NATURAL GAS POLICY ACT OF 1978 AN ACT For the relief of Joe Cortina of Tampa, Florida. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, [Private relief matter relating to Joe Cortina not shown.] SECTION 1. SHORT TITLE; TABLE OF CONTENTS. (a) SHORT TITLE.-This Act may be cited as the "Natural Gas Policy Act of 1978". (b) TABLE OF CONTENTS. TABLE OF CONTENTS Sec. 1. Short title; table of contents. Sec. 2. Definitions. TITLE I-WELLHEAD PRICING Subtitle A-Wellhead Price Controls Sec. 101. Inflation adjustment; other general price ceiling rules. Sec. 102. Ceiling price for new natural gas and certain natural gas produced from the Outer Continental Shelf. Sec. 103. Ceiling price for new, onshore production wells. Sec. 104. Ceiling price for sales of natural gas dedicated to interstate commerce. Sec. 105. Ceiling price for sales under existing intrastate contracts. Sec. 106. Ceiling price for sales under rollover contracts. Sec. 107. Ceiling price for high-cost natural gas. Sec. 108. Ceiling price for stripper well natural gas. Sec. 109. Ceiling price for other categories of natural gas. Sec. 110. Treatment of State severance taxes and certain production-related costs. Subtitle B-Decontrol of Certain Natural Gas Prices Sec. 121. Elimination of price controls for certain natural gas sales. Sec. 122. Standby price control authority. Sec. 123. Report to the Congress. TITLE II-INCREMENTAL PRICING Sec. 201. Industrial boiler fuel use. Sec. 202. Amendment expanding application for other industrial uses. Sec. 204. Method of passthrough. Sec. 205. Local distribution company passthrough requirements. Sec. 206. Exemptions. Sec. 207. Treatment of certain imports. Sec. 208. Alaska natural gas. TITLE III—ADDITIONAL AUTHORITIES AND REQUIREMENTS Subtitle A-Emergency Authorities Sec. 301. Declaration of Emergency. (131) Subtitle B-Other Authorities and Requirements Sec. 311. Authorization of certain sales and transportation. Sec. 312. Assignment of contractual rights to receive surplus natural gas. Sec. 313. Effect of certain natural gas prices on indefinite price escalator clauses. Sec. 314. Clauses prohibiting certain sales, transportation, and commingling. Sec. 315. Contract duration; right of first refusal; filing of contracts and agreements. TITLE IV-NATURAL GAS CURTAILMENT POLICIES Sec. 401. Natural gas for essential agricultural uses. Sec. 402. Natural gas for essential industrial process and feedstock uses. Sec. 403. Establishment and implementation of agricultural and industrial priorities. Sec. 404. Limitation on revoking or amending certain pre-1969 certificates of public convenience and necessity. TITLE VI-ADMINISTRATION, ENFORCEMENT, AND REVIEW Sec. 501. General rulemaking authority. Sec. 502. Administrative procedure. Sec. 503. Determinations for qualifying under certain categories of natural gas. Sec. 505. Intervention. Sec. 506. Judicial review. Sec. 507. Congressional review. Sec. 508. Technical amendment. TITLE VI-COORDINATION WITH THE NATURAL GAS ACT; EFFECT ON STATE LAWS Sec. 601. Coordination with the Natural Gas Act. Sec. 602. Effect on State laws. [15 U.S.C. 3301 note] SEC. 2. DEFINITIONS. For purposes of this Act (1) NATURAL GAS.-The term "natural gas” means either natural gas unmixed, or any mixture of natural and artificial gas. (2) WELL.-The term "well" means any well for the discovery or production of natural gas, crude oil, or both. (3) NEW WELL.-The term "new well" means any well (A) the surface drilling of which began on or after February 19, 1977; or (B) the depth of which was increased, by means of drilling on or after February 19, 1977, to a completion location which is located at least 1,000 feet below the depth of the deepest completion location of such well attained before February 19, 1977. (4) Old well.-The term "old well" means any well other than a new well. (5) MARKER WELL. (A) GENERAL RULE.-The term "marker well" means any well from which natural gas was produced in commercial quantities at any time after January 1, 1970, and before April 20, 1977 (B) NEW WELLS.-The term "marker well" does not include any new well under paragraph (3)(A) but includes any new well under paragraph (3)(B) if such well qualifies as a marker well under subparagraph (A) of this paragraph. (6) RESERVOIR.-The term "reservoir" means any producible natural accumulation of natural gas, crude oil, or both, confined (A) by impermeable rock or water barriers and characterized by a single natural pressure system; or (B) by lithologic or structural barriers which prevent pressure communication. (7) COMPLETION LOCATION. (A) GENERAL RULE.-The term "completion location" means any subsurface location from which natural gas is being or has been produced in commercial quantities. (B) MARKER WELL.