Interstate Natural Gas Ass'n of America v. F.E.R.C., s. 81-1690
| Court | United States Courts of Appeals. United States Court of Appeals (District of Columbia) |
| Writing for the Court | Douglas W. Rasch, Houston, Tex., with whom Edmunds Travis, Jr., Houston, Tex., Exxon Corp., David M. Whitney, Houston, Tex., Aminoil USA, Inc., et al., Arthur Wright, Dallas, Tex., Atlantic Richfield Co., Justin R. Wolf and George Rothschild, Washing |
| Citation | 716 F.2d 1 |
| Parties | INTERSTATE NATURAL GAS ASSOCIATION OF AMERICA, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Mobil Oil Corporation, et al., General American Oil Company of Texas, Phillips Petroleum Company, Pennzoil Company, Mississippi River Transmission Corp., Shell Oil Company, Exxon Corporation, Laclede Gas Company, Getty Oil Company, Louisiana Land & Exploration Company, Associated Gas Distributors, Northern Natural Gas Company, Texas Gas Transmission Corporation, Texaco, Inc., Tenneco Oil Company, Houston Oil and Minerals Corporation, Gulf Oil Corporation, Placid Oil Company, Aminoil, USA, Inc., et al., Intervenors. MICHIGAN WISCONSIN PIPELINE COMPANY, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Mobil Oil Corporation, et al., Amoco Production Company, General American Oil Company of Texas, Phillips Petroleum Company, Pennzoil Company, Exxon Corporation, Shell Oil Company, Tenneco Oil Company, Union Oil Company of California, Louisiana Land & Exploration Company, Getty Oil Company, Associated Gas Distributors, Laclede Gas Company, Sun Oil Company, Arco Oil & Gas Company, Placid Oil Company, Texaco, Inc., Gulf Oil Corporation, Intervenors. TRANSCONTINENTAL GAS PIPE LINE CORPORATION, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Mobil Oil Corporation, General American Oil Company of Texas, Phillips Petroleum Company, Pennzoil Company, Shell Oil Company, Associated Gas Distributors, Getty Oil Company, Louisiana Land & Exploration Company, Texaco, Inc., Exxon Corporation, Sun Oil Company, Tenneco Oil Company, Houston Oil and Minerals Corporation, Gulf Oil Corporation, Placid Oil Company, Intervenors. NATURAL GAS PIPELINE COMPANY OF AMERICA, Petitioner, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, Mobil Oil Corporation, et al., General American Oil Company of Texas, Phillips Petroleum Company, Pennzoil Company, Shell Oil Company, Laclede Gas Company, Associated Gas Distributors, Getty Oil Company, Louisiana Land & E |
| Docket Number | 82-1004 and 82-1177,81-1696,Nos. 81-1690,81-1691,81-1680,81-1802,81-1692,s. 81-1690 |
| Decision Date | 09 August 1983 |
Page 1
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Mobil Oil Corporation, et al., General American Oil Company
of Texas, Phillips Petroleum Company, Pennzoil Company,
Mississippi River Transmission Corp., Shell Oil Company,
Exxon Corporation, Laclede Gas Company, Getty Oil Company,
Louisiana Land & Exploration Company, Associated Gas
Distributors, Northern Natural Gas Company, Texas Gas
Transmission Corporation, Texaco, Inc., Tenneco Oil Company,
Houston Oil and Minerals Corporation, Gulf Oil Corporation,
Placid Oil Company, Aminoil, USA, Inc., et al., Intervenors.
MICHIGAN WISCONSIN PIPELINE COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Mobil Oil Corporation, et al., Amoco Production Company,
General American Oil Company of Texas, Phillips Petroleum
Company, Pennzoil Company, Exxon Corporation, Shell Oil
Company, Tenneco Oil Company, Union Oil Company of
California, Louisiana Land & Exploration Company, Getty Oil
Company, Associated Gas Distributors, Laclede Gas Company,
Sun Oil Company, Arco Oil & Gas Company, Placid Oil Company,
Texaco, Inc., Gulf Oil Corporation, Intervenors.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Mobil Oil Corporation, General American Oil Company of
Texas, Phillips Petroleum Company, Pennzoil Company, Shell
Oil Company, Associated Gas Distributors, Getty Oil Company,
Louisiana Land & Exploration Company, Texaco, Inc., Exxon
Corporation, Sun Oil Company, Tenneco Oil Company, Houston
Oil and Minerals Corporation, Gulf Oil Corporation, Placid
Oil Company, Intervenors.
