Outdated Natural Gas Act Creates Energy Policy Chaos

Why It Matters

An 88-year-old law is at the center of one of Washington's sharpest energy fights, and a new Congressional Research Service (CRS) report lays out exactly why that matters now.

The Natural Gas Act of 1938 was written to rein in monopolistic pipeline companies. Today, it governs everything from liquified natural gas (LNG) export terminals to eminent domain over private farmland, and the Trump administration, federal courts, and the 119th Congress are all pulling its provisions in different directions at once. The CRS report, published June 3, makes clear that the law's ambiguities are active fault lines.

The central tension: Congress wrote the Natural Gas Act to give federal agencies broad discretion, but that discretion means policy can shift dramatically from one administration to the next. What the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE) are required to do (versus what they are merely permitted to do) is now being contested in courts, regulatory dockets, and committee hearings simultaneously.

The Big Picture

A Framework Built for a Different Era

The Natural Gas Act has been amended only a handful of times since 1938, with the last significant changes coming more than 20 years ago. That gap matters. U.S. annual natural gas production has grown from roughly 128 billion cubic feet in 1900 to nearly 35,000 billion cubic feet today, and the United States has become a leading LNG exporter. The regulatory architecture has not kept pace.

The law divides authority between two agencies: FERC, which oversees pipeline and LNG terminal siting and natural gas transportation rates, and DOE, which handles the commodity export and import permitting. Both agencies operate under a "public interest" standard that the statute never defines. That ambiguity is the engine driving nearly every current dispute.

Natural Gas Infrastructure

Under NGA Section 7, any company seeking to build an interstate natural gas pipeline must obtain a certificate of "public convenience and necessity" from FERC. Under Section 3, FERC holds exclusive authority to approve LNG terminal siting. The statute sets no deadlines for FERC to complete these reviews.

Critics argue that growing environmental complexity, driven by court rulings requiring more rigorous review of climate impacts and effects on local communities, has stretched permitting timelines. FERC revised its NEPA procedures in June 2025, citing a goal of making the permitting process more efficient. But some members of Congress say that has not been enough.

The Improving Interagency Coordination for Pipeline Reviews Act, which passed the House on December 12, 2025, would affirm FERC as the sole lead agency for coordinating environmental reviews of pipeline applications and prohibit FERC from setting an authorization deadline more than 90 days after completing its NEPA review. A companion Senate measure, the Jurisdictional Oversight and Adjudication for Natural Gas Act, contains similar provisions.

LNG Export Policy

DOE's authority over LNG exports to non-free trade agreement countries has become one of the most contested corners of natural gas regulation. The NGA mandates automatic approval for exports to FTA countries, but exports to non-FTA countries require a public interest finding, and the statute gives DOE no guidance on what factors to weigh.

The Biden administration's January 2024 pause on non-FTA LNG export approvals was challenged in federal court and stayed by a judge who found DOE had failed to provide adequate justification. President Trump's Executive Order 14154, signed January 20, 2025, lifted the pause and directed DOE to weigh domestic economic and employment effects, along with the energy security of U.S. allies, when assessing public interest.

That executive order reflects the administration's posture, but it does not change the statute. A future administration could reverse course using the same discretionary authority. That vulnerability is precisely what several bills in the 119th Congress are designed to address.

The LNG Export Security Act would define "public interest" in statute to center on domestic economic interests and national security. The Natural Gas Export Expansion Act would extend automatic approval to non-FTA countries, except those under U.S. sanctions. The Unlocking Domestic LNG Potential Act of 2025 goes further, proposing to repeal the NGA's restrictions on natural gas exports and imports entirely.

On the other side, the LNG Public Interest Determination Act of 2025 and the Energy Bills Relief Act would require that climate impacts, consumer energy costs, and environmental justice factors be considered in any public interest review, a direct counter to the administration's direction.

