Miscellaneous Provisions Sec. 304. (a) Information.— (1) Obtaining of Information.-In order to obtain information to carry out his authority under this subtitle, the President may (A) sign and issue subpoenas for the attendance and testimony of witnesses and the production of books, records, papers, and other documents; (B) require any person, by general or special order, to submit answers in writing to interrogatories, requests for reports or for other information, and such answers shall be made within such reasonable period, and under oath or otherwise, as the President may determine; and (C) secure, upon request, any information from any Federal agency. (2) Enforcement of Subpoenas and Orders.-The appropriate United States district court may, upon petition of the Attorney General at the request of the President, in the case of refusal to obey a subpoena or order of the President issued under this subsection, issue an order requiring compliance therewith, and any failure to obey an order of the court may be punished by the court as a contempt thereof. (b) Reporting of Prices and Volumes. In issuing any order under section 302 or 303, the President shall require that the prices and volumes of natural gas delivered, transported, or contracted for pursuant to such order shall be reported to him on a weekly basis. Such reports shall be made available to the Congress. (c) Presidential Reports to Congress.-The President shall report to the Congress, not later than 90 days following the termination under section 301(b) of any declaration of a natural gas supply emergency (or extension thereof) under section 301(a), respecting the exercise of authority under section 301, 302, 303, or this section. (d) Delegation of Authorities.-The President may delegate all or any portion of the authority granted to him under section 301, 302, 303, or this section to such Federal officers or agencies as he determines appropriate, and may authorize such redelegation as may be appropriate. Except with respect to section 552 of title 5 of the United States Code, any Federal officer or agency to which authority is delegated or redelegated under this subsection shall be subject only to such procedural requirements respecting the exercise of such authority as the President would be subject to if such authority were not so delegated. (e) Antitrust Protections. (1) Defenses.-There shall be available as a defense for any person to civil or criminal action brought for violation of the Federal antitrust laws (or any similar law of any State) with respect to any action taken, or meeting held, pursuant to any order of the President under section 303(b), (c), (d), or (i), or any meeting held pursuant to a request of the President under section 303(g), if (A) such action was taken or meeting held solely for the purpose of complying with the President's request or order; (B) such action was not taken for the purpose of injuring competition; and (C) any such meeting complied with the requirements of paragraph (2). Persons interposing the defense provided by this subsection shall have the burden of proof, except that the burden shall be on the person against whom the defense is asserted with respect to whether the actions were taken for the purpose of injuring competition. (2) Requirements of Meetings.-With respect to any meeting held pursuant to a request by the President under section 303(g) or pursuant to an order under section 303 (A) there shall be present at such meeting a full-time Federal employee designated for such purposes by the Attorney General; (B) a full and complete record of such meeting shall be taken and deposited, together with any agreements resulting therefrom, with the Attorney General, who shall make it available for public inspection and copying; (C) the Attorney General and the Federal Trade Commission shall have the opportunity to participate from the beginning in the development and carrying out of agreements and actions under section 303, in order to propose any alternative which would avoid or overcome, to the greatest extent practicable, possible anticompetitive effects while achieving substantially the purposes of section 303 and any order thereunder; and (D) such other procedures as may be specified by the President in such request or order shall be complied with. (f) Effect on Certain Contractual Obligations.-There shall be available as a defense to any action brought for breach of contract under Federal or State Law arising out of any act or omission that such act was taken or that such omission occurred for purposes of complying with any order issued under section 303. (g) Preemption. Any order issued pursuant to this title shall preempt any provision of any program for the allocation, emergency delivery, transportation, or purchase of natural gas established by any State or local government if such program is in conflict with any such order. Subtitle B-Other Authorities and Requirements Sec. 311. Authorization of Certain Sales and Transportation (a) Commission Approval of Transportation. (1) Interstate Pipelines. (A) In General.-The Commission may, by rule or order, authorize any interstate pipeline to transport natural gas on behalf of (i) any intrastate pipeline; and (ii) any local distribution company. (B) Just and Reasonable Rates.