crs_reports: R48967

Congressional Research Service reports with summaries, authors, and topic classifications.

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R48967 The Natural Gas Act: Background, Key Provisions, and Policy Issues 2026-06-03T04:00:00Z 2026-06-06T05:53:52Z Active Reports Paul W. Parfomak, Adam Vann, Michael Ratner Energy Policy, Fossil Energy, International Energy Issues, Environmental Policy Natural gas has been sold commercially in the United States since 1816, starting with the Gaslight Company of Baltimore. Technological advancements around the turn of the 20th century greatly expanded its uses for heating, cooking, and industrial applications. New pipeline technology and new drilling techniques led to a shift from local, manufactured gas (i.e., distilled from coal) toward geological gas shipped from distant fields through an expanding interstate pipeline network. Growth of the industry brought with it unfair business practices and market abuses. In response, Congress passed the Natural Gas Act of 1938 (NGA; P.L. 75-688), giving the Federal Power Commission (FPC) regulatory authority over interstate natural gas transportation and wholesale sales, the import or export of natural gas, and companies or persons engaged in these activities. In 1977, Congress terminated the FPC and transferred its authorities to the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE), both newly created under the Department of Energy Organization Act (EOA; P.L. 95-91). Congress has amended the NGA several times since 1938 to address regulatory gaps, court decisions, or changes in natural gas markets. These amendments added eminent domain authority for interstate natural gas pipelines; exempted certain natural gas companies from federal regulation; allowed intrastate pipelines to transport gas for interstate pipelines; deregulated wellhead natural gas prices; eased restrictions on liquefied natural gas (LNG) trade with free trade partners; gave FERC authority to prohibit gas market manipulation; and designated FERC as the lead agency for coordinating federal authorizations and compliance with the National Environmental Policy Act (NEPA; P.L. 91-190), among other changes. In recent Congresses, certain NGA authorities and requirements, or the absence thereof, have drawn the attention of stakeholders and Members of Congress. Congress has debated FERC’s interpretation of the “public interest” standard for authorization of natural gas infrastructure under Sections 3 and 7 of the NGA. Members have also debated whether pipeline and LNG terminal permit reviews have been unduly delayed due to a lack of agency coordination, agency inaction, growing complexity (especially due to environmental considerations), and related directives from the courts. Some in Congress have expressed concern about the NGA’s 30-day deadline for FERC to “act[] upon” a request for rehearing and practices FERC has used in the past to effectively circumvent this deadline, indefinitely delaying the ability for aggrieved parties to seek judicial review. Others have questioned the NGA’s provisions granting eminent domain authority to pipeline developers, including issues regarding landowner rights, just compensation, and the initiation of construction-related activities on acquired rights-of-way while aspects of a pipeline’s approval have been incomplete or challenged. Congress has also debated DOE’s interpretation of the NGA’s public interest standard for LNG commodity trade with non-free trade agreement (non-FTA) countries, especially accounting for domestic price impacts, greenhouse gas emissions, and geopolitics. The NGA’s provisions regarding refunds for unjust and unreasonable pipeline rates have also been a recurring issue in Congress. In drafting the NGA, Congress gave the implementing agencies discretion to interpret the statute and to establish their rules accordingly, taking account of the contemporary context. FERC and DOE have exercised this discretion to address new industry developments (e.g., U.S. shale gas production) and challenges (e.g., growing LNG exports), often in the face of direction from Congress or the courts. In many cases, discretionary changes in the agencies’ implementation of the NGA have allowed the agencies to adapt their policies relatively quickly. In other cases, such changes have taken years. Notwithstanding a steady stream of legislative proposals over many decades to amend the NGA, Congress has not often done so. The historical infrequency of such amendments may suggest that Congress, as a whole, has continued to support the agencies’ discretionary approach to implementing the NGA, even as Members express concerns about particular provisions or policies at particular times. Alternatively, the infrequency of amendments may suggest a lack of consensus in Congress about how to address concerns related to the NGA. In the 119th Congress, as in previous Congresses, Members have proposed numerous bills to amend the NGA or to direct FERC or DOE as to how the law should be implemented. As Congress considers these proposals, the question arises whether these agencies may align their discretionary policies to congressional intent without direct intervention, or whether Congress must pass legislation amending the NGA to establish (and maintain) certain policy priorities. A related question is whether the NGA conveys to the implementing agencies all the necessary authorities to fulfill its fundamental mission. Understanding how these considerations may fit into the nation’s overall policies regarding energy, the economy, the environment, and international trade could be a particular challenge for Congress. https://www.congress.gov/crs_external_products/R/PDF/R48967/R48967.3.pdf https://www.congress.gov/crs_external_products/R/HTML/R48967.html

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