as amended, which is classified principally to chapter 84 (§ 7101 et seq.) of Title
42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note
set out under section 7101 of Title 42 and Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3343, 3412,
3416 of this title.
§ 3348. Alaska natural gas
In the case of natural gas produced from the
Prudhoe Bay Unit of Alaska and transported
through the natural gas transportation system
approved under the Alaska Natural Gas Tranmportation Act of 1976 [15 U.S.C. 719 et seq.](1) any portion of the first sale acquisition
cost of such natural gas incurred by any interstate pipeline which is not required to be
incrementally priced under this subchapter,
and
(2) any amount incurred by any interstate
pipeline, for transportation 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 November 9,
1978, for establishing rates in connection with
the issuing of certificates under the Natural
Gas Act [15 U.S.C. 717 et seq.] for interstate
pipelines.
(Pub. L. 95-621, title II, § 208, Nov. 9, 1978, 92
Stat. 3381.)
REFERENCES IN TEXT

The Alaska Natural Gas Transportation Act of 1976.
referred to in text, is Pub. L. 94-586, Oct. 22, 1976. 90
Stat. 2903, as amended, which is classified generally to
chapter 15C (§ 719 et seq.) of this title. For complete

TITLE 15-COMMERCE AND TRADE

§3361

classification of this Act to the Code, see Short Title
note set out under section 719 of this title and Tables.
The Natural Gas Act, referred to in text, is act June
21. 1938, ch. 556, 52 Stat. 821, as amended, which is
classified generally to chapter 15B (§ 717 et seq.) of
this title. For complete classification of this act to the
Code. see section 717w of this title and Tables.
SUBCHAPTER III-ADDITIONAL
AUTHORITIES AND REQUIREMENTS
PART A-EMERGENCY AUTHORITY

§ 3361. )eclaration of emergency
(a) Presidential declaration
The President may declare a natural gas
supply emergency (or extend a previously declared emergency) 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
3362 or section 3363 of this title is reasonably
necessary, having exhausted other alternatives to the maximum extent practicable, to
assist in meeting natural gas requirements for
such high-priority uses.
(b) Limitation
(1) Expiration
Any declaration of a natural gas supply
emergency (or extension thereof) under subsection (a) of this section, shall terminate at
the earlier of(A) the date on N, -h the President finds
that any shortage described in subsection
(a) of this section does not exist or is not
imminent; or
(B) 120 days after the date of such declaration of emergency (or extension thereof).
(2) Extensions
Nothing in this subsection shall prohibit
the President from extending, under subsection (a) of this section, any emergency (or extension thereof), previously declared under
subsection (a) of this section, upon the expiration of such declaration of emergency (or
extension thereof) under paragraph (1)(B).
(Pub. L. 95-621, title III, § 301, Nov. 9, 1978, 92
Stat. 3381.)
DELEGATION OF FUNCTIONS

Functions of the President nder this subchapter,
except for the authority to declare, extend, and terminate a national gas supply emergency pursuant to this
section, delegated to the Secretary of Energy, see section 1-101 of Ex. Ord. No. 12235, Sept. 3, 1980, 45 F.R.
58803, set out as a note under section 3364 of this title.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to inI sections 3362, 3363,
3364, 3412, 3416 of this title.
§ 3362. Emergency purchase authority
(a) Presidential authorization
During any natural gas supply emergency declared under section 3361 of this title, the President may, by rule or order, authorize any interstate pipeline or local distribution company
served by any interstate pipeline to contract,

Page 1202

upon such terms and conditions as the President determines to be appropriate (including
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 President)
if(A) such natural gas is not produced from
the Outer Continental Shelf; and
(B) the sale or transportation of such natural gas was not pursuant to a certificate
issued under the Natural Gas Act [15 U.S.C.
717 et seq.] 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 authjrized
under subsection (a) of this section may not
exceed 4 months. The preceding sentence shall
not prohibit the President from authorizing
under subsection (a) of this section 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 subsection (a) of thih section. 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 pipeline to transport natural
gas in excess of such pipeline's available capacity.
d) Maintenance of adequate records
The Ccmmission shall require any interstate
pipeline or local distribution company contracting 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.
(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.
(Pub. L. 95-621, title III, § 302, Nov. 9, 1978, 92
Stat. 3382.)
REFERENCES IN TEXT

The Natural Gas Act, referred to in subsec.
(a)(1)(B), is act June 21, 1938, ch. 556. 52 Stat. 821, as

Page 1203

TITLE 15-COMMERCE AND TRADE

amended, which is classified generally to chapter 15B
(§ 717 et seq.) of this title. For complete classification
of this act to the Code, see section 717w of this title
and Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3361, 3363,
3364, 3373, 3374, 3412, 3414, 3416, 3417. 3431, 3432 of
this title.
§ 3363. Emergency allocation authority
(a) In general
In order to assist in meeting natural gas requirements for high-priority uses of natural gas
during any natural gas supply emergency declared under section 3361 of this title, the President may, by order, allocate supplies of natural
gas under subsections (b), (c), and (d) of this
section to(1) any interstate pipeline;
(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 natu:'al 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 of cert n boiler fuel gas
(1) Required finding
The President shall not allocate supplies of
natural gas under this subsection unless he
finds that(A) to the maximum extent practicablc,
emergency purchase authority under section 3362 of this title has been utilized to
assist in meeting natural gas requirements
for high-priority uses of natural gas;
(B) emergency purmhases of natural gas
supplies under section 3362 of this title are
not likely to satisfy the natural gas requirements for such high-priority uses;
(C) the exercise of authority under this
subsection is reasonably necessary to assist
in meeting natural gas requirements 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 I 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 highpriority 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 717z of this title (relating to the use of
natural gas as a boiler fuel during any natural
gas supply emergency).
'So In original.

§ 3363

(c) Allocation of general pipeline supply
(1) Required findings
The President shall not allocate supplies of
natural gas under this subsection unless he
finds that(A) to the maximum extent practicable,
allocation of supplies of natural gas under
subsection (b) of this section 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 reasonably necessary to assist
in meeting natural gas requirements 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 pipeline 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 resultng 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) 2 Notification
The President shall not allocate supplies
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 in such State; and
(iii) the exercise of authority under
State law is inadequate to nrotect highpriority 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 subparagraph (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 highpriority uses of natural gas in such State;
'So in original. Par. (2) enacted without a subpar. (B).

§ 3363

TITLE 15-COMMERCE AND TRADE

(i) information received from persons in
the business of producing, selling, trans.
porting, or delivering natural gas in such
State as to the volumes of natural gas supplies 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 issuing any order under this subsection
the I-resident shall consider the relative availability of alternative fuel to natural gas users
supplied by the interstate pipeline ordered to
make deliveries pursuant to this subsection.
(d) Allocation of user-owned gas
(1) Required finding
The President shall not allocate supplies of
natural gas under this subsection unless he
finds chat(A) to the maximum extent practicable,
allocation of supplies of natural gas under
subsection (c) of this section 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 reasonably necessary to assist
in meeting natural gas requirements 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 wnich would be certificated natural gas but for the second sentence of section
3301(19) of this title.

