AMERICAN GAS ASS'N v. F.E.R.C.

Nos. 87-1588, 87-1336 to 87-1346, 87-1595, 87-1604, 87-1613, 87-1614, 87-1638, 87-1649, 87-1650, 87-1652, 87-1655, 87-1667, 87-1678, 87-1710, 87-1732, 87-1763, 87-1766 to 87-1768, 87-1772 and 87-1773.

888 F.2d 136 (1989)

AMERICAN GAS ASSOCIATION, et al., Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent, The Independent Oil & Gas Association, et al., Intervenors.

United States Court of Appeals, District of Columbia Circuit.

Decided October 16, 1989.

As Amended January 5, 1990.


Attorney(s) appearing for the Case

Raymond N. Shibley, Washington, D.C., with whom David J. Muchow and Roger B. Cooper, Arlington, Va., for American Gas Association; Daniel F. Collins and William W. Brackett, Washington, D.C., for ANR Pipeline Company and Colorado Interstate Gas Company; John H. Cheatham III, for Interstate Natural Gas Association of America; Kevin J. Lipson, John E. Holtzinger, Jr., Charles C. Thebaud, Jr., Washington, D.C., and Stephen E. Williams for CNG Transmission Corporation; Terence J. Collins, Washington, D.C., Margaret L. Bollinger, Houston, Tex., and Robert H. Benna, Washington, D.C., for Tennessee Gas Pipeline Company; Robert T. Hall, III, New York City, and Stephen L. Huntoon for Williston Basin Interstate Pipeline Company; William J. Grealis, Dana B. Ott, Washington, D.C., and Cheryl M. Foley, Houston, Tex., for Transwestern Pipeline Company; John F. Harrington, Birmingham, Mich., for Texas Gas Transmission Corp.; Michael R. Waller, Washington, D.C., for United Gas Pipe Line Company; and Michael E. Small, Washington, D.C., for Williams Natural Gas Company were on the joint brief for Pipeline Group in 87-1588, et al.

Jennifer N. Waters with whom Frederick Moring, Washington, D.C., for Associated Gas Distributors; William T. Miller, Susan N. Kelly and Mark C. Darrell, Washington, D.C., for American Public Gas Association; Roberta L. Halladay, Washington, D.C., Marilyn A. Specht and C. William Cooper, for United Distribution Companies; Richard A. Solomon and David D'Alessandro, Pittsburgh, Pa., for The Public Service Commission, State of New York; Lynne H. Church and Robert Fleishman and Jeffrey D. Watkiss, Washington, D.C., for Baltimore Gas and Electric Company; Robert B. Langstaff, for Board of Water Gas & Light Commissioners, Albany, Georgia; William I. Harkaway, Harvey L. Reiter, Washington, D.C., and Barbara M. Gunther, Brooklyn, N.Y., for Consolidated Edison Company of New York; Kenneth J. Neiss, for Laclede Gas Company; John M. Glynn for Maryland People's Counsel; Frank J. Kelley, Detroit, Mich., Louis J. Caruso, Don L. Keskey, Henry J. Boynton, Lansing, Mich., Patricia S. Barone, Murphysboro, Ill., Ronald D. Eastman and Lynda S. Mounts, Washington, D.C., for The State of Michigan and Michigan Public Service Commission; Glen W. Letham and Kenneth M. Albert, Washington, D.C., for Memphis Light, Gas & Water Division; Charles F. Wheatley, Jr., Philip B. Malter for National Association of Gas Consumers; Harry H. Voight and M. Reamy Ancarrow, Washington, D.C., for Niagara Mohawk Power Corporation, and Orange and Rockland Utilities, Inc.; David I. Bloom, Washington, D.C., for Northern Illinois Gas Company; Margaret Ann Samuels, Columbus, Ohio, for Office of the Consumers' Counsel, State of Ohio; William I. Harkaway, Washington, D.C., and C. Burnett Dunn, for Oklahoma Natural Gas Transmission Company; Steven F. Greenwald, Joshua Bar-Lev and Lindsey How-Downing, San Francisco, Cal., for Pacific Gas & Electric Company; James R. Lacey, for Public Service Electric & Gas Company; Janice E. Kerr, J. Calvin Simpson, and Michael B. Day, San Francisco, Cal., for The Public Utilities Commission of The State of California; E.R. Island and David L. Huard, Los Angeles, Cal., for Southern California Gas Company; Frank H. Strickler, Gordon M. Grant, Washington, D.C., and Ralph E. Fisher for Washington Gas Light Company; Veronica Smith for Pennsylvania Public Utility Commission; James Hinchliff, Chicago, Ill., Thomas M. Patrick, Mark J. McGuire, and Karen Lee for The Peoples Gas Light & Coke Company and North Shore Gas Company were on the joint brief for Local Distribution Companies, state commissions and related agencies in 87-1588, et al.

