In 1988, FERC, pursuant to the Natural Gas Act of 1938, issued Standards of Conduct to regulate natural gas pipelines’ interactions with their marketing affiliates. The Standards required pipelines and ther marketing affiliates to function independently and imposed restrictions the the sharing of information between them. In 2004, FERC extended the reach of the Standards so that they applied to the pipeline companies’ relationship not only with marketing affiliates but other entities in the industry.
In National Fuel Gas Supply Corp. v. Federal Energy Regulatory Commission, 468 F.3d 831 (D.C. Cir. 2006),, the D.C. Circuit struck down the order extending the reach of the Standards of Conduct. The court found that “FERC’s asserted factual premises d[id] not withstand scrutiny and that the Order [did] not reflect the reasoned decisionmaking required by the Administrative Procedure act.”