[Federal Register Volume 59, Number 151 (Monday, August 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18869]


[[Page Unknown]]

[Federal Register: August 8, 1994]


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DEPARTMENT OF ENERGY
18 CFR Parts 154, 157, 270, 271, 272, 273, 274 and 275

[Docket No. RM94-18-000; Order No. 567]

 

Removal of Outdated Regulations Pertaining to the Sales of 
Natural Gas Production

July 28, 1994.
AGENCY: Federal Energy Regulatory Commission, Energy.

ACTION: Final rule.

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SUMMARY: The Federal Energy Regulatory Commission (Commission) has 
reviewed its regulations and has determined that certain of its 
regulations pertaining to producer natural gas matters are either 
outdated or serve no useful purpose. Consequently, these outdated or 
nonessential regulations will be removed from the Commission's 
regulations.

EFFECTIVE DATE: This final rule is effective July 28, 1994.

FOR FURTHER INFORMATION CONTACT:
Sandra Elliott, Office of the General Counsel, Federal Energy 
Regulatory Commission, 825 North Capitol Street, NE., Washington, DC 
20426, (202) 208-0694.

SUPPLEMENTARY INFORMATION: In addition to publishing the full text of 
this document in the Federal Register, the Commission also provides all 
interested persons an opportunity to inspect or copy the contents of 
this document during normal business hours in Room 3308, 941 North 
Capitol Street, NE., Washington, DC 20426.
    The Commission Issuance Posting System (CIPS), an electronic 
bulletin board service, provides access to the texts of formal 
documents issued by the Commission. CIPS is available at no charge to 
the user and may be accessed using personal computer with a modem by 
dialing (202) 208-1397. To access CIPS, set your communications 
software to use 300, 1200 or 2400 baud, full duplex, no parity, 8 data 
bits, and 1 stop bit. The full text of this notice will be available on 
CIPS for 30 days from the date of issuance. The complete text on 
diskette in WordPerfect format may also be purchased from the 
Commission's copy contractor, La Dorn Systems Corporation, also located 
in Room 3308, 941 North Capitol Street, NE., Washington, DC 20426.

    Before Commissioners: Elizabeth Anne Moler, Chair; Vicky A. 
Bailey, James J. Hoecker, William L. Massey, and Donald F. Santa, 
Jr.

I. Introduction and Background

    The Federal Energy Regulatory Commission (Commission) has reviewed 
its regulations and has determined that certain of its regulations 
pertaining to natural gas producer matters are either outdated or serve 
no useful purpose due to the decontrol of wellhead sales. Some of the 
regulations under the Natural Gas Act at issue here were promulgated by 
the Federal Energy Regulatory Commission's predecessor, the Federal 
Power Commission (FPC). Consequently, these outdated or nonessential 
regulations will be deleted from the Commission's body of regulations. 
The regulations to be deleted are located in 18 CFR Parts 154, 157, 
270, 271, 272, 273, 274, and 275.
    The Commission derives its initial responsibility regarding natural 
gas matters from the Natural Gas Act of 1938, 15 U.S.C. 717-717(w) 
(1988) (NGA).\1\ Subsequently, Congress amended the NGA by enacting the 
Natural Gas Policy Act of 1978, 15 U.S.C. 3301-3432 (1988) (NGPA). The 
NGPA was enacted in 1978 to deal with the shortages of gas occurring in 
the 1970's in the interstate market. Under the NGPA, certain categories 
of natural gas were immediately removed from the Commission's 
jurisdiction, and other categories of natural gas were removed between 
1979 and 1987. Subsequently, Congress passed the Natural Gas Wellhead 
Decontrol Act of 1989 (Decontrol Act).\2\ The Decontrol Act was the 
final step in the wellhead decontrol of natural gas that was begun by 
the NGPA. The Decontrol Act deregulated certain categories of first 
sales of natural gas prior to January 1, 1993, and provided that, as of 
January 1, 1993, all ``first sales'' of natural gas, as that term was 
defined in the NGPA, are no longer subject to federal regulation. The 
Decontrol Act states that as a result of the repeal of Title I of the 
NGPA, the provisions of the contracts between the parties for the sale 
of such gas will govern according to their terms. The Decontrol Act 
also repealed section 503 of the NGPA which set forth the procedures 
and requirements for obtaining NGPA well category determinations. 
However, the NGA still governs the transportation and wholesale sales 
of natural gas by interstate pipelines. In passing the Decontrol Act, 
Congress also expressed its intent that the Commission reduce 
unnecessary filings and reporting requirements.\3\
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    \1\In Phillips Petroleum Company v. Wisconsin, 347 U.S. 672 
(1954), the Court held that the NGA also extended the Commission's 
jurisdiction over the price for wellhead sales of natural gas for 
resale in interstate commerce.
    \2\Pub. L. No. 101-60; 103 Stat. 157 (1989).
    \3\Senate Report 101-39, 101st Cong. 1st Sess. at 15.
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    In light of the complete decontrol of all wellhead sales of natural 
gas on January 1, 1993, the Commission's regulations implementing Title 
I of the NGPA and Sections 4, 5, and 7 of the NGA for wellhead sales 
are no longer necessary, and will be deleted.