Thomas G. Johnson with whom Charles J. McClees, Jr. and James A. Ruoff, Houston, Tex., for Shell Offshore, Inc. and Shell Western E & P Inc.; Jack M. Wilhelm, Amoco Production Co.; R. Gordon Gooch, Washington, D.C., and F. Nan Wagoner, Houston, Tex., for Anadocko Petroleum Corp.; Richard G. Morgan for Apache Corp.; Harris S. Wood and Kathleen E. Magruder, Houston, Tex., for Arco Oil and Gas Company; David J. Evans, and James B. Atkin, San Francisco, Cal., for Chevron USA Inc.; Ernest J. Altgelt, III, Houston, Tex., for Conoco, Inc.; C. Roger Hoffman and D.W. Rasch, Houston, Tex., for Exxon Corporation; Toni D. Hennike, Dallas, Tex., and Gerald M. Bendo, Tulsa, Okl., for Hunt Oil Company; John J. Akins, Oklahoma City, Okl., for Kerr-McGee Corporation; Robert C. Murray, New York City, for Marathon Oil Company; R. Brent Harshman for Maxus Energy Corp.; Paul F. O'Konski and Randolph C. Bruton for Meridian Oil, Inc.; Jay G. Martin, Houston, Tex., for Mobil Natural Gas Inc., and Mobil Oil Exploration & Producing Southeast, Inc.; John B. Chapman, El Paso, Tex., for Pennzoil Company; Michael L. Pate for Oxy USA, Inc.; John L. Williford, Bartlesville, Okl., Larry Pain and Luke A. Mickum, Oklahoma City, Okl., for Phillips Petroleum Co. and Phillips 66 Natural Gas Co.; Ronald D. Hurst, for Placid Oil Company; Ralph J. Pearson, Jr., Austin, Tex., and David B. Lindberg for Texaco, Inc.; Kenneth L. Riedman, Jr., Los Angeles, Cal., for Union Oil Company of California; and Kerry R. Brittain and Alan W. Tomme, Midland, Tex., for Union Pacific Resources Company were on the joint brief for Producers Group in 87-1588, et al.

William W. Brackett with whom Daniel F. Collins, Washington, D.C., ANR Pipeline Company and Colorado Interstate Gas Company; Steven E. Williams, Kevin J. Lipson, John E. Holtzinger and Charles C. Thebaud, Jr., for CNG Transmission Corporation, Michael R. Waller, Washington, D.C., for United Gas Pipe Line Company, and Robert T. Hall, III, New York City, and Stephen L. Huntoon, Washington, D.C., for Williston Basin Interstate Pipeline Company were on the joint brief for Pipeline Group, in the Take-or-Pay and Contract Demand Issues in 87-1588, et al.

Robert H. Benna with whom John T. Ketcham, David D. Withnell, Washington, D.C., and Margaret L. Bollinger, Houston, Tex., were on the brief for Tennessee Gas, on the Take-or-Pay and Contract Demand Issues in 87-1588, et al.

Edward B. Myers also entered an appearance for petitioner Interstate Natural Gas Association of America.

