Transportation of natural gas across state lines from production to consuming areas is a function of interstate pipeline companies. The modern U.S. natural gas industry also includes natural gas exploration and production companies, intrastate pipelines, local distribution companies (LDCs), end-users and, the most recent addition to the industry, marketers.

Historical Background

Transportation of natural gas through pipelines began in the United States in the early part of the nineteenth century. One of the first known uses occurred in 1821 with the building of a system of metallic lead pipes to transport natural gas from a nearby shallow well to commercial establishments in Fredonia, New York. Gas lights—burning gas made from coal—illuminated the streets of Baltimore beginning in 1816.

By 1900, natural gas had been discovered in seventeen states, mostly as a byproduct of oil...