phillips petroleum wisconsin argued decided june company involved engages production gathering processing sale natural gas engage interstate transmission gas producing fields consumer markets affiliated company sells natural gas five interstate pipeline companies transport resell gas consumers local distributing companies gas flows producing wells network converging pipelines one processing plants extractable products impurities removed thence flows short distance delivery point sold delivered interstate pipeline company continues flow interstate pipeline system delivered held company company within meaning natural gas act sales interstate commerce natural gas resale subject jurisdiction rate regulation federal power commission pp company admittedly engaged sale interstate commerce natural gas resale within meaning act sales company part production gathering natural gas excluded commission jurisdiction since production gathering end sales occur interstate natural gas federal power pp congress intend regulate interstate pipeline companies rather legislative history indicates congressional intent give commission jurisdiction rates wholesales natural gas interstate commerce whether pipeline company whether occurring transmission interstate pipeline company pp cities service gas peerless oil gas phillips petroleum oklahoma require different result pp regulation sales interstate commerce resale made independent producer essentially different regulation sales made affiliate interstate pipeline company together texas et al wisconsin et al federal power commission wisconsin et also certiorari hugh cox argued cause petitioner brief rayburn foster harry turner stanley temko dan moody argued cause petitioners brief john ben shepperd attorney general charles crenshaw special assistant attorney general moody state texas et mac williamson attorney general oklahoma corporation commission oklahoma richard robinson attorney general george graham special assistant attorney general state new mexico et petitioners paull marshall also counsel solicitor general sobeloff argued cause federal power commission petitioner brief assistant attorney general burger melvin richter willard gatchell william grove louis kaplan stewart honeck deputy attorney general wisconsin william torkelson charles rhyne james lee harry slater argued causes respondents joint brief vernon thomson attorney general honeck state wisconsin torkelson public service commission wisconsin lee city detroit michigan david proctor rhyne kansas city missouri walter mattison slater city milwaukee wisconsin respondents brief amici curiae urging reversal filed fred leblanc attorney general state louisiana coleman attorney general state mississippi christianson attorney general state north dakota howard black attorney general state wyoming jay kyle state corporation commission kansas paull marshall also counsel briefs amici curiae urging affirmance filed burnquist attorney general george sjoselius state minnesota john bonner city minneapolis minnesota leo hoegh attorney general state iowa clarence beck attorney general state nebraska anderson john mortimer dale fillmore john banks henry curtis abraham freedman alexander brown dion holm charles rhyne national institute municipal law officers justice minton delivered opinion cases present common question concerning jurisdiction federal power commission rates charged producer gatherer sale interstate commerce gas resale three cases outgrowth proceeding power commission involve facts issues phillips petroleum company large integrated oil company also engages production gathering processing sale natural gas concerned operations phillips known independent producer engage interstate transmission gas producing fields consumer markets affiliated interstate pipeline company revealed record us however phillips sell natural gas five interstate pipeline transmission companies transport resell gas consumers local distributing companies fourteen approximately gas produced phillips remainder purchased producers substantial part casinghead gas produced connection production oil gas flows producing wells instances well pressure network converging pipelines progressively larger size one twelve processing plants extractable products impurities removed nine networks pipelines involved cases five located entirely texas one oklahoma one new mexico two extend texas oklahoma processing completed gas flows processing plant outlet pipe varying lengths hundred feet delivery point gas sold delivered interstate pipeline company gas continues flow interstate pipeline system delivered federal power commission october instituted investigation determine whether phillips company within jurisdiction commission whether rates unjust unreasonable extensive hearings examiner facts described developed well much additional information intermediate decision dispensed commission issued opinion order held phillips company within meaning term used natural gas act therefore within commission jurisdiction rates consequently commission proceed investigate reasonableness rates charged phillips appeals decision commission reversed appeals district columbia circuit one judge dissenting app granted certiorari power commission authorized natural gas act regulate rates charges made demanded received company connection transportation sale natural gas subject jurisdiction commission company defined act mean person engaged transportation natural gas interstate commerce sale interstate commerce gas resale jurisdiction commission set forth follows provisions act shall apply transportation natural gas interstate commerce sale interstate commerce natural gas resale ultimate public consumption domestic commercial industrial use companies engaged transportation sale shall apply transportation sale natural gas local distribution natural gas facilities used distribution production gathering natural gas agree view statutory language pertinent legislative history past decisions support conclusion appeals phillips company within meaning term defined natural gas act sales interstate commerce natural gas resale subject jurisdiction regulation federal power commission commission found phillips sales part production gathering process least exempt incident thereof determination appears based primarily commission reading legislative history