- 10 -10 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 regulatoryPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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