WALKER OPERATING CORPORATION, ET AL., PETITIONERS,

v.

FEDERAL ENERGY REGULATORY COMMISSION, RESPONDENT, PHILLIPS PETROLEUM COMPANY; NORTHERN STATES POWER COMPANIES; LAKE SUPERIOR DISTRICT POWER COMPANY; NATURAL GAS PIPELINE COMPANY OF AMERICA; IOWA PUBLIC SERVICE COMPANY; ANADARKO PRODUCTION COMPANY; PAN EASTERN EXPLORATION COMPANY; INTER-CITY GAS; THE ENERGY ISSUES INTERVENTION OFFICE OF THE MINNESOTA DEPARTMENT OF PUBLIC SERVICE; NORTHERN NATURAL GAS COMPANY, DIVISION OF ENRON CORP.; COLORADO INTERSTATE GAS COMPANY; DORCHESTER MASTER LIMITED PARTNERSHIP; MOBIL PRODUCING TEXAS & NEW MEXICO INC.; WILLIAMS NATURAL GAS COMPANY; TEXACO PRODUCING INC.; CONOCO, INC., INTERVENORS

TACHA, Circuit Judge.

This case presents for review, pursuant to¹⁵ U.S.C. § 717r(b) and¹⁵ U.S.C. § 3416(a)(4), two orders issued by the Federal Energy Regulatory Commission (FERC). These administrative orders determined that certain oil well operators had violated federal law by the diversion of natural gas dedicated to interstate commerce and by selling that gas at a price in excess of the statutorily established maximum price. We hold that FERC had jurisdiction to issue those orders, that FERC’s findings of fact were based upon substantial evidence, that its conclusions of law were reasonable, and that there are no procedural grounds for overturning the orders. We affirm.

I.

The Texas Panhandle is the site of a vast hydrocarbon reservoir, the overlying surface area of which is some 124 miles long and averages approximately twenty miles in width. This reservoir contains both oil-producing and gas-producing formations, with the most significant formation for natural gas production being the brown dolomite. Often, a gas producing horizon overlies an oil producing horizon. Furthermore, when a formation produces both gas and oil, the hydrocarbons constituting oil, being denser than those constituting gas, usually will be found in the lower portions of that formation. Within a specific well, the contact line between the gas zone and the oil zone is referred to as the “gas-oil contact.”

Within this area, generally referred to as the Panhandle Field, the spacing of oil wells and of gas wells must comply with state regulations that establish specific oil well and gas well proration units. A pro-ration unit here is “[t]he area in a pool that can be efficiently and economically drained by one well, as determined by [the agency regulating production].” H. Williams & C. Meyers, Oil and Gas Terms 111 (7th ed. 1987); see 15 U.S.C. § 3301(8). The Railroad Commission of Texas has designated oil fields by county within the Panhandle Field area and has established ten-or twenty-acre oil proration units for the oil wells in these fields. Likewise, the Railroad Commission has divided the Panhandle Field area into two gas fields, establishing 640-acre gas proration units in the Panhandle West Gas Field and 160-acre gas pro-ration units in the Panhandle East Gas Field. Within the Panhandle Field, the gas rights and the oil rights to the same surface area often are separate leasehold estates held by separate parties. Thus, at times, separate and multiple leasehold estates may apply to the various hydrocarbons produced from a single well bore. See Dorchester Gas Producing Co. v. Harlow Corp., 743 S.W. 2d 243, 250-51 (Tex.Ct.App.1987, writ denied).

Because a gas proration unit and an oil proration unit can occupy the same surface area, and because of the “split lease” situation, in the Panhandle Field area it is possible — and quite often the case — that the pro-ration units for several oil wells might overlap a single gas well’s proration unit, with the oil wells being operated by a different operating company from that operating the gas well. As the Fifth Circuit recently noted, “[wjith the advent of new drilling and legal strategies, the so-called ‘split leases’ have now for several years produced a steady flow of gas, controversy, and litigation.” Pan E. Exploration Co. v. Hufo Oils, 855 F. 2d 1106, 1109 (5th Cir.1988).

From its early days the geological and regulatory realities of the Panhandle Field have led periodically to friction between oil producers and gas producers, especially over problems arising from the perforation of oil well casings in a gas-producing horizon above the oil-producing horizon in which the well was completed. The gas producers saw this activity, sometimes called “high perforation,” as resulting in production of natural gas to which they held proper title.