interpretation certain decisions also testimony record effect meaning gathering commonly accepted industry comprehends sales incident physical activity collecting processing gas petitioners contend commission finding reasonable basis law supported substantial evidence record therefore accepted courts particularly since commission consistently interpreted act conferring jurisdiction companies phillips see gray powell labor board hearst publications opinion however finding without adequate basis law production gathering sense terms used end sales phillips occur federal power commission panhandle eastern pipe line observed natural clear meaning phrase production gathering natural gas encompasses producing properties gathering facilities company similarly colorado interstate gas federal power commission stated ransportation sale include production gathering indicated production gathering exemption applies physical activities facilities properties used production gathering natural gas see also federal power commission hope natural gas peoples natural gas federal power commission app cf public utilities commission even directly point decision interstate natural gas federal power commission interstate company produced purchased natural gas turn sold delivered three interstate pipeline companies activities occurring within state noted xceptions primary grant jurisdiction section strictly construed held conferred jurisdiction sales federal power commission stating petitioner asserts sales three companies part gathering process consequently within commission power regulation basic contention given rise great many subsidiary questions whether sales made petitioner gathering lines petitioner transmission lines whether gathering process continued points sale commission found completed point prior surrender custody passage title found unnecessary resolve issues gas moved petitioner points sale consisted gas produced petitioner wells commingled produced gathered companies introduced petitioner system course movement time sales consummated nothing gathering process remains done held sales interstate commerce doubted regulation predominantly matter national contrasted local concern gas sold transactions destined consumption louisiana unreasonable charges exacted stage interstate movement become perpetuated large part fixed items costs must covered rates charged subsequent purchasers gas including ultimate consumer avoid situations natural gas act passed interstate case also said distinguishable involve asserted conflict state regulation federal control opposed state authorities instant cases said conflicting state regulations federal jurisdiction vigorously opposed producing short answer contention jurisdiction federal power commission intended vary state state depending upon degree state regulation state opposition federal control expressly rejected implication contrary interstate case see federal power commission hope natural gas supra cases discussed supply ready answer determination commission also petitioners suggestion production gathering construed mean business production gathering sale product considered integral part business see reason depart previous decisions especially since consistent language legislative history natural gas act general petitioners contend congress intended regulate interstate pipeline companies since certain alleged excesses companies evil brought legislation case difficulty perceiving commission jurisdiction transportation sale resale interstate commerce natural gas granted disjunctive sufficed give commission jurisdiction companies engage transportation transportation sale resale interstate commerce interstate pipeline companies intended covered see federal power commission east ohio gas rather believe legislative history indicates congressional intent give commission jurisdiction rates wholesales natural gas interstate commerce whether pipeline company whether occurring transmission interstate pipeline company dispute overriding congressional purpose plug gap regulation companies resulting judicial decisions prohibiting federal constitutional grounds state regulation many interstate commerce aspects business significant part gap created cases holding regulation wholesale rates gas electrical energy moving interstate commerce beyond constitutional powers interstate natural gas federal power commission supra committee reports bill became natural gas act specifically referred two cases necessity federal regulation occupy hiatus created thus satisfied congress sought regulate wholesales natural gas occurring ends interstate transmission systems petitioners cite recent decisions cities service gas peerless oil gas phillips petroleum oklahoma authority proposition may regulate sales question hence sales within gap natural gas act intended fill cases upheld constitutional state minimum price orders justified conservation measures applying sales natural gas interstate commerce well settled gap referred thought exist time natural gas act passed jurisdiction commission affected subsequent decisions somewhat loosened constitutional restrictions state activities affecting interstate commerce absence conflicting federal regulation illinois natural gas central illinois public service federal power commission east ohio gas supra federal power commission participate cities service phillips petroleum cases appellants assert possible conflict federal authority natural gas act consequently expressly refused consider time hether gas act authorizes power commission set field prices sales independent producers leaves function regulation sales interstate commerce resale made independent producer essentially different regulation sales made affiliate interstate pipeline company cases rates charged may direct substantial effect price paid ultimate consumers protection consumers exploitation hands companies primary aim natural gas act federal power commission hope natural gas supra attempts weaken protection amendatory legislation exempting independent producers federal regulation repeatedly failed refuse achieve result strained interpretation existing statutory language judgment affirmed footnotes stat amended et seq one commissioner concurred decision one dissented consistency commission regard may questioned compare columbian fuel interstate natural gas brief