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regulated by FERC. NGPA section 503, however, does not contain a
specific reference to or definition of "tight formation gas".
NGPA section 503 does contain reference to several categories of
natural gas which are covered under its procedures, including
"high-cost natural gas". See 15 U.S.C. sec. 3413(a)(1)(D).
NGPA section 503 was enacted in 1978 and did not
specifically mention tight formation gas. The introduction of
tight formation gas to the price incentive provisions, including
NGPA section 503, did not occur until some later time. The
introduction of tight formation gas into this scenario occurred
as described in Williams Natural Gas Co. v. FERC, 872 F.2d 438,
441 (D.C. Cir. 1989), as follows:
NGPA section 107(c)(5) gives the * * * [FERC] the power
to prescribe an incentive price for high-cost natural
gas which does not fit within the categories enumerated
in section 107(c)(1)-(4). On July 16, 1979, President
Carter recommended the establishment of incentives for
the production of "tight formation" natural gas. After
conducting a rulemaking, * * * [FERC] promulgated
regulations establishing incentive prices for tight
formation gas. [Fn. ref. omitted.]
The courts thereafter held that NGPA section 503 is the
procedural mechanism for the determination of whether a
particular well's production qualifies for the price incentive as
tight formation gas vis-a-vis the NGPA section 503 category
"high-cost natural gas". See, e.g., Williston Basin Interstate
Pipeline Co. v. FERC, 816 F.2d 777, 780 (D.C. Cir. 1987).
NGPA section 503 contains a four-step process by which
determinations may be obtained. First, the local regulatory
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