In the Panhandle Field area, production of oil usually will result in some natural gas also being produced from the oil well. This, in fact, occurs in the area that is the subject of these proceedings, because there the “free gas phase overlies and is in contact with a black oil zone.” Stowers Oil & Gas Co., 30 FERC 1163,017, at 65,031 (1985) (recommended decision). At a minimum, this type of gas — from an oil-producing horizon and inevitably produced along with the oil from that horizon — is known as “casinghead gas.” The parties here dispute what else is included in that term.

The statutory and regulatory structure of Texas oil and gas law recognizes the possibility of gas and oil production from the same well. Texas statutes therefore classify specific producing wells as “oil wells” or as “gas wells” based on a specific well’s “gas-oil ratio.”¹

In 1983 the FERC enforcement staff began a preliminary investigation into natural gas sales by oil operators in the Panhandle West Gas Field. The investigation focused on the activities of thirty-seven oil well operators whose oil wells and oil proration units were located on the same surface acreage (the subject acreage) as the gas wells and gas proration units of Dorchester Gas Producing Company (Dorchester). In February 1984 FERC issued an order requiring the thirty-seven oil well operators to show cause why they should not be found to have violated section 7(b) of the Natural Gas Act (NGA),¹⁵ U.S.C. § 717f(b), by the diversion of natural gas dedicated to interstate commerce, and section 504(a)(1) of the Natural Gas Policy Act of 1978 (NGPA),¹⁵ U.S.C. § 3414(a)(1), by selling that gas at a price in excess of the statutorily established maximum price. Stowers Oil & Gas Co., 26 FERC ¶ 61,207, 61,478-80 (1984) (show cause order).

A hearing was conducted, and in January 1985 the administrative law judge (AU) issued a recommended decision that found thirty-five of the oil well operators in violation of one or both of the statutory provi sions. Stowers Oil & Gas Co., 30 FERC ¶ 63,017, at 65,048-49 (1985) (recommended decision). The AU found that the evidence against the two remaining operators was inconclusive and required further investigation. Id. at 65,049.

In determining whether the operators had sold natural gas at a price in excess of its statutory ceiling price, the AU first had to determine whether that gas was being produced from reserves that Dorchester had dedicated to interstate commerce. Any gas produced from a Dorchester gas proration unit is dedicated gas. Although the operators’ oil proration units and the Dorchester gas proration units sometimes occupy overlapping surface areas, the AU concluded that the Texas regulatory scheme used each well’s gas-oil contact to divide the overlying gas proration units from the underlying oil proration units. Therefore, if the operators had produced gas from above the gas-oil contact, they would have been diverting natural gas dedicated to interstate commerce, and, consequently, they would have been selling gas at a higher ceiling price than that allowed by law.

The operators claimed that it was ultimately irrelevant whether gas from their wells had been produced from dedicated reserves. They pointed to pricing category determinations made by Texas for most of their wells. Those determinations, they asserted, removed all gas produced by those wells from the statutory ceiling price for dedicated gas. The ALJ concluded, however, that those well determinations covered only the casinghead gas produced by the operators and that, as a practical matter, the Texas definition of casinghead gas covered only that gas produced from below the gas-oil contacts. Therefore, if the operators were producing gas from above the gas-oil contact, they were, in fact, diverting dedicated gas and selling it at a price above its statutory ceiling price.

In July 1985 FERC affirmed the AU’s recommended decision “in its entirety, including all findings of fact and conclusions of law.” Stowers Oil & Gas Co., 32 FERC ¶ 61,043, at 61,136 (1985) (opinion no. 239). After FERC issued a subsequent order denying motions for stay and requests for rehearing, Stowers Oil & Gas Co., 33 FERC ¶ 61,207 (1985), the thirty-five operators appealed to this court for review of the Commission’s orders. Before this court, the petitioners are those operators together with third parties who have also petitioned for review. Other third parties are present as intervenors, some in support of the petitioners and some in support of the respondent, FERC.

II.

This case requires us to examine the appropriate demarcation of authority between federal and state regulatory agencies. Much of the petitioners’ argument on appeal is devoted to the contention that FERC impinged impermissibly upon areas reserved for state regulation and, therefore, attacks the agency’s jurisdiction below. Congress, moreover, has directed the reviewing courts to “hold unlawful and set aside agency action ... found to be ... in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.” 5 U.S.C. § 706(2)(C). Therefore, before turning to specific judicial review of FERC’s findings of fact, its conclusions of law, or its decision, we address this threshold issue of FERC’s jurisdiction.