federal power commission interstate natural gas federal power commission brief federal power commission interstate natural gas federal power commission federal power commission order fed reg federal power commission order fed reg see scanlan administrative abnegation face congressional coercion interstate natural gas company affair notre dame law note yale matter even consistent error still error referring taking natural gas purchasing interstate pipeline companies outlet processing plants recently observed pipeline companies obviously engaged gathering gas within meaning term ordinary usage pipe line calvert committee reports bill enacted natural gas act reveal construction production gathering exemption substantially limit affirmative grant jurisdiction commission contemplated quoting exemptive clause house report quoted words actually necessary matters specified therein said fairly covered language affirmatively stating jurisdiction commission similar language previous bills rather invite contention however unfounded elimination negative language broaden scope act committee included bill sess senate report adopted reprinted house report bill sess despite fact urged commission basis decision brief federal power commission interstate natural gas federal power commission wording suggested rejected house committee considering enactment natural gas act chairman state new york department public service public service commission hearings house committee interstate foreign commerce sess earlier bill limited jurisdiction power commission transportation natural gas mains interstate commerce companies engaged transportation much legislative history advanced support petitioners position developed connection bill including testimony dozier devane solicitor federal power commission much different jurisdictional provision testimony little relevance bill held hearings leading passage natural gas act introduced provided commission jurisdiction sale natural gas interstate commerce resale public similarly company defined including person engaged sale natural gas interstate commerce resale public general solicitor national association railroad utilities commissioners suggested language changed manner almost identical contained natural gas act referring proposed changes commented another designed make certain bill apply intercompany sales natural gas wholesale even though sale one company another company resell another corporation gas finally sold public hearings house committee interstate foreign commerce sess see also federal power commission east ohio gas federal power commission panhandle eastern pipe line panhandle eastern pipe line public service commission interstate natural gas federal power commission colorado interstate gas federal power commission federal power commission hope natural gas illinois natural gas central illinois public service missouri kansas natural gas public utilities commission attleboro steam electric state corporation commission wichita gas cf milling bondurant lemke farmers grain shafer farmers grain see jersey central power light federal power commission course many years regulated sales natural gas consumers intrastate transactions also able regulate sales consumers even though sales interstate commerce sales considered local character absence congressional prohibition subject state regulation intention enacting present legislation disturb exercise jurisdiction however case sales resale wholesale sales interstate commerce example sales producing companies distributing companies legal situation different transactions considered local character even absence congressional action subject state regulation see missouri kansas gas public service commission attleboro steam electric basic purpose present legislation occupy field held may act sess sess among bills introduced recent congresses restrict existing jurisdiction federal power commission producers sess sess sess sess justice frankfurter concurring join opinion one consideration leading conclusion decisive deem appropriate give emphasis section construed face comes us authoritative gloss must construe though congress words added present text language following however since sales resale wholesale sales interstate commerce local character constitutionally subject state regulation see missouri kansas gas public utilities commission attleboro steam electric basic purpose legislation occupy field may act sure kansas gas case excluded business piping gas supply company one state distributing companies another attleboro case involved transmission electric current producing company took one state boundary another state sold distributing company resale state case sale phillips made texas interstate pipeline transmission companies transported gas resale distributing companies consumers fact phillips pipe gas state boundary directly another state slightest alter constitutional applicability attleboro doctrine situation us fact continuous transmission facilities phillips facilities phillips connecting pipelines transmitting gas change interstate character transaction reason decision attleboro relying peoples gas public service commission barred state regulation may well problem attleboro case came today constitutional doctrine laid found compelling immaterial congress leave determination whether attleboro situation subject state regulation wrote doctrine attleboro case natural gas act said effect attleboro situation taken federal regulation left fluctuation adjudications commerce clause course many years regulated sales natural gas consumers intrastate transactions also able regulate sales consumers even though sales interstate commerce sales considered local character absence congressional prohibition subject state regulation see pennsylvania gas public service commission intention enacting present legislation disturb exercise jurisdiction however case sales resale wholesale sales interstate commerce example sales producing companies distributing companies legal situation different transactions considered local character even absence congressional action subject state regulation see missouri kansas gas public service commission attleboro steam electric basic purpose present legislation occupy field held may act sess justice douglas dissenting question whether sales natural gas independent producer mouth