Page 1204

(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 available 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 transportation of natural
gas by any pipeline in excess of its available
transportation capacity.
(f) Industry assistance
The President may request that representatives 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) In general
If the parties to any order issued under subsection (b), (c), (d), or (h) of this section fail
to agree upon the terms of compensation for
natural gas deliveries or transportation required pursuant to such order, the President,
after a hearing ht'd 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) of
this section, 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 order, but in
no event may such compensation exceed
Just compensation prescribed in section 717z
of this title; and
(B) for transportation, storage, delivery,
and other services, 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) or (d) of this section(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 President determines that, notwithstanding paragraph (A) of this subsection, any portion thereof cannot practicably
be compensated in kind, the Prtsident 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 compa-

Page 1205

TITLE 15-COMMERCE AND TRADE

nies whole, in the case of any order under
subsection (c) of this section, or to make
the user from whom natural gas is allc
cated whole, in the case of any order
under subsection (d) of this section 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 (a) of this section:
and
(it) for transport ation, storage, delivery,
and other services, based upon reasonable
Posts, 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
whole.
(h) Related transportation and facilities
The President may, by order, require any
pipeline to trai.sport natural gas, and to construct and operate such facilities for the transportation of natural gas, as he determines necessary to carry out any order under subsection
(b), (c), or (d) of this section. Compensation for
the costs of any construction or transportation
ordered under this subsection shall be determined under subsection (g) of this section 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 part,
the President shall monitor the operation of
any order made pursuant to this section to
assure that natural ras delivered pursuant to
this section is applied to high-priority uses
only.
(j) Commission study
Not later than June 1, 1979, the Commission
shall prepare and submit to the Congress a
report regarding whether authority to allocate
natural gas, which is not otherwise subject to
allocation under this part, is likely to be necessary to meet high-priority uses.
(k) Definition of high-priority use
For purposes of this section, 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
(3) any use of natural gas the curtailment
of which the President determines would endanger life, health, or maintenance of physical property.
(Pub. L. 95-621, title III, § 303, Nov. 9, 1978, 92
Stat. 3383.)
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 717z, 3361,
3364, 3373, 3374, 3412, 3414, 3416. 3431, 3432 of this
title.

§ 3364

§ 3364. Miscellaneous provisions
(a) Information
(1) Obtaining of information
In order to obtain information to carry out
his authority under this part, the President
may(A) sign and issue subpenas for the attendance and testimony of witnesses and
the production of books, records, papers,
and other documents;
(B) require any person, by general or special order, to submit 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) 3 secure, upon request, any information
from any Federal 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 subsection,
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 33F12 or
3363 of this title, the President shall require
that the prices and volumes 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 termination under section 3361(b) of this title of any
declaration of a natural gas supply emergency
(or extension thereof) under section 3361(a) of
this title, respecting the exercise of authority
under section 3361, 3362, 3363 of this title, or
this section.
(d) Delegation of authorities
The President may delegate all or any portion of the authority granted to him under section 3361, 3362, 3363 of this title, or this section
to such Federal officers or agencies as he determines appropriate, and may authorize such redelegation as may be appropriate. Except with
respect to section 552 of title 5, any Federal officer or agency to which authority is delegated
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.
'So in original. Probably should be "(C)".

§ 3371

TITLE 15-COMMERCE AND TRADE

(e) Antitrust protections
(I) Defenses
There shall be available as a defense for
any 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 P:esident under section
3363(b), (c), (d), or (i) of this title, or any
meeting held pursuant to a request of the
President under section 3363(g) of this title,
if(A) such action was taken or meeting held
solely for the purpose of complying with
the President's request or order;
(B) such action was not taken for the purpose of injuring competition; and
(C) any such meeting complied with the
requirements of paragraph (2).
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 competition.
(2) Requirements of meetings
With respect to any meeting held pursuant.
to a request by the Piesident under section
3363(g) of this title or pursuant to an order
under section 3363 of this title(A) there shall be present at such meeting
a full-time Federal employee designated for
such purposes by the Attorney 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 available for public inspection and
copying;
(C) the Attorney General and the Federal
Trade Commission shall have the opportunity to participate from the beginning in
the development and carrying out of agreements and actions under section 3363 of
this title, in order to propose any alternative which would avoid or overcome, to the
greatest extent practicable, possible anticompetitive effects while achieving substantially the purposes of section 3363 of this
title and any order thereunder; 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 under
Federal or State Law arising out of any act or
omission that such act was taken or that such
omission occurred for purposes of complying
with any order issued under section 3363 of this
title.
(g) Preemption
Any order issued pursuant to this subchapter
shall preempt 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.

Page 1206

(Pub. L. 95-62 ., title III, § 304, Nov. 9, 1978, 92
Stat. 338s.)

Ex. Onn. No. 12235.

ASSIGNMENT OF MANAGEMENT

RESPONSIBILITY IN CASES OF NATURAL GAS EMERGENCIES

Ex. Ord. No. 12235, Sept. 3, 1980, 45 P.R. 58803, pro-

vided:

By the authority vested in me as President by the
Constitution and statutes of the United States of
America, including Section 304(d) of the Natural Gas
Policy Act of 1978 (92 Stat. 3387; 15 U.S.C. 3364(d))
and Section 301 of Title 3 of the United States Code,
and in order to assign management re.ponsibility in
case of a natural gas aupply emergency, it is hereby ordered as follows:
1-101. The functions vested In the President by Sections 301 through 304(c) of the Natural Gas Policy Act
of 1978 (92 Stat. 3381-3387; 15 U.S.C. 3361-3364(c)) are
delegated to the Secretary of Energy; except for the
authority to declare, extend, and terminate a natural
gas supply emergency pursuant to Section 301 thereof
(15 U.S.C. 3361).
1-102. The functions vested in the President by Section 607 of the Public Utility Regulatory Policies Act
of 1978 (92 Stat. 3171; 15 U.S.C. 717z) are delegated to
the Secretary of Energy; except for the authority to
declare, extend, and terminate a natural gas supply
emergency pursuant to Section 607(a) and (b) thereof
(15 U.SC. 717z(a) and (b)).
1-103. The Secretary shall consult with the Administrator of the Environmental Protection Agency, the
Director of the Federal Emergency Management
Agency, and the heads of other executive agencies in
exercising the functions delegated to him by this
Order.
1-104. All functions delegated to the Secretary by
this Order may be redelegated, in whole or in part, to
the head of any other agency.
1-105. All Executive agencies shall, to the extent
permitted by law, cooperate with and assist the Secre.
tary in carrying out the functions delegated to him by
this Order.
JIMMY CARTER.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3416 of this
title.
PART B-OTHER AUTHORITIES AND REQUIREMENTS

§ 3371. Authorization of certain sales and transportation
(a) Commission approval of transportation
(I) Interstate pipelines
(A) In general
The Commission may, by rule or order,
authorize any interstate pipeline to transport natural gas on behalf of(1) any intrastate pipeline; and
(ii) any local distribution company.
(B3)Just and reasonable rates
The rates and charges of any interstate
pipeline with respect to any transportation
authorized under subparagraph (A) shall be
Just and reasonable (within the meaning of
the Natural Gas Act [15 U.S.C. 717 et seq.]).
(2) Intrastate pipelines
(A) In general
The Commission may, by rule or order,
authorize any intrastate pipeline to transport natural gas on behalf of(I) any interstate pipeline; and

Page 1207

TITLE 15-COMMERCE AND TRADE

(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 equitable 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
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, delivery, or
similar service provided by such pipeline
in connection with any transportation
of natural gas authorized under subparagraph (A); and
(II) provide an opportunity for such
pipeline to earn a reasonable profit on
such services.
(b) Commission approval of sales
(1)In 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 interstate pipeline.
(2) Rates 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 acquisition 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.