Eminent Domain

NGA Section 7 grants pipeline developers holding FERC certificates the right of eminent domain to acquire rights-of-way when landowners will not sell voluntarily. A 2021 Supreme Court ruling confirmed this authority extends even to state-owned lands. The question now is how early in the approval process power can be exercised.

In 2025, FERC rescinded a prior policy that had barred pipeline developers from beginning construction during the 30-day window for filing rehearing requests, or while a rehearing was pending. Landowner groups objected. The practical effect is that construction can now begin on acquired land even while legal challenges to a pipeline's approval remain unresolved.

Bills in recent Congresses have sought to restrict this. In the 118th Congress, S. 2547 would have prevented a developer from exercising eminent domain until all FERC rehearings were concluded and all necessary agency authorizations were in place.

The Rate Refund Gap

One provision of the Natural Gas Act that draws less attention but has real consequences for consumers: FERC cannot order retroactive refunds when it finds pipeline rates to be unjust under Section 5. Under Section 4, if a pipeline raises rates and FERC later finds them unreasonable, refunds are available. But when FERC initiates a review on its own motion, it can only set new rates going forward; it cannot recover past overcharges.

This stands in contrast to the electric sector, where the Federal Power Act allows refunds going back up to 15 months. The MPACT Act, introduced in the 118th Congress, would have closed that gap by giving FERC refund authority for natural gas rates as well. No comparable bill has been enacted.

Political Stakes

For the Administration

The Trump administration has staked significant credibility on energy expansion: LNG exports in particular have been central to its trade and foreign policy messaging with European allies. But most of the policy changes made so far are executive actions or regulatory revisions, not statutory changes. The CRS report implicitly frames this as a durability problem: without legislation, the next administration inherits the same discretionary tools and can use them differently.

FERC's 2025 rescission of the construction moratorium during rehearing also creates a potential liability. Landowner conflicts over pipeline rights-of-way have generated bipartisan concern in the past, and accelerating construction while legal challenges are pending could produce high-profile confrontations.

For Republicans

The 119th Congress has moved several pipeline and LNG-related bills, with H.R. 3668 clearing the House in December. But Senate action has been slower, and the broader legislative agenda, including the reconciliation package, has consumed floor time. The CRS report's inventory of pending bills underscores how much remains unfinished.

For Republicans who represent rural districts with active pipeline development, the eminent domain issue is not a clean partisan story. Some of the most persistent landowner-rights legislation has come from members who otherwise support energy infrastructure broadly.

For Democrats

Democrats are split between members who support domestic LNG production as an economic and geopolitical asset and those who want climate and environmental justice considerations built into every approval decision. The bills introduced on both sides, the FERC Greenhouse Gas and Environmental Justice Policy Act of 2025 on one end, the LNG Export Security Act on the other, reflect that internal tension.

For the Public

Natural gas accounts for 43 percent of U.S. electricity generation, according to the Energy Information Administration's February 2026 data cited in the report. The rules governing how pipelines get built, how LNG gets exported, and what rates consumers pay for gas transportation are not abstract regulatory questions. They shape energy costs and reliability in ways that touch nearly every household and business.

The Bottom Line

The CRS report's framing surfaces a question Congress has been deferring for two decades: whether the Natural Gas Act's reliance on agency discretion is a feature or a flaw.

The agencies implementing the law, FERC and DOE, have adapted their policies repeatedly in response to court decisions, changing markets, and shifting administrations. That flexibility has allowed the framework to survive. But it has also produced the instability that stakeholders across the political spectrum now cite as a problem. What counts as the "public interest" for a pipeline or an LNG export terminal has meant different things under different administrations, and litigation over those differences has itself become a source of delay.

The 119th Congress has introduced more bills touching the Natural Gas Act than any recent Congress. Whether that volume of legislative activity translates into enacted law or whether the agencies continue to adapt on their own will determine whether the 88-year-old statute gets updated or simply reinterpreted again.

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