*2 RIVES and This is Deep a case to of Texas v. Federal Power Company, pursuant that Shell Oil to Sec- tion of the Natural (b), seeking U.S.C.A. 717r review of the order of the Federal Power Commis- sion which is the also in the South case. While the facts the instant case presented
are similar
South, they
thereto,
are not
identical
present purposes they may
and for
be
summarized as follows: Petitioner here-
in,
Company,
engaged
Shell Oil
exploring for, producing,
business of
fining
marketing petroleum
pe-
products,
respect
troleum
and with
to its
operations,
produces
and sells
“casinghead gas” at or near the wellhead
McElroy
from nineteen oil wells in the
eight
Field
oil
wells in
“gas
gas”
Field.
It also sells
-
one well in
latter
field.
casinghead gas
The
which is
Whilden,
Searls, R. H.
Hous-
McElroy
David T.
ton,
Stone,
York
New
Oliver
Petroleum
a
City,
John
Ben
tract
entered
Elkins,
Searls,
Tex., Vinson,
assignor
Weems &
Howard,
May 7,
Midland,
Houston, Tex., Paxton
among
provides,
The contract
gaseous
only change
ing inevitably
a
is from
with it
tlio
change
state,
jurisdic-
is no
in mole-
blessings
and there
from which all
gaso-
structure,
flow,
gas?
cular
sale
tion
of
if,
a sale
If
a sale
“natural
for re-
holds,
not? And
as the Court
price
Is the sale
statewide
sale”?
can
Commission
establish the
company
tributing
pay
local distributors
which Texas Gas must
Likewise, suppose
Shell
sale?
South where
South’s volume is but
requirement
oil
Texas Gas
and its
5%
output
had
chaser who in turn
sold the
moves
intrastate
95%
5%
Phillips,
interstate, why
who had
in turn
cannot
the Commission
price
to El
residue
Paso.
Is that
fix the
for each barrel of this
original
carry-
oil,
bearing, gas carrying
sale of
wellhead
oil?
taking
pay
things,
to the head. After
title and
proceeds
points,
fifty percent
at
mingles
net
these
seller
pipelines
received from
*3
gas
gasoline
many
plant.
purchased
to
Prior
sources
it
delivery
from
other
sells from the
gas
commingled
transports
from and
mass to
the
the
under the contract
processing plant
in
is
this
the
which
each of
located
Winnie
the nineteen wells
through
by
operated
parent
passes
and into
owned and
its
cor-
field
gas
poration.
with
the
a flow line which is connected
At the Winnie
(located
single
processed
separator
water
is
the removal of
central field
for
gas
sepa- vapor
liquefiable hydrocarbons
lease)
and
on
where the
is
and
Shell’s
Corpora-
Pipeline
water.
and free
thereafter Texas Gas
rated from crude oil
shipment a
point at
the
tion receives for interstate
Within a few feet from
gas
separator
portion
is
processed
it
which the
leaves this
thereto
and title
metered and delivered
passes
opin-
we noted in
South
As
the
South,
As in
ion,
proceedings
as well
in this cause
the
commingled
gas
by petitioner is
the
sold
and
were
in Cases Nos.
purchaser’s
pipelines with
field
for
consolidated before the Commission
hearing
gas
casinghead
of
from number
other
presiding ex-
in
both the
commingled
in
field
the
wells
the
aminer’s
and the Commission’s
decision
gas
Phillips’
enters
mass of
thereafter
Opinion
that
it
determined
it is scrub-
where
Crane
gas by Deep
all sales of natural
through
bed,
ab-
compressed, and run
Shell,
Oil,
under con-
and Humble
there
lique-
sorption
of
for
removal
towers
the
gas
sideration,
were sales
The-greater part
hydrocarbons.
of
fiable
in
for
interstate commerce
resale within
Phillips
gas
the
is thereafter
the
Natural Gas Act and
tailgate
plant El Paso
the
of the Crane
petitioners
“nat-
that each of the
awas
Company.
as this
Inasmuch
Natural Gas
gas
ural-gas company” subject to
the
high
percentage of
contains too
jurisdiction.
mission’s
hydrogen sulphide
for
dioxide
and carbon
proceeding,
In this review
basic
the
fuel,
tip
El Paso
burner
as a domestic
contentions and the
gas
purchases
it
which
the
further treats
aside the Commission’s order
diluents,
incombustible
to remove these
dehydrates
urged by
in essence identical to those
gas,
turns
the
petitioner
case, supra,
South
for trans-
lines
of
transmission
one
its
what we have said in that case
portation
other
States.
