Meese Asked to Investigate Gas Pipelines for Anti-Trust

THE JOURNAL RECORD, November 8, 1985 | Go to article overview
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Meese Asked to Investigate Gas Pipelines for Anti-Trust


TULSA - U.S. Attorney General Edwin Meese was asked by the Oklahoma Independent Petroleum Association Thursday to investigate possible anti-trust violation by interstate natural gas pipelines, which have elected not to carry low-cost gas under new federal regulations.

The new gas transportation rules were issued Oct. 9 by the Federal Energy Regulatory Commission (FERC). They allow a pipeline to choose whether to carry low-cost gas.

However, if a pipeline decides to carry the gas, it must do so for all its customers, the rules said.

The Oklahoma Independent Petroleum Association, a 1,500-member trade group based in Tulsa, said eight of approximately 40 interstate pipelines nationwide have decided to carry the cheaper gas during a trial period ending Dec. 15.

By that time, even fewer pipelines may elect to carry the gas, the association said.

Because so many pipelines are not carrying inexpensive gas, the association asked Meese to investigate if the pipelines violated any anti-trust laws by arriving at the decision collectively or if they decided individually.

The petroleum association has cited harm to independent gas producers and residential consumers as another reason for asking Meese to intervene.

"Most interstate pipelines which purchase gas in Oklahoma have been carrying it at below original contract price to industrial consumers under special marketing programs approved by FERC," said David House of Tulsa, who chairs the association natural gas committee.

"When a court ruled pipelines must provide that lower priced gas to all customers," he continued, "FERC responded with order No. 436 which gives pipelines the option. Obviously, the majority of thepipelines opted not to provide low-cost gas."

The result, said House, is that "hundreds of gas wells in Oklahoma are being shut in," since the pipelines already had refused to carry gas at the higher contract prices.

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