The Natural Gas Act: Background, Key Provisions, and Policy Issues
Congressional research reportJun 3, 2026
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The Natural Gas Act: Background, Key
Provisions, and Policy Issues
June 3, 2026
Congressional Research Service
https://crsreports.congress.gov
R48967
SUMMARY
The Natural Gas Act: Background, Key
Provisions, and Policy Issues
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 20 th 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).
R48967
June 3, 2026
Paul W. Parfomak
Specialist in Energy Policy
Adam Vann
Legislative Attorney
Michael Ratner
Specialist in Energy Policy
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 (nonFTA) 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.
Congressional Research Service
The Natural Gas Act: Background, Key Provisions, and Policy Issues
Contents
Introduction ..................................................................................................................................... 1
Natural Gas Market Origins ............................................................................................................ 1
Federal Trade Commission Investigation.................................................................................. 3
Key Provisions of the Natural Gas Act............................................................................................ 5
Pipeline and Liquefied Natural Gas Facility Siting Authority .................................................. 6
Public Interest Considerations ............................................................................................ 6
Timing of Application Reviews .......................................................................................... 9
Order Rehearing and Judicial Appeals ................................................................................ 9
Eminent Domain Authority ................................................................................................ 11
DOE Commodity Export/Import Permitting ........................................................................... 12
Public Interest and Non-FTA Trade .................................................................................. 12
Natural Gas Rate Regulation ................................................................................................... 14
Just and Reasonable Standard ........................................................................................... 15
Rate Refunds ..................................................................................................................... 15
Conclusion ..................................................................................................................................... 16
Figures
Figure 1. Principal Natural Gas Transmission Pipelines in the Contiguous United States,
December 1934 ............................................................................................................................ 2
Figure 2. U.S. Annual Natural Gas Production 1935-2025 ........................................................... 17
Contacts
Author Information........................................................................................................................ 18
Congressional Research Service
The Natural Gas Act: Background, Key Provisions, and Policy Issues
Introduction
The Natural Gas Act of 1938 (NGA)1 is a foundational statute underpinning the regulation of the
U.S. natural gas industry.2 The NGA establishes the framework for federal oversight of interstate
natural gas transportation and the U.S. export and import of natural gas. Originally enacted to
address natural gas market failures and to promote the development of natural gas infrastructure,
the act has evolved over time in response to changes in natural gas supply and consumption and
the growth of international markets. Given the essential role of natural gas in the U.S. economy,
Congress has had a continuing interest in the NGA and its implementation since its original
enactment. Challenges to the development of natural gas pipelines and liquefied natural gas
(LNG) infrastructure, and issues related to natural gas pipeline rates and environmental impacts,
have brought renewed congressional attention to the NGA.3 In recent Congresses, including the
119th Congress, numerous bills have been introduced to amend the NGA or to direct federal
agencies in its implementation.
This report reviews the historical development of the U.S. natural gas market and the legislative
origins of the NGA, including amendments to the act since 1938. It summarizes selected
provisions of the NGA of recent interest to Congress, including provisions that have been the
subject of debate or litigation, and legislative proposals that could affect those provisions. The
report concludes with considerations for Congress. Although the report discusses environmental
issues in the context of infrastructure siting and gas exports, including agency compliance with
the National Environmental Policy Act,4 its focus is limited to the NGA itself and to proposals
specifically related to this statute.5 The report cites specific legislative proposals in recent
Congresses, but the report does provide a comprehensive review of all the bills introduced that
may be pertinent to the NGA.
Natural Gas Market Origins
Natural gas has been sold commercially in the United States since 1816, starting with the Gas
Light Company of Baltimore, which was established to provide public street lighting in that city.6
In the following decades, similar companies proliferated in other urban areas—including
Washington, D.C., where the Washington Gas Light Company was chartered by Congress in
1 15 U.S.C. §§717-717z.
2 Panhandle E. Pipe Line Co. v. Pub. Serv. Comm’n of Ind., 332 U.S. 507 (1947) (“The Natural Gas Act created an
articulate legislative program based on a clear recognition of the respective responsibilities of the federal and state
regulatory agencies. It does not contemplate ineffective regulation at either level. We have emphasized repeatedly that
Congress meant to create a comprehensive and effective regulatory scheme, complementary in its operation to those of
the States.”)
3
See, for example, Statement of Rep. Jerry McNerny in U.S. Congress, House Committee on Energy and Commerce,
Subcommittee on Energy, Modernizing the Natural Gas Act to Ensure It Works for Everyone, hearing, 116th Cong., 2nd
sess., February 5, 2020, H.Hrg. 116-95, p. 2, https://www.congress.gov/116/chrg/CHRG-116hhrg50300/CHRG116hhrg50300.pdf (“To this day, the Federal Energy Regulatory Commission continues to manage pipeline
applications through their authority under this act. However, in recent years, the Commission’s administration of the
act has come under scrutiny.”).
4 National Environmental Policy Act (NEPA), P.L. 91-190, 42 U.S.C. §§4321 et seq.
5 For more background and discussion of NEPA, see CRS In Focus IF12560, National Environmental Policy Act: An
Overview, by Kristen Hite and Heather McPherron.
6 Amanda Winters, “BGE Celebrates Bicentennial by Giving Back to Baltimore,” Maryland Marketing Partnership,
June 27, 2016, https://business.maryland.gov/news/bge-celebrates-bicentennial-giving-back-baltimore/.
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The Natural Gas Act: Background, Key Provisions, and Policy Issues
1848.7 By mid-century, natural gas companies were operating in around 50 U.S. cities, and many
more followed.8 Although some geological sources of natural gas were available in the 1880s,
nearly all the natural gas sold by lighting companies during this period was manufactured locally
through the distillation of coal or oil and distributed by means of local pipeline systems.9 For
most of the 1800s, natural gas was used principally for street lighting and, beginning around the
mid-1800s, for interior lighting in homes and businesses.10
Technological advancements around the turn of the 20th century brought about significant growth
and change in the natural gas market. Improved methods of burning natural gas—reducing soot
and undesirable combustion byproducts—greatly expanded the potential uses of natural gas for
heating, cooking, and industrial applications. Advancements in pipeline technology—such as
improved steel fabrication methods and the use of compressors—facilitated the transportation of
natural gas over longer distances.11 Improved drilling techniques provided access to emerging
sources of geological natural gas in Appalachia, Texas, California, and other parts of the country.
The combination of these factors led to a shift away from local, manufactured gas toward
geological natural gas shipped from distant gas fields through a rapidly expanding interstate
pipeline network (Figure 1).
Figure 1. Principal Natural Gas Transmission Pipelines in the Contiguous United
States, December 1934
Source: C. Emery Troxel, “Long-Distance Natural Gas Pipe Lines,” Journal of Land & Public Utility Economics, vol.
12, no. 4 (November 1936), p. 345, https://www.jstor.org/stable/3158172.
7 An Act to Incorporate the Washington Gas Light Company, ch. 95, 9 Stat. 722 (1848).
8 Christopher Castaneda, “Manufactured and Natural Gas Industry,” EH.Net Encyclopedia, ed. Robert Whaples,
September 3, 2001, https://eh.net/encyclopedia/manufactured-and-natural-gas-industry/. For a list of major cities
where, and dates when, gas service was introduced, see Arlon R. Tussing and Connie C. Barlow, The Natural Gas
Industry: Evolution, Structure, and Economics (Ballinger, 1984), p. 13.
9 Scott M. Harkins et al., U.S. Production of Manufactured Gases: Assessment of Past Disposal Practices,
Environmental Protection Agency, February 1988, p. ES-2, https://semspub.epa.gov/work/05/235693.pdf.
Manufactured natural gas was often referred to as “town gas.”