However,
dispositive of those issues.
'
gas,
casinghead and
All of
both
Shell’s
vigorous
and in
of
as-
view
gas
gas,
the
which
well
sertion that
sales to
of
Pipe-
Texas
Gas
gas
processed
which must be
subsidiary
Corporation,
of Texas
subsequent
purchaser
both its
buyer,
Corporation,
to a contract
Paso,
El
are not for “resale” but
1954. As
on October
entered into
“manufacture,”
for
we shall set forth
the contract
rejecting
opinion
this
our reasons for
Gas,
of
for the sale
the contract
argument.
this
gas
Field similar-
from the Nome
Shell’s
strongly
ly
performance thereof
Petitioner
relies
to the
commits
gas
“purpose”
produced from Shell’s
the
clause of its contract
all of the
casing-
provides
provides that
field and
the
leases
gas
conveyed
in a full
stream head
is to be delivered
thereunder
gasoline
buyer
purpose
the
of
of
or
the extraction
the
manufactur
without
Likewise,
ing gasoline
products
hydrocarbons.
or such other
as in the
may
Deep South,
plant.
re-
at the
the
be manufactured
Crane
of
overlooked,however,
the
should not be
of
It
ceives
separators
contains
valve of
contract
limitation on
outlet
authority
dispose
is delivered at the
well-
any
fit,
way
Merrill,
Orleans,
and affirma- New
La.,
it sees
tively provides
buyer
Houston, Tex.,
Holloway,
William H.
right
surplus
Co.,
all
sell
or
remaining
gas-
Ross,
after the “extraction” of
Rex
Baker, Houston,
G.
provides
payment
oline and also
for the
Foster, Washington,
Marsh &
fifty
percent of
counsel.
ceipts
Thus,
true
sales.
Lichten-
David S.
purpose of
includes the
contract
stein,
Russell, Attys.,
Robert L.
Willard
process-
after
which remains
*4
Counsel, F.P.C.,
W.
ington,
Wash-
ing
prod-
as well as the
of extracted
D.
John Ben
legal
may,
ucts. But be
as it
Texas,
Gen. of
Mert
question rests not
determination of the
Texas,
curiae.
amici
upon
parties’
“manu-
the word
BROWN,
RIYES and
facture,”
disposition
upon
the actual
Circuit
clearly
The record here
shows
Judge.
thus,
it and
companion
This is a
case to the two
question
there can be
today
cases we have
decided
Numbers
15,849 Deep
Oil
within
for resale
—
Commission,
Texas v. Federal Power
meaning of the Act.
F.2d
—Shell
Accordingly,
of the Commis-
the order
Federal
v.
Power
F.2d
hereby is
sion
must be and the
in-
herein has
affirmed.
jurisdiction
voked the
of this Court un-
Affirmed.
der Section
of the Natural Gas
Act,
717(b),
15 U.S.C.A.
Judge.
set aside the order
Federal Power
reasons hereafter
filed. For
to be
Commission which
also of
senting opinion, see
review those cases. Petitioner’s basic contentions aside the Commission’s order in essence iden- urged by petitioners tical two Consequently, cases. by reason of the circumstance that the present facts in this identity an legal principles with those involved OIL & HUMBLE REFINING cases, supra, South and Shell what dispositive we have said those cases is Accordingly, of this case. and for the length, reasons there stated at we clude that order of the Commission declaring United States Court of “natural-gas pany company” to be a within must be hereby is affirmed. Affirmed.
BROWN, Circuit Jones, Illig, Houston, Nelson I dissent reasons hereafter Carl Jr., dissenting opinion Foster, Washington, A. filed. Bernard Caillouet, Janvier, Charles Bernard