Natural Gas Production, Utilization, and Conservation Act

Natural Gas Production, Utilization, and Conservation Act - Title I: Removal of Artificial Impediments on Natural Gas Usage - Repeals the Powerplant and Industrial Fuel Use Act of 1978.

Terminates the incremental pricing requirements of the Natural Gas Policy Act of 1978 (the Act).

Title II: Incentives for Increased Natural Gas Production - Provides that the provisions of the Act respecting the maximum lawful price for any sale of natural gas shall cease to apply to any first sale of natural gas produced from any well: (1) the surface drilling of which commenced on or after January 1, 1981; and (2) the drilling of which is pursuant to a permit, license, or comparable authorization issued by the applicable agency.

Sets forth a formula under the Act for determining the maximum lawful price applicable to any first sale of natural gas for any month beginning after December 1981 or more than 30 days after enactment, whichever is later, subject to provisions of the Act which provide that if any natural gas qualifies under more than one provision relating to price, the provision resulting in the highest price shall be applicable.

Terminates, effective January 1, 1985, provisions of the Act respecting the maximum lawful price applicable to the first sale of any natural gas.

Repeals provisions of the Act allowing the reimposition of price controls after January 1, 1985.

Provides that effective January 1, 1985 provisions of the Act relating to the interstate sale of natural gas shall not apply to any first sale of gas committed or dedicated as of the day before enactment of this Act. Provides that prior to January 1, 1985, those same provisions of the Act shall not apply to any first sale of natural gas which was committed or dedicated to interstate commerce as of the day before enactment and which is: (1) high cost natural gas; (2) new natural gas; (3) natural gas produced from any new onshore production well; or (4) natural gas produced from wells drilled on or before January 1, 1981.

Title III: Removal of Artificial Impediments to Natural Gas Sales - Provides that prior to January 1, 1985, those provisions of the Act relating to the interstate sale of natural gas shall not apply to any first sale of natural gas which was committed or dedicated as of the day before enactment of this Act and which is natural gas from the Outer Continental Shelf if such sale is to an intrastate pipeline, local distribution company, or end user within an affected State.

Exempts natural gas from the Outer Continental Shelf transported by any intrastate pipeline or end user, located within an affected State, from the provisions of the Act relating to the sale of gas, except that an interstate pipeline may not charge more than a just and reasonable rate.

Provides that for purposes of provisions of the Act concerning the sale of natural gas the jurisdiction of the Federal Energy Regulatory Commission shall not apply to any sale, or resale, of natural gas and such gas shall not be deemed to be in interstate commerce if the gas sold was: (1) transported in interstate commerce by an interstate pipeline carrier; or (2) transported in interstate commerce by an interstate pipeline pursuant to an emergency Presidential order.

Prohibits the Commission from specifying the minimum duration of any contract for the purchase of natural gas. Prohibits the Commission, in the case of any person who would have been entitled to receive natural gas committed or dedicated to interstate commerce but for the deregulation provisions of this Act, from requiring that such gas be offered for sale to such person, either directly or through the granting of any right of first refusal of an offer made to any other person.

States that any maximum lawful price under the wellhead pricing provisions of the Act shall be deemed a just and reasonable rate established by order of the Commission, for purposes of any contractual pricing provision. Provides that in the case of any contract in effect when a maximum lawful price applied to any first sale of gas and which contains an area rate clause, the price payable for natural gas exempted from the application of a maximum price shall be deemed to equal the maximum price as if the gas were not exempt, until the contract terminates or is renegotiated.