FEDERAL REGULATION OF OIL AND
NATURAL GAS PIPELINES
Paper For:
Professor Gary A. Ahrens
Energy Regulations
by
Marian M. Holmes
July 9, 1981
The Department of Energy Organization Act
1 transferred
to the Federal Energy Regulation Commission (PERC) the regulatory authority over oil and natural gas pipelines exercised
by two agencies:
1) Federal Power Commission (FPC) authority over natural
2
gas pipelines empowered by the Natural Gas Act
(NGA),
2) Interstate Commerce Commission (ICC) authority over
3
the oil pipelines empowered by the Elkins Act
as amended
4
by the Hepburn Act.
The goal of legislation creating these agencies was to
insure reasonable rates in commercial activities where
natural monopolies interfered with the setting of competitive
prices.
Loopholes in common carrier regulation of oil pipe-
lines allow the industry more freedom of action than the public
utilities regulation of the natural gas pipeline industry.
As FERC assimilates these divergent regulatory systems, the
potential for extending the more stringent NGA rate regulation
to encompass oil pipeline operation may obviate the perennial
demand for divestiture by the vertically integrated oil corporations of oil pipeline affiliates.
ICC Regulation of the Oil Pipelines
Federal »regulation of oil pipelines originated in the
trust-busting era of President Theodore Roosevelt. The
5
Elkins Act, aimed at curbing excesses of the railroad industry,
failed to adequately meet this charge and so Congress
6
considered the Hepburn Bill
-to tighten ICC authority barring
00143
rebate practices of the industry.
Senator Lodge used this
opportunity to attack the "Standard Oil trusts.
He proposed
an amendment to the bill that brought oil pipelines under
ICC purview.
Standard oil reputedly controlled ninety percent
of the nation's oil pipelines and thus, held monopsony power
in the market for oil well production, as well as monopoly
7
power in the marketing of refinery products.
When oil was first successfully produced by Colonel
Edwin Drake, the teamsters transported oil in barrels on
drays.
However, this inefficient method of transportation
-was quickly replaced by pipeline transport.
Six years after
the first oil well at Titusville, Pennsylvania, Van Syckel
laid the first pipeline connecting the oil field with the
railhead.
Teamsters,
were in competition with the pipe-
line fought the construction of this two inch line covering
six miles by ripping
up at night the joints of pipe laid
8
during the day.
Pinkerton agents infiltrated the teamsters
9 .
nd had the ringleaders arrested.
The completed pipeline
delivered crude oil at the rate of one dollar per barrel,
10
half the rate charged by the teamsters.
At this juncture the railroads helped finance the
construction to ensure a supply of crude oil .at the railhead,
but after 1$74, when a pipeline bypassed the railroad and
delivered dir.ectly to Pittsburg, the railroads resisted
construction by fighting, in and out of the courtroom,
11
pipeline crossings of railroad rights of way.
Standard
Oil soon engaged in collusive agreements with the railroads
- 2 -
0015j
which enabled the oil company to deliver crude from Pennsylvania
oil fields to New York refineries' at ten cents per barrel while
competitors costs for delivery ran as high as forty-five cents
12
per barrel.
To prevent this inequitable rate structure,
Senator Lodge proposed ICC regulation of pipeline rates and
common carrier status for the pipelines so that all producers
could use them.
The amendment as passed made subject to
regulation carriers transporting "oil or other commodity,
except water and except natural or artificial gas, by pipe
line, or partly by pipe line and partly by railroad or by
13
water."
14
Another part of the Hepburn Act, the commddities Clause,
forbade railroads from shipping their own products by rail.
However, the Lodge amendment as enacted by Congress omitted
oil pipelines from the "commodity clause" and spared Standard
Oil from legal requirements of divestiture of its pipeline
holdings.
—.
Within six months of passage of the Hepburn Act, the
Department of Justice began prosecution of the antitrust
15
case against Standard Oil
under the Sihfcrman Antitrust Act
16
of 1890.
The case went to the Supreme Court which held
Standard Oil to be an illegal
17 monopoly and provided a remedy
of horizontal divestiture.
Vertical integration of
pipelines with refineries continued with the establishment of
the several oil companies.
Concerning this part of the
remedy, Chief Justice White stated:
. -30 0 1 rr
By the effect of the transfer of the
stock the pipelines would come under the control of various corporations instead of being
subjected to a uniform control. If various
corporations owning the lines determined in
the public interests to so combine as to make
a continuous line, such agreement or combination would not be repugnant to the act, and
yet it might be restrained by the decree . . . .
we construe the the sixth paragraph of the
decree /enjoining future combinations/ not
as depriving the stockholders or the corporations of the right to live under the law of
the land, but as compelling obedience to
that law.
