Colorado Interstate Gas Co. v. State Corp. Commission
| Citation | 386 P.2d 266,192 Kan. 1 |
| Decision Date | 02 November 1963 |
| Docket Number | 41555,Nos. 41515,41556,41516,s. 41515 |
| Parties | COLORADO INTERSTATE GAS COMPANY, Appellee, v. The STATE CORPORATION COMMISSION of the State of Kansas, Southwest Kansas Royalty Owners Assoiation, and Panhandle Eastern Pipe Line Company, Appellants, Cross-Appellants, and Cross-Appellees (two cases). NORTHERN NATURAL GAS COMPANY, a corporation, Appellee, v. The STATE CORPORATION COMMISSION of the State of Kansas, Southwest Kansas Royalty Owners Association, and Panhandle Eastern Pipe Line Company, Appellants, Cross-Appellants, and Cross-Appellees (two cases). |
| Court | United States State Supreme Court of Kansas |
1. A district court has no jurisdiction to review an order of the State Corporation Commission issued under the provisions of the Gas Conservation Statute, G.S.1949, 55-701 et seq. in the absence of a timely petition for rehearing as required by G.S.1949, 55-606.
2. A district court is given authority to set aside an unlawful order of the Commission issued under the Gas Conservation Statute, but it cannot direct the Commission to follow any particular formula in correcting its order.
3. Where an order of the Commission states only formulae, factors, and policy to be followed in the future and further action is necessary before it can have any affect, it is not subject to judicial review.
4. Where a district court sets aside an order of the Commission, it is required to make findings of fact and conclusions of law which disclose the reason for its judgment.
5. In determining the validity of the Commission's orders regulating the production of natural gas, the courts can consider only the statutes granting the Commission's authority and the Commission's basic orders with such amendments as are properly made thereto.
6. The facts that are to be considered and the relative weight to be given them in making a determination are matters left to the Commission's discretion. The courts cannot substitute their judgment for that of the Commission.
7. The record, covering numerous appeals from judgments of the district court setting aside orders of the Commission fixing production allowables for the Kansas-Hugoton Gas Field, is examined and it is held:
(1) the orders were supported by substantial competent evidence;
(2) the orders did not violate the provision of G.S.1949, 55-703 or the Commission's basic order;
(3) the orders did not constitute an interference with interstate commerce or invade the province of the Federal Power Commission under the Natural Gas Act;
(4) the orders did not violate the due process clause of the Constitution of the United States or impair the obligation of contracts.
Robert C. Londerholm, Topeka, argued the cause, and J. Robert Wilson, John D. Townsend, Charles C. McCarter, J. B. Grant, Wichita, and Charles R. Escola, Topeka, and Richard C. Byrd, Ottawa, were with him on the briefs for the appellant, State Corporation Commission of State of Kansas.
Dale M. Stucky, Wichita, argued the cause, and A. E. Kramer and Bernard Nordling, Hugoton, Wayne E. Coulson, Paul R. Kitch, Donald R. Newkirk, Robert J. Hill, Gerrit H. Wormhoudt, Philip Kassebaum, John E. Rees, Robert T. Cornwell, Willard B. Thompson, David W. Buxton, Homer V. Gooing, and Hugo T. Wedell, Wichita, were with him on the briefs for appellant, Southwest Kansas Royalty Owners Ass'n.
Jeff A. Robertson, Topeka, argued the cause, and Wendell J. Doggett and C. A. Conoley, Kansas City, Mo., and Chas. Vance and C. C. Linley, Liberal, were with him on the briefs for appellant, Panhandle Eastern Pipe Line Co.
Malcolm Miller, Wichita, argued the cause, and L. M. Poe, Colorado Springs, Colo., Ray H. Calihan and Daniel R. Hopkins, Garden City, and Carl T. Smith, Stuart R. Carter, and Gerald Sawatzky, Wichita, were with him on the briefs for appellee, Colorado Interstate Gas Co.
Mark H. Adams, II, Wichita, argued the cause, and Lawrence I. Shaw, F. Vinson Roach, and Patrick J. McCarthy, Omaha, Neb., Ray H. Calihan, Logan N. Green, Daniel R. Hopkins, and Ray H. Calihan, Jr., Garden City, Mark H. Adams, Charles E. Jones, William I. Robinson, J. Ashford Manka, Clifford L. Malone, John S. Seeber, Floyd E. Jensen, and Joe Rolston, Wichita, were with him on the briefs for appellee, Northern Natural Gas Co.
HATCHER, Commissioner.
These appeals are from judgments of the district court on the review of numerous orders of the State Corporation Commission establishing allowables for the Kansas-Hugoton Natural Gas Field. The review proceedings challenged the validity of monthly allowable orders and related orders pertaining to the gas field. The many appeals filed (thirty-nine) as Cases 41,515 and 41,516 are from identical judgments rendered in separate actions which were tried together on a single record and involve the orders from May, 1956, through September, 1958. Cases 41,555 and 41,556 are appeals (thirty) from similar judgments involving the Commission's six-months allowable order for the period from October, 1958, through March, 1959, and the monthly allowable order for October, 1958, through January, 1959.