II. Public Reporting Burden

    The Commission believes that the elimination of these nonessential 
and outdated regulations will to some extent reduce the reporting 
burden on producers of natural gas since there will no longer be a need 
to file applications and changes in rate schedule, and this rule will 
not impose any new reporting requirements. The Commission is notifying 
the Office of Management and Budget that the information collection 
burdens are being reduced by this rule.

III. Discussion

A. Part 154

    Section 154.42 pertains to natural gas that is produced by an 
interstate pipeline or an affiliate thereof and that is delivered to 
such pipeline or affiliate in a first sale on or after December 1, 
1978. This regulation is outdated because of the Decontrol Act. In 
Order No. 523,\4\ the Commission found that the Decontrol Act 
deregulated the sale of pipeline production for system supply on July 
27, 1989. The Commission also found that pipeline production subject to 
an existing contract with another pipeline or particular customer was 
eligible for decontrol in accordance with the provisions of the 
Decontrol Act. Thus, the sale of pipeline production was totally 
deregulated as of January 1, 1993. Therefore, this section will be 
deleted.
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    \4\Order Implementing the Natural Gas Wellhead Decontrol Act of 
1989, 55 FR 17425 (April 25, 1990) FERC Stats. & Regs. Preambles 
30,887 April 18, 1990).
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    Sections 154.91-103 specify the requirements for the filing of rate 
schedules and changes in rate schedules for the sale of natural gas by 
natural gas producers and gatherers and the requirements governing the 
Commission's acceptance or rejection of those filings. Since the 
Decontrol Act deregulated all first sales of natural gas as of January 
1, 1993, the filing of rate schedules for the sale of natural gas by 
producers and gatherers is no longer required and these regulations are 
obsolete. Therefore, these sections will be deleted.
    Sections 154.105-109(b) set forth area rates for interstate natural 
gas producer sales. The Commission has not established area or national 
rates since passage of the NGPA in 1978. Sections 104 and 106(a) of the 
NGPA established maximum lawful prices for certain first sales of 
natural gas, which reflected the area and national rates established by 
the Commission. The Decontrol Act deregulated the price for all first 
sales of natural gas as of January 1, 1993. Therefore, these sections 
are obsolete and will be removed.
    Section 154.110 provides a small producer exemption from the 
requirements of Secs. 154.92-102. As we are removing those sections 
from the Commission's body of regulations in this order, Sec. 154.110 
is no longer needed. Accordingly, this section will be removed.

B. Part 157

    Subpart B of Part 157 concerns filings by producers and gatherers 
for certificates of public convenience and necessity under section 7 of 
the NGA.
    Section 157.23 concerns the filing by producers of applications for 
NGA 7(c) certificates for the first sale of natural gas for resale in 
interstate commerce. All first sales were deregulated as of January 1, 
1993. In addition, in Order No. 547,\5\ the Commission issued a final 
rule governing jurisdictional sales for resale of natural gas (e.g., 
LNG or imported gas) by persons who are not interstate pipelines. That 
rule issued blanket certificates of public convenience and necessity 
authorizing certificate holders to make jurisdictional gas sales for 
resale at negotiated rates, with pregranted abandonment, and eliminated 
the need or requirement for persons to file applications seeking such 
authorizations. Thus, this section is no longer needed since the 
blanket certificate will cover any jurisdictional sales formerly 
subject to this section that still require certificate authorization.
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    \5\Regulations Governing Blanket Marketer Sales Certificates, 57 
FR 57592 (December 8, 1992), III FERC Stats. & Regs. Preambles 
30,957 (November 30, 1992).
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    Sections 157.24-27 describe the contents of the application under 
Sec. 157.23. Since that section is being deleted, these sections are 
also deleted.
    Section 157.28 concerns the filing for temporary authorizations 
upon the filing of an application under Sec. 157.23. Since that section 
is being deleted, this section is also deleted.
    Section 157.30 governs the abandonment of sales by independent 
producers, and any first seller. Since all first sales of natural gas 
have been decontrolled as of January 1, 1993, this section is being 
deleted.
    Section 157.39 excludes small producers, as that term is defined in 
Sec. 157.40, from the requirements of the above cited provisions in 
Part 157 except for Sec. 157.30. Since those provisions are being 
deleted, this section is also deleted.
    Section 157.40 excludes small producers, as defined in that 
section, from various filing requirements. Since those filing 
requirements are no longer applicable, this section is not necessary.
    Section 157.41 requires the inclusion of a prudent operator 
provision in developing and maintaining deliverability from natural gas 
reserves in every certificate of public convenience and necessity for 
the first sale of natural gas for resale. Since the Commission does not 
have jurisdiction over wellhead production activities or first sales of 
natural gas, the section is being deleted.