The several oil companies created did make agreements
to share ownership of and transmission by pipelines
thereafter without Department of Justice prosecution for
19
divestiture.
After the horizontal divestiture of Standard Oil, the
several oil companies contested application of ICC pipeline
regulation setting reasonable rates and granting access for
all shippers to pipeline transportation.
The Lodge amend-
ment called for common carrier status for all oil pipelines
engaged in interstate commerce.
The oil companies claimed
that the amendment only applied to pipelines that were common
carriers at the date of enactment of the bill or to those
electing common carrier status by use of eminent domain
grants.
In the alternative, the oil companies claimed that
the act was unconstitutional because it deprived owners of
m
m
property without due process and was a taking for public use
20
without compensation.
21
The Pipeline Cases
-4-
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opinion,
written b y Justice Oliver Wendell Holmes, stated that the
legislative intent of the amendment was to include within the
scope of the ICC authority all pipelines engaged in transporting oil purchased from producers.
The act did not violate the
Fifth Amendment because it only banned a pipeline company
from requiring sale of oil to it as a condition for trans-
22
porting the oil.
The lone exception among the parties to
the suit, Uncle Sam Oil Company, operated outside the jurisdiction of the ICC because the company owned the wells, the
pipeline and the refinery, which Justice Holmes likened to
using well water for household use - the transportation
23
from well to refinery was incidental to the use of the oil.
Thereafter the oil pipelines subject to ICC scrutiny
complied with the form of the law, However, 24
the question
of "reasonable rates" remained a sore point.
Railroads
25
and pipelines could not indulge in rebates,
but the
ownership of pipelines and the oil transmitted therein
resulted in su)b. rosa rebates.
The parent company of a
pipeline received dividenendspaid on profits from the rates
charged independent shippers and parent company alike.
In
26
United States v. Atlantic Refining Company,
the government sought to enjoin ninety pipeline companies 27 from
paying rebates in the guise of dividends to their alter ego
*
0
oil corporations.
The attack on Pearl Barbor during the
litigation created a crisis environment.
The need for
expeditious delivery of oil -5to gear up the economy for wartime
ooirr
outweighed concern for the public interest in reasonable
rates.
The Department of Justice acceded to the oil companies
in the consent decree and allowed a dividend of seven
per cent
return on valuation of the pipeline. T.h e pipeline companies
could retain any profits above the '.seven per cent return
for expansion, but could not pass it on to the parent companies.
The ICC valuation of pipeline property included weighted
averages of initial costs and reproduction costs less depreciation, but excluded improvements made with excess profits. 2 8
In 1959 the issue of rebates disguised as dividends
29
again arose.
For sixteen years the ICC had allowed a
sever per cent return calculated on total investment.
The
Department of Justice claimed the return only applied to
the amomt invested by the oil company and not debt financing
of the pipelines.
The example footnoted in the opinion
described the difference in computation:
Assuming a carrier has an ICC "valuation" of
$10,000,000, $2,000,000 of which represents stock
investments of $1,000,000 by each of two shipper
oil companies, and $8,000,000 of which represents
debt because of money borrowed by the carrier from
others, on the appellee-companies * interpretation
of the decree, each of two shipper-owners would
be entitled to "dividends" of one-half ($1,000,000/
$2,000,000) of 7% of $10,000,000 or $350,000. On
the government's new interpretation instead, each
shipper-owner's "share" would be one-tenth
($1,000,000/
$10,000,000 or $70,000, this being 7% or each one's
actual investment of $1,000,000 in the company.
The court rejected the new interpretation of the
31
Elkins Act and reaffirmed the consent decree,
which had
heretofore been binding on parties to the suit but not,
CO
1
u :
by doctrine of res judicata,
applicable to all pipeline
compan Les.
Commensurate with the debilitating effects of legislative oversight and judicial interpretation favorable to
the pipeline companies, the ICC enforcement practices
tended to favor the pipeline companies.
As rate regu-
lation developed, the ICC accepted the tariffs filed by
the pl.peli.nos as presunipt Lve]y fair* because the commission
had little experience with the industry.
In regulating
railroad rates, competition in the industry elicited shipper
complaints as to the unreasonableness of the tariffs filed.