10 Castaneda, “Manufactured and Natural Gas Industry.”
11 C. Emery Troxel, “Long-Distance Natural Gas Pipe Lines,” Journal of Land & Public Utility Economics, vol. 12, no.
4 (November 1936), p. 344, https://www.jstor.org/stable/3158172.
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Annual natural gas production was accelerating at this time, growing from 128 billion cubic feet
(Bcf) in 1900 to nearly 2,000 Bcf in 1935.12 By the mid-1930s, hundreds of local natural gas
distribution companies were operating throughout the country, supplied by over 65,000 miles of
natural gas transmission pipeline.13 Although the expansion of the natural gas industry was
providing a valuable service to ever more communities, that expansion brought with it certain
market problems—notably, market concentration and unregulated interstate pricing. As one legal
scholar described the situation at that time,
An increasingly large proportion of this burgeoning industry was being parceled out among
a relatively small number of powerful groups ... exercising progressively more
concentrated control.... Among them they controlled approximately 18 per cent of gas
production, 56 per cent of the pipe lines, and 60 per cent of the interstate movement of gas.
Control of interstate pipe line transportation was the key to dominance over the industry;
there was no alternative mode of transportation, and in 1935 the interstate movement of
gas was not regulated. The four giants, with six other companies, controlled 86 per cent of
the interstate movement of gas in 1934.... The holding company was the chosen instrument
of control.14
Similar market concentration was also occurring in the nascent electric power industry, with some
holding companies involved in both natural gas and electricity businesses.15 The emergence of
large interstate holding companies, controlling numerous natural gas and electric power
subsidiaries, in turn gave rise to widespread unfair business practices and market abuses.16
Federal Trade Commission Investigation
Concerned about holding company monopolies and market abuses in the electric power and
natural gas industries, on February 15, 1928, the Senate adopted Senate Resolution 83, which
directed the Federal Trade Commission (FTC) to investigate the financial status, business
practices, services, and public impacts of public utility corporations supplying electricity, natural
gas, or both.17 Pursuant to the resolution, the FTC conducted a seven-year investigation of major
utility holding companies in the electricity and gas industries.18 In an extensive series of reports,
the FTC identified, among other findings, abusive holding company practices “such as issuing
securities based on inflated asset values, overcharging for services provided by affiliates to the
regulated utility, and unsound or unnecessary financial structures or practices that prevented
oversight by state regulators.”19
12 Energy Information Administration (EIA), “U.S. Natural Gas Marketed Production,” April 30, 2026,
https://www.eia.gov/dnav/ng/hist/n9050us2a.htm.
13 Troxel, “Long-Distance Natural Gas Pipe Lines,” p. 345.
14 Ralph K. Huitt, “Natural Gas Regulation Under the Holding Company Act,” Law and Contemporary Problems, vol.
19, no. 3 (Summer 1954), pp. 455-456, https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=2607&context=
lcp.
15 Norman S. Buchanan, “The Origin and Development of the Public Utility Holding Company,” Journal of Political
Economy, vol. 44, no. 1 (February 1936), pp. 31-53.
16 EIA, Public Utility Holding Company Act of 1935: 1935-1992, DOE/EIA-0563, January 15, 1993, pp. 9-13,
https://www.osti.gov/servlets/purl/10133206.
17 S.Res. 83, 70th Cong., 1st sess.
18 Federal Trade Commission (FTC), Annual Report of the Federal Trade Commission for the Fiscal Year Ended June
30, 1936, 1936, p. 34, https://www.ftc.gov/sites/default/files/documents/reports_annual/annual-report-1936/
ar1936_0.pdf.
19 Kelly Signs, “FTC Milestones: Making the Case for Reform of Public Utility Holding Company Laws,” FTC,
Bureau of Competition, November 18, 2014, https://www.ftc.gov/enforcement/competition-matters/2014/11/ftcmilestones-making-case-reform-public-utility-holding-company-laws.
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The Natural Gas Act: Background, Key Provisions, and Policy Issues
On December 31, 1935, the FTC delivered the last report of its investigation, which dealt
“primarily with groups and companies of the natural gas and natural gas pipe line industry.”20 In
addition to its prior findings about holding companies, the FTC reached the following conclusions
specific to the natural gas industry, and called for the federal government to intervene:
Because of the importance of natural gas as a national resource, the serious extent to which
its supply is being depleted through uneconomical consumption and waste, the fact that a
great part of the natural gas produced in the United States travels across many State
boundaries, the apparent inability of the States unaided to meet the requirements of the
situation presented, the serious abuses which have arisen in the industry by reason of the
absence of regulation of interstate gas pipe-line companies, and the insistent and wellfounded demands of communities, some even located in or near the producing area or
reasonably adjacent to existing lines, not loaded to capacity, for the benefits of natural gas
for their industries and for the general consuming public, the situation presents a strong
claim for such remedial aid on the part of the Federal Government as may lawfully be
granted.21
In response to the FTC’s findings about holding company practices overall, Congress enacted the
Public Utility Holding Company Act of 1935 (PUHCA; P.L. 74-333), which sought to end abuses
of market power in the gas and electric utility industries.22 Although the PUHCA addressed
regulation of natural gas holding companies as such, it did not cover federal oversight of
interstate natural gas trade. For this purpose, Congress subsequently passed the NGA (P.L. 75688; 15 U.S.C. §§717-717z). The NGA declared “that Federal regulation in matters relating to the
transportation of natural gas and the sale thereof in interstate and foreign commerce is necessary
in the public interest.”23 Accordingly, the act gave the Federal Power Commission (FPC), which
was already established, regulatory authority over interstate natural gas transportation and
wholesale sales, the importation or exportation of natural gas in foreign commerce, and
companies or persons engaged in these activities.24
The scope of the FPC’s authority has evolved since enactment of the NGA. In 1954, the U.S.
Supreme Court ruled that the FPC’s authority extended to the pricing of all natural gas produced
for interstate sales.25 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).
20 FTC, Utility Corporations: Final Report of the Federal Trade Commission to the Senate of the United States
Pursuant to Senate Resolution No. 83, 70th Congress, 1st session on Economic, Corporate, Operating, and Financial
Phases of the Natural-Gas-Producing, Pipe-Line, and Utility Industries, with Conclusions and Recommendations, 70th
Cong., 1st sess., 1936, S.Doc. 70-92, Part 84-A, p. VI.
21 FTC, S.Doc. 70-92, Part 84-A, p. 611.
22 The Public Utility Holding Company Act (PUHCA) required each interstate holding company engaged through its
subsidiaries in the electric utility business to register with the Securities and Exchange Commission; file detailed
reports about its organization, financial structure, and operations; and operate as a coordinated, integrated system,
confined to the “State in which it is organized and States contiguous thereto.” PUHCA was repealed in the Energy
Policy Act of 2005 (P.L. 109-58). For more background, see Markian M. W. Melnyk and William S. Lamb, “PUHCA’s
Gone: What’s Next for Holding Companies?” Energy Law Journal, vol. 27, no. 1 (2006), pp. 1-24, https://www.ebanet.org/wp-content/uploads/2023/02/2-Vol27_No1_2006_Art_PUCHAs-Gone.pdf.
23 15 U.S.C. §717(a).
24 15 U.S.C. §717(b). Congress created the Federal Power Commission (FPC) in 1920 under the Federal Water Power
Act (FWPA) to provide federal oversight of nonfederal hydropower development. Title II of PUHCA amended the
FWPA to create the Federal Power Act (FPA) and granted authority to the FPC to regulate the interstate transmission
and sales of electricity.
25 Phillips Petrol. Co. v. Wisconsin, 347 U.S. 672 (1954).
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The Natural Gas Act: Background, Key Provisions, and Policy Issues
Congress has amended the NGA several times since 1938 to address regulatory gaps in the
original statute, court decisions, or changes in natural gas markets. In 1947, in an Act to Amend
the Natural Gas Act (P.L. 80-245), Congress added eminent domain authority for interstate natural
gas pipelines.26 In 1954, Congress enacted the Hinshaw Bill (P.L. 83-323), which exempted
certain natural gas companies from federal regulation. The Natural Gas Policy Act of 1978 (P.L.