-The term "completion location", when used with reference to any marker well, means any subsurface location from which natural gas was produced from such well in commercial quantities after January 1, 1970, and before April 20, 1977. (8) PRORATION UNIT.-The term "proration unit" means— (A) any portion of a reservoir, as designated by the State or Federal agency having regulatory jurisdiction with respect to production from such reservoir, which will be effectively and efficiently drained by a single well; (B) any drilling unit, production unit, or comparable arrangement, designated or recognized by the State or Federal agency having jurisdiction with respect to production from the reservoir, to describe that portion of such reservoir which will be effectively and efficiently drained by a single well; or (C) if such portion of a reservoir, unit, or comparable arrangement is not specifically provided for by State law or by any action of any State or Federal agency having regulatory jurisdiction with respect to production from such reservoir, any voluntary unit agreement or other comparable arrangement applied, under local custom or practice within the locale in which such reservoir is situated, for the purpose of describing the portion of a reservoir which may be effectively and efficiently drained by a single well. (9) NEW LEASE.-The term "new lease", when used with respect to the Outer Continental Shelf, means a lease, entered into on or after April 20, 1977, of submerged acreage. (10) OLD LEASE.-The term "old lease", when used with respect to the Outer Continental Shelf, means any lease other than a new lease. (11) NEW CONTRACT.-The term "new contract" means any contract, entered into on or after the date of the enactment of this Act, for the first sale of natural gas which was not previously subject to an existing contract. (12) ROLLOVER CONTRACT.-The term "rollover contract" means any contract, entered into on or after the date of the enactment of this Act, for the first sale of natural gas that was previously subject to an existing contract which expired at the end of a fixed term (not including any extension thereof taking effect on or after such date of enactment) specified by the provisions of such existing contract, as such contract was in effect on the date of the enactment of this Act, whether or not there is an identity of parties or terms with those of such existing contract. (13) EXISTING CONTRACT.-The term "existing contract" means any contract for the first sale of natural gas in effect on the day before the date of the enactment of this Act. (14) SUCCESSOR TO AN EXISTING CONTRACT.-The term "successor to an existing contract” means any contract, other than a rollover contract, entered into on or after the date of the enactment of this Act, for the first sale of natural gas which was previously subject to an existing contract, whether or not there is an identity of parties or terms with those of such existing contract. (15) INTERSTATE PIPELINE.-The term "interstate pipeline" means any person engaged in natural gas transportation subject to the jurisdiction of the Commission under the Natural Gas Act. (16) INTRASTATE PIPELINE.-The term "intrastate pipeline" means any person engaged in natural gas transportation (not including gathering) which is not subject to the jurisdiction of the Commission under the Natural Gas Act (other than any such pipeline which is not subject to the jurisdiction of the Commission solely by reason of section 1(c) of the Natural Gas Act). (17) LOCAL DISTRIBUTION COMPANY.-The term “local distribution company” means any person, other than any interstate pipeline or any intrastate pipeline, engaged in the transportation, or local distribution, of natural gas and the sale of natural gas for ultimate consumption. (18) COMMITTED OR DEDICATED TO INTERSTATE COMMERCE.— (A) GENERAL RULE.-The term "committed or dedicated to interstate commerce", when used with respect to natural gas, means— (i) natural gas which is from the Outer Continental Shelf; and (ii) natural gas which, if sold, would be required to be sold in interstate commerce (within the meaning of the Natural Gas Act) under the terms of any contract, any certificate under the Natural Gas Act, or any provision of such Act. (B) EXCLUSION.-Such term does not apply with respect to (i) natural gas sold in interstate commerce (within the meaning of the Natural Gas Act)— (I) under section 6 of the Emergency Natural Gas Act of 1977; (II) under any limited term certificate, granted pursuant to section 7 of the Natural Gas Act, which contains a pregrant of abandonment of service for such natural gas; (III) under any emergency regulation under the second proviso of section 7(c) of the Natural Gas Act; or (IV) to the user by the producer and transported under any certificate, granted pursuant to section 7(c) of the Natural Gas Act, if such certificate was |