-The rates and charges of any interstate pipeline with respect to any transportation authorized under subparagraph (A) shall be just and reasonable (within the meaning of the Natural Gas Act). (2) Intrastate Pipelines. (A) In General.-The Commission may, by rule or order, authorize any intrastate pipeline to transport natural gas on behalf of (i) any interstate pipeline; and (ii) any local distribution company served by any interstate pipeline. (B) Rates and Charges.— (i) Maximum Fair and Equitable Price. The rates and charges of any intrastate pipeline with respect to any transportation authorized under subparagraph (A), including any amount computed in accordance with the rule prescribed under clause (ii), shall be fair and equitable and may not exceed an amount which is reasonably comparable to the rates and charges which interstate pipelines would be permitted to charge for providing similar transportation service. (ii) Commission Rule.-The Commission shall, by rule, establish the method for calculating an amount necessary to (I) reasonably compensate any intrastate pipeline for expenses incurred by the pipeline and associated with the providing of any gathering, treatment, processing, transportation, delivery, or similar service provided by such pipeline in connection with any transportation of natural gas authorized under subparagraph (A); and (II) provide an opportunity for such pipeline to earn a reasonable profit on such services. (b) Commission Approval of Sales. (1) In General.-The Commission may, by rule or order, authorize any intrastate pipeline to sell natural gas to— (A) any interstate pipeline; and (B) any local distribution company served by any interstate pipeline. (2) Rates and Charges. (A) Maximum Fair and Equitable Price.-The rates and charges of any intrastate pipeline with respect to any sale of natural gas authorized under paragraph (1) shall be fair and equitable and may not exceed the sum of gas; (i) such intrastate pipeline's weighted average acquisition cost of natural (ii) an amount, computed in accordance with the rule prescribed under subparagraph (B); and (iii) any adjustment permitted under subparagraph (C). (B) Commission Rule.-The Commission shall, by rule, establish the method for calculating an amount necessary to (i) reasonably compensate any intrastate pipeline for expenses incurred by the pipeline and associated with the providing of any gathering, treatment, processing, transportation, or delivery service provided by such pipeline in connection with any sale of natural gas authorized under paragraph (1); and (ii) provide an opportunity for such pipeline to earn a reasonable profit on such services. (C) Adjustment. (i) Application. This subparagraph shall apply in any case in which, in order to deliver any volume of natural gas pursuant to any sale authorized under paragraph (1), any intrastate pipeline acquires quantities of natural gas under any existing contract, if— existing such intrastate pipeline acquires any volume of natural gas under such contract in excess of that which such pipeline would otherwise have acquired; and (II) the price paid for such additional volume of natural gas acquired under such contract is greater than such pipeline's weighted average acquisition cost of natural gas, computed without regard to the acquisition of such additional volume of natural gas. (ii) Commission Adjustment.-In any case to which this subparagraph applies, the Commission shall permit an adjustment to the maximum fair and equitable price provided under subparagraph (A) to increase the revenue to the intrastate pipeline under such sale by an amount determined by the Commission to be adequate to offset the additional cost incurred by such pipeline due to any increase in such pipeline's weighted average acquisition cost of natural gas. (3) Limitation. (A) Two-Year Duration.-No authorization of any sale (or any extension thereof) under paragraph (1) may be for a period exceeding two years. (B) Extension.-Any authorization of any sale under paragraph (1), and any extension of any such authorization under this subparagraph, may be extended by the Commission if such extension satisfies the requirements of this subsection. (4) Adequacy of Service to Intrastate Customers. Any sale authorized under paragraph (1) shall be subject to interruption to the extent that natural gas subject to such sale is required to enable the intrastate pipeline involved to provide adequate service to such pipeline's customers at the time of such sale. (5) Procedural Requirements. (A) Affidavit.—Any application for authorization of any sale under paragraph (1) shall be accompanied by an affidavit filed by the intrastate pipeline involved and setting forth (i) the identity of the interstate pipeline or local distribution company involved; (ii) each point of delivery of the natural gas from the intrastate pipeline; (iii) the estimated total and daily volumes of natural gas subject to such sale; (iv) the price or prices of such volumes; and (v) such other information as the Commission may, by rule, require. (B) Verification of Compliance.