Federal Regulation of the Uses of Natural Gas

The Natural Gas Act of 1938, as amended in 1942, requires natural-gas companies subject to the act to obtain certificates of public convenience and necessity from the Federal Power Commission before transporting or selling natural gas in interstate commerce, as well as before acquiring, constructing, or extending facilities for those purposes. The issuance of such certificates is a conventional function of public-utility regulatory bodies, and the Commission has administered it in a conventional manner. The tests developed by the Commission to determine the “public convenience and necessity,” relating primarily to the adequacy of natural gas reserves, physical facilities, financial resources, and market demand, are commonplace standards, framed in the public-utility tradition to fit the economic and physical characteristics of the natural-gas industry. The real importance of the certificate power under the Natural Gas Act lies in the fact that issues raised in proceedings pursuant to it have transcended the scope of these standards, involving no less than an attempt to redefine in the broadest terms the public interest in respect to natural gas.