ABSTRACT
This chapter focuses on US regulation of interstate natural gas pipeline construction and operation. It provides an overview of the competence to regulate interstate gas pipelines and discusses the construction and operation of these pipelines. The interstate gas markets of the US are regulated by the Federal Energy Regulatory Commission (FERC) pursuant to the Natural Gas Act. The FERC’s jurisdiction is limited to the transportation in the interstate pipelines and to certain sales as well as to persons engaging in these transactions. The chapter provides an overview of the FERC regulation of interstate pipeline operation and the main developments towards the status quo. Pipeline companies operate a natural monopoly, which can often not reasonably be duplicated, and access to the pipeline is necessary to compete in the supply market for natural gas. Initially, the Natural Gas Act did not adopt an open-access type of “common carrier” model but rather opted for a cost-of-service rate-making model.