-Any application for authorization of any sale under paragraph (1) shall be accompanied by a statement by the intrastate pipeline involved verifying by oath or affirmation that such sale, if authorized, would comply with all requirements applicable to such sale under this subsection and all terms and conditions established, by rule or order, by the Commission and applicable to such sale. (6) Termination of Sales. (A) Hearing.-Upon complaint of any interested person, or upon the Commission's own motion, the Commission shall, after affording an opportunity for oral presentation of views and arguments, terminate any sale authorized under paragraph (1) if the Commission determines (i) such termination is required to enable the intrastate pipeline involved to provide adequate service to the customers of such pipeline at the time of such sale; (ii) such sale involves the sale of natural gas acquired by the intrastate pipeline involved solely or primarily for the purpose of resale of such natural gas pursuant to a sale authorized under paragraph (1); (iii) such sale violates any requirement of this subsection or any term or condition established, by rule or order, by the Commission and applicable to such sale; or (iv) such sale circumvents or violates any provision of this Act. (B) Suspension Pending Hearing.-Prior to any hearing or determination required under subparagraph (A), upon complaint of any interested person or upon the Commission's own motion, the Commission may suspend any sale authorized under paragraph (1) if the Commission finds that it is likely that the determinations described in subparagraph (A) will be made following the hearing required under subparagraph (A). (C) Determination.-The determination of whether any interruption of any sale authorized under paragraph (1) is required under subparagraph (A)(i) shall be made by the Commission without regard to the character of the use of natural gas by any customer of the intrastate pipeline involved. (D) State Intervention.-Any interested State may intervene as a matter of right in any proceeding before the Commission relating to any determination under this section. (7) Disapproval of Application.-The Commission shall disapprove any application for authorization of any sale under paragraph (1) if the Commission determines (A) such sale would impair the ability of the intrastate pipeline involved to provide adequate service to its customers at the time of such sale (without regard to the character of the use of natural gas by such customer); (B) such sale would involve the sale of natural gas acquired by the intrastate pipeline involved solely or primarily for the purpose of resale of such natural gas pursuant to a sale authorized under paragraph (1); (C) such sale would violate any requirement of this subsection or any term or condition established, by rule or order, by the Commission and applicable to such sale; or (D) such sale would circumvent or violate any provision of this Act. (c) Terms and Conditions.-Any authorization granted under this section shall be under such terms and conditions as the Commission may prescribe. Sec. 312. Assignment of Contractual Rights to Receive Surplus Natural Gas (a) Authorization of Assignments.-The Commission may, by rule or order, authorize any intrastate pipeline to assign, without compensation, to any interstate pipeline or local distribution company all or any portion of such intrastate pipeline's right to receive surplus natural gas at any first sale, upon such terms and conditions as the Commission determines appropriate. (b) Effect of Authorization Under Subsection (a).-For the effect of an authorization under subsection (a), see section 601 (relating to the coordination of this Act with the Natural Gas Act). (c) Surplus Natural Gas.-For purposes of this section, the term "surplus natural gas" means any natural gas (1) which is not committed or dedicated to interstate commerce on the day before the date of the enactment of this Act; (2) the first sale of which is subject to a maximum lawful price established under title I of this Act; and (3) which is determined, by the State agency having regulatory jurisdiction over the intrastate pipeline which would be entitled to receive such natural gas in the absence of any assignment to exceed the then current demands on such pipeline for natural gas. Effect of Certain Natural Gas Prices on Indefinite Price Escalator Clauses Sec. 313. (a) High-Cost Natural Gas.-No price paid in any first sale of high-cost natural gas (as defined in section 107(c)) may be taken into account in applying any indefinite price escalator clause (as defined in section 105(b)(3)(B)) with respect to any first sale of any natural gas other than high-cost natural gas (as defined in section 107(c)). (b) Other Transactions.-No price paid (1) in any sale authorized under section 302(a), or (2) pursuant to any order issued under section 303(b), (c), (d), or (g), may be taken into account in applying any indefinite price escalator clause (as defined in section 105(b)(3)(B)). Clauses Prohibiting Certain Sales, Transportation, and Commingling Sec. 314. (a) General Rule.