C. Parts 270-275

    Parts 270 through 275 concern first sale regulations under the 
NGPA. As explained more fully below, in light of the repeal of NGPA 
Title 1, effective January 1, 1993, these regulations are not necessary 
since there no longer are maximum ceiling prices.
    Part 270 discusses the application of ceiling prices to the first 
sales of natural gas. With the repeal of NGPA Title I, effective 
January 1, 1993, the contract between the parties establishes the price 
of the natural gas.
    Part 271 reflects the maximum lawful price of the various 
categories of natural gas under NGPA Title I. With the repeal of Title 
I, effective January 1, 1993, this section is no longer necessary.
    Section 271.1105 established the Production-Related Costs Board 
(Board), with authority to resolve disputes regarding the appropriate 
allowance for production-related costs in excess of the otherwise 
applicable maximum lawful price. The repeal of Title I of the NGPA 
eliminates the need for the Board and deletion of Part 271 terminates 
the existence of the Board. Therefore, any matter pending before the 
Board on the effective date of this order, or any subsequent dispute 
that would have been referred to the Board, will be acted on by the 
Commission.
    Part 272 describes the various categories of gas that were 
deregulated under the NGPA and the Decontrol Act. Since all first sales 
of gas were deregulated effective January 1, 1993, the section is no 
longer necessary.
    Part 273 concerns the authority of first sellers to make interim 
collections (pending a final NGPA well category determination) and 
retroactive collections (subsequent to a final NGPA well category 
determination) of certain prices for first sales of natural gas under 
the NGPA. Part 273 also provides for the refund of any unauthorized 
interim collections or interim collections in excess of the maximum 
lawful price under the NGPA. The Decontrol Act deregulated the price 
for all first sales of natural gas and repealed Section 503 of the NGPA 
which contained the authority to make interim collections and NGPA 
eligibility determinations. Therefore, Part 273 is outdated and will be 
deleted.
    Part 274 sets forth procedures and filing requirements for 
jurisdictional agency determinations that gas produced from a 
particular well qualifies for certain maximum lawful prices under the 
NGPA. The Decontrol Act deregulated all first sales of natural gas and 
repealed Section 503 of the NGPA, which contained the authority to make 
jurisdictional agency NGPA well category determinations, as of January 
1, 1993. Order No. 539-C required that all pending jurisdictional 
agency NGPA well category determinations be filed with the Commission 
by April 30, 1994.\6\ Accordingly, Part 274 is outdated and will be 
removed.
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    \6\Order Qualifying Certain Tight Formation Gas for Tax Credit, 
58 FR 38528 (July 19, 1993), III FERC Stats. & Regs. Preambles 
30,974 (July 12, 1993). The Commission denied extension of the 
April 30, 1994 deadline in an order issued March 1, 1994. Order 
Qualifying Certain Tight Formation Gas for Tax Credit, 66 FERC 
61,269 (1994). However, since April 30, 1994, was a Saturday, in 
accordance with Commission regulations, notices of determination 
filed by jurisdictional agencies with the Commission by May 2, 1994, 
were accepted.
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    Part 275 concerns the procedures and requirements for Commission 
NGPA well category determinations and Commission review of 
jurisdictional agency NGPA well category determinations. The Decontrol 
Act deregulated all first sales of natural gas and repealed Section 503 
of the NGPA, which provided the Commission's authority to make NGPA 
well category determinations and to review jurisdictional agency well 
category determinations, as of January 1, 1993. The deadline for 
jurisdictional agency determinations to be filed with the Commission 
has passed. Accordingly, Part 275 is obsolete and will be deleted. 
However, rescission of Part 275 is prospective only and any timely 
filed applications for NGPA well category determination proceedings 
still pending before the Commission, will continue to be subject to the 
requirements of Part 275 as that section existed prior to the effective 
date of this order.
    Furthermore, in accordance with the intent of Congress, any first 
sale of natural gas occurring prior to decontrol will be subject to the 
Commission's wellhead pricing regulations as they were in effect at the 
time of the sale. The Senate Report on the 1989 Wellhead Decontrol Act 
states, ``The Committee intends the usual `savings clause' 
interpretations, such as those in I U.S.C. 109, to be applied to this 
legislation.''\7\ Similarly, the House report on the 1989 Wellhead 
Decontrol Act states, ``the gradual expiration of controls after 
enactment and before January 1, 1993, and their complete expiration on 
and after that date, will not affect civil or criminal proceedings 
pending at the time of decontrol, nor any action or proceeding based on 
pre-decontrol acts or conduct.''\8\
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    \7\S. Rept. No. 39, 101st Cong., 1st Sess. (1989).
    \8\H. Rept. No. 29, 101st Cong., 1st Sess. (1989).
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IV. Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act\9\ generally requires a description 
and analysis of final rules that will have significant economic impact 
on a substantial number of small entities. Because this rule eliminates 
pricing regulations regarding the sale of natural gas, which reduces 
the burdens on small entities, the Commission certifies that 
promulgating this rule does not represent a major federal action having 
a significant economic impact on a substantial number of small 
entities. Therefore, no regulatory flexibility analysis is required.
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    \9\5 U.S.C. 601-612 (1988).
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V. Information Collection Statement