§ 3371

(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 paragraph (1), any
intrastate pipeline acquires quantities of
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 revenue 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 a period exceeding two years.
(B) Extension
Any authoration of any sale tinder paragraph (1), and any extension of any such
authorization under this subparagraph,
may be extended by the Commission if such
extension satisfies the requirements of this
subsection.
(4) Adequacy of 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 distribution 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;

§ 3372

TITLE 15-COMMERCE AND TRADE

(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 applit.,tion for authorization of any
sale under paragraph (1) shall be accompanied by a statement by the intrastate pipeline involved verifying by oath or affirmation that such sale, if authorized, would
comply with all requirements applicable to
such sale under this subsection and all
terms and conditions established, by rule or
order, by the Commission and applicable to
such sale.
(6) Termination 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 paragraph (1) if the Commission determines(i) such termination is required to
enable the intrastate pipeline involved to
provide adequate service to the customers
of such pipeline at the time of such sale;
(ii) such sale involves the sale of natural
gas acquired 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 subsection 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 chapter.
(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 authorized 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 subparagraph (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) l)isapproval of application
The Commission shall disapprove any application for authorization of any sale under
paragraph (1) if the Commission determines-

Page 1208

(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 pip, line involved solely or primarily 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 subsection 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 chapter.
(c) Terms and conaitions
Any authorization granted under this section
shall be under such terms and conditions as the
Commission may prescribe.
(Pub. L. 95-621, title III, § 311, Nov. 9, 1978, 92
Stat. 3388.)
REFERENCES IN TEXT

The Natural Gas Act, referred to in subsec.
(a)(l)(B), is act June 21, 1938, ch. 556, 52 Stat. 821, as
amended, which is classified generally to chapter 15B
(§ 717 et seq.) of this title. For complete classification
of this act to the Code, see section 717w of this title
and Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3343, 3374,
3431. 3432 of this title.
§ 3372. Assignment of contractual rights to receive
surplus natural gas
(a) Authorization of assignments
The Commission may, by rule or order, authorize any intrastate pipeline to assign, without compensation, to any interstate pipeline or
local distribution company all or any portion of
such intrastate pipeline's right to receive surplus natural gas at any first sale, upon such
terms and conditions as the Commission determines appropriate.
(b) Effect of authorization under subsection (a)
For the effect of an authorization under subsection (a) of this section, see section 3431 of
this title (relating to the coordination of this
chapter with the Natural Gas Act [15 U.S.C.
717 et seq.]).
(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 commerce on November 8, 1978;
(2) the first sale of which is subject to a
maximum lawful price established under subchapter I of this chapter; 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.

Page 1209

TITLE 15-COMMERCE AND TRADE

(Pub. L. 95-621, title III, § 312, Nov. 9, 1978, 92
Stat. 3392.)
REFERENCES IN TEXT

The Natural Gas Act, referred to in subsec. (b), is act
June 21, 1938, ch. 556, 52 Stat. 821, as amended, which
is Plassifled generally to chapter 15B (§ 717 et seq.) of
this title. For complete classification of this act to the
Code, see section 717w of this title and Tables.
SECTION REFERRED TO IN

OTHER SECTIONS

This section is referred to in sections 337,. 3431 of
this title.
§ 3373. Effect of certain natural gas prices on indefinite price escalator clauses
(a) lligh-cost natural gas
No price paid in any first sale of high-cost
natural gas (as defined in section 3317(c) of this
title) may be taken into account in applying
any indefinite price escalator cla-ue tas defined
in section 3315(b)(3)(B) of this title) with respect to any first sale of any natural gas other
than high-cost natural gas (as defined in section 3317(c) of this title).
(b) Other transactions
No price paid(1) in any sale authorized under section
3362(a) of this title, or
(2) pursuant to any order issued under section 3363(b), (c), (d), or () of this title,
may be taken into account in applying any indefinite price escalator clause (as defined in section 3315(b)(3)(B) of this title).
(Pub. L. 95-621, title III, § 313, Nov. 9, 1978, 92
Stat. 3392.)
§ 3374. Clauses prohibiting certain sales, transportation, and commingling
(a) General rule
Any provision of any contract for the first
sale of natural gas is hereby declared against
public policy and unenforceable with respect to
any natural gas covered by this chapter if such
provision(1) prohibits the commingling of natural
gas subject to such contract with natural gas
subject to the jurisdiction of the Commission
under the provisions of the Natural Gas Act
(15 U.S.C. 717 et seq.];
(2) prohibits the sale of any natural gas
subject to such contract to, or transportation
of any such natural gas by, any person subject to the jurisdiction of the Commission
under the Natural Gas Act [15 U.S.C. 717 et
seq.], or otherwise prohibits the sale or transportation in interstate 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 commingling, sale, or transportation.
(b) Natural gas covered by this chapter
For purposes of subsection Ca) of this section,
the term "natural gas covered by this chapter"
means-

§ 3375

(1) natural gas which is not committed or
dedicated to interstate commerce as of November 8, 1978;
(2) natural gas, the sale in interstate commerce of which(A) is authorized under section 3362(a) or
3371(b) of this title; or
(B) is pursuant to an assignment under
section 3372(a) of this title; and,
(3) natural gas, the transportation in interstate commerce of which is,.,) pursuant to any order under section
3362(c) or section 3363(b), (c), (d), or (h) of
this title; or
(B) authorized by the Commission under
section 3371(a) of this title.
(Pub, L. 95-621, title III, § 314, Nov. 9, 1978, 92
Stat. 3392.)
REFERENCES IN TEXT

The Natural Gas Act, referred to in subsec. (a)(1).
(2), is act June 21, 1938, ch. 556, 52 Stat. 821, as
amended, which is classified generally to chapter 15B
(§ 717 et seq.) of this title. For complete classification
of this act to the Code, see section 717w of this title
and Tables.
§ 3375. Contract duration; right of first refusal; filing
of contracts and agreements
(a) Contract duration
(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 section
3431(a)(1)(A) or (B) of this title 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 reservoir. The provisions of this paragraph shall not apply to contracts of natural gas subject to the requirements of paragraph (3).
(2) Nondiscriminatory application
(A) In 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.
(11)Special circumstances
The Commission may vary any requirement established under paragraph (1) with
respect to any contract by an interstate
pipeline or intrastate pipeline to the extent
necessary to respond to special circumstances.

