The Federal Power Commission Does Not Have Jurisdiction Over the Sale of a Developed Leasehold Interest of Gas in Formation-Marr v. FPC

Independent gas producers erected producing wells upon certain land to extract leased mineral interests. This development of the leasehold supplied geological information from which the amount of gas reserves was estimated. The gas leasehold was then sold to Texas Eastern Transmission Company, an interstate pipeline company that sought additional reserves. Texas Eastern applied to the Federal Power Commission for a certificate of public convenience and necessity to connect its transportation system to the field. The FPC asserted jurisdiction over the sale of the leasehold in order to investigate the cost aspects of the transaction. Because the details of the sale appeared to adversely affect the ultimate price of gas to the consumer, the FPC refused to grant the requested certificate.” On appeal, held, the Federal Power Commission does not have jurisdiction over the sale of a developed leasehold interest of gas in formation. Marr v. FPC, 33 U.S. L. WEEK 2074 (5th Cir. Aug. 8, 1964).