A.

Congress has established a regulatory scheme that allocates specific areas of natural gas regulation to state or to federal regulators. We first examine, therefore, the contours of that regulatory scheme.

Prior to congressional action, the Supreme Court held that the “mere force of the commerce clause of the Constitution” barred state agencies from interfering with interstate sales of natural gas. Missouri ex rel. Barrett v. Kansas Natural Gas Co., 265 U.S. 298, 307-08, 44 S.Ct. 544, 545-46, 68 L.Ed. 1027 (1924). In 1938 Congress stepped into the area by enacting the NGA, ch. 556, 52 Stat. 821 (1938) (codified as amended at 15 U.S.C. §§ 717-717w). “[Wjithout supplanting any of the existing authority of the state agencies, the Act was intended to provide a powerful regulatory partner, the Federal Power Commission, which could regulate activities where the state bodies could not.” Corporation Comm’n v. Federal Power Comm’n, 415 U.S. 961, 962, 94 S.Ct. 1548, 1548, 39 L.Ed.2d 863 (1974) (Rehnquist, J., dissenting from summary affirmation).² The NGA delineated specific areas as areas of federal regulation or of state regulation. For example, the transportation or sale of natural gas for resale in interstate commerce was affirmatively placed within the federal regulatory sphere, while intrastate commerce in natural gas, and such matters as production or local distribution, were relegated to the state regulatory sphere.³ Perhaps the most noteworthy area reserved for state regulation was the “production or gathering of natural gas,”¹⁵ U.S.C. § 717(b).

Although Congress delineated areas of federal and of state regulation, inevitably conflicts developed between the two regulatory spheres. Such conflicts, however, are subject to the principle that the jurisdiction of the states is contingent upon state regulation not intruding into those areas clearly within the sphere of federal regulation. In Northern Natural Gas Co. v. State Corp. Comm’n, 372 U.S. 84, 83 S.Ct. 646, 9 L.Ed.2d 601 (1963), the Supreme Court addressed a state’s defense of its regulation on the basis of the production or gathering exemption and noted that “it has been consistently held that ‘production’ and ‘gathering’ are terms narrowly confined to the physical acts of drawing the gas from the earth and preparing it for the first stages of distribution,” id. at 90, 83 S.Ct. at 649-50. Furthermore, the Court declared:

it was settled even before the passage of the Natural Gas Act, that direct regulation of the prices of wholesales of natural gas in interstate commerce is beyond the constitutional power of the States— whether or not framed to achieve ends, such as conservation, ordinarily within the ambit of state power. Id. at 90, 83 S.Ct. at 649-50 (emphasis in original). Finally, the Court held that, after the enactment of the NGA, “[t]he federal regulatory scheme leaves no room either for direct state regulation of the prices of interstate wholesales of natural gas or for state regulations which would indirectly achieve the same result.” Id. at 91, 83 S.Ct. at 650 (citation omitted) (emphasis added).4 The jurisdiction of FERC “was not intended to vary from state to state, depending upon the degree of state regulation and of state opposition to federal control.” Phillips Petroleum Co. v. Wisconsin, 347 U.S. 672, 681, 74 S.Ct. 794, 798, 98 L.Ed. 1035 (1954).

Not only must state regulatory action give way if it, directly or indirectly, intrudes into the comprehensive federal regulatory scheme, but it is also true that state regulation under the production or gathering exemption does not bar legitimate federal regulatory action that Congress clearly delegated to FERC. In Colorado Interstate Gas Co. v. Federal Power Comm'n, 324 U.S. 581, 65 S.Ct. 829, 89 L.Ed. 1206 (1945), the Supreme Court considered an appeal of a federal order fixing new rates for gas transported by two natural gas companies. The Court, addressing the argument that the federal order was barred by the production or gathering exemption, held that the exemption did not preclude the federal agency “from reflecting the production and gathering facilities of a natural gas company in the rate base ... for the purposes of determining the reasonableness of rates subject to its jurisdiction.” Id. at 603, 65 S.Ct. at 839-40. Thus, even though “[t]hat treatment of producing properties and gathering facilities has of course an indirect effect on them,” the production and gathering clause did not shield those properties or facilities from the consequences of the proper federal regulatory action. Id.