§3391

TITLE 15-COMMERCE AND TRADE

(3) Contracts for purchase of OCS natural gas
The Commission 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 3312(b) of this title) or
high-cost natural gas (as defined in section
3317(c)(1), (2). (3), or (4) of this title) shall be
for a duration of not less than 15 years or, if
less, the commercially producible life of the
reservoir.
(b) Offers; right of first refusal
(1) Application
This subsection shall apply with respect to
any natural gas which is committed or dedicated to interstate commerce on November 8,
1978, and which is(A) high-cost natural gas (as defined in
section 3317(c)(1), (2), (3), or (4) of this
title);
(B) new natural gas (as defined in section
3312(c) of this title); or
(C) natural gas produced from any new,
onshore production well (as defined in section 3313(cj of this title).
This subsection shall not apply to any natural gas committed or dedicated to interstate
commerce solely by reason of section
3301(18)(A)(i) of this title.
(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
November 9, 1978, a bona fide offer to sell
such natural gas must be made to the person
who, but for the provisions of section
3431(a)(1)(B) of this title (relating to deregulation), would have been entitled pursuant to
the commitment or dedication of such natural gas to interstate commerce to receive such
natural 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 requirements of
this subsection to the person who, but for
the provisions of section 3431(a)(1)(B) of
this title (relating to deregulation), would
have been entitled pursuant to the commitment or dedication of such natural gas to
interstate commerce to receive such natural
gas if such natural gas were sold (or any
successor in interest to such person), or
(B) any rejection of any bona fide offer,
described in paragraph (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 exer-

Page 1210

clse 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 Commission may, by rule or o.rder, require any first sale purchaser of natural gas
under a new contract, a successor to an existing
contract, or a rollover contract to file with the
Commission a copy of such contract, together
with all ancillary agreements and any existing
contract applicable to such natural gas.
(Pub. L. 95-621, title III, § 315, Nov. 9, 1978, 92
Stat. 3393.)
SUBCHAPTER IV-NATURAL GAS
CURTAILMENT POLICIES
SUBCHAPTER REFERRED TO IN

OTHER SECTIONS

This subchapter is referred to in title 42 section
8235e.
§ 3391. Natural gas for essential agricultural uses
(a) G.eneral rule
Not later than 120 days after November 9,
1978, 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) of this section)
and to che maximum extent practicable, no curtailment 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) of this
section; or
(2) is necessary in order to meet the requirements of high-priority users.
(b) Curtailment priority not applicable if alternative
fuel 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 reasonably available as an alternative for
any agricultural use of natural gas, the provisions of subsection (a) of this section shall not
apply with respect to any curtailment of deliveries for such use.
(c) I)etermination of essential agricultural use requirements
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 of 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

Page 1211

§ 3392

TITLE 15-COMMERCE AND TRADE

the rule prescrited under subsection (a) of this
section.
(e) Limitation
The Secretary of Agriculture may not exercise any authority under this section for the
purpose of restricting the production of any
crop.
(f) Definitions
For purposes of this section(1) Essential agricultural use
Th2 term "essential agricultural 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 maintenance,
irrigation pumping, crop drying, or
(B) as a process fuel or feedstock in the
production of fertilizer, agricultural chemicals, animal feed, or food,
whicn 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 pl-ak day;
(C) uses natural gas in any s -.i1, hospital, or similar institution; 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.
(Pub. L. 95-621, title IV, § 401, Nov. 9, 1978, Y2
Stat. 3394.)
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to In sections 3391a, 3392,
3393 of this title.
§ 3391a. Essential agricultural use defined
For the purposes of section 3391 of this title,
the tPrm "essential agricultural use" shall(1) include use of natural gas in sugar refining for production of alcohol;
(2) include use of natural gas for agricultural production on set-aside acreage or acreage
diverted from the production of a commodity
(as provided under the Agricultural Act of
1949 [7 U.S.C. 1421 et seq.)) to be devoted to
the production of any commodity for conversion into alcohol or hydrocarbons for use as
motor fuel or other fuels; and
(3) for the 5-year period beginning on June
30, 1980, include use of natural gas in the distillation of fuel-grade alcohol from food
grains or other biomass by facilities in existence on June 30, 1980, which do not have the
installed capability to burn coal lawfully.
(Pub. L. 96-294, title II, § 273, June 30, 1980, 94
Stat. 711.)

REFERENCES IN TEXT

The Agricultural Act of 1949, referred to in par. (2),
is act Oct. 31, 1949, ch. 792, 63 Stat. 1051. as amended,
which is classified principally to chapter 35A (1 1421 et
seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see Short Title note set
out under section 1421 of Title 7 and Tables.
CODIFICATION

Section was enacted as part of the Biomass Energy
and Alcohol Fuels Act, of 1980 which is title II of the
Energy Security Act, and not as part of the Natural
Gas Policy Act of 1978 which comprises this chapter.
§ 3392. Natural gas for essential indistrial process
and feedstock uses
(a) General rule
The Secretary of Energy shall prescribe and
make effective a rule which provides that, notwithstanding any other provision of law (other
than subsection (b) of this section) and to the
maximum extent practicable, no interstate
pipeline may curtail deliveries of natural 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) of this
section;
(2) is necessary in order to meet the requirements of high-priority 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 3391 of this title.
(b) kurtailment priority applicable only if alternative
fuel not available
The provisions of subsection (a) of this section shall apply with respect to any curtailment
of deliveries for any essential industrial process
or feedstock use on.y 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 of essential industrial use requirements
The Secretary of Energy shall determine and
certify to the Commission the natural gas requirements (expressed either as volumes or percentages of use) of persons (or classes thereof)
for essential industrial process and feedstock
uses (other than those referred to in section
3391(f)(1)(B) of this title).
(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) Iligh-priority user
The term "high-priority user" has the same
meaning as given such term in section
3391(f)(2) of this title.

TITLE 15-COMMERCE AND TRADE

§ 3393

(Pub. L. 95-621, title IV, § 402, Nov. 9, 1978, 92
Stat. 3395.)
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3393 of this
title.

§ 3393. Establishment and implementation of priorities
(a) Establishment of priorities
The Secretary of Energy shall prescribe the
rules under sections 3391 and 3392 of this title
pursuant to his authority under the Department of Energy Organization Act [42 U.S.C
7101 et seq.] to establish and review priorities
for curtailments under the Natural Gas Act [15
U.S.C. 717 et seq.).
(b) Implementation of priorities
The Commission shall implement the rules
prescribed under sections 3391 and 3392 of this
title pursuant to its authority under the Department of Energy Organization Act [42
U.S.C. 7101 et seq.] to establish, review, and enforce curtailments under the Natural Gas Act
[15 U.S.C. 717 et seq.).
(Pub. L. 95-621, title IV, § 403, Nov. 9, 1978, 92
Stat. 3396.)
REFERENCES IN TEXT

The Department of Energy Organizat Ion Act, referred to in subsecs. (a) and (b), is Pub. L. 95-91, Aug.
4, 1977, 91 Stat. 565, as amended, which is classified
principally to chapter 84 (§ 7101 et seq.) of Title 42,
The Public Health and Welfare. For complete classification ef this Act to the Code, see Short Title note set
out under section 7101 of Title 42 and Tables.
The Natural Gas Act, referred to in subsecs. (a) and
(b), is act June 21, 1938, ch. 556, 52 Stat. 821, as
amended, which is classified generally to chapter ILB
(§ 717 et seq.) of this title. For complete classification
of this act to the Code, see section 717w of this title
and Tables.
§ 3394. Limitation on revoking or amending certain
pre-1969 certificates of public convenience and
necessity
(a) General rule
The Commission may not, during the 10-year
period beginning on November 9, 1978, revoke
or amend any certificate of public convenience
and necessity issued before January 1, 1969,
under section 7 of the Natural Gas Act [15
U.S.C. 717f] for the transportation 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) of this
section shall not affect the authority of the
Commission to enforce any curtailment of deliveries of natural gas under the Natural Gas
Act [15 U.S.C. 717 et seq.].
(Pub. L. 95-621, title IV, § 404, Nov. 9, 1978, 92
Stat. 3396.)
REFERENCES IN TEXT

The Natural Gas Act, referred to in subsec. (b), is act
June 21, 1938, ch. 556, 52 Stat. 821, as amended, which
is classified generally to chapter 15B (§ 717 et seq.) of