Dale A. Wright and Michael E. Small, Washington, D.C., entered appearances for petitioners Williams Natural Gas Co., Northwest Pipeline Corp.

Charles M. Darling, IV and Stephen L. Teichler, Washington, D.C., entered an appearance for petitioner Ashland Exploration, Inc., Cabot Corp.

Robert T. Hall, III, New York City, and Stephen L. Huntoon, Washington, D.C., entered appearances for petitioner Williston Basin Interstate Pipeline Co.

Jerome M. Feit, Solicitor, FERC, Washington, D.C., with whom Catherine C. Cook, General Counsel, Dwight C. Alpern, Detroit, Mich., and Joel M. Cockrell, Washington, D.C., attorneys, FERC, were on the brief for respondent in 87-1588, et al., John Estes, Joseph Davies, attorneys, FERC, also entered appearances for respondent.

Edward J. Grenier, Jr. with whom William H. Penniman, James M. Bushee, Washington, D.C., for Process Gas Consumers Group, American Iron and Steel Institute and Georgia Industrial Group and Robert F. Shapiro and Thomas E. Hirsch, III, Washington, D.C., for American Paper Institute, Inc., were on the joint brief for intervenors Industrial End Users Group in 87-1588, et al.

George L. Weber and Kenneth L. Glich, for National Fuel Gas Supply Corporation; Stephen J. Small, Boston, Mass., Mark D. Clark, John H. Pickering, Timothy N. Black, Neal T. Kilminster, and Susan D. McAndrew, Washington, D.C., for Columbia Gas Transmission Corp.; and Ronald N. Carroll, for Inland Gas Company, Inc. were on the joint brief for intervenors on Contract Demand Reduction Issues in 87-1588, et al.

Norma K. Scogin, Assistant Attorney General, State of Texas, Austin, Tex., was on the joint brief for intervenors Railroad Commission of Texas, Corporation Commission of the State of Kansas, and State of Louisiana in 87-1588, et al.

Richard G. Morgan and Brian T. O'Reilly entered an appearance for intervenor American Gas, et al.

Rigdon H. Boykin, New York City, and Thomas E. Hirsch, III, Washington, D.C., entered appearances for intervenor The American Paper Institute, Inc.

William T. Miller, Susan N. Kelly and Mark C. Darrell, Washington, D.C., entered appearances for intervenor American Public Gas Association.

Jon L. Brunenkant, Kevin M. Sweeney, Washington, D.C., and Jack M. Wilhelm entered appearances for intervenor Amoco Production Co.

Gordon Gooch, Katherine Edwards, Washington, D.C., Dennis Moss and Dan A. Spencer, Spring, Tex., entered appearances for intervenor Anadocko Petroleum Corp.

Richard G. Morgan entered an appearance for intervenor Apache Corporation.

Harris S. Wood, Norma J. Rasner and Kathleen E. Magruder, Houston, Tex., entered appearances for intervenor ARCO Oil and Gas Co.

Joel L. Greene and Barbara S. Jost, Washington, D.C., entered appearances for intervenors Arizona Public Service Co., et al.

Ivy Lincoln entered an appearance for intervenor The Arkansas Public Service Commission.

Frederick Moring, M. Lisanne Crowley and Jennifer N. Waters, Washington, D.C., also entered appearances for intervenor Associated Gas Distributors.

Robert Fleishman, Lynne H. Church and Jeffrey D. Watkiss, Washington, D.C., entered appearances for intervenor Baltimore Gas and Electric Co.

John W. Glendening, Jr. and Bruce B. Glendening, Washington, D.C., entered appearances for intervenors Bay State Gas Co., et al.

Patricia A. Curran, Houston, Tex., also entered an appearance for intervenor Cabot Corporation.

Robert B. Langstaff, Albany, Ga., entered an appearance for intervenor City of Albany, Georgia Board of Water, Gas and Light Commissioners.

Richard I. Chaifetz, Washington, D.C., entered an appearance for intervenor City of Willcox, Arizona, et al.

