The U.S. Supreme Court case Colorado Interstate Gas Co. v. Federal Power Commission (1944) revolved around the issue of whether or not the Federal Power Commission had jurisdiction over sales for resale of natural gas in interstate commerce, even if such sales were made by a company that produced and transported the gas itself rather than purchasing it from others for resale. The court ruled in favor of the Federal Power Commission, asserting its authority to regulate these transactions under Section 1(b) of Natural Gas Act which grants FPC jurisdiction over transportation and sale for resale of natural gas in interstate commerce but excludes production or gathering facilities from this regulation. This decision was significant as it clarified federal regulatory power over aspects of energy industry operations.

In the dissenting opinion for Colorado Interstate Gas Co. v. Federal Power Commission, Justice Frankfurter argued that the majority's interpretation of the Natural Gas Act was too broad and exceeded its intended scope. He contended that Congress did not intend to give such extensive regulatory power to the Federal Power Commission (FPC) over independent producers of natural gas who were not engaged in interstate commerce but merely sold their gas directly to interstate pipelines. The justice believed this interpretation could lead to an unwarranted expansion of federal authority into areas traditionally governed by state law, disrupting established legal principles regarding federal-state jurisdictional boundaries. Furthermore, he expressed concern about potential negative impacts on small businesses due to increased regulatory burdens imposed by FPC oversight under this expanded view of its powers.