95-621) established price ceilings for wellhead natural gas, eliminated pricing distinctions
between the interstate and intrastate gas markets, and allowed intrastate pipelines to transport gas
for interstate pipelines (and distribution companies they served) without becoming subject to
NGA jurisdiction, among other provisions.27 The Natural Gas Wellhead Decontrol Act of 1989
(P.L. 101-60) completely deregulated wellhead natural gas prices.28 The Energy Policy Act of
1992 (P.L. 102-486) eased restrictions on LNG imports from free trade partners and exempted
from federal regulation natural gas sales for vehicular use. The Energy Policy Act of 2005 (P.L.
109-58) clarified FERC’s jurisdiction over LNG terminal siting, gave FERC authority to prohibit
natural gas market manipulation, designated FERC as the lead agency for coordinating federal
authorizations and NEPA compliance for jurisdictional gas infrastructure, and directed FERC to
establish a schedule for all such federal authorizations, among other provisions.29
What is Liquefied Natural Gas?
When natural gas is cooled to temperatures below minus 260 degrees Fahrenheit, it condenses into a liquid form,
generally referred to as “liquefied natural gas,” or LNG. As a liquid, natural gas occupies 1/600th of the volume of
its gaseous state, so it is stored more efficiently in a limited space and is more readily transported in insulated
tanker vessels, tanker trucks, and specialized shipping containers. At warmer temperatures, LNG becomes
gaseous again and can be delivered to local natural gas distribution systems or supplied directly into power plants
or industrial facilities via pipelines. Federal statutes and regulations referring to natural gas generally apply to both
its gaseous or liquefied state, although some may refer to LNG specifically.30
Key Provisions of the Natural Gas Act
The NGA establishes federal oversight of interstate natural gas infrastructure development,
natural gas exports/imports, and natural gas transportation rates. In recent Congresses, certain
NGA authorities and requirements, or the absence thereof, have drawn the attention of energy and
environmental stakeholders, public advocates, and Members of Congress. Key provisions of the
act (as amended), their administration by FERC or DOE, and associated policy issues are
discussed in the following sections.
26 For more information on federal eminent domain authority, see CRS Report R47562, The Takings Clause of the
Constitution: Overview of Supreme Court Jurisprudence on Key Topics, by Adam Vann.
27 P.L. 95-621, 92 Stat. 3350 (1978). Natural gas “wellhead” prices are wholesale prices for raw natural gas at the point
where it is produced (i.e., at the wellhead).
28 U.S. President (G. H. W. Bush), “Statement on Signing the Natural Gas Wellhead Decontrol Act of 1989,” Public
Papers of the Presidents of the United States, vol. 2 (July 26, 1989), p. 1019.
29 For details and discussion, see Federal Energy Regulatory Commission (FERC), FERC and EPAct 2005: Meeting
Milestones, August 8, 2006, https://www.ferc.gov/sites/default/files/2020-04/ferc-and-epact-2005.pdf.
30 Liquefied natural gas (LNG) should not be confused with natural gas liquids (NGLs), which are hydrocarbon chains
like ethane, propane, and butane that are also traded as fuels. For more details, see Department of Energy (DOE),
“Understanding Liquefied Natural Gas (LNG),” web page, https://www.energy.gov/hgeo/understanding-liquefiednatural-gas-lng.
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The Natural Gas Act: Background, Key Provisions, and Policy Issues
Pipeline and Liquefied Natural Gas Facility Siting Authority
NGA Section 7(c) authorizes FERC to issue certificates of “public convenience and necessity” for
“the construction or extension of any facilities ... for the transportation in interstate commerce of
natural gas.”31 Therefore, companies seeking to build interstate natural gas pipelines or LNG
facilities used in interstate natural gas transportation (e.g., “peakshaver” LNG facilities used for
seasonal storage) must first obtain certificates of public convenience and necessity from FERC.32
Similarly, under Section 3(e) of the NGA, FERC has “the exclusive authority to approve or deny
an application for the siting, construction, expansion, or operation of an LNG terminal” for export
or import, onshore or in state waters.33
Because pipelines are essential for transporting natural gas from production areas to natural gas
markets—often in other states—and LNG terminals are essential for overseas LNG trade, FERC’s
siting authorities under the NGA give it overarching influence on the development of the U.S.
natural gas industry. Because natural gas is the single largest energy source for electricity
generation in the United States (43% in 2024), natural gas pipeline development also heavily
influences the U.S. electricity sector.34 Several specific aspects of FERC’s siting authority and
implementation have lately been issues debated in Congress, as discussed below.
Public Interest Considerations
The NGA establishes a public interest standard for federal authorization of natural gas
infrastructure. Section 3 directs FERC to authorize the construction and operation of a proposed
LNG export/import terminal unless the Commission finds that the terminal “will not be consistent
with the public interest.”35 Section 7 provides that “a certificate shall be issued” for an interstate
pipeline facility if FERC determines that the facility “is or will be required by the present or
future public convenience and necessity.”36
The NGA contains no specifics regarding what the public interest or public convenience and
necessity entail. As a result, details of what FERC considers in making a public interest
determination remain largely at the Commission’s discretion. FERC exercises its pipeline
certification and LNG terminal approval authorities in accordance with its own regulations and
the guidance of its own policy statements.37 The Commission employs similar processes for the
review of permit applications for both natural gas pipelines and LNG terminals.38 In 2022, FERC
31 15 U.S.C. §717f(c).
32 15 U.S.C. §717b(e). FERC must also approve the abandonment of gas facility use and service and the establishment
of physical connections. Executive Order 10485 designates and empowers FERC (as the successor to the FPC) to
authorize “permits for the construction, operation, maintenance, or connection, at the borders of the United States, of
facilities for the exportation or importation of natural gas to or from a foreign country,” assigning to FERC authority
over cross-border pipeline crossings similar to its Natural Gas Act authorities for domestic pipelines. Executive Order
10485 of September 3, 1953, “Providing for the Performance of Certain Functions Heretofore Performed by the
President with Respect to Electric Power and Natural Gas Facilities Located on the Borders of the United States,” 18
Federal Register 5397 (September 9, 1953), https://archives.federalregister.gov/issue_slice/1953/9/9/5397-5399.pdf.
33 Congress gave FERC “exclusive” jurisdiction over LNG terminal siting, among other LNG-related provisions, in the
Energy Policy Act of 2005 (P.L. 109-58, §311(c)).
34 EIA, Monthly Energy Review, February 2026, p. 135, Table 7.2a, https://www.eia.gov/totalenergy/data/monthly/
archive/00352602.pdf.
35 15 U.S.C. §717b(a).
36 15 U.S.C. §717f(e). Executive Order 10485, while independent of the NGA, similarly imposes a “public interest”
requirement for cross-border pipeline permits.