The ICC relied on the adversary proceeding to develope all
the L'acts.
However, the majority of shipping by pipeline
was done by the owners, and this factor cut down on the
exposure of potential adversaries to the tariffs the
pipelines filed.
It became accepted practice within the
ICC to rely on the business .judgment of those in the pipeline industry as to the factors involved in establishing
32
reasonable rates.
The absence of complaints by non-owner shippers
.implied effective government regulation and/or little
friction between owner and non-owner shippers, according
to the ICC.
Testifying before
Senate Committee, the ICC
Chairman stated:
m
Today there are so few complaints and so
_
few problems that 1 must say /bhe pipelines are/
one of the best run transportation systems we
have . . . .In conclusion, it would appear that
except for certain iinpedlmerits b rought about
-7-
0t;155
because of environmental considerations,
pipelines have been constructed on an as-needed
basis and generally provide good service. It
has been our experience that pipeline rates
are just and reasonable . . . .We have received
no complaints in recent years involving allegations relative to the size of tender, the
failure to publish through routes and joint 33
rates, or to provide service to independents.
To the contrary, an assistant Attorn^-General - from the
Department of Justice pointed out the fallacy in relying on
shipper complaints to ascertain unreasonable rate structures
in the oil pipeline industry.
In his testimony before a
different Senate Committee five years later, he stated:
The ICC's long periods of regulatory
passivity on both carrier and rate matters
appear to have been premised on a "Hear-No-Evil,
See-No-Evil11 approach to regulation. According
to the theory, if complaints are few, the system
must be working well and the public interst
being served. But the interests of the shipping
public are not necessarily coincident with those
of the public at large, especially where, as
is often the case with oil pipelines, the shipper and the carrier share a strong commonality
of interest.
Not unexpectedly at hearing*such
as this, the industry points to the absence of
complaints as proof of non-discriminatory service to the shipping public. In weighing
that record, however, Congress should aiso consider the fact that the non-owner-shipper has
in the past been faced with a climate of regulatory indifference in an industry dominated by
carrier-affliiated shipments. This is an additional burden to any reluctance that may exist
in the non-owner- shipper to disturb a customer/
supplier relationship by resort to litigation. 3^
Noting lack of independent shipper protest of pipeline
rates, Justice Brennan, in his majority opinion in Trans35
Alaska Pipeline Rate Case,
stated, "Indeed , it is telling
that no shipper of oil protested the TAPS rates.
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Instead,
as one might predict from experience
under the Hepburn Act .
-8-
only
the public perceives that it will be injured by the
36
proposed TAPS rates and has objected to them."
The
37
eight owner oil companies
of TAPS filed tariffs
with
the ICC which encountered protests from the State of Alaska,
the Arctic Slope Regional
Corporation, the Department of
38
Justice and the ICC.
The oil companies computed their
rates using the Consent Decree standard of seven per cent
return on total investment. The complaining
39 parties termed
this valuation standard "double dipping."
The Supreme
Court upheld the ICC authority to suspend proposed rates
40
pending formal inquiry.
Since initiation of the rate
case
FERC has assumed authority in place of the ICC.
The
case remains tied up in administrative law court hearings
to date while the search continues for "reasonable
rates"
after 150 hearing days, 24,275 transcript pages, and 947
41
exhibits.
(An anonymous wit at FERC has labeled this case
42
"FERC's first foray" into oil pipeline rates. )
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FPC Regulation
of Natural Gas Pipelines
As a by-product of oil recovery, natural gas was "flared"
or "popped off" except for gas used to power machinery needed
ti petroleum recovery.
No royalties were paid the lessor
or mineral estate owner for natural gas so used.
Gas-
lights of the Victorian era burned with the synthetic gas
made at the local gasworks yhich operated as public utilities.
With the advent of oil production in Pennsylvania, natural
gas from the oil wells replaced synthetic gas at the
-9-
local gasworks.
Possessing the characteristics of a
natural monopoly, the natural gas.industry became subject
44
to state or municipal control as a public utility.
Although the local governments first regulated natural gas
by granting franchises and rights of way, state governments
soon took over the regulation of distribution systems.
The pipeline company need not distribute gas to the public
to use eminent domain grants as long as the pipeline company
delivered gas to local gasworks for distribution in home for
45
heat and light.
However, the pipeline or the gas works
w ere required to supply consumers 46
generally and not select
customers in an arbitrary fashion.