    The Office of Management and Budget's (OMB) regulations\10\ require 
that OMB approve certain information collection requirements imposed by 
agency rule. Since this order does not impose new regulations and has 
no impact on current information collections, there is no need to 
obtain OMB approval as to the deletion of these regulations.
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    \10\5 CFR Part 1320.
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VI. National Environment Policy Act Statement

    The Commission concludes that promulgating this rule does not 
represent a major federal action having significant adverse effect on 
the human environment under the Commission's regulations implementing 
the National Environmental Policy Act.\11\ This rule is procedural in 
nature and therefore falls within the categorical exemptions provided 
in the Commission's regulations.\12\ Consequently, neither an 
environmental impact statement nor an environmental assessment is 
required.
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    \11\18 CFR Part 380.
    \12\18 CFR 380.4(a)(2)(ii).
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VII. Effective Date

    This rule does not alter the substantive rights or interests of any 
interested persons, and it merely removes certain outdated and 
nonessential natural gas regulations from the Commission's body of 
regulations on a prospective basis. Therefore, prior notice and comment 
under section 4 of the Administrative Procedure Act (APA)\13\ are 
unnecessary. Since the purpose of this final rule is to remove 
directives from the Commission's regulations that are no longer 
pertinent, the Commission finds good cause to make this rule effective 
immediately upon issuance. This rule therefore is effective July 28, 
1994.
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    \13\5 U.S.C. 533(b) (1988).
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List of Subjects

18 CFR Part 154

    Natural gas, Pipelines, Reporting and recordkeeping requirements.

18 CFR Part 157

    Administrative practice and procedures, Natural gas, Reporting and 
recordkeeping requirements.

18 CFR Parts 270, 271, 273 and 274

    Natural gas, Price controls, Reporting and recordkeeping 
requirements.

18 CFR Part 272

    Natural gas.

18 CFR Part 275

    Natural gas, Price controls, Reporting and recordkeeping 
requirements.

    By the Commission.
Lois D. Cashell,
Secretary.

    In consideration of the foregoing, the Commission amends Parts 154, 
157, 270, 271, 272, 273, 274, and 275, Title 18, Chapter I, Code of 
Federal Regulations, as set forth below.

PART 154--RATE SCHEDULES AND TARIFFS

    1. The authority citation for Part 154 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717w; 31 U.S.C. 9701; 42 U.S.C. 7102-
7352.


Sec. 154.42 and 154.91 thru 154.110  [Removed]

    2. Sections 154.42 and 154.91 through 154.110 are removed.

PART 157--APPLICATIONS FOR CERTIFICATES OF PUBLIC CONVENIENCE AND 
NECESSITY AND FOR ORDERS PERMITTING AND APPROVING ABANDONMENT UNDER 
SECTION 7 OF THE NATURAL GAS ACT

    3. The authority citation for Part 157 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717w, 3301-3432; 42 U.S.C. 7102-7352.

Subpart B of Part 157--[Removed and Reserved]

    4. Subpart B of Part 157 is removed and reserved.
    5. Under the authority of the Gas Wellhead Decontrol Act of 1989, 
Pub. L. No. 101-60, Parts 270 through 275 are removed.

[FR Doc. 94-18869 Filed 8-5-94; 8:45 am]
BILLING CODE 6717-01-M