37 FERC, “Policy Statements,” September 24, 2024, https://www.ferc.gov/major-orders-regulations/policy-statements.
38 FERC, “FERC Processes,” March 15, 2021, https://www.ferc.gov/industries-data/resources/ferc-processes.
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The Natural Gas Act: Background, Key Provisions, and Policy Issues
issued two statements updating its policies “to provide an updated, legally durable ... approach for
permitting interstate natural gas pipelines and LNG facilities” under the NGA’s public
convenience and necessity standard, but five weeks later redesignated both policy statements as
drafts following criticism in Congress.39
Before FERC can issue a final decision on an application for either type of facility, the agency
must identify and consider the environmental impacts of the proposed project in accordance with
NEPA.40 Under NEPA, federal agencies must prepare an environmental impact statement (EIS)
for proposed “major Federal actions significantly affecting the quality of the human environment”
unless an exemption applies.41 An EIS generally must assess reasonably foreseeable effects of a
proposed action, identify irreversible and irretrievable commitments of resources, and consider a
reasonable range of alternatives to the proposed action.42 While the NEPA review and “public
interest” determination mandated by the NGA are separate reviews, “FERC considers
environmental effects alongside other public interest factors when determining whether to
authorize a project.”43
FERC’s interpretation of what it is obligated to consider under the NGA’s “public interest”
standard—informed by its related evaluation of environmental impacts under NEPA—has been
an issue of debate within the Commission and in Congress and the courts.44 For example, a series
of federal court rulings starting in the early 2020s found deficiencies in FERC’s environmental
review of permit applications, its market assessments, or both.45 Recent judicial decisions have
illuminated the boundaries of the related NEPA considerations. In Seven County Infrastructure
Coalition v. Eagle County, the Supreme Court addressed “agencies’ discretionary decisions about
where to draw the line when considering indirect environmental effects” with respect to NEPA
39 Testimony of FERC Chairman Richard Glick in U.S. Congress, Senate Committee on Energy and Natural Resources,
Hearing to Review the Recent Actions of the Federal Energy Regulatory Commission Relating to Permitting,
Construction, and Operation of Interstate Natural Gas Pipelines and Other Natural Gas Infrastructure Projects,
hearing, 117th Cong., 2nd sess., March 3, 2022, S.Hrg. 117-276, pp. 9-10, https://www.congress.gov/117/chrg/CHRG117shrg47754/CHRG-117shrg47754.pdf. For additional background, see CRS Report R45239, Interstate Natural Gas
Pipeline Siting: FERC Policy and Issues for Congress, by Paul W. Parfomak.
40 NEPA requires federal agencies to “take a hard look at environmental consequences” of their proposed actions (e.g.,
granting a certificate), consider alternatives, and publicly disseminate such information before taking final action.
Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989).
41 42 U.S.C. §4332(2)(C). The statutory definition of “major federal action” (42 U.S.C. § 4336e(10)) is “an action that
the agency carrying out such action determines is subject to substantial Federal control and responsibility,” which
would generally include actions that require federal agency approvals via a permit or other regulatory approval. For
more details, see CRS In Focus IF12560, National Environmental Policy Act: An Overview, by Kristen Hite and
Heather McPherron.
42 42 U.S.C. §4332(2)(C).
43 FERC, Office of Public Participation, Explainer—Public Participation in FERC’s Environmental Justice Review
Process, January 2025, p. 2, https://eelp.law.harvard.edu/wp-content/uploads/2025/01/Explainer_Public-Participationin-FERCs-Environmental-Justice-Review-Process.pdf.
44 See, for example, Testimony of FERC Commissioner Cheryl A. LaFleur in U.S. Congress, House Committee on
Energy and Commerce, Subcommittee on Energy, Modernizing the Natural Gas Act to Ensure It Works for Everyone,
hearing, 116th Cong., 2nd sess., February 5, 2020, H.Hrg. 116-95, p. 15, https://www.congress.gov/116/chrg/CHRG116hhrg50300/CHRG-116hhrg50300.pdf; Commissioner Mark C. Christie, “Items C-1 and C-2: Commissioner
Christie’s Dissent from the Certificate Policy and Interim Greenhouse Gas Policy Statements,” FERC, February 17,
2022, https://www.ferc.gov/news-events/news/items-c-1-and-c-2-commissioner-christies-dissent-certificate-policy-andinterim.
45 See, for example, Sierra Club v. FERC, 867 F.3d 1357 (D.C. Cir. 2017) and Food & Water Watch v. FERC, 28 F.4 th
277 (D.C. Cir. 2022). For further details and discussion, see CRS Report R48347, Federal Energy Regulatory
Commission (FERC) Natural Gas Permitting and Litigation, by Paul W. Parfomak and Adam Vann.
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analyses.46 The Court held that an agency has the discretion under NEPA to decline to consider
certain indirect environmental effects if the agency decides those effects are too remote.47 In
Sierra Club v. FERC, the U.S. Court of Appeals for the District of Columbia Circuit applied the
Seven County decision to FERC pipeline authorizations, holding that “FERC has ‘broad latitude’
to decide ‘where to draw the line’ in considering environmental effects, and ‘substantial
discretion’ to determine what constitute ‘feasible alternatives.’”48 These rulings may resolve
certain scoping questions regarding FERC’s environmental reviews, particularly its obligations
under NEPA; however, debate about the Commission’s environmental considerations and other
aspects of FERC’s public interest standard, such as project impacts on local communities,
continues.49
Bills have been introduced in the 119th Congress and previous Congresses seeking to address
aspects of FERC’s permitting requirements, public interest considerations, or judicial review. In
the 119th Congress, the FERC Greenhouse Gas and Environmental Justice Policy Act of 2025 (S.
3324 and H.R. 6378) would “confirm and clarify” FERC’s “obligation to assess and mitigate the
impacts to climate change and environmental justice communities from projects approved
pursuant to the Natural Gas Act.” The Protect LNG Act of 2025 (H.R. 3592) would mandate that
“a civil action relating to an environmental review under” the NGA or NEPA “shall not affect the
validity of” the associated FERC authorization under NGA Section 3(e) and would bar courts
from vacating certain permits, licenses, or approvals that are found to violate the NGA or NEPA,
among other provisions. The North American Energy Act (S. 1485) and the Promoting CrossBorder Energy Infrastructure Act (H.R. 3062) would eliminate the Presidential Permit
requirement for border-crossing natural gas pipeline facilities, replacing it with a requirement to
obtain a “certificate of crossing” from FERC, among other provisions.50
In the 118th Congress, provisions in the Fiscal Responsibility Act of 2023 (P.L. 118-5), which
authorized completion of the Mountain Valley Pipeline, directed FERC (among other agencies)
“to continue to maintain such authorizations, permits, verifications, extensions, ... and any other
approvals or orders issued” necessary for constructing and operating the pipeline.51 Section 3002
of the SPUR Act (S. 1456) would have amended the NGA to specify what “effects” FERC could
consider in conducting an environmental review under NEPA. The Pipeline Fairness,
Transparency, and Responsible Development Act of 2023 (S. 2547) would have amended the
NGA “to bolster fairness and transparency in the consideration of interstate natural gas pipeline
permits” through various measures intended to protect landowner interests, including notice
requirements and limitations on the exercise of eminent domain.
46 605 U.S. 168, 169 (2025).
47 605 U.S. at 188.
48 145 F.4th 74, 79 (D.C. Cir 2025).
49 See, for example, Office of Representative Valerie Foushee, “Foushee, Scott, McClellan Urge Full Review of
Proposed Natural Gas Pipelines’ Environmental Impact,” press release, December 2, 2025, https://foushee.house.gov/
media/press-releases/foushee-scott-mcclellan-urge-full-review-of-proposed-natural-gas-pipelines-environmentalimpact.
50 A Presidential Permit is currently required for the construction, connection, operation, and maintenance of certain
facilities that cross the United States’ borders with Canada and Mexico. See Executive Order 13867 of April 10, 2019,
“Issuance of Permits with Respect to Facilities and Land Transportation Crossings at the International Boundaries of
the United States,” 84 Federal Register 15491, April 15, 2019, https://www.govinfo.gov/content/pkg/FR-2019-04-15/
pdf/2019-07645.pdf.
51 P.L. 118-5, §324(c), 137 Stat. 10, 47 (2023). For background on the Mountain Valley Pipeline, see CRS Insight
IN12032, Mountain Valley Pipeline: Past the Finish Line, by Paul W. Parfomak and Adam Vann.