Page 1212

this title. For complete classification of this act to the
Code, see section 717w of this title and Tables.
SUBCHAPTER V-ADMINISTRATION,
ENFORCEMENT, AND REVIEW
§3411. General rulemaking authority
(a) In general
Except where expressly provided otherwise,
the Commission shall administer this chapter.
The Commission, or any other Federal officer
or agency in which any function under this
chapter is vested or delegated, is authorized to
perform any and all acts (including any appro.
priate 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 chapter.
(b) Authority to d'.fine terms
Except where otherwise expressly provided,
the Commission is authorized to define, by rule,
accounting, technical, and trade terms used in
this chapter. Any such definition shall be consistent with the definitions set forth in this
chapter.
(c) Delegation of certain determinations
The Commission may delegate to an,' -. te
agency (with the consent of such agency, any
of its functions with respect to sectioits 3315,
3316(b), and 3319(a)(1) and (3) of this title.
(Pub. L. 95-621, title V, § 501, Nov. 9, 1978, 92
Stat. 3396.)
§ 3412. Administrative procedure
(a) Administrative Procedure Act
Subject to subsection (b) of this section, the
provisions of subchapter II of chapter 5 of title
5 shall apply to any rule or order issued under
this chapter having the applicability and effect
of a rule as defined in section 551(4) of title 5;
except that sections 554, 556, and 557 of such
title 5 shall not apply to any order under such
section 3361, 3362, or 3363 of this title.
(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) of this section (other than an order
under section 3361, 3362, or 3363 of this title).
To the maximum extent practicable, 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, and no later than 45 days after such date in
all other cases. A transcript shall be made uf
any such oral presentation.
(c) Adjustments
The Commission or any other Federal officer
or agency authorized to issue rules or orders described in subsection (W) of this section (other
than an order under section 3361, 3362, or 3363
of this title) shall, by rule, provide for the
making of such adjustments, consistent with

Page 1213

TITLE 15-COMMERCE AND TRADE

the other purposes of this chapter, 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 seeking 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
adjustment 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 sectioi 3416 of this
title when such denial becomes final. The officer or agency shall, by rule, etitablish procedures, including an opportunity 'or oral presentation of data, views, and arguments, for considering requests for adjustment under this subsection.
(d) Procedures applicable for incremental pricing determinations respecting imports
Notwithstanding the preceding provisions of
this section, any determination made under section 3347(c) of this title shall be made in accordance with the procedures applicable to the
granting of any authority under the Natural
Gas Act [15 U.S.C. 717 et seq.] to import natural gas or liquefied natural gas (as the case may
be).
(Pub. L. 95-621, title V, § 502, Nov. 9, 1978. 92
Stat. 3397.)
REFERENCES IN TEXT

The Natural Gas Act, referred to in subsec. (d), is act
June 21, 19.8, ch. 556, 52 Stat. 821, as amended, which
is classified generally to chapter 15B (§ 717 et seq.) of
this title. For complete classification of this act to the
Code, see section 717w of this title an-] Tables.
§ 3413. Determinatiois for qualifying under certain
categories of natural gas
(a) General rule
(1) Determination
If any State or Federal agency makes any
final determination which it is authorized to
make under subsection (c) of this section for
purposes of(A) applying the definition of new natural
gas under section 3312(c) of this title;
(B) deciding if certain natural gas produced from the Outer Continental Shelf
qualifies under section 3312(d) of this title
for the new natural gas ceiling price;
(C) applying the definition of new, onshore production well under section 3313(c)
of this title;
(D) applying the definition of high-cost
natural gas under section 3317(c) of this
title; or
(E) applying the definition of stripper
well natural gas under section 3318(b) of
this title;
such determination shall be applicable under
this chapter for such purposes unless such determination is reversed under the provisions
of subsection (b) of this section or unless such
State or Federal agency has waived its authority under the provisions of subsection (c)
of this section.

93413

(2) Notice to Commission
Any Federal or State agency making k determination under paragraph (1) shah provide timely notice in writing of such del rmination to the Commission. Such notice hall
include such substantiation and be In sL h a
manner as the Commission may, by ru!,, 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) of this section if(A) it makes a finding that such determination is not supported by substantial evidence in 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 subsection (a)(2' of this section
and the final such .inding 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 part of the record upon which
such deLermination was made; and
(B) such preliminary finding and notice
Lhereof under paragraph (3) is made within
45 days after the date on which the Commission received notice of such determination under subsection (a)(2) of this section
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 consideration
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
subsection (other than this paragraph).
(3) Notice
The Commission shall provide notice of any
proposed finding under this subsection to the
State cr Federal agency which made such determinat!on and those parties identified 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 of Appeals for any circuit in which
such party is located or has its principal
place of business, or in the United States

§ 3,113

T 1 TLE 15-COMMERCE AND TRADE

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.
(11)Findings
Any person aggrieved or adversely affected by a final finding of the Commission
under paragraph (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 determination 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 regulatory jurisdiction with respect to the production of natural gas is authorized to make determinations referred to in subsection (a) of
this section.
(2) Waiver
(A) In general
Any Federal or State agency may, in
whole or in part waive its authority to make
determinations referred to in subsection
(a)(1) of this section by entering into an
agreement in accordance with subparagraph (B). If such agency executes such a
waiver, the Commission shall, consistent
with the agreement, make the determirations which would otherwise be made by
such Federal or State agency until the earlier of(i) the expiration of the period specified
in the agreement; 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) of this section.
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 revocation is made.
(B) Agreements
Any waiver under subparagraph (A) may
be made only by a written agreement between the Federal 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) of this
section 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

Page 1214

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) of this section 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) of this section.
(d) Effect of determinat" ms
For purposes of this chapter(1) General rule
Any final determination referred to in subsection (a)(1) of this section made by a Federal or State ag-,cy (or by the Commission
under subsection (c)(2) of this section) which
relates to any natural gas and which is no
longer subject to review by the Commission
under this aection or tu judicial revk w shall
thereafter be binding with respect Lo such
natural gas. The preceding sentence shall not
apply to Fny 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 misleading, 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.
(e) Interim collection of maximum lawful price
(I) Collection of section 3319 price
(A) General rule
Effective beginning on the first day of the
first month beginning after November 9,
1978, 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
under section 3319 of this title for any first
sale of such natural gas.
(B) R1equirements
A seller may charge and make collections
under subparagraph (A) only in accordance
with the following requirements:
(1) Sworn statement
Before any such 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) of this section, a
written sworn statement that such natu-

Page 1215

TITLE 15-COMMERCE AND TRADE

ral gas is produced from a new well and
that such seller believes in good faith that
such natural gas is eligible und-r this
chapter to be sold at a price not less than
the appropriate maximum lawful price
under section 3319 of this title.
(ii) Petition for determination
Within 90 days after November 9, 1978,
the seller files a petition to such Federal
or State agency for a determination under
this section.
(iii) Collection subject to refund
Any such collection 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 maximum
lawful pribe is lower than that provided
under section 3319 of this title.
(2) Alternate interim collection authority
(A) General rule
Promptly after November 9, 1978, the
Commission shall, by rule or order, provide
one or more methods under which a seller
of natural gas may, in accordance with requirements established, and for such period
as may be prescribed, under such rule or
order, charge and collect for any first sale
ol such natural gas the maximum lawful
price under subchapter I of this chapter for
which a petition is filed for a determination
under this section in any case in which such
price exceeds the appropriate maximum
lawful price under section 3319 of this title.
(B) Collection subject to refund
Any such collection made by the seller
pending a determination under this section,
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 chapter that the applicable maximum lawful price is equal to or
greater than that collected. In addition,
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
attributable to a price in excess of the appropriate maximum lawful price under subchapter I of this chapter 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) of this section, a seller of natural gas
covered by such determination may, in accordance with subparagraph (B), charge
and collect the appropriate maximum
lawful price applicable under such determination.
(B) Requirements
A seller may charge and make collections
under subparagraph (A) if such collection is

