Natural Gas Act Law and Legal Definition

The Natural Gas Act of 1938 is a federal law that made a first attempt for Federal regulation of the natural gas industry.

The act gave the Federal Power Commission (FPC) (subsequently the Federal Energy Regulatory Commission (FERC)) the authority to set just and reasonable rates for the transmission or sale of natural gas in interstate commerce. The FPC was empowered to grant certificates allowing construction and operation of facilities used in interstate gas transmission. The act permitted the pipeline companies to charge customers for some of the expenses incurred in pipeline construction and operation. The NGA also requires Commission approval prior to abandonment of any pipeline facility or services. Under the act Federal approval by the Department of Energy is required for the import and export of natural gas, including liquefied natural gas (LNG), and approval by FERC for the construction, and operation of onshore LNG import and export facilities.