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Timing of Application Reviews
The NGA includes no statutory time limits within which FERC must complete its own certificate
review process or issue an order.52 Members of Congress have long debated whether interstate
natural gas pipeline and LNG terminal permit reviews have been unduly delayed due to a lack of
coordination or insufficient action among agencies involved in the process, including the
Commission itself.53 Others have expressed concern that the growing complexity of permit
applications in recent years, especially due to environmental considerations and related directives
from the courts, have extended the permitting timelines for natural gas projects under FERC’s
jurisdiction.54 In 2025, the Commission revised its regulations and staff procedures on its
implementation of NEPA to “mak[e] the permitting process more efficient.”55 Nonetheless, some
Members of Congress express continued concern about “delays” in FERC’s permitting
processes.56
In the 119th Congress, the Improving Interagency Coordination for Pipeline Reviews Act (H.R.
3668), which passed in the House on December 12, 2025, and the Jurisdictional Oversight and
Adjudication for Natural Gas Act (S. 4300) would affirm FERC as the only lead agency for
coordinating the environmental review of permit applications under NEPA (requiring other
involved agencies to defer to FERC’s scope for a NEPA review). The act would also prohibit
FERC from establishing a deadline for authorizing a project under the NGA more than 90 days
after completing its NEPA review, among other provisions. In the 118th Congress, the SPUR Act
(S. 1456) included similar provisions. Also in the 118th Congress, Title I of the Energy Freedom
Act (S. 879) would have established deadlines to expedite the review of permits and other
authorizations for natural gas transmission projects, natural gas interstate pipelines, and the
exportation of natural gas.
Order Rehearing and Judicial Appeals
NGA Section 19 includes provisions for bringing legal challenges to FERC orders.57 Anyone who
wishes to appeal a FERC order must first apply for rehearing at FERC—and wait for the
Commission to either deny rehearing or reach a conclusion on the merits—before they can seek
52 Under the Energy Policy Act of 2005, FERC has authority to establish a schedule for all federal authorizations from
cooperating agencies and provides for judicial petition “if a Federal or State administrative agency” fails to comply
with that schedule. 15 U.S.C. §717n(c).
53 See, for example, Opening Statement of Senator Joe Manchin in U.S. Congress, Senate Committee on Energy and
Natural Resources, Oversight of the Federal Energy Regulatory Commission, hearing, 118th Cong., 1st sess., May 4,
2023, S.Hrg. 118-271, p. 1, https://www.congress.gov/118/chrg/CHRG-118shrg55520/CHRG-118shrg55520.pdf; U.S.
Congress, Senate Committee on Environment and Public Works, Oversight Hearing to Review the Permitting of
Energy Projects, hearing, 109th Cong., 1st sess., May 25, 2005, S.Hrg. 109-856, https://www.congress.gov/109/chrg/
CHRG-109shrg32211/CHRG-109shrg32211.pdf.
54
See, for example, U.S. Congress, Senate Committee on Natural Resources, “Barrasso Calls on FERC to Recommit to
American Natural Gas,” press release, December 15, 2021, https://www.energy.senate.gov/2021/12/barrasso-calls-onferc-to-recommit-to-american-natural-gas (“Putting aside particular calculations, the time FERC has taken to consider
certificate applications to construct new and upgrade existing interstate natural gas pipelines has been greater since
January 21, 2021 than ... prior to January 21, 2021.”).
55 FERC, “FERC Revises NEPA Procedures to Make Permitting More Efficient,” press release, June 30, 2025,
https://www.ferc.gov/news-events/news/ferc-revises-nepa-procedures-make-permitting-more-efficient.
56 See, for example, Rep. Richard Hudson, “Rep. Hudson’s Bill to Speed Pipeline Approvals, Lower Energy Costs
Passes House,” press release, December 12, 2025, https://hudson.house.gov/press-releases/rep-hudsons-bill-to-speedpipeline-approvals-lower-energy-costs-passes-house.
57 15 U.S.C. §717r.
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judicial review.58 In addition, the NGA provides that requests for rehearing can be made by a
“person, State, municipality, or State commission” only if they are a “party” to the proceeding—
either the applicant or an intervenor.59 Only intervenors have the right to file briefs, attend
hearings, and appeal the Commission’s decision regarding the certificate. If FERC denies a
rehearing, or affirms its order upon rehearing, then an intervenor may appeal FERC’s final actions
in the federal court of appeals where the certificate applicant is located (or has its principal place
of business) or in the U.S. Court of Appeals for the District of Columbia Circuit.60 The NGA
further provides that, until the record of FERC’s proceeding is filed in court, “the Commission
may at any time ... modify or set aside, in whole or in part, any finding or order made or issued by
it under the provisions of th[e] Act.”61
The NGA’s 30-day deadline for FERC to act upon a request for rehearing had been the subject of
a long-standing dispute among affected parties and the Commission over the common FERC
practice of issuing “tolling orders,” which could delay a decision on the merits of the request.
Section 19 of the NGA deems an application for rehearing to be denied—meaning the applicant
may seek judicial review—unless the Commission acts upon the application within 30 days after
it is filed.62 Under its practice prior to 2020, FERC issued a tolling order within 30 days of a
rehearing request; the tolling order granted rehearing only “for the limited purpose of further
consideration.”63 The purpose was to provide the Commission more time to review a rehearing
request without triggering the automatic 30-day “deemed” denial through Commission inaction.
Under a tolling order, there was no deadline by which FERC needed to make a final decision
about a rehearing request based on the merits. Therefore, a tolling order could indefinitely delay
the ability for aggrieved parties to ask for judicial review of a FERC certificate order.64
FERC stopped issuing tolling orders following a 2020 opinion by the D.C. Circuit, which held
that “the Commission has no authority to erase and replace the statutorily prescribed
jurisdictional consequences of its inaction.”65 Under FERC’s current policy, if the Commission
does not act on the merits of a rehearing request within 30 days, it will issue either a Notice of
Denial of Rehearing by Operation of Law, or a Notice of Denial of Rehearing by Operation of
Law and Providing for Further Consideration.66 In the 118th Congress, S. 2547 would have
amended the NGA to provide that “an order granting an application for rehearing solely for the
purpose of further considering the issues raised in the application ... shall not be considered to be
a ruling on the merits,” so it would be considered a deemed denial. S. 1456 would have extended
FERC’s deadline for rehearing requests from 30 days to 60 days.
58 15 U.S.C. §717r.
59 15 U.S.C. §717r. According to FERC’s regulations (18 C.F.R. §385.214), persons or institutions wishing to become
intervenors must file a motion to intervene stating their position to be taken in the proceeding and their interest in the
proceeding sufficient to meet certain criteria for intervention. Intervenors receive the certificate applicant’s filings and
other FERC documents related to the case, as well as materials filed by other interested parties.
60 15 U.S.C. §717r.
61 15 U.S.C. §717r.
62 15 U.S.C. §717r.
63 See, for example, Order Granting Rehearing for Further Consideration, Transcon. Gas Pipe Line Co., LLC, No.
CP15-138-001 (Mar. 13, 2017).
64 Bricker Graydon Wyatt LLP, “D.C. Circuit Bars Long-Standing FERC Rehearing Tolling Practice,” July 6, 2020,
https://www.bricker.com/insights/publications/D-C-Circuit-bars-long-standing-FERC-rehearing-tolling-practice.
65 Allegheny Def. Project v. FERC, 964 F.3d 1 (D.C. Cir. 2020). For details, see CRS Legal Sidebar LSB10535, For
Whom the FERC Tolls: Federal Court Rejects Agency “Tolling Orders”, by Adam Vann.
66 See FERC, “Recent Changes in Commission Rehearing Practice—Item A-3,” September 17, 2020,
https://www.ferc.gov/news-events/news/recent-changes-commission-rehearing-practice-item-3.