interstate pipeline subject regulation federal power commission natural gas act question never decided indeed one expressly reserved decision interstate natural gas federal power commission much said national point view regulating sales ends interstate pipelines power congress unquestioned whether natural gas act political legal controversy raged commission congress years question free doubts act makes regulatory provisions applicable sale interstate commerce natural gas resale ultimate public consumption also makes inapplicable production gathering natural gas sale independent producer sale interstate commerce resale also integral part production gathering natural gas justice clark makes clear opinion end phase producing gathering process must make choice choice easy one legislative history helpful congress concerned interstate pipelines independent producers thoughtful comment yale points one judge reports federal trade commission preceded act doc pt sess hearings debates congress bills evolved act little consideration given need regulating sales independent producers pipelines gap filled existing pipelines brought regulation sales distributors along pipelines opinion justice clark demonstrates view commission decision followed heels act columbian fuel decision exempted regulation independent producer phillips material respects comparable decision made men intimately familiar background history act leland olds basil manly claude draper clyde seavey one commissioner john scott dissented construction act commission persisted time see billings gas oil gas production tennessee gas transmission decision present case construction commission especially since contemporaneous american trucking long continued federal power commission panhandle eastern pipe line entitled great weight obtuse questions less legal character terms production gathering gas entrusted administrative agency charged regulation see shields utah idaho central sunshine anthracite coal adkins gray powell practical considerations buttress position lead conclude reverse commission present case phillips sales regulated commission set rate base phillips rate base phillips must necessity include phillips producing gathering properties supervision operating expenses necessarily includes supervision producing gathering expenses held colorado interstate gas federal power commission commission control extended far case interstate pipeline company owned producing gathering properties regulation pipelines owned gas supplies effective understanding regulation entails lead different result case fastening rate regulation independent producer brings production gathering natural gas effective federal control spite fact congress made phase natural gas business exempt regulation effect certain profound price independent producer sell gas determines price able willing pay buys wells sales price determines profits profits profits gatherers whose gas moves interstate pipelines profound effects rate production methods production old wells continued production new ones explored etc regulating price independent producer sell gas regulates business vital way business regulated regulation largely nullifies exemption granted congress much said terms policy position commissioner scott dissented first time commission ruled jurisdiction sales history language act ground taken battle congress regulation business producing gathering natural gas involves considerations know little competent deal justice clark justice burton concurs dissenting perhaps congress included control production gathering natural gas among powers gave federal power commission natural gas act congress contrary congress provided act shall apply production gathering natural gas language express clearer command majority renders language almost entirely nugatory holding rates charged wholly independent producer gatherer may regulated federal power commission stop sweep opinion rates wholesales natural gas interstate commerce whether pipeline company whether occuring transmission interstate pipeline company covered act ante emphasis supplied face language brings every gas operator smallest producer largest pipeline federal regulatory control acts contrary intention congress understanding federal power commission federal power commission thereby thrust regulatory domain traditionally reserved natural gas industry like ancient gaul divided three parts parts production gathering interstate transmission pipeline distribution consumers local distribution companies business unit may perform one functions typically production gathering addition interstate transmission phillips natural gas operations confined exclusively first part production gathering interstate transmission trunk lines sell distribution companies course distribute ultimate consumer nine gathering systems merely bring gas producers wells central plants producing fields rendered usable fuel since facilities storage amount gas casinghead produced gathered day depends demands interstate pipelines turn depend weather conditions consuming areas gas wells cut market demand gas requires gathering takes place well pressure forcing gas numerous small pipes connecting well central gathering plant processing station gas first comes common header processed use fuel processing gas central gathering plant necessary remove hydrocarbons hydrogen sulphide foreign elements order permit use fuel plant operates wells producing phillips operations including acreage wells produce gas wells lines connect run central plant form closely knit unit entirely local field involved processing gas immediately delivered interstate pipelines sales contracts commission found hough technically consummated interstate commerce sales phillips pipelines made course production gathering sales closely connected local incidents production gathering render rate regulation commission inconsistent substantial interference exercise affected regulatory functions believe finding correct approved doubt congress thought production gathering exemption saved phillips sales federal power commission regulation act legislative history removes solicitor commission dozier devane hearings connection predecessor bill finally became natural gas act testified federal power commission jurisdiction rates natural gas paid gathering field hearings subcommittee