NATURAL GAS PIPELINE COMPANY OF AMERICA, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Mobil Oil Corporation, et al., General American Oil Company
of Texas, Phillips Petroleum Company, Pennzoil Company,
Shell Oil Company, Laclede Gas Company, Associated Gas
Distributors, Getty Oil Company, Louisiana Land &
Exploration Company, Texaco, Inc., Sun Oil Company, Chevron,
USA, Exxon Corporation, Tenneco Oil Company, Houston Oil and
Minerals Corporation, Gulf Oil Corporation, Placid Oil
Company, Intervenors.
LONE STAR GAS COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
General American Oil Company of Texas, Phillips Petroleum
Company, Pennzoil Company, Shell Oil Company, Laclede Gas
Company, Louisiana Land & Exploration Company, Getty Oil
Company, Associated Gas Distributors, Valero Transmission
Company, Texaco, Inc., Exxon Corporation, Sun Oil Company,
Tenneco Oil Company, Houston Oil and Minerals Corporation,
Gulf Oil Corporation, Placid Oil Company, Panhandle Eastern
Pipe Line Co., et al., Intervenors.
LACLEDE GAS COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
LONE STAR GAS COMPANY, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent,
Exxon Corporation, Conoco Inc., General American Oil Company
of Texas, Pennzoil Company, Tenneco Oil Company, Union Oil
Co. of California, Getty Oil Company, Aminoil USA, Inc.,
Gulf Oil Corporation, Texaco, Inc., Mobil Oil Corporation,
et al., Houston Oil and Minerals Corporation, Shell Oil
Company, Atlantic Richfield Company, Sun Exploration and
Production Co., Intervenors.
ASSOCIATED GAS DISTRIBUTORS, Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION, Respondent.
82-1004 and 82-1177.
District of Columbia Circuit.
Decided Aug. 9, 1983.
Page 2
Petition for Review of Orders of the Federal Energy Regulatory commission.
John H. Cheatham, III, Washington, D.C., with whom Judith M. Johnson, Houston, Tex., was on the brief for petitioner, Interstate Natural Gas Ass'n of America.
Douglas G. Robinson, Washington, D.C., with whom Erica A. Ward, Enid L. Veron, Washington, D.C., and Michael K. Chapman, Houston, Tex., were on the brief for petitioner, Lone Star Gas Co. Rodney O. Thorson, Washington, D.C., also entered an appearance for petitioner.
William W. Brackett, Washington, D.C., with whom Daniel F. Collins and Terry O. Vogel, Washington, D.C., Michigan Wisconsin Pipe Line Co., Thomas F. Ryan, Jr., and
Page 3
Richard T. Boone, Washington, D.C., Transcontinental Gas Pipe Line Co., Paul E. Goldstein, Chicago, Ill., Harry L. Albrecht and Robert D. Rosenberg, Washington, D.C., Natural Gas Pipeline Co. of America, Cleon L. Burt, St. Louis, Mo., and John B. Rudolph, Washington, D.C., Mississippi River Transmission Corp., Dean W. Wallace, and John B. Will, Omaha, Neb., Northern Natural Gas Co., were on the brief for petitioners, Michigan Wisconsin Pipe Line Co., et al.Frederick Moring, Washington, D.C., was on the brief for petitioner, Associated Gas Distributors.
J. David Mann, Jr., Washington, D.C., was on the brief for petitioner, Laclede Gas Co.
Joel M. Cockrell, Atty., F.E.R.C., Washington, D.C., with whom Charles A. Moore, Gen. Counsel, Houston, Tex., Jerome M. Feit, Sol., F.E.R.C., and George H. Williams, Jr., Atty., F.E.R.C., Washington, D.C., were on the brief, for respondent.