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Eminent Domain Authority
NGA Section 7 grants a FERC certificate holder “the right of eminent domain” to acquire “the
necessary right-of-way to construct, operate, and maintain a pipe line or pipe lines for the
transportation of natural gas” if the holder cannot acquire the necessary property rights
contractually from the landowner through negotiation.67 The exercise of eminent domain
authority under the NGA by pipeline developers has been controversial. Issues have arisen
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 have
been challenged.68
A 2021 U.S. Supreme Court opinion reaffirmed FERC’s authority to delegate the eminent domain
authority to a private party (e.g., pipeline developer) as provided in Section 7 of the NGA, even
on state-owned lands.69 FERC’s regulation and oversight of eminent domain authority under the
NGA continue to be debated. For example, in 2025, despite the objections of landowners and
other groups, FERC rescinded an earlier policy that barred pipeline developers with FERC
certificates from starting construction during the 30-day period for filing rehearing requests for
initial orders, or while rehearing is pending.70
Bills introduced in recent Congresses would have imposed restrictions on the exercise of eminent
domain under the NGA. In the 118th Congress, S. 2547 would have prevented a pipeline
developer’s exercise of eminent domain until all FERC certificate rehearings were concluded and
until all necessary authorizations for the project from any agency were granted, among other
provisions. The Just Compensation Act of 2023 (S. 3429), while not specifically directed at
FERC, would have prevented any federal agency—including FERC—from delegating eminent
domain authority to a “private entity,” and would have required compensation to landowners “of
not less than 150 percent of fair market value” of their property. In the 117th Congress, the Ending
Natural Gas Companies’ Seizure of Land for Export Profits Act (S. 655), Fairness for
Landowners Facing Eminent Domain Act (H.R. 2889), Landowner Fairness Act (S. 641),
Landowners’ Right to Due Process in Rehearings at FERC Act of 2021 (H.R. 4774), and Fairness
for Landowners Facing Eminent Domain Act (H.R. 2889) all would have made changes to
FERC’s eminent domain authority under the NGA.
67 15 U.S.C. §717f(h). Congress added the eminent domain section to the Natural Gas Act in 1947 with P.L. 80-245,
https://www.govinfo.gov/content/pkg/STATUTE-61/pdf/STATUTE-61-Pg459-3.pdf#page=1. At the time, state
governments, coal companies, railroads, and landowners were preventing interstate natural gas pipeline developers
from expanding their systems. U.S. Congress, Subcommittee of the Senate Committee on Interstate and Foreign
Commerce, S.734 and S.1028: Bills to Amend the Natural Gas Act, As Amended, committee print, 80th Cong., 1st sess.,
June 21, 1938; see also Alexandra B. Klass and Danielle Meinhardt, “Transporting Oil and Gas: U.S. Infrastructure
Challenges,” Iowa Law Review, vol. 100, no. 3 (2015), p. 998, https://ilr.law.uiowa.edu/sites/ilr.law.uiowa.edu/files/
2023-02/ILR-100-3-Klass-Meinhardt.pdf. According to the article, the Senate subcommittee “found it untenable that
states were able to essentially nullify FPC orders (and by association, federal legislative will) by refusing to allow an
interstate pipeline with a federal certificate of public convenience and necessity.”
68 See, for example, Pamela King, “Va. Widow Leads Eminent Domain Fight at Supreme Court,” E&E News, August
13, 2019, https://www.eenews.net/articles/va-widow-leads-eminent-domain-fight-at-supreme-court/; Commissioner
James Danly, “Item C-7: Commissioner James Danly Concurrence in Part and Dissent in Part Regarding Northern
Natural Gas Company,” FERC, March 24, 2022, https://www.ferc.gov/news-events/news/item-c-7-commissionerjames-danly-concurrence-part-and-dissent-part-regarding.
69 PennEast Pipeline Co. v. New Jersey, 594 U.S. 482 (2021). For details, see CRS Legal Sidebar LSB10634, PennEast
Pipeline Company v. New Jersey: Can a Natural Gas Pipeline Company Bring a Condemnation Suit Against a State?,
by Eric N. Holmes.
70 Removal of Regulations Limiting Authorizations to Proceed with Construction Activities Pending Rehearing, 194
FERC ¶ 61,132 (2026), https://www.ferc.gov/media/c-2-rm25-9-001.
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DOE Commodity Export/Import Permitting
Under NGA Section 3(a), parties seeking to enter into natural gas trade (import or export) with
foreign buyers—either for pipeline natural gas or LNG—must apply for an authorization from
DOE.71 If the United States has a free trade agreement (FTA) in effect with the nation with which
it seeks to trade, the NGA mandates that the application “shall be deemed to be consistent with
the public interest, and ... granted without modification or delay.”72 LNG trade with non-FTA
countries is presumed to be in the public interest “unless, after opportunity for hearing, [DOE]
finds that the proposed exportation or importation will not be consistent with the public
interest.”73 LNG commodity export/import applications involving FTA countries thus must be
approved automatically, but export/import applications involving non-FTA countries must go
through a permit review process.
The DOE authorization for commodity export/import is separate from, and in addition to,
authorization from FERC to construct any associated LNG terminal facilities. As is the case for
FERC’s LNG terminal authorizations, before DOE can issue a final decision on a non-FTA
commodity export/import application, the agency must identify and consider the environmental
impacts of the proposed permit in accordance with NEPA, in addition to other public interest
considerations. Over the last decade, the United States has imported only very small volumes of
natural gas from non-FTA countries due the abundance of domestic natural gas, so Congress has
focused primarily on non-FTA exports.
Public Interest and Non-FTA Trade
The NGA does not specify what factors need to be considered in DOE’s evaluation of public
interest for non-FTA exports, giving the agency discretion in its review of permit applications.
According to DOE, the agency “has identified a range of factors that it evaluates when reviewing
an application to export LNG to non-FTA countries ... includ[ing] economic impacts,
international impacts, security of natural gas supply, and environmental impacts, among others.”74
How DOE has considered these factors—especially domestic price impacts, environmental
impacts, and energy security—has been an issue of debate in Congress. For example, in
November 2011, during a Senate committee hearing on LNG exports, DOE was asked to
undertake two studies, in part to better understand the economic effects of LNG exports on
consumers and the country as a whole.75 The first study, undertaken by the Energy Information
Administration (EIA), examined the impact to domestic natural gas prices of hypothetical LNG
71 15 U.S.C. §717b(a); DOE regulations implementing those requirements were promulgated at 10 C.F.R. pt. 590
(Administrative Procedures with Respect to the Import and Export of Natural Gas).
72 15 U.S.C. §717b(c).
73 15 U.S.C. §717b(a).
74 DOE, “Policy Statement on Export Commencement Deadlines in Authorizations to Export Natural Gas to Non-Free
Trade Agreement Countries,” 88 Federal Register 25272, 25274, April 26, 2023. See also DOE, Fossil Energy and
Carbon Management, In re Sierra Club et al., “Order Denying Petition for Rulemaking on Exports of Liquefied Natural
Gas,” July 18, 2023, https://perma.cc/TB8Y-56TV (“Precisely because the U.S. LNG market and related issues—
including climate change considerations and global energy security—are dynamic, the LNG export program is best
served by continuing to update the economic and environmental studies, analytical approaches, and public interest
factors that DOE considers in an iterative fashion, based on developing facts and circumstances.”).
75 U.S. Congress, Senate Committee on Energy and Natural Resources, Full Committee Hearing: To Consider Market
Developments for US Natural Gas, Including the Approval Process and Potential for Liquefied Natural Gas Exports,
hearing, 112th Cong., 1st sess., November 8, 2011, S.Hrg. 112-215, https://www.energy.senate.gov/hearings/2011/11/
full-committee-hearing-to-consider-market-developments-for-us-natural-gas-including-the-approval-pro.
