Vela: legacy of conflict over determination of market value for royalties on intrastate and interstate gas and continued controversy with the Natural Gas Policy Act of 1978

Journal Article · Tue Jan 01 04:00:00 EST 1980 · Public Land Resour. Law Dig.; (United States)

OSTI ID:6725212

Hayes, W S

A legacy of conflict in judicial interpretation and continued uncertainty result because the Vela doctrine was established prior to the energy shortage and intrastate gas price spiral and well before federal regulation of the gas industry. The test of comparable sales in Vela was rendered at a time when there was little difference between interstate and intrastate gas prices. A power application of the Vela test became uncertain and often inadequate in the determination of market value for interstate gas. A test of comparable sales has little validity in a completely regulated market. The test should either be overruled, more narrowly defined, or a more-specific guideline established. A new test must include a consideration of the price disparity between interstate and intrastate gas before, during, and perhaps after the Natural Gas Policy Act and the uniform pricing policy. The industry's growth, increased complexity, technical changes, and absolute regulation must be included in any new guideline or redefinition of the test for market value. The courts must fashion a solution which will provide a market value standard that will not automatically lead to litigation. 208 references.

• OSTI ID: 6725212
• Journal Information: Public Land Resour. Law Dig.; (United States), Journal Name: Public Land Resour. Law Dig.; (United States) Vol. 17:1; ISSN PRLDD
• Country of Publication: United States
• Language: English

Related Subjects

03 NATURAL GAS
030600 -- Natural Gas-- Economic
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031000 -- Natural Gas-- Legislation & Regulations
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294003* -- Energy Planning & Policy-- Natural Gas
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
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MARKET
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NATURAL GAS INDUSTRY
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