Gas Reform Act of 1983

Gas Reform Act of 1983 - Title I: Removal of Wellhead Price Controls and Repeal of Jurisdiction Over Certain First Sales - Amends the Natural Gas Policy Act of 1978 to repeal the provisions of subtitle A (Wellhead Price Controls) of title I (Wellhead Pricing) with respect to any first sale of natural gas except as provided in title II of this Act which provides for transitional price and contract provisions. Provides that except as provided above beginning on the first day of the 49th month following enactment of the provisions of subtitle A respecting the maximum lawful price shall cease to apply to any first sale of natural gas. Provides that effective beginning on November 1, 1979, the provisions of subtitle A respecting the maximum lawful price for the first sale of natural gas shall cease to apply to the first sale of high-cost natural gas (except for high- cost gas produced under extraordinary risk or cost).

Provides for the coordination of the provisions of this Act with the Natural Gas Act by repealing the Natural Gas Act jurisdiction over first sales of committed or dedicated natural gas.

Repeals the President's standby price control authority.

Title II: Transitional Price and Contract Provisions - Requires the monthly computation and publication of a "gas cap price" by the Federal Energy Regulatory Commission (FERC) which shall be based upon the wholesale price for low sulphur number six residual fuel oil for the most recent three months less the cost of transporting natural gas to electric plants. Provides: (1) that for each month following enactment, with respect to first sales of natural gas which is being sold at or below the gas cap price on the date of enactment, one forty-eighth of such gas will be required to be sold at the gas cap price and will be referred to as released gas (thereby, providing a four year period during which prices will phase up to the gas cap price); and (2) that either party to a natural gas contract subject to part one of this sentence may terminate such contract effective as of the first day of the 49th month following enactment upon providing at least 180 days notice to the other party before the first day of the 49th month following enactment. Prohibits any natural gas from qualifying as released gas until the take or pay obligation applicable to gas delivered by a seller under all its contracts with its buyers does not exceed 70 percent of deliverability under each such contract. Provides: (1) that for each month following enactment, with respect to any imported natural gas or with respect to any first sales of natural gas sold above the gas cap price on the date of enactment, one thirtieth of such gas must be sold at or below the gas cap price and will be referred to as reduced price gas; (2) that natural gas not qualifying as reduced price gas will continue to be sold at the contract price or maximum lawful price under the Act; and (3) that either party to a natural gas contract subject to part one of this sentence may terminate the contract effective as of the first day of the 31st month following enactment upon providing at 180 days notice to the other party before the first day of the 31st month following enactment. Provides that beginning with the first day of the 31st month following enactment, with respect to all natural gas subject to the provisions of the preceding sentence: (1) any such provisions which prevent such gas from being sold at a price in excess of the gas cap price shall cease to apply; and (2) the free market price for such gas shall be as agreed between buyer and seller.

Provides that, with respect to gas sold after enactment, the price shall be the price as agreed between buyer and seller but shall not be in excess of the gas cap price until the 31st month following enactment.

Provides that beginning with the first day of the 49th month following enactment: (1) all gas not qualified as released gas shall no longer be subject to the provisions of subtitle A; (2) the gas cap price shall cease to be the mandatory price for any such gas; and (3) the free market price for such gas shall be as agreed between buyer and seller.

Exempts synthetic gas or artificial gas from the provisions of this Act.

Repeals provisions of the Act concerning contract duration, right of first refusal, and filing of contracts and agreements, and substitutes a provision which as a general rule provides that: (1) to the extent permitted by appropriate State or regulatory authorities, each interstate pipeline will be required to purchase and take natural gas under each of its domestic supply contracts at the same percentage rate of deliverability under such contract as it is purchasing and taking under all of its domestic supply contracts; (2) where the applicable supply contract does not provide for establishing deliverability, the rate shall be as established by the appropriate State or Federal regulatory authority; and (3) where no regulatory authority establishes deliverability, the rate shall be set by deliverability tests. Provides that the above provisions shall not apply to reduce production of casinghead gas or to reduce production of natural gas: (1) which is required in order to prevent drainage and protect the correlative rights of the owners of the natural gas involved; or (2) to the extent that reduction in takes would be likely to result in damage to the well or reservoir so that remaining recoverable reserves are reduced.