The lower court 'reversed and set aside' all of the orders in part. Appeals were then taken to this court.
Before the above mentioned cases reached this court for determination, additional appeals had been filed challenging judgments of district courts in two separate forums which had reviewed the same orders of the Commission fixing the six-months allowables for the period covering October 1, 1959, through March 31, 1960, and also the monthly allowable orders covering each month for the same period. Although these appeals will be disposed of in a separate opinion, they are mentioned here because the general facts are applicable to all.
It will be noted that the various parties filed separate appeals, separate abstracts, and separate briefs. Fifty-two separate printed documents consisting of abstracts and briefs have been presented to this court, all covering substantially the same facts and questions of law.
The district court, which disapproved the orders of the Commission, refused to make findings of fact and conclusions of law. In an attempt to have the issues pinpointed, and to develop some semblance of order from the voluminous and chaotic record, this court appointed Mr. Harry Colmery, a member of the Bar of this state, to make findings of fact and conclusions of law on what he thought to be the issues involved in the numerous appeals and report thereon. The Commissioner has done so in a most efficient and commendable manner. Although the Commissioner's findings and conclusions can be advisory only, they have served the very useful purpose of forcing the parties to limit their controversy to clear-cut issues. The findings and conclusions of the Commissioner are challenged in some respects. Some errors occurred because of ambiguities and confusion in the record. The report of the Commissioner has resulted in clarification of such matters through supplemental briefs.
The Hugoton Gas Field was discovered near Hugoton, Kansas, in 1922, but it was not until about 1929 that its possibilities for domestic and industrial purposes had been fully realized. It is said to be the largest known reservoir of natural gas in the world, the gas being found at a depth of about 2,600 to 2,900 feet in porous limestone and dolomite formations about 50 feet thick. The thickness of the gas producing horizons varies considerably. Such horizons are not uniform as to their porosity or permeability. The field, as presently developed, is approximately 160 miles long and varies from 40 to 72 miles in width. It covers portions of the nine counties in the southwest corner of Kansas, extends across the entire width of the Oklahoma Panhandle, and into portions of several counties of northern Texas. The largest portion, about two-thirds, of the field is located in Kansas. This portion is commonly known as 'Kansas-Hugoton.' The portion in Oklahoma is called 'Guymon-Hugoton' and that part in Texas 'Texas-Hugoton.'
The sole purchasers of gas produced in the Kansas-Hugoton Field, as stated by the Commission, are Cities Service Gas Company, Colorado Interstate Gas Company, Hugoton Production Company, Kansas-Colorado Utilities, Inc., Kansas-Nebraska Natural Gas Company, Inc., Northern Natural Gas Company, Panhandle Eastern Pipeline Company, Quinque Oil and Gas Producing Company, United Carbon Company, and Shallow Water Refining Company.
When the basic order for the field was promulgated in April, 1944, there were only 331 Kansas wells. When these proceedings were initiated in 1956 there were 3,555 Kansas wells producing from 2,262,748 acres. There are relatively few remaining undrilled locations.
Most of the gas from the Kansas-Hugoton Field is transported through large pipelines to points far removed from Kansas. A small portion is consumed in the Wichita, Topeka, and Kansas City areas. The rest is transported and consumed in Michigan, Minnesota, Ohio, Illinois, Indiana, Missouri, Colorado, and Nebraska. With one or two exceptions the gas produced from the Oklahoma and Texas portions of the field is similarly transported through the same large pipeline systems for the same or similar uses.
The integrated pipeline systems which transport gas from the Kansas-Hugoton Field are also connected with other gas fields. Kansas gas is therein commingled with gas from various other fields, including the Guymon-Hugoton.
In 1956, five major pipelines, Cities Service Gas Company, (Cities Service), Northern Natural Gas Company, (Northern Natural), Panhandle Eastern Pipe Line Company, (Panhandle), Kansas-Nebraska Natural Gas Company, (Kansas-Nebraska), and Colorado Interstate Gas Company, (Colorado Interstate), had acquired the exclusive right to purchase the gas produced from 90% of the Kansas-Hugoton wells. (These five pipeline companies, which are involved in this controversy, will...
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Southwest Kansas Royalty Owners Ass'n v. State Corp. Com'n of State of Kan.
...we repeat them here. The Hugoton Field is the largest known reservoir of natural gas in the world. Colorado Interstate Gas Co. v. State Corporation Comm., 192 Kan. 1, 4, 386 P.2d 266 (1963), cert. denied 379 U.S. 131, 85 S.Ct. 272, 13 L.Ed.2d 333 (1964). It extends south from Kansas into Ok......
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