John L. Shailer and Roger C. Post, Columbus, Ohio, entered appearances for intervenor Columbia Gas Distribution Co.

Stephen J. Small, Boston, Mass., Giles D. Snyder and Ronald N. Carroll also entered appearances for intervenor Columbia Gas Transmission Corp.

Ernest J. Altgelt, III, Houston, Tex., entered an appearance for intervenor Conoco, Inc.

William I. Harkaway, Harvey L. Reiter, Washington, D.C., and Barbara M. Gunther, Brooklyn, New York, also entered appearances for intervenor Consolidated Edison Co. of N.Y., Inc.

John E. Holtzinger, Jr. and Robin Taylor Wiggins, Washington, D.C., also entered appearances for intervenor Consolidated Gas Transmission Corp.

Donald J. MacIver, Jr., Richard Owen Baish, Scott D. Fobes, El Paso, Tex., and Richard C. Green also entered appearances for intervenor El Paso Natural Gas Co.

Dennis D. Ahlers entered an appearance for intervenor Energy Issues Intervention Office of the Minnesota Department of Public Service.

C. Roger Hoffman, Joseph G. Stiles, D.W. Rasch, Houston, Tex., Charles M. Darling IV, Stephen L. Teichler and Sheryl S. Hendrickson, Washington, D.C., also entered appearances for intervenor Exxon Corp.

Stephen A. Herman, Newark, N.J., entered an appearance for intervenor The Fertilizer Institute.

Charles H. Shoneman, Washington, D.C., entered an appearance for intervenor The Independent Oil & Gas Association of West Virginia.

Robert C. Platt entered an appearance for intervenor Independent Petroleum Association of America, et al.

Kenneth J. Neises, Washington, D.C., entered an appearance for intervenor Laclede Gas Co.

Kevin M. Sweeney, Washington, D.C., entered an appearance for intervenor Marathon Oil Co.

Thomas C. Gorak, Washington, D.C., and John M. Glynn, Baltimore, Md., entered appearances for intervenor Maryland People's Counsel.

Glenn W. Letham and Kenneth M. Albert, Washington, D.C., also entered appearances for intervenor Memphis Light Gas & Water Division.

Jeffrey M. Petrash, Washington, D.C., and James H. Holt also entered appearances for intervenor Michigan Consolidated Gas Co.

Jay G. Martin, Houston, Tex., entered an appearance for intervenor Mobil Natural Gas Inc.

Paul E. Goldstein, Paul W. Mallory, Lombard, Ill., and Paul Korman, Washington, D.C., entered appearances for intervenor Natural Gas Pipeline Co. of America.

Harry H. Voigt, M. Reamy Ancarrow and Mindy A. Buren, Washington, D.C., also entered appearances for intervenors Niagara Mohawk Power Corp., Orange and Rockland Utilities, Inc.

David I. Bloom, Washington, D.C., also entered an appearance for intervenor Northern Illinois Gas Co.

James T. McManus and Stephen K. Schroeder, Salt Lake City, Utah, entered appearances for intervenor Northwest Pipeline Corp.

William I. Harkaway, Washington, D.C., and C. Burnett Dunn also entered appearances for intervenors ONG Transmission Co., et al.

Michael L. Pate entered an appearance for intervenor Oxy, USA, Inc.

Joshua Bar-Lev, Steven F. Greenwald, and Lindsey How-Downing, San Francisco, Cal., entered appearances for intervenor Pacific Gas and Electric Co.

Raymond N. Shibley, Brian D. O'Neill and Bruce W. Neely, Washington, D.C., also entered appearances for intervenors Panhandle Eastern Pipe Line Co., et al.

Robert P. Haynes, John F. Povilaitis, Daniel P. Delaney, Harrisburg, Pa., and Veronica Smith entered appearances for intervenor The Pennsylvania Public Utility Commission.

John K. McDonald and Charles E. Suffling also entered appearances for intervenor Pennzoil Co.