Too remote from^etropolitan areas for natural gas
consumption as a clean, efficient fuel for lighting and
heat, the Texas oil fields wasted countless Mcfs. (1,000
cubic feet) of natural gas produced with oil by flaring it.
Consequently, the view from the air over West Texas looked
"as if campfires of all the 47
armies
world were burning below."
in the history of the
Demand for gas soon exceeded the availability intrastate.
The ;sole method of transport for technical and safety reasons
was by pipeline.
Some independent companies seized the
opportunity and built interstate gas pipelines.
These
distribution networks again were natural monopolies, holding
»
monopsony power in the field of production at one end of the
pipeline and monopoly power at the other end in the distribution to local gas utility companies.
fcljLUO
State regulatory
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agencies sought
to maintain control.
These attempts
failed to withstand court scrutiny in cases where
crossed state boudaries.
pipelines
The Supreme Court held consuming
states regulatory agencies could not regulate wholesale
rates charged by pipelines to distributors for gas produced
in another state nop could the agencies set interstate
transportation rates for gas transmission.
Such regulation
violated the Commerce Clause of the Constitution, according
48
to the Court.
The Natural Gas Act, prompted by the growing power of
interstate pipelines, paralleled the passage of the Federal
49
Power Act
in 1935.
Contrary to legislative experience in
attempting to write statutes regulating oil pipelines,
the purchasers (the gas utilities) and the pipeline companies
welcomed the proposed legislation.
As a quid pro quo for
submission to federal regulation , the interstate pipeline
companies won protection from competition with the consonV
ant duplication of facilities and also safely extricated
50
themselves from the 'highly politicized arena of Congress."
The gas producers remained untouched by the original
legislation and, hence, subject to monopsony power of the
pipeline companies.
By one, account, the producers pre-
ferred to be free of wellhead regulation and could afford to
risk monopsony 52
powerb ecause without pipelines they had no
market at all.
Sam Rayburn is said to have persuaded a
delegation of Texas gas producers not to testify in Congressional hearings by promising
that the bill would not en-11-
compass wellhead prices.
Patterned after federal regulation of electric power,
54
the Natural Gas Act
provided that gas could not be sold
interstate without a certificate of public convenience
and necessity from the PPC nor could deliveries of gas
cease unless the gas supply was depleted or such abandonment
served the public convenience and necessity.
The same type
of certificate was required for pipeline construction or
abandonment.
Rates
charged for gas were to be "just and
reasonable" by PPC standards.
The act also empowered the
" PPC to regulate mergers and securities acquisition of pipeline companies.
A major distinction between oil and natural gas pipelines
industries w a s that oil pieplines did not necessarily own
the product transmitted but were common carriers .
Natural
gas pipeline companies took title to the gas in the field
of production and sold the product at the distribution point
Thus, a reasonable rate for ICC purposes only included the
costs of transmission.
In PPC terms, reasonable rate
included the cost of the gas and the cost of transmiss ion.
Oil production could be sent in batches of different
qualities of crude as well as different ownership by insert55
ing arvinflated ball to separate the batches.
However,
gas was totally fungible and was shipped in a continuous
s tream from the well without use of storage tanks at
either end of the pipeline.
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"Just
and reasonable rates" in utility regulation have
had a special meaning.
The standard for just and reasonable
meant a regulated price derived from costs by a "formula or
56
method with which an appeals court will agree."
The pipeline companies recognized a loophole in the
Natural Gas Act.
Although the rates at the point of de-
livery to gas utilities were regulated, that rate was
based in part on the cost
to the pipeline companies of
the natural gas in the field of production, which was not
regulated.
If the pipeline company or its affiliates owned
the production side of the natural gas industry as well as
the pipeline, they could charge themselves high prices for
their own product and have this cost reflected In the rate
charged the gas utility companies.
The FPC approval of
the rate charged the utilities would necessarily take into
account the cost to the pipeline company over which the FPC
did not have jurisdiction.
57
Company v. FPC,
In Interstate Natural Gas
the Supreme Court extended FPC jurisdiction
to rates charged by a producer if the producer was also an
owner or affiliate of a pipeline company.
From that point
on the FPC regulated the price of natural gas produced by
pipeline affiliated gathering companies at actual production
costs, usually much lower than the price of non-affiliated
58
production.
/
This regulatory power curtailed any rate
advantages of vertical integration in the natural gas industry.
Gas pipeline rates, as electric utility rates, under the FPC
and now FERC, take into consideration:
0016$"
1) actual
operating costs,
2) depreciation based on actual costs of construction,
3) return on investment calcuJotted on:
a) actual cost of debt, and
b) return on equity investment,
59
4) cost of natural gas in the field of production.