§ 3414

subject to conditions prescribed by the
Commission to assure refund, with interest,
in the event it is determined under this
chapter that the applicable maximum
lawful price is lower than that provided
under section 3319 of this title.
(Pub. L. 95-621, title V, § 503, Nov. 9, 1978, 92
Stat. 3397.)
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3312, 3313,
3317, 3318 of this title; title 26 sections 44D, 613A.
§ 3414. Enforcement
(a) General rule
It shall be unlawful for any person(1) to sell natural gas at a first sale price in
excess of any applicable maximum lawful
price under this chapter; or
(2) to otherwise violate any provision of this
chapter or any rule or order under this chapter.
(b) Civil enforcement
(1) In 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 constitutes or
will constitute a violation of any provision of
this chapter, 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 chapter, 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
3362 of this title or any order or supplemental order issued under section 3363 of this
title, the President may bring a civil action in
any appropriate district court of the United
States to enjoin such acts or practices.
(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 appropriate to assure
compliance with the provisions of section
3345 of this title requiring the passthrough of
surcharges paid under section 3344 of this
title by any local distribution company with
respect to nautral I gas delivered to incre'So In original. Probably should be "natural".

§ 3414

TITLE 15-COMMERCE AND TRADE

mentally 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 temporaly restraining order or preliminary or permanent injunction without
bond. In 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 evidence as may be available concerning any acts
or practices constituting any possible violations of the Federal antitrust laws to the Attorney General who may institute appropriate criminal proceedings.
(6) Civil penalties
(A) In general
Any person who knowingly violates any
provision of this chapter, or any provision
of any rule or order under this chapter,
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 an order
under section 3362 of this title or an order
or supplemental order under section 3363
of this title.
(B) Definition of knowing
For purposes of subparagraph (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) Each day 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
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 the acts or omissions
constituting such violation, or If there was

Page 1216

omitted a material fact necessary in order
to make any statement made by, or acquiesced to by, the violator with 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 2 such penalty.
(F) Judicial review
If the civil penalty has not been paid
within 60 calendar days after the assessment order has been made under 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 jurisdiction 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 chapter
Except in the case of violations covered
under paragraph (3), any person who knowingly and willfully violates any provision of
this chapter 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
und2r this chapter (other than an order of
the Commission assessing a civil penalty
under subsection (b)(4)(E) of this section),
shall be subject to a fine of not more than
$500 for each violation.
(3) Violations of emergency orders
Any person who knowingly and willfully
violates an order under section 3362 of this
title or an order or supplemental order under
section 3363 of this title shall be fined not
more than $50,000 for each violation.
(4) Each day separate violation
For purposes of this subsection, each day of
violation shall constitute a separate violation.
(5)Definition of knowingly
For purposes of this subsection, the term
"knowingly", when used with respect to any
act or omission by any person, means such
person(A) had actual knowledge; or
'So in original. Probably should be "assess".

Page 1217

TITLE 15-COMMERCE AND TRADE

(B) had constructive knowledge deemed to
be possessed by a reasonable individual who
acts under similar circumstances.
(Pub. L. 95-621, title V, § 504, Nov. 9, 1978, 92
Stat. 3401.)
SECTION REFERRED TO IN OTHER SECTIONS

This section Is referred to in sections 3345, 3416 of
this title.
§ 3415. Intervention
(a) Authority to intervene
(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, natural 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 proceeding described
in subsection (a) of this section, the Secretary
shall have access to information available to
other parties to the proceeding if such 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.
(M)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) of this section 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 3 amicus curiae in any judicial
review of any proceeding described in subsection (a)(1) of this section.
(Pub. L. 95-621, title V, § 505, Nov. 9, 1978, 92
Stat. 3403.)
§ 3416. Judicial review
(a) Orders
(1) in f,eneral
Th'. provisions of this subsection shall
apply to judicial review of any order, within
the meaning of section 551(6) of title 5 (other
than an order assessing a civil penalty under
section 3414(b)(4) of this title or any order
under section 3362 of this title or any order
under section 3363 of this title), issued under
'So In original. Probably should be "as".

§ 34116

this chapter and to any final agency action
under this chapter required to be made on
the record after an opportunity for an agency
hearing.
(2) Rehearing
Any person aggrieved by any order issued
by the Commission in a proceeding under this
chapter 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 Comi ission acts
upon such application 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 Commission for 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 chapter.
(4) Judicial review
Any person who is a party to a proceeding
under this chapter 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 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 application 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 complained of was entered, as provided in section
2112 of title 28. 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 consid-

§ 3417

TITLE 15-COMMERCE AND TRADE

ered 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 sup
ported 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 modification 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.
(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 subsections (a) and (c)
of this section, Judicial review of any rule or
order, within the meaning of section 551(4) of
title 5, issued under this chapter may be obtained in the United States Court of Appeals
for any appropriate circuit pursuant to the provisions of chapter 7 of title 5, except that the
second sentence of section 705 thereof shall not
apply.
(e) Judicial review of emergency orders
Except with respect to enforcement of orders
or subpenas under section 3364(a) of this title,
the Temporary Emergency Court of Appeals,
established pursuant to section 211(b) of the
Economic Stabilization Act of 1970, as amended, shall have exclusive original Jurisdiction to
review all civil cases and controversies under
section 3361, 3362 or 3363 of this title, including
any order issued, or other action taken, under
such section. The Temporary Emergency Court
of Appeals shall have exclusive jurisdiction of
all appea.s from the district courts of the
United States In cases and controversies arising
under section 3364(a)(2) of this title; 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

Page 1218

judgment by the district court. Prior to a final
judgment, no court shall have jurisdiction tc
grant any injunctive relief to stay or defer the
implementation of any order issued, or action
taken, under section 3361, 3362. or 3363 of this
title.
(d) Judicial review of certain incremental pricing determinations
Notwithstanding the preceding provisions of
this section, any final determination made
under section 3347(c) of this title shall be subject to judicial review in accordance with the
provisions of the Natural Gas Act [15 U.S.C.
717 et seq.] applicable to judicial review of any
final determination respecting the grant or
denial of any authority to import natural gas or
liquefied natural gas.
(Pub. L. 95-621, title V, § 506, Nov. 9, 1978, 92
Stat. 3404.)
REFERENCES IN TEXT

Section 211(b) of the Economic Stabilization Act of
1970, as amended, referred to in subsec. (c), is section
211(b) of Pub. L. 91-379, title II, Aug. 15, 1970, 84 Stat.
799, formerly set out as an Economic Stabilization
Provisions note under section 1904 of Title 12, Banks
and Banking.
The Natural Gas Act, referred to in subsec. (d), is act
June 21, 1938, ch. 556, 52 Stat. 821, as amended, which
is classified generally to chapter 15B (§ 717 et seq.) of
this title. For complete classification of this act to the
Code, see section 717w of this title and Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3412 of this
title.
§ 3417. Congressional review
(a) Application
This section applies with respect to(1) any disapproval by concurrent resolution of a Presidential reimposition of maximum lawful prices under section 3332 of this
title;
(2) any congressional reimposition by concurrent resolution of maximum lawful prices
under section 3332 of this title; and
(3) any resolution of disapproval relating to
incremental pricing under section 3342(c) or
3346(d)(2) of this title.
(b) Determination of calendar days of continuous
Session

