Phillips Petroleum Co. v. Wisconsin,
347 U.S. 672 (1954)

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U.S. Supreme Court

Phillips Petroleum Co. v. Wisconsin, 347 U.S. 672 (1954)

Phillips Petroleum Co. v. Wisconsin

Argued April 6-7, 1954

Decided June 7, 1954*

347 U.S. 672


The Company here involved engages in the production, gathering, processing and sale of natural gas. It does not engage in the interstate transmission of gas from the producing fields to consumer markets and is not affiliated with any company that does so, but it sells natural gas to five interstate pipeline companies which transport and resell the gas to consumers and local distributing codmpanies from 14 states. The gas flow from producing wells through a network of converging pipelines to one of 12 processing plants, where extractable products and impurities are removed. Thence it flows a short distance to a delivery point, where it is sold and delivered to an interstate pipeline company. It then continues its flow through an interstate pipeline system until delivered in other states.

Held: this Company is a "natural gas company" within the meaning of the Natural Gas Act, and its sales in interstate commerce of natural gas for resale are subject to the jurisdiction of, and rate regulation by, the Federal Power Commission. Pp. 347 U. S. 674-685.

(a) The Company admittedly is engaged in "the sale in interstate commerce of natural gas for resale" within the meaning of the Act. P. 347 U. S. 677.

(b) The sales by this Company are not a part of the "production or gathering of natural gas," which are excluded from the Commission's jurisdiction under § 1(b), since the production and gathering end before the sales occur. Interstate Natural Gas Co. v. Federal Power Comm'n, 331 U. S. 682. Pp. 677-681.

(c) Congress did not intend to regulate only interstate pipeline companies. Rather the legislative history indicates a congressional intent to give the Commission jurisdiction over the rates of all wholesales of natural gas in interstate commerce, whether by a pipeline company or not and whether occurring before, during, or after transmission by an interstate pipeline company. Pp. 347 U. S. 681-684.

Page 347 U. S. 673

(d) Cities Service Gas Co. v. Peerless Oil & Gas Co., 340 U. S. 179, and Phillips Petroleum Co. v. Oklahoma, 340 U. S. 190, do not require a different result. Pp. 347 U. S. 684-685.

(e) Regulation of sales in interstate commerce for resale made by a so-called independent natural gas producer is not essentially different from regulation of such sales when made by an affiliate of an interstate pipeline company. P. 347 U. S. 685.

92 U.S.App.D.C. 284, 205 F.2d 706, affirmed.

Page 347 U. S. 674

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