Provides that for the purposes of an area rate clause, the gas cap price is a governmentally established rate or price.

Provides that for purposes of determining the amount payable as royalty: (1) where royalty is based on market value, any price paid for natural gas shall be considered its market value; (2) under any lease of Federal oil and gas lands under the Mineral Leasing Act or the Mineral Leasing Act for Acquired Lands, any price paid for the first sale of natural gas produced under such lease shall be considered the value of such natural gas; or (3) under any Federal oil and gas lease under the Outer Continental Shelf Act, any price paid for the sale of natural gas shall be considered the value of such gas, if the price was established either pursuant to the transitional price provisions of this Act, pursuant to renegotiation if renegotiation occurred after enactment, or pursuant to any contract entered into after enactment.

Title III: Removal of Impediments to Interstate Movements of Gas - Revises provisions relating to interstate and intrastate sales and transportation to: (1) authorize the FERC to permit any interstate pipeline to transport natural gas on behalf of any person; (2) authorize the FERC to permit any intrastate pipeline or local distribution company to transport natural gas on behalf of any person; and (3) authorize the FERC to permit any pipeline or local distribution company to sell natural gas to any pipeline or local distribution company. Authorizes the FERC to permit any pipeline or local distribution company to assign surplus gas to any other pipeline or distribution company.

Exempts intrastate pipelines and local distribution companies from FERC jurisdiction because of buying natural gas in certain "covered transactions."

Requires an interstate pipeline, intrastate pipeline, or local distribution company to transport natural gas if: (1) a seller or purchaser of natural gas requests the pipeline or company to transport natural gas; (2) the pipeline or company has available capacity; and (3) the seller or purchaser certifies that at least 45 days in advance it notified the pipeline or company currently serving the person for whom such transportation service is being sought of its intent to request an authorization, it made a good faith attempt to negotiate a continuation of current service by such pipeline, and it has been unable to conclude any other satisfactory transportation agreement for such gas. Requires, in addition to the above requirements, that with respect to an intrastate pipeline or local distribution company the request must be filed with the appropriate State agency, and the agency has not acted within 90 days of receipt of the request. States that a pipeline or company shall be presumed to have available capacity unless it is determined that the pipeline's or company's total capacity is necessary to render adequate service to its existing customers. Requires a pipeline to continue to serve its existing customers and permits any contract carriage customer to try to establish a contract carriage service priority in order to assure that capacity is available for the existing high-priority users of the gas transported on behalf of such customer. Sets forth provisions relating to: (1) contract carriage compensation; (2) construction of new facilities; (3) service obligation; (4) termination (of transportation service); (5) regulations (issuance by FERC); (6) procedures; and (7) definitions.

Amends the Act to provide for the coordination of provisions with respect to FERC's jurisdiction.

Sets forth effective date provisions.

Title IV: Repeal of Certain Restrictions on Natural Gas and Petroleum Use and Pricing - Amends the Powerplant and Industrial Fuel Use Act of 1978 to repeal: (1) prohibitions on the use of natural gas and petroleum as a primary energy source in new electric powerplants and new major fuel-burning installations; (2) the prohibition on the construction of new powerplants without alternate fuel capability; (3) the authority of the Secretary of Energy to prohibit the use of natural gas in certain boilers used for space heating; (4) the prohibition on the use of natural gas for decorative outdoor lighting; and (5) the authority of the Secretary to restrict increased uses of petroleum by existing powerplants. Makes conforming amendments.

Repeals the incremental pricing provisions of the Natural Gas Policy Act of 1978.