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export volumes.76 The second study, undertaken by a private consulting firm, was a broader
economic evaluation of LNG exports, using the EIA price study as an input.77 Since those two
studies were completed, DOE has periodically commissioned other studies on factors of interest
to Congress, including on lifecycle greenhouse gas emissions, on price effects of different levels
of exports, and particularly on the effects of exports on domestic natural gas prices.78 After Russia
invaded Ukrainian Crimea in 2014, DOE also broadened its consideration of national security
issues when evaluating the public interest.79
How DOE evaluates the public interest under the NGA with respect to non-FTA LNG export
proposals has been the subject of litigation and executive action in recent years. In January 2024,
the Biden Administration announced “a temporary pause on pending decisions” on applications to
export LNG to non-FTA countries “until the [DOE] can update the underlying analyses for
authorizations.”80 The announcement cited the need for DOE to reconsider potential impacts to
domestic natural gas prices, greenhouse gas emissions, and the health of frontline communities
exposed to pollution from new LNG export facilities.81 A federal court subsequently stayed the
permitting pause, in part because DOE “failed to provide a more detailed justification for its halt
of the approval process.”82 On January 20, 2025, President Trump issued Executive Order 14154,
“Unleashing American Energy,” which lifted the non-FTA permitting pause, among other
provisions.83 In addition, this executive order states that when assessing the public interest, DOE
should consider domestic economic and employment effects, and the security of U.S. allies and
partners.
Bills in the 119th Congress would amend aspects of the NGA or its implementation related to
LNG commodity exports. The LNG Export Security Act (S. 4520) would define “public interest”
as the consideration of the development of U.S. natural gas facilities and domestic natural gas
supply; domestic economic interests; and national security interests. The LNG Public Interest
Determination Act of 2025 (H.R. 381) and the Energy Bills Relief Act (H.R. 7977) would require
that public interest determinations for proposed natural gas exports consider potential climate
impacts, consumer energy costs, and environmental justice factors. The Protecting American
Energy Security Act of 2026 (H.R. 7061) would amend Section 3 of the NGA to require a DOE
“certification” that the LNG export “would be in the public interest” in order to export natural gas
76 EIA, Effect of Increased Natural Gas Exports on Domestic Energy Markets, January 2012, https://www.energy.gov/
sites/prod/files/2013/04/f0/fe_eia_lng.pdf.
77 NERA Economic Consulting, Macroeconomic Impacts of LNG Exports from the United States, prepared for DOE,
December 3, 2012, https://www.energy.gov/sites/prod/files/2013/04/f0/nera_lng_report.pdf.
78 DOE Hydrocarbons and Geothermal Energy Office, “2024 LNG Export Study: Energy, Economic, and
Environmental Assessment of U.S. LNG Exports,” accessed March 30, 2026, https://hgeo.energy.gov/app/docketindex/
docket/index/30; DOE Hydrocarbons and Geothermal Energy Office, “LNG Export Studies,” June 12, 2018,
https://www.energy.gov/hgeo/articles/lng-export-studies.
79 U.S. Congress, House Committee on Energy and Commerce, Subcommittee on Energy and Power, Quadrennial
Energy Review and Related Discussion Drafts, hearing, 114th Cong., 1st sess., June 2, 2015, H.Hrg. 114-47,
https://www.govinfo.gov/content/pkg/CHRG-114hhrg97282/pdf/CHRG-114hhrg97282.pdf.
80 White House, “Fact Sheet: Biden-Harris Administration Announces Temporary Pause on Pending Approvals of
Liquefied Natural Gas Exports,” January 26, 2024, https://www.energy.gov/sites/default/files/2024-02/
001WHI~1.PDF.
81 White House, “Fact Sheet: Biden-Harris Administration Announces Temporary Pause on Pending Approvals of
Liquefied Natural Gas Exports.”
82 Louisiana v. Biden, No. 2:24-CV-00406, 2024 WL 3253103 (W.D. La. July 1, 2024), appeal dismissed, No. 2430489, 2025 WL 2255023 (5th Cir. Mar. 12, 2025).
83 Executive Order 14154 of January 20, 2025, “Unleashing American Energy,” 90 Federal Register 8357, January 29,
2025. The litigation related to President Biden’s 2024 executive order was subsequently stayed by the U.S. Court of
Appeals for the Fifth Circuit. Louisiana, 2025 WL 2255023.
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to a “covered nation.”84 The Unlocking Domestic LNG Potential Act of 2025 (S. 883; H.R. 1949)
would repeal the NGA’s restrictions on the export and import of natural gas, among other
provisions. The Natural Gas Export Expansion Act (S. 3035; H.R. 5814) would extend automatic
approval for LNG trade with non-FTA countries, except those countries subject to U.S. sanctions
or excluded “for reasons of national security.” The American Gas for Allies Act (H.R. 2769)
would, for a three-year period, require DOE to deem applications for LNG exports to North
Atlantic Treaty Organization (NATO) countries “consistent with the public interest” and approve
them “without modification or delay.” The North American Energy Act (S. 1485) and the
Promoting Cross-Border Energy Infrastructure Act (H.R. 3062) would require DOE to approve
natural gas exports to, or imports from, Mexico or Canada within 30 days of receiving an
application. The Cutting LNG Bunkering Red Tape Act (H.R. 4760) would amend the NGA to
clarify that the sale of LNG to a marine vessel as (bunker) fuel “shall not be considered an
export” unless it occurs in foreign waters.85 Under a provision in the SHIPS for America Act of
2025 (S. 1541; H.R. 3151), DOE LNG export permits would require an annually increasing
percentage of the exported LNG to be carried on U.S.-made and U.S.-flagged vessels. S. 1035
would prohibit the export of U.S.-produced natural gas “with the intent of further exporting that
natural gas through a foreign LNG terminal.”
In the 118th Congress, the Energy Permitting Reform Act of 2024 (S. 4753, §601) would have set
a deadline for DOE to approve or deny certain LNG export applications and, if the agency did not
meet the deadline, would have deemed the applications approved. H.R. 8022 would have
amended the NGA to establish a 180-day deadline for the review of applications for natural gas
export and import orders and require the Secretary of Energy to report to Congress on any failure
to grant or deny an application before the deadline. The LNG Security Act (S. 3829) would have
required DOE to approve LNG exports to all countries that have imported, currently import, or
have facilities capable of importing Russian or Iranian natural gas.86
Natural Gas Rate Regulation
Under Section 4 of the NGA, rates for the transportation or sale of natural gas in interstate
commerce are under FERC’s jurisdiction.87 Section 4 requires that “[a]ll rates and charges made,
demanded or received by any natural gas company for or in connection with the transportation or
sale of natural gas subject to the jurisdiction of the Commission ... shall be just and reasonable,
and any such rate or charge that is not just and reasonable is declared to be unlawful.”88 Section 4
also allows interstate natural gas companies to file applications with FERC to change their rates
at any time.89
84 “Covered nation” as defined in 10 U.S.C. §4872(f) means the Democratic People’s Republic of North Korea, the
People’s Republic of China, the Russian Federation, and the Islamic Republic of Iran.
85 For further background on LNG as a bunker fuel, see CRS Podcast WPD00143, Science and Technology Q&A:
Alternative Fuels in Maritime Shipping, by John Frittelli and Paul Parfomak, https://www.crs.gov/audio/detail/
WPD00143. Bunker fuel is the fuel for ship engines that was historically stored in “bunkers.”
86 U.S. Congress, Senate Committee on Energy and Natural Resources, “Barrasso, Cassidy Introduce Bill to Reverse
Biden’s LNG Pause,” press release, February 29, 2024, https://www.energy.senate.gov/2024/2/barrasso-cassidyintroduce-bill-to-reverse-biden-s-lng-pause.
87 15 U.S.C. §717c.
88 15 U.S.C. §717c(a). Reference here to the “Commission” does not refer to FERC, but rather to the now-defunct FPC.
The Department of Energy Organization Act (P.L. 95-91), Section 402(a)(1)(C), assigned Natural Gas Act oversight of
rates for natural gas transportation and sale to FERC.