In determining calendar days of continuous
session for purposes of provisions of this chapter 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 ses-

Page 1219

TITLE 15-COMMERCE AND TRADE

sion. 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
3332, 3342, and 3346 of this title(1) Concurrent resolution disapproving reimposition of price ceilings
The term "concurrent resolution of disapproval", when used with respect to reimposition of maximum lawful prices under section
3332(c)(1) of this title, means a resolution the
matter after the resolving clause of which is
as follows: "That the Congress 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 [15 U.S.C. 3332(c)(1)] 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 respect to reimposition of maximum lawful prices under section 3332(c)(2) of
this title, means a resolution the matter after
the resolving clause of which is as follows:
That 4 the Congress favors reimposition of
maximum lawful prices for first sales of natural gas as provided for under section 122(c)(2)
of the Natural Gas Policy Act of 1978 [15
U.S.C. 3332(c)(2)]".
(3) Resolution of 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 [15 U.S.C. 3301 et seq.]
(relating to incremental pricing of natural
gas) '. copy of which was trasnmitted 5 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
(I) 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
'So In original. Probably should be preceded by a quotation
mark.
'So in original. Probably should be "transmitted".

§3417

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 6 full recognition of the constitutional right of either House to change the
rules (so far as relating to the procedure 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 imrrediately 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 Representatives, as
the case may be.
(3) Discharge
(A) In 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 further consideration of such
resolution or to discharge the committee
from further consideration of any other resolution with respect to such submittal
which has been 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 committee 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.
(C) Renewal
If the motion to discharge is agreed to or
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
'So in original. Probably should be "with".

§ 3418

TITLE 15-COMMERCE AND TRADE

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
business
Motions to postpone, made with respect
to the discharge 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 from 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 provisions of
this subsection, if a House has approved a resolution with respect to a submittal, then it
shall not be in order to consider in that
House any other resolution with respect to
the same such submittal.
(Pub. L. 95-621, title V, § 507, Nov. 9, 1978, 92
Stat. 3406.)
REFERENCES IN TEXT

The Natural Gas Policy Act of 1978, referred to in
subsec. (c)(3), is Pub. L. 95-621, Nov. 9, 1978, 92 Stat.
3350, which is classified generally to this chapter
(Q 3301 et seq.). For complete classification of this Act
to the Code, see Short Title note set out under section
3301 of this title and Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3332, 3342,
3346 of this title.
§ 3418. Applicability of other Federal statutory provi.
sions relating to information-gathering
In order to obtain information for the purpose of carrying out its functions under this
chapter, the Commission shall have the same
authority as is vested in the Secretary under
7151(a) of title 42 with respect to the exercise
of authority under section 796(b) of this title
and section 772(b), (c), and (d) of this title.
(Pub. L. 95-621, title V, § 508(b), Nov. 9, 1978, 92
Stat. 3408.)
'So in original. Subsec. (d) was enacted without a par. (5).

Page 1220

SUBCHAPTER VI-COORDINATION WITH
NATURAL GAS ACT; MISCELLANEOUS
PROVISIONS
§ 3431. Coordination with the Natural Gas Act
(a) Jurisdicticn of the Commission under the Natural
Gas Act
(1) Sales
(A) Natural gas not committed or dedicated
For purposes of section 1(b) of the Natural Gas Act [15 U.S.C. 717(b)], effective on
the first day of the first month beginning
after November 9, 1978, the provisions of
the Natural Gas Act (15 U.S.C. 717 et seq.]
and the jurisdiction of the Commission
under such Act shall not apply to natural
gas which was not committed or dedicated
to interstate commerce as of November 8,
1978, 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 November 9,
1978, for purposes of section 1(b) of the
Natural Gas Act [15 U.S.C. 717(b)], the provisions of such Act [15 U.S.C. 717 et seq.]
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 November 8, 1978, and which
is(i) high-cost natural gas (as defined in
section 3317(c)(1), (2), (3), or (4) of this
title);
(ii) new natural gas (as defined in section 3312(c) of this title); or
(fii) natural gas produced from any new,
onshore production well (as defined in
section 3313(c) of this title).
(C) Authorized sales or assignments
For purposes of section 1(b) of the Natural Gas Act [15 U.S.C. 717(b)], the provisions of the Natural Gas Act [15 U.S.C. 717
et seq.] and the jurisdiction of the Commission under such Act shall not apply by
reason of any sale of natural gas(I) authorized under section 3362(a) or
3371(b) of this title; or
(it) pursuant to any assigned authorized
under section 3372(a) of this title.
(DI)
Natural-gas company
For purposes of the Natural Gas Act [15
U.S.C. 717 et seq.], the term "natural-gas
company" (as defined in section 2(6) of such
Act [15 U.S.C. 717a(6) et seq.]) 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 Commission do not apply to
such sale solely by reason of subparagraph
(A), (B), or (C) of this paragraph.
(E) Alaskan natural gas
Subparagraph (B)(ii) and (ili) shall not
apply with respect to natural gas produced
from the Prudhoe Bay unit of Alaska and

Page 1221

TITLE 15-COMMERCE AND TRADE

transported through the transportation
system approved under the Alaska Natural
Gas Transportation Act of 1976 [15 U.S.C.
719 et seq.].
(2) Transportation
(A) Jurisdiction of the Commission
For purposes of section l(b) of the Natural Gas Act [15 U.S.C. 717(b)] the provisions of such Act [15 U.S.C. 717 et seq.] 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(i) pursuant to any order under section
3362(c) or section 3363(b), (c), (d), or (h)
of this title; or
(ii) authorized by the Commission under
section 3371(a) of this title.
(B) Natural-gas company
For purposes of the Natural Gas Act [15
U.S.C. 717 et seq.], the term "natural-gas
company" (as defined in section 2(6) of such
Act [15 U.S.C. 717a(6)1) 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 just and reasonable
(1)Sales
(A) First sales
Subject to paragraph (4), for purposes of
sections 4 and 5 of the Natural Gas Act [15
U.S.C. 717c, 717d], any amount paid in any
first sale of natural gas shall be deemed to
be just and reasonable if(i) such amount does not exceed the applicable maximum lawful price established under subchapter I of this chapter;
or
(ii) there is no applicable maximum
lawful price solely by reason of the elimination of price controls pursuant to part
B of subchapter I of this chapter.
(B) Emergency sales
For purposes of sections 4 and 5 of the
Natural Gas Act (15 U.S.C. 717c, 717d], any
amount paid in any sale authorized under
section 3362(a) of this title shall be deemed
to be Just and reasonable if such amount
does not exceed the fair and equitable price
established under such section and applicable to such sale.
(C) Sales by intrastate pipelines
For purposes of sections 4 and 5 of the
Natural Gas Act [15 U.S.C. 717c, 717d] any
amount paid in any sale authorized by the
Commission under section 3371(b) of this
title shall be deemed to be just and reasonable if such amount does not exceed the
fair and equitable price established by the
Commission and applicable to such sale.
(D) Assignments
For purposes of sections 4 and 5 of the
Natural Gas Act [15 U.S.C. 717c, 717d], any

