Natural Gas Market Transition Act of 1981

Natural Gas Market Transition Act of 1981 - Title I: Natural Gas Price Control Provisions - Amends the Natural Gas Policy Act of 1978 to establish a monthly maximum price on the first sale of natural gas produced from any well where: (1) surface drilling began on or after January 1, 1980; and (2) the drilling is pursuant to an authorized Federal or State permit. States that such maximum price shall be equal to the Btu equivalent of the current adjusted refiner's petroleum acquisition cost. Defines such cost as 80 percent of the average crude oil acquisition cost of U.S. refiners during the preceding month. Sets forth another method of determining the maximum price for the first sale of any natural gas not described above. Exempts high-cost natural gas from the price limitation. Provides that the above price limitations shall be effective beginning January 1, 1982.

Eliminates all price controls on first sales of natural gas beginning January 1, 1985.

Deems, for purposes of any contractual pricing provision, any maximum lawful price under the Act to be a just and reasonable rate established by the Federal Energy Regulatory Commission.

Declares certain indefinite price escalator clauses against public policy and unenforceable, effective January 1, 1985. Defines an indefinite price escalator clause as any provision of any contract which: (1) provides for the pricing of natural gas by reference to other nautral gas or petroleum products; (2) allows for pricing of natural gas by negotiation.

Defines an area rate clause as any contractual provision which bases the contract price for the first sale of natural gas on any Federally established price, without regard to whether the clause specifies the identity of the Federal authority. Provides, effective January 1, 1985, for the application of a maximum price to certain contracts containing such a clause until such a contract terminates or is renegotiated.

Provides that, effective January 1, 1985, the Natural Gas Policy Act and the jurisdiction of the Federal Energy Regulatory Commission shall not apply to any first sale of natural gas committed to interstate commerce before enactment of this Act. Provides that before January 1, 1985, the Natural Gas Policy Act and the jurisdiction of the Commission shall not apply to any first sale of natural gas committed or dedicated to interstate commerce prior to enactment of this Act 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 from any well at which surface drilling commenced on or after January 1, 1980.

Provides that the Natural Gas Policy Act of 1978 shall preempt any State or local law which precludes the recovery of any amount paid with respect to any natural gas purchase if: (1) such amount is just and reasonable; and (2) the amount is not excessive due to fraud.

Title II: Elimination of Certain Fuel Use Restrictions - Repeals the Powerplant and Industrial Fuel Use Act of 1978.

Title III: Elimination of Certain Restrictions on Natural Gas Transmission and Distribution - Terminates the incremental pricing provisions of the Natural Gas Policy Act of 1978.

Provides that the Natural Gas Policy Act and the jurisdiction of the Commission shall not apply: (1) to any sale or resale of natural gas and that the gas shall not be considered in interstate commerce if transported in interstate commerce by pipeline; and (2) to natural gas from the outer Continental Shelf sold intrastate.

Prohibits the Commission from specifying the minimum duration of any contract to purchase natural gas. Eliminates required offers and rights of first refusal on the sale of natural gas to certain individuals.