89 15 U.S.C. §717c(d).
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NGA Section 5 allows FERC and third parties to challenge the rates established by pipeline
companies. If, after a hearing on its own motion or a complaint from a third party, FERC
determines that a rate is “unjust, unreasonable, unduly discriminatory or preferential,” the
Commission must issue an order determining the “just and reasonable” rate.90
Although the NGA’s statutory language authorizes only states, municipalities, state commissions,
and gas distribution companies to bring third-party challenges to natural gas rates, FERC and the
courts have since determined that if a party other than those specified files a complaint against a
natural gas company, the complaint will be interpreted as a request for FERC to initiate an
investigation at its own discretion.91 NGA Section 6 authorizes FERC to “investigate and
ascertain the actual legitimate cost of the property of every natural-gas company,” including
depreciation, and “other facts” as necessary for rate-making purposes.92
Just and Reasonable Standard
The NGA establishes a “just and reasonable” standard for natural gas pipeline rates and charges,
but provides no additional guidance on how FERC should make such determinations.93 According
to the Commission, determining what is just and reasonable “requires a balancing of equities
between the interests of the pipeline and its ratepayers.”94 FERC’s “basic methodology” is costof-service ratemaking, whereby “rates are designed based on a pipeline’s cost of providing
service including an opportunity for the pipeline to earn a reasonable return on its investment.”95
Under the Natural Gas Policy Act of 1978, rates charged by intrastate pipelines transporting
natural gas for interstate pipelines must be “fair and equitable.”96 When FERC sets the rates for
intrastate pipeline service (rather than state regulators), the Commission uses the same cost-ofservice methodology as it does under the NGA.97
Rate Refunds
The NGA’s provisions regarding refunds for unjust and unreasonable rates have been a recurring
issue in the natural gas industry and in Congress.98 Under Section 4 of the NGA, a pipeline
company may file with FERC to increase its rates with 30 days’ notice.99 If the new rate goes into
effect during FERC’s review of the rate change, and the Commission subsequently finds the new
rate to be unjust, Section 4 provides that FERC may “order such natural-gas company to refund,
with interest, the portion of such increased rates or charges by its decision found not justified.”100
If FERC initiates a rate review upon complaint or its own initiative, Section 5 of the NGA does
not authorize refunds if FERC finds the rate to be unjust or unreasonable. Section 5 only allows
90 15 U.S.C. §717d(a).
91 See Order Setting Complaint for Hearing, Panhandle v. Sw. Gas Storage Co., 117 FERC ¶ 61,318, para. 21 (2006)
(citing Gen. Motors Corp. v. FERC, 613 F.2d 939 (D.C. Cir. 1979)).
92 15 U.S.C. §717e.
93
15 U.S.C. §717e.
94 FERC, “Cost-of-Service Rate Filings,” September 11, 2024, https://www.ferc.gov/natural-gas/general-information/
cost-service-rate-filings.
95 FERC, “Cost-of-Service Rate Filings.”
96 15 U.S.C. §3371(b)(2).
97 15 U.S.C. §3371(b)(2).
98 See, for example, American Public Gas Association, “Championing Section 5 Reform: Pipeline Rate
Accountability,” accessed May 12, 2026, https://www.apga.org/advocacy/nga-reform.
99 15 U.S.C. §717c(d).
100 15 U.S.C. §717c(e).
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FERC to order that the just and reasonable rate “be thereafter observed and in force.”101
Therefore, the Commission cannot order a pipeline company to refund prior overcharges. By
contrast, under Section 206 of the Federal Power Act, the Commission may order an electric
utility to refund amounts paid in excess of rates that would have been just and reasonable for the
period subsequent to a refund effective date through 15 months after that date.102
In the 118th Congress, the MPACT Act (S. 4171) would have given FERC the authority to order
natural gas companies to pay refunds with interest to their consumers for rates or charges found to
be unjust, unreasonable, unduly discriminatory, or preferential. The SPUR Act (S. 1456,
§3001(b)) included a provision that would have required FERC to “adopt tariff provisions and
rate treatments, and establish separately, by rule, additional reforms ... necessary to protect the
adequacy, affordability, reliability, and security of the supply and delivery of ... natural gas by
interstate natural gas pipelines.” How this provision may have applied to the Commission’s
refund authority, or lack thereof, under Sections 4 and 5 is an open question.
Conclusion
Congress originally enacted the NGA to regulate the early development of the nation’s interstate
natural gas industry while preserving the public interest. While the U.S. gas industry has grown
exponentially over the ensuing decades (Figure 2), Congress has preserved the underlying
structure of the NGA. As the ranking member of the House Committee on Energy and
Commerce, Subcommittee on Energy, stated in 2020, “[W]hile the natural gas industry has
undergone remarkable changes over the decades since its passage in 1938, the law has withstood
the test of time and does remain sound.”103 Nonetheless, Congress has seen the need to amend the
NGA from time to time as the gas industry has matured, technology has changed, and natural gas
markets have evolved—both domestically and internationally. Through its oversight of the natural
gas sector and its oversight of the implementing agencies—FERC and DOE—Congress regularly
revisits the act and its impacts on natural gas production, transportation, prices, and international
trade. In addition, over the last 10 years, Congress has increased its attention to the environmental
impacts of natural gas activities under the NGA’s jurisdiction.
101 15 U.S.C. §717d(a).
102 16 U.S.C. §824e(b).
103 Opening Statement of Rep. Fred Upton in U.S. Congress, House Committee on Energy and Commerce,
Subcommittee on Energy, Modernizing the Natural Gas Act to Ensure It Works for Everyone, hearing, 116th Cong., 2nd
sess., February 5, 2020, H.Hrg. 116-95, p. 3, https://www.congress.gov/116/chrg/CHRG-116hhrg50300/CHRG116hhrg50300.pdf.
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Figure 2. U.S. Annual Natural Gas Production 1935-2025
Billion Cubic Feet (Bcf)
Source: Energy Information Administration, “U.S. Dry Natural Gas Production,” February 27, 2026,
https://www.eia.gov/dnav/ng/hist/n9070us2A.htm.
In drafting the NGA, Congress chose to give the implementing agencies considerable discretion
to interpret the statute and establish and modify 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. Potential instability or unpredictability in
FERC’s or DOE’s policies due to changing agency leadership has been seen as a problem by
some stakeholders, including some regulators.104
Notwithstanding a steady stream of legislative proposals over many decades to amend the NGA,
Congress has not often done so, the last time being more than 20 years ago. The historical
infrequency of such amendments may suggest that Congress, as a whole, has generally continued
to support the agencies’ discretionary approach to implementing the NGA, even as it expresses
concerns about particular provisions or agency 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. These
proposals address significant and, in some cases, long-standing concerns—some of which have
come to the fore due to changes in the natural gas markets and environmental policies. As
Congress considers these proposals, the question arises whether FERC and DOE may align their
discretionary policies with 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
104 See, for example, Commissioner Mark C. Christie, “Items C-1 and C-2: Commissioner Christie’s Dissent from the
Certificate Policy and Interim Greenhouse Gas Policy Statements,” FERC, February 17, 2022, https://www.ferc.gov/
news-events/news/items-c-1-and-c-2-commissioner-christies-dissent-certificate-policy-and-interim (“[T]he Supreme
Court has been very clear that any public interest analysis undertaken in the course of determining ‘public necessity and
convenience’ ... is not an open-ended license to use this Commission’s certificating authority to promote whatever a
majority of Commissioners from time to time may happen to view as the ‘public interest.’”).
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the nation’s overall policies regarding energy, the economy, the environment, and international
trade could be a particular challenge for Congress.
Author Information
Paul W. Parfomak
Specialist in Energy Policy
Michael Ratner
Specialist in Energy Policy
Adam Vann
Legislative Attorney
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