-Any provision of any contract for the first sale of natural gas is hereby declared against public policy and unenforceable with respect to any natural gas covered by this Act if such provision (1) prohibits the commingling of natural gas subject to such contract with natural gas subject to the jurisdiction of the Commission under the provisions of the Natural Gas Act; (2) prohibits the sale of any natural gas subject to such contract to, or transportation of any such natural gas by, any person subject to the jurisdiction of the Commission under the Natural Gas Act, or otherwise prohibits the sale or transportation in interstate commerce (within the meaning of the Natural Gas Act) of natural gas subject to such contract; or (3) terminates, or grants any party the option to terminate, any obligation under any such contract as a result of such commingling, sale, or transportation. (b) Natural Gas Covered by This Act.-For purposes of subsection (a), the term "natural gas covered by this Act" means (1) natural gas which is not committed or dedicated to interstate commerce as of the day before the date of the enactment of this Act; (2) natural gas, the sale in interstate commerce of which— (A) is authorized under section 302(a) or 311(b); or (B) is pursuant to an assignment under section 312(a); and (3) natural gas, the transportation in interstate commerce of which is (A) pursuant to any order under section 302(c) or section 303(b), (c), (d), or (h); or (B) authorized by the Commission under section 311(a). Contract Duration; Right of First Refusal; Filing of Contracts and Agreements Sec. 315. (a) Contract Duration. (1) General Rule.-The Commission may, by rule or order, specify the minimum duration of any contract (other than any existing contract) for the purchase of natural gas to which section 601(a)(1)(A) or (B) is applicable. In no case may the minimum contract duration specified under this paragraph applicable to natural gas produced from any reservoir exceed 15 years or, if less, the commercially producible life of such reservoir. The provisions of this paragraph shall not apply to contracts of natural gas subject to the requirements of paragraph (3). (2) Nondiscriminatory Application. (A) In General.-Except as provided in subparagraph (B), the Commission may not exercise the authority provided under paragraph (1) in a manner which— (i) provides an advantage to interstate pipelines by diverting supplies of natural gas to interstate pipelines and thereby denying adequate supplies of natural gas to intrastate pipelines; or (ii) otherwise discriminates between purchases by interstate pipelines and intrastate pipelines of natural gas. (B) Special Circumstances.-The Commission may vary any requirement established under paragraph (1) with respect to any contract by an interstate pipeline or intrastate pipeline to the extent necessary to respond to special circumstances. (3) Contracts for Purchase of OCS Natural Gas.-The Commission shall prescribe a rule which shall require that any first sale contract (other than any existing contract) for the purchase of natural gas which is produced from any reservoir on the Outer Continental Shelf and which is new natural gas (as defined in section 102(b)) or high-cost natural gas (as defined in section 107(c)(1), (2), (3), or (4)) shall be for a duration of not less than 15 years or, if less, the commercially producible life of the reservoir. (b) Offers; Right of First Refusal.— (1) Application.-This subsection shall apply with respect to any natural gas which is committed or dedicated to interstate commerce on the day before the date of the enactment of this Act and which is (A) high-cost natural gas (as defined in section 107(c)(1), (2), (3), or (4)); (C) natural gas produced from any new, onshore production well (as defined in section 103(c)). This subsection shall not apply to any natural gas committed or dedicated to interstate commerce solely by reason of section 2(18)(A)(i). (2) Offer of Sale.-The Commission shall, by rule, require that if natural gas subject to the requirements of this subsection is produced on or after the first day of the first month beginning after the date of the enactment of this Act, a bona fide offer to sell such natural gas must be made to the person who, but for the provisions of section 601(a)(1)(B) (relating to deregulation), would have been entitled pursuant to the commitment or dedication of such natural gas to interstate commerce to receive such natural gas if such natural gas were sold (or any successor in interest to such person). (3) Right of First Refusal.-The Commission shall, by rule, require that following(A) the expiration or termination of any contract with respect to the first sale of natural gas subject to the requirements of this subsection to the person who, but for the provisions of section 601(a)(1)(B) (relating to deregulation), would have been entitled pursuant to the commitment or dedication of such natural gas to interstate commerce to receive such natural gas if such natural gas were sold (or any successor in interest to such person), or (B) any rejection of any bona fide offer, described in paragraph (2), to sell natural gas subject to the requirements of this subsection, |