Rejecting Midstream Contracts in Chapter 11: Understanding the Jurisdictional and Procedural Issues

1 min

Almost 15 years ago, new shale and fracking technology opened areas like North Dakota and Appalachia to significant oil and gas exploration and development, but the advances also created the need for construction of pipelines and related facilities (e.g., gathering, storage, and/or transportation systems) to ensure that oil and gas could be economically moved by interstate transport to markets vital to the U.S. economy. By then, the Federal Power Act (1938) (FPA) and the Natural Gas Act (1938) (NGA) had appointed FERC (and its predecessor, the Federal Power Commission) to serve as the regulator and protector of the public interest in the face of potential utility and pipeline monopolies. FERC performs its task by reviewing and approving rates and other contract terms for pipeline transportation and storage of natural gas and the transmission and sale for resale of electricity in interstate commerce.