In the 1944 case Panhandle Eastern Pipe Line Co. et al. v. Federal Power Commission et al., the U.S Supreme Court ruled on whether or not the Federal Power Commission (FPC) had jurisdiction over sales of natural gas for resale in interstate commerce by a pipeline company that produced and gathered some, but not all, of its own gas supply. The court held that such sales were within FPC's regulatory authority under Section 1(b) of Natural Gas Act which was enacted to protect consumers against exploitation at hands of natural gas companies. This decision clarified an important aspect regarding federal regulation over interstate commerce particularly in energy sector, emphasizing consumer protection as a key consideration.

The dissenting opinion in the case of Panhandle Eastern Pipe Line Co. et al. v. Federal Power Commission et al., argued that the majority's decision to uphold the Federal Power Commission's (FPC) jurisdiction over natural gas companies was incorrect, as it misinterpreted and expanded upon Congress' intent when drafting the Natural Gas Act. The dissenters believed that Congress intended for FPC regulation to apply only to those activities directly related to interstate commerce, such as sales or transportation of natural gas across state lines; not production or gathering processes which occur within a single state before any interstate activity takes place. They maintained that by extending its regulatory reach into intrastate activities, the FPC had exceeded its statutory authority under federal law and violated principles of federalism by infringing on states' rights to regulate their own internal affairs.