Douglas W. Rasch, Houston, Tex., with whom Edmunds Travis, Jr., Houston, Tex., Exxon Corp., David M. Whitney, Houston, Tex., Aminoil USA, Inc., et al., Arthur Wright, Dallas, Tex., Atlantic Richfield Co., Justin R. Wolf and George Rothschild, Washington, D.C., Chevron USA, Inc., Tom Burton and Ernest T. Altgelt, Houston, Tex., Conoco, Inc., Charles M. Darling, IV, Washington, D.C., and Thomas J. Eastment, New York City, General American Oil Co. of Tex., Cloy D. Monzingo and Roger L. Brandt, Houston, Tex., Getty Oil Co., Lawrence E. Glenn and Thomas A. Loftus, III, Houston, Tex., Gulf Oil Corp., Edwin S. Nail, Houston, Tex., Houston Oil and Mineral Corp., Robert D. Haworth and Edgar K. Parks, Houston, Tex., Mobil Oil Corp., et al., Patricia A. Curran, Houston, Tex., Pennzoil Co., C.J. Roberts, Charles L. Pain and Jennifer A. Cates, Phillips Petroleum Co., Ronald D. Hurst, Dallas, Tex., Placid Oil Co., Thomas G. Johnson and Robert A. Hasty, Jr., Houston, Tex., Shell Oil Co., Harry W. Sullivan, Jr., and Becky McGee, Dallas, Tex., Sun Exploration and Production Co., Pat Timmons, Houston, Tex., The Superior Oil Co., Phyllis Rainey and Richard G. Harris, Houston, Tex., Tenneco Oil Co., Karen A. Berndt, Washington, D.C., Texaco Inc., and Lois E. Gold, Los Angeles, Cal., Union Oil Co. of California, were on the brief for producer intervenors. Edward J. Kremer, Dallas, Tex., Atlantic Richfield Co., Carolyn S. Hazel, Houston, Tex., Conoco Inc., Martin N. Erck, Houston, Tex., and Joseph G. Stiles, Washington, D.C., Exxon Corp., Bernard A. Foster, III, Washington, D.C., Getty Oil Co., Charles J. McClees, Jr., Houston, Tex., Mobil Oil Corp. and Gordon Gooch, Washington, D.C., Tenneco Oil Co., also entered appearances, for producer intervenors.
William T. Benham, Houston, Tex., entered an appearance for intervenor, Amoco Production Co.
Albert D. Hoppe, Dallas, Tex., entered an appearance for intervenor, Arco Oil and Gas Co.
Karol Lyn Newman, Washington, D.C., entered an appearance for intervenor, Laclede Gas Co.
Bernard A. Foster, III, Washington, D.C., entered an appearance for intervenor, Louisiana Land and Exploration Co.
George J. Meiburger, Frank X. Kelly, Washington, D.C., and John B. Will, Omaha, Neb., entered appearances for intervenor, Northern Natural Gas Co.
Raymond N. Shibley, Brian D. O'Neill and L. Charles Landgraf, Washington, D.C., entered appearances for intervenors, Panhandle Eastern Pipe Line Co., et al.
Christopher T. Boland, Washington, D.C., and J. Derrill Cody, Owensburg, Ky., entered appearances for intervenor, Texas Gas Transmission Corp.
William J. Grove, Jr., Washington, D.C., entered an appearance for intervenor, Valero Transmission Co.
Philip J. Mause, Washington, D.C., Norman A. Pedersen, Peggy Kobacker Shiffrin, Los Angeles, Cal., and Steven M. Schur, Madison, Wis., were on the brief for amicus curiae; The Public Service Commission of Wisconsin supporting reversal.
Page 4
Before ROBINSON, Chief Judge, and MIKVA and SCALIA, Circuit judges.
Opinion for the Court filed by Circuit Judge MIKVA.
MIKVA, Circuit Judge:
The petitioners in this action, numerous natural gas transmission and distribution companies and their respective trade associations, seek review of a final rule of the Federal Energy Regulatory Commission (FERC or Commission). That rule establishes a new approach to measuring the energy content of natural gas for the wellhead pricing purposes of the Natural Gas Policy Act of 1978 (NGPA), 15 U.S.C. Secs. 3311-3333 (Supp. V 1981). Specifically, the new rule requires that the energy content of natural gas be measured under the varying, relatively "dry" conditions at which gas is delivered for sale instead of the uniform, water-vapor saturated, "wet" condition under which the Commission had previously determined the energy content of gas. The petitioners argue that the new rule, by defining energy content in a way unforeseen by Congress, effectively raises the wellhead prices of natural gas above the maximum ceiling prices established by Congress in the NGPA. Alternatively, the petitioners argue that the rule was adopted without adequate notice and comment under the Administrative Procedure Act; was impermissibly given retroactive effect; and failed to guarantee wholesale gas purchasers automatic pass through of any retroactive payments they may be forced to make. We agree that the rule violates the NGPA's statutory pricing scheme and accordingly vacate the Commission's rule.
I. BACKGROUND
A. Technical and Historical Background of the "Wet" Rule
The energy content of natural gas is measured in terms of British thermal units (Btu's), each Btu representing the amount of energy needed to raise the temperature of one pound of water one degree Fahrenheit, see Texaco, Inc., 33 F.P.C. 1228,...
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