Conclusions
Pipelines hold a natural monopoly in the transmission
of oil by virtue of economies of scal^4nd cost advantages
"as well as geographic limitations.
The railroad and trucking
industries do not offer an alternate nleans due to the high
costs encountered.
Technical differences of pipelines from
the alternate means include:
1) the use of a narrow right of way benath the surface
allowing limited use of the surface for other puroses,
2) the movement of cargo in one direction only,
3) the lack of "dead weight" movement such as tank
cars and engines,
4) the movement at standard speeds without disruption
for traversing traffic , weather conditions, etc.,
5) the requirement of full capacity for the movement
of the cargo
59
6) the absence of miscellaneous cargo.
Due to the volatile nature of natural gas, no safe
alternate means of transmission remains economically viable.
Vertical integration -14of oil pipeline companies with
refinery and marketing functions restricts competition
with independent refineries as their costs include shipment costs on pipelines owned by their competitors.
Abuse of monopoly power by increasing rates beyond
those that would be set in a competitive market mandate
government intervention in the public interest.
Federal
agency authority to ensure just and reasonable rates protects
the public from abuses of monopoly power.
However, standards
for regulation of "just and reasonable" rates in the oil
pipeline industry differ from those employed in the
natural gas pipeline industry.
Oil pipelines are not
required to obtain certificates of public convenience and
necessity for the initiation or cessation of shipment, nor
are they required to obtain certificates for the construction
or abandonment of pipelines.
The valuation of oil pipe-
lines for computation of costs of service to set rates
differs from the valuation of natural gas pipelines .
Oil
pipelines valuation computes in present replacement value
and allows a rate of return based on total investment, not
just equity.
Although the pricing of natural gas currently manifests
supply and allocation problems, the root of those problems
lies in the regulation of prices at the wellhead and not
with the federal regulation of transmission costs.
The
purpose of this study has been to address the contrasting
federal regulation oil and natural gas pipelines as trans-15-
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mission agents
and the effects of the merger of the FPC and
0
ICC regulatory functions into FERC on these transmission
agents.
Transportation costs are ultimately passed on to
the consume in gas utility bills or prices of petroleum
products.
From this cursory study it can be concluded that
the transportation costs for natural gas under FPC were
fairly regulated compared to the ICC regulation of oil
tranmission costs.
Oil transportation by pipeline has a
long history of questionable rate structures due to the
vertical integration of the industry and the incomplete
absorption of the pipeline industry under the Elkins Act,
which was conceived for regulation of the railroad industry.
FERC has jurisdiction over the rates and charges of
oil pipelines and may exercise this authority by informal
60
rulemaking,
- 62
tion.
61
by formal rulemaking,
and by formal adjudica-
To eliminate possible abuses of natural monopoly
power as well as to achieve other regulatory objectives, it
is necessary to insure that the revenues of oil pipelines
not exceed their
costs ( including an allowance for a rea-
sonable return on equity).
The outcome of the TAPS Rate Case
should indicate how successful FERC h a s b e e n in achieving
these goals.
Should the rate regulation in the TAPS case
m>
not resolve these issues, more
radical measures may ensue,
such as divestiture of vertically Integrated oil pipelines,
either by antitrust action or extension to oil pipelines of
the commoJificS clause, now barring railroads from ownership
of cargo. .
B y contrast, however, concern' for construction of
new oil and natural gas pipelines mitigates against any
positive steps to close the loopholes in legislation or
regulation.
The transportation of Alaskan crude and natural
gas has been hamstrung by the sheer size of the endeavor as
well as environmental concerns.
Because of the need to
transport these commodities to the the United States market,
the laxness of oil pipeline regulation may extend to the
regulation of the proposed Alaskan Natural Gas Pipeline.
63
Enabling legislation
has already cut through the time-
consuming litigation of environmentalists.
But the oil
companies are being wooed as essential financial partners
for the project to encourage other investors in order to meet
the projected $35 to $50 billion cost.
By agreement, Exxon,
ARCO and Standard Oil own 30.'per cent of the projected
pipeline. Congressional approval of oil company ownership
3s being sought as well as approval of a return on their
64
investment.
In the balancing of interests, Congress may
grant this natural gas pipeline company a regulatory environment more akin to that experienced by oil pipelines in the
past, rather than less.
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FOOTNOTES
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1. 42 U.S.C.A.