house committee interstate foreign commerce bill said attempt regulate gathering rates gathering business see also bill devane testified described substantially similar natural gas act views treated authoritative federal power commission panhandle eastern pipe line see also federal power commission east ohio gas face well federal power commission adherence devane views ever since first cases subject columbian fuel billings gas absence specific matter act legislative history refuting devane views today erroneously finds devane testimony little relevance ante dispute congress intended natural gas act close gap created decisions barring state regulation certain interstate gas sales legislative history act refers two decisions missouri kansas natural gas public utilities commission attleboro steam electric see pp cases nothing sales interstate pipelines wholly independent unintegrated unaffiliated producers gatherers phillips neither companies involved cases engaged exclusively production gathering producing transportation companies kansas natural gas attleboro electricity kansas attleboro sold distributing companies course interstate transmission thus house report expressed act aim regulate wholesales sales producing companies distributing companies immediately thereafter cited kansas attleboro cases report unmistakable reference sales integrated local distributor refer independent producer gatherer first independent never sells local distributors secondly two cited cases support reference independents congress aimed abuses resulting gap end transmission process integrated unintegrated pipelines abuses prior transmission clear final report federal trade commission senate malpractices natural gas industry doc sess report stimulus federal intervention industry federal trade commission outlined abuses industry gap made powerless prevent abuses monopolistically situated pipelines gouged consumer charging local distribution companies unreasonable rates federal trade commission find abusive pricing independent producers gatherers anything independents producing end pipelines likewise victims monopolistic practices pipelines decisions certainly indicated gap distribution end transmission process thus federal power commission hope natural gas observed federal power commission given authority production gathering natural gas producing power protect interests sell gas interstate operator emphasis supplied five years later federal power commission panhandle eastern pipe line supra said approval commission inclusion cost production gathering facilities interstate pipeline latter rate base precedent regulation part production marketing emphasis supplied today decision restricts phrase production gathering physical activities facilities properties used production gathering gloss strips words substance congress intended left state regulation mass empty pipe vacant processing plants thousands hollow wells scarecrow derricks monuments new extension federal power understood years enforcing regulatory laws covering production gathering including pricing proration gas ratable taking unitization fields processing casinghead gas including priority gases well spacing repressuring abandonment wells marginal area development devices everyone fully aware direct relationship price conservation federal power commission panhandle eastern pipe line supra power regulate producers gatherers prices upheld cities service gas peerless oil gas phillips petroleum oklahoma doubt commission found federal regulation production gathering collide substantially interfere hinder enforcement state regulatory measures square result house report act subsequently enacted bill drawn complement manner usurp state regulatory authority supra majority rely heavily interstate natural gas federal power commission support position sure language case face seems govern present case case involved materially different fact situation interstate gas company already subject federal power commission jurisdiction interstate pipeline operations company affiliated one pipelines sold addition emphasized fact interstate claim state regulatory authority made indeed interstate company successfully resisted state attempts regulate hence possibility conflict case either federal power commission moved interstate remained unregulated perhaps significant factual distinction terms reasoning case rests fact total volume gas interstate sold roughly purchased others produced gathered almost enough supply needs three interstate pipelines interstate sold already gathered processed moved interstate branch trunk main trunk lines short interstate equivalent middleman gatherers pipelines almost gas sold pipelines performed function transporting gas purchased gatherers branch trunk main trunk lines phillips performs middleman transmission function addition late chief justice vinson case specifically stated express opinion validity jurisdictional tests employed commission cases columbian billings supra since cases federal power commission established policy declining jurisdiction rates charged wholly independent producers gatherers difficult see interstate control present case look interstate guidance better focus following words late chief justice clearly among powers thus reserved power regulate physical production gathering natural gas interests conservation consideration legitimate local concern intention congress give full freedom matters thus sales though technically consummated interstate commerce made course production gathering closely connected local incidents process render rate regulation federal power commission inconsistent substantial interference exercise state regulatory functions jurisdiction federal power commission attach words justice jackson believe observance good faith requires interpret act represented time urged enactment terms read today declared supplement supplant state regulation federal power commission east ohio gas supra casinghead gas produced oil furnishes pressure latter brought surface gas shut without closing oil production therefore produced regardless demand since primary recovery oil available purchasers gas flared burned fields much casinghead gas still flared since market immediately available sound conservation practice dictates whenever possible casinghead gas used satisfy demand natural gas wells turned