In the case of Mobil Oil Corp. v. Federal Power Commission, 1973, the U.S Supreme Court was tasked with deciding whether or not the Federal Power Commission (FPC) had overstepped its authority by setting rates for natural gas leases on private and state-owned lands that were higher than those set by federal law for similar leases on federally owned land. The FPC argued it had this power under section 1(b) of the Natural Gas Act which gives them jurisdiction over transportation and sale of natural gas in interstate commerce to ensure reasonable rates. However, Mobil Oil Corporation contended that such an interpretation would infringe upon states' rights to manage their own resources as protected by Congress's intent when passing said act. The court ruled in favor of Mobil Oil Corp., stating that while FPC has broad powers under Section 1(b), they do not extend to direct regulation of leasing practices or sales at wellheads; these are matters left primarily to individual states’ control unless specifically addressed otherwise by Congress within legislation itself.

In the dissenting opinion for Mobil Oil Corp. v. Federal Power Commission, it was argued that the majority's decision to uphold the Federal Power Commission's (FPC) jurisdiction over independent producers of natural gas was incorrect and inconsistent with previous court rulings. The dissent emphasized that Congress did not intend for FPC to have such broad authority when it enacted the Natural Gas Act in 1938, which aimed at regulating interstate commerce in natural gas by controlling its transportation and sale but not production or gathering. It further contended that this expansion of regulatory power could potentially harm small independent producers who were already struggling due to low prices set by FPC, thereby threatening domestic energy supply security. Additionally, they disagreed with how majority interpreted certain provisions within Natural Gas Act as granting FPC control over all aspects of natural gas industry including production rates and reserves.