§7101 et. seq. (1980).
2. 15 U.S.C. §717 et. seq. (1976).
3. 49 U.S.C §§4l-3 (1976).
4. 34 Stat. 584 (1906).
5. 49 U.S.C §§41-3 (1976).
6. 40 Cong. Rec. 6361 (1906).
7. Id. at 6365-6.
8. Bond, Oil Pipe Lines - Their Operation and Regulation,
25, I.C.C. Prac.J. 730, 731 (1958).
9- Sen. Comm. on Energy and Natural Resources and Sen Comm.
on Commerce, Science and Transportation, National Energy
Tranportation, Vol. Ill, S. Rep. No. 95-15, 95th Cong.
2d Sess. 161 (1978).
10. Andress, Development of the Pipe Line Industry, Common
Carrier Pipe Line Operations and Accounting 2 (P. Graber
ed. 1951).
11. Bond at 731.
12. G. Wolbert, American Pipe Lines 51 (1951).
13. 49 U.S.C §1 (1) (c) (1976).
14. 49 U.S.C §1 (8) (1976).
15. United States v. Standard Oil Co. of J.J., 173 Fed. 177
(C.C.E.D.Mo. 1909).
*
16. 26 Stat. 209*(1980), 15 U.S.C.§1 et. seq. (1976).
17. Standard Oil Co. of N.J. v. United States, 221 U.S. 1 (1911).
18. Id. at 80-1.
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19- Hearings
before the Temporary National Economic Committee,
76th Cong., 2d & 3d Sess., Part 14-17A (hereinafter cited
TNEC Hearings) 7103-4 (1939-41).
20. In the Matter of Pipe Line Cases, 24 I.C.C. 1, 11 (1912).
21. The Pipe Line Cases, 234 U.S. 548 (1913).
22. Id. at 560.
23. Id.
24. See TNEC Hearings, Part 14-17A.
25. 49 U.S.C §43 (1976).
26. Civil Action No. 14060 (D.D.C. 1941), reprinted in
Consent Decree Program of the Department of Justice:
Hearings Before the Antitrust Subcommittee of the Hse.
Comm. on the Judiciary, Vol. I, 85th Cong., 1st Sess. 188 (1957).
27. Parent oil compnies numbered twenty, G. Wolbert, American
Pipe Lines 143 (1951).
28. Civil Action No. 14060 at 193-5.
29. United States v. Atlantic Refining Co., 360 U.S.19 (1959).
30. Id.at 22n.2.
31. Id.
32. Wolbert at 136.
33- Market Performance and Competition in the Oil Industry:
Hearings Before the Sen. Comm. on Interieeor and Insular
Affairs, 93rd Cong. 1st Sess. 896 (1973).
>
34. Concerning Oil Company Ownership of Pipelines: Hearing
Before the Subcomm. on Antitrust and Monopoly of the
Sen Comm. on the Judiciary. 95th Cong., 2nd Sess. 11-2 (1978).
35. 436 U.S. 631 (1978).
36. _Id. at 644.
37. The companies were Sohio, Arco, Exxon, British Petroleum
Mobil, Phillips, Union, and Amerada Hess. National Energy
Transportation, Vol. Ill, Sen Rep. 95-15 at 275.
38. 436 U.S. at 635.
39. JjL. at 636 n.ll.
40. Id.
41. FERC Hearing Process Status Report (White Book) 85
(May 1, 1981).
42. Id.
43. .1 Thornton, Oil
as §259 (3rd ed. 1918)
44. R. Pierce, Natural Gas Regulation Handbook 15.(1980).
45. 2A Nichols-, ~Fhe Law of Eminent Domain §7-523(1) (3rd ed. 1980).
46. Id.
47. Exxon v. Middleton, 571 S.W.2d 349, 352 (Tx. App. Ct. - Houston
14th Dis. 1978), remanded in part 613 S.W.2d 240 (1981).
48. Missouri v. Kansas Gas, 265 U.S. 298 (1924), see also
Public Utilities Commission v. Attleboro Steam & Electric
Co., 273 U.S. 83 (1927).
49. 16 U.S.C. §791 et. seq. (1976) . ' n
,
50. J. ;Gault,/Publlg Utility Regulation of an Exhaustible Resource 7 (1979).
51. Id. at 8. ;
>
52. Id. at 273 rzf.ll.
53. 15 U.S.C. §717 et. seq.(1976).
54. W. Beard, Regulation of Pipelines as Common Carriers 158 (1941).
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