§ 3431

amount paid pursuant to the terms of any
contract with respect to that portion of
which the Commission has authorized an
assignment
authorized
under
section
3372(a) of this title shall be deemed to be
just and reasonable if such amount does not
exceed the applicable maximum lawful
price established under subchapter I of this
chapter.
(E) Affiliated entities limitation
For purposes of paragraph (1), in the case
of any first sale between any interstate
pipeline and any affiliate of such pipeline,
any amount paid in any first sale shall bc
deemed to be just and reasonable if, in addition to satisfying the requirements of such
paragraph, 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
Natural Gas Act [15 U.S.C. 717c, 717d], any
amount paid by any interstate pipeline for
transportation, storage, delivery or other
services provided pursuant to any order
under section 3363(b), (c), or (d) of this title
shall be deemed to be just and reasonable if
such amount is prescribed by the President
under section 3363(h)(1) of this title.
(B) Transportation
For purposes of sections 4 and 5 of the
Natural Gas Act [15 U.S.C. 717c, 717d], any
amount paid by any interstate pipeline for
any transportation authorized by the Commission under section 3371(a) of this title
shall be deemed to be just and reasonable if
such amount does not exceed that approved
by the Commission under such section.
(c) Guaranteed passthrough
(1) Certificate may not be denied based upon price
The Commission may not deny, or condition the grant of, any certificate under section 7 of the Natural Gas Act [15 U.S.C. 717f]
based upon the 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 purposes of sections 4 and 5 of the Natural Gas Act [15 U.S.C. 717c, 717d], the Commission may not deny any interstate pipeline
recovcry of any amount paid 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 [15 U.S.C. 717c, 717d], and
(B) such recovery is not inconsistent with
any requirement of any rule under section
3341 of this title (including any amendment
under section 3342 of this title),
except to the extent the Commission determines that the amount paid was excessive due
to fraud, abuse, or similar grounds.

TITLE 15-COMMERCE AND TRADE

§ 3432

(Pub. L. 95-621, title VI, § 601, Nov. 9, 1978, 92
Stat. 3409.)
REFERENCES IN

TEXT

The Natural Gas Act, referred to in subsec.
(a)(1)(A), (B), (C). (W (2)(A), (B), is act June 21, 1938.
ch. 556, 52 Stat. 821, as amended, which is classified
generally to chapter 15B (§ 717 et seq.) of this title.
For complete classification of this act to the Code, see
section 717w of this title and Tables.
The Alaska Natural Gas Transportation Act of 1976,
referred to in subsec. (a)(1)(E), is Pub. L. 94-586, Oct.
22, 1976, 90 Stat. 2903, as amended, which is classified
generally to chapter 15C (§ 719 et seq.) of this title.
For complete classification of this Act to the Code, see
Short Title note set out under section 719 of this title
and Tables.
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3372, 3375 of
this title.
§ 3.132. Effect on State laws
(a) Authority to prescribe lower maximum lawful
prices

Nothing in this chapter shall affect the authority of any State to establish 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 subchapter I of this chapter.
(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
3362(c) or section 3363(b), (c), (d), or (i) of
this title; or
(2) authorized by the Commission under
section 3371(a) of this title.
(Pub. L. 95-621, title VI, § 602, Nov. 9, 1978, 92
Stat. 3411.)
CHAPTER 61-SOFT DRINK INTERBRAND
COMPETITION
Sec.
3501.

3502.
3503.

Page 1222

consumers within a defined geographic area:
Provided, That such product is in substantial
and effective competition with other products
of the same general class in the relevant
market or markets.
(Pub. L. 96-308, § 2, July 9, 1980, 94 Stat. 939.)
SHORT TITLE

Section 1 of Pub. L. 96-308 provided that: "This Act
[enacting this chapter] may be cited as the 'Soft
Drink Interbrand Competition Act'."
SUSPENSION OF STATUTE OF LIMITATIONS ON INSTITUTION OF ANTITRUST PROCEEDINGS BY UNITED STATES;
ENFORCEMENT OF TRADEMARK LICENSING AGREEMENT
PROVISIONS CONCERNING SOFT DRINK PRODUCTS

Section 4 of Pub. L. 96-308 provided that: "In the
case of any proceeding instituted by the United States
described in subsection (i) of section 5 of the Clayton
Act (relating to suspension of the statute of limitations on the institution of proceedings by the United
States) (15 U.S.C. 16(i)) which is pending on the date
of the enactment of this Act [July 9, 1980], that subsection shall not apply with respect to any right of
action referred to in that subsection based in whole or
in part on any matter complained of in that proceeding consisting of the existence or enforcement of any
provision described in section 2 of this Act [this section] in any trademark licensing contract or agreement described in that section."
SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 3502 of this
title.
§ 3502. Price fixing agreements, horizontal restraints
of trade, or group boycotts
Nothing in this chapter shall be construed to
legalize the enforcement of provisions described
in section 3501 of this title in trademark licensing contracts or agreements described in that
section by means of price fixing agreements,
horizontal restraints of trade, or group boycotts, if such agreements, restraints, or boycotts
would otherwise be unlawful.
(Pub. L. 96-308, § 3, July 9, 1980, 94 Stat. 939.)

Exclusive territorial licenses to manufacture,
distribute, and sell trademarkeJ soft drink
products; ultimate resale to consumers;
substantial and effective competition.
Price fixing agreements, horizontal restraints of trade, or group boycotts.
Definition.

§ 3501. Exclusive territorial licenses to manufacture,
distribute, and sell trademarked soft drink prod.
ucts; ultimate resale to consumers; substantial
and effective competition
Nothing contained in any antitrust law shall
render unlawful the inclusion and enforcement
in any trademark licensing contract or agreement, pursuant to which the licensee engages
in the manufacture (including manufacture by
a sublicensee, agent, or subcontractor), distribution, and sale of a trademarked soft drink product, of provisions granting the licensee the sole
and exclusive right to manufacture, distribute,
and sell such product in a defined geographic
area or limiting the licensee, directly or indirectly, to the manufacture, distribution, and
sale of such product only for ultimate resale to

§ 3503. Definition
As used in this chapter, the term "antitrust
law" means the Sherman Act (15 U.S.C. 1 et
seq.), the Clayton Act (15 U.S.C. 12 et seq.), and
the Federal Trade Commission Act (15 U.S.C.
41 et seq.).
(Pub. L. 96-308, § 5, July 9, 1980, 94 Stat. 939.)
REFERENCES IN TEXT

The Sherman Act (15 U.S.C. 1 et seq.), referred to in
text, is act July 2, 1890, ch. 647, 26 Stat. 209, as amended, which is classified to sections I to 7 of this title.
For complete classification of this Act to the Code, see
Short Title note set out under section 1 of this title
and Tables.
The Clayton Act (15 U.S.C. 12 et. seq.), referred to in
text, is act Oct. 15, 1914, ch. 323, 38 Stat. 730, as
amended, which is classified generally to sections 12,
13, 14 to 19, 20, 21, and 22 to 27 of this title, and sections 52 and 53 of Title 29, Labor. For further details
and complete classification of this Act to the Code, see
References in Text note set out under section 12 of
this title and Tables.
The Federal Trade Commission Act (15 U.S.C. 41 et
seq.), referred to in text, is act Sept. 26, 1914, ch. 311,