Charles L. Pain, Bartlesville, Okl., Jennifer A. Cates, John L. Williford, Luke A. Mickum, Bartlesville, Okl., and Larry Pain also entered appearances for intervenors Phillips Petroleum, et al.

Edward J. Grenier, Jr., William H. Penniman, Glen S. Howard and James M. Bushee, Washington, D.C., also entered appearances for intervenor The Process Gas Consumers Group, et al.

Richard A. Solomon and David A. D'Alessandro, Pittsburgh, Pa., also entered appearances for intervenor The Public Service Commission of the State of New York.

James R. Lacey entered an appearance for intervenor Public Service Electric and Gas Co.

Janice E. Kerr, J. Calvin Simpson and Michael B. Day, San Francisco, Cal., entered appearances for intervenor The Public Utilities Commission of the State of California.

Sarah F. Miller and Norma K. Scogin, Austin, Tex., also entered appearances for intervenor Railroad Commission of Texas.

Carroll L. Gilliam, J. Paul Douglas, Kevin M. Sweeney, Washington, D.C., Craig Harman Walker, Charles J. McClees, Jr., Houston, Tex., and Thomas G. Johnson also entered appearances for intervenors Shell Offshore, Inc. et al.

E.R. Island, Los Angeles, Cal., entered an appearance for intervenor Southern California Gas Co.

R. David Hendrickson and Donna J. Bailey entered appearances for intervenor Southern Natural Gas Co.

Robert Y. Hirasuna, Washington, D.C., entered an appearance for intervenor The State of Louisiana.

John M. Hopper, Jr., Houston, Tex., entered an appearance for intervenor Tejas Power Corp.

Phyllis G. Rainey, Houston, Tex., also entered an appearance for intervenor Tenneco Oil Co.

Harold L. Talisman, Robert H. Benna, David D. Withnell, John T. Ketcham, Terence J. Collins, Washington, D.C., Ernest B. Abbott and Margaret L. Bollinger, Houston, Tex., also entered appearances for intervenor Tennessee Gas Pipeline Co.

Michael J. Manning, James F. Moriarty and James P. White entered appearances for intervenor The Tennessee Small General Service Customer Group.

Ralph J. Peason, Jr. entered an appearance for intervenor Texaco, Inc.

Judy M. Johnson also entered an appearance for intervenor Texas Eastern Transmission Corp.

Ralph E. Simon, Jr., Tulsa, Okl., entered an appearance for intervenor Transok, Inc.

William J. Grealis, Dana B. Ott, Washington, D.C., and Cheryl M. Foley, Houston, Tex., entered appearances for intervenor Transwestern Pipeline Co.

Kerry Brittain entered an appearance for intervenor Union Pacific Resources Co.

F. Nan Wagoner, Houston, Tex., Gordon Gooch, Katherine B. Edwards, Washington, D.C., also entered appearances for intervenor Union Texas Petroleum Corp.

Roberta L. Halladay, Washington, D.C., and C. William Cooper also entered appearances for intervenor United Distribution Companies.

Michael R. Waller, Frederick W. Peters, Washington, D.C., Phillip D. Endom, Houston, Tex., entered appearances for intervenor United Gas Pipe Line Co.

M. Frazier King, Jr. entered an appearance for intervenor Valero Interstate Transmission Co.

Luis M. Guzman entered an appearance for intervenor, Valero Transmission Co., L.P.

Dale A. Wright and Michael E. Small, Washington, D.C., also entered appearances for intervenors Williams Natural Gas Co. and Northwest Pipeline Corp.

Before WILLIAMS, D.H. GINSBURG and SENTELLE, Circuit Judges.


Opinion for the Court filed by Circuit Judge D.H. GINSBURG.

D.H. GINSBURG, Circuit Judge:

The Federal Energy Regulatory Commission embarked in the early 1980s on an ambitious program to restructure the natural gas industry along lines more competitive than it had traditionally followed. One of the major components of this program, the encouragement of natural gas pipelines to adopt an "open access" transportation policy, failed to pass muster when we reviewed...

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