Over its first forty years, the NGA regulatory structure — with prices in the interstate market controlled by federal regulation and prices in the intrastate markets largely left to market forces — began to create problems. “[Shortages in the interstate market developed because gas producers could get higher prices in unregulated intrastate markets.” FERC v. Martin Exploration Management Co., 486 U.S. 204, 108 S.Ct. 1765, 1767, 100 L.Ed.2d 238 (1988). In response to this situation, in 1978 Congress enacted the NGPA, Pub.L. No. 95-621, 92 Stat. 3351 (1978) (codified as amended at 15 U.S.C. §§ 3301-3432).5

The statutory scheme established by the NGPA divides natural gas production into numerous categories that are distinguished by the date that production began from a well or the particular type of drilling involved. Gas in these categories can be broadly classified as “old” gas, “new” gas, or difficult to produce gas. “Old” gas is generally that produced from wells that had been operating before the passage of the NGPA.... “New” gas is generally that produced from wells that began production after the passage of the NGPA.... Several methods of production are specifically described in the statute as difficult to produce gas.... The categories are not mutually exclusive: a particular sale may be “dually qualified” within a “new” or “old” gas category and also a difficult to produce category.

The NGPA established ceiling prices for each of these categories of natural gas production.

Martin Exploration Management Co. v. FERC, 813 F. 2d 1059, 1063-64 (10th Cir.1987) (citations omitted) (footnotes omitted), rev’d on other grounds, 486 U.S. 204, 108 S.Ct. 1765, 100 L.Ed.2d 238 (1988).

With the enactment of the NGPA, some doubt arose whether Congress had “altered those characteristics of the federal regulatory scheme which provided the basis in Northern Natural for a finding of preemption.” Transcontinental Gas Pipe Line Corp. v. State Oil & Gas Bd., 474 U.S. 409, 417, 106 S.Ct. 709, 714, 88 L.Ed.2d 732 (1986). The Supreme Court soon dispelled that doubt and held that Congress’ shifting of some specific pricing regulation away from FERC and into the control of market forces had not removed that regulation from the “comprehensive federal regulatory scheme.” Id. at 422, 106 S.Ct. at 716-17. Consequently, Congress had not “intended to give the States the power it had denied FERC.” Id. (reversing judgment of Mississippi Supreme Court that NGPA had vitiated Northern Natural Gas). Also, because the NGPA’s natural gas categories spanned both interstate and intrastate gas, “the NGPA in some respects expanded federal control, since it granted FERC jurisdiction over the intrastate market for the first time.” Id. at 421, 106 S.Ct. at 716. In sum, the Supreme Court has narrowly interpreted the exceptions to FERC’s jurisdiction over the regulation of natural gas. With this in mind, we turn to FERC’s actions in this case to determine whether they impermissibly impinged upon regulatory activities expressly reserved for the state.

B.

“The standard of review on a jurisdictional decision of the FERC is whether the decision was without an adequate basis in law.” Alexander v. FERC, 609 F. 2d 543, 546 (D.C.Cir.1979), quoted in National Ass’n of Regulatory Utility Comm’rs v. FERC, 823 F. 2d 1377, 1382 (10th Cir.1987). A recent Tenth Circuit decision upheld FERC’s determination that it had jurisdiction over whether certain gas was dedicated to interstate commerce. National Ass’n of Regulatory Utility Comm’rs, 823 F. 2d 1377. In making that decision, this court looked to the statutory language, its interpretation by the Supreme Court, and policy considerations in holding that FERC’s interpretation of the congressional intent was reasonable. Id. at 1383, 1385.

The petitioners here mount an attack against the statutory jurisdiction of FERC. They contend generally that the production or gathering clause bars FERC from hearing any issues involving such matters as gas-oil ratios, gas-oil contacts, casinghead gas, or high perforations. More specifically, they contend that in this case the integral nature of these “production” issues barred FERC from inquiring into either the scope of Dorchester’s natural gas reserves dedicated to interstate commerce or the scope of the Texas pricing determinations covering the petitioners’ wells. We disagree.

The Commission here was regulating the price ceilings of sales of natural gas in interstate commerce. As the Supreme Court has noted, “sales in interstate commerce for resale by.producers to interstate pipeline companies do not come within the ‘production or gathering’ exemption.” Phillips Petroleum, 347 U.S. at 680-81, 74 S.Ct. at 797-98 (stating what Phillips Petroleum Court saw as the “ground” of the decision in Interstate Natural Gas Co. v. Federal Power Comm’n, 331 U.S. 682, 67 S.Ct. 1482, 91 L.Ed. 1742 (1947)).

In order to ascertain whether the petitioners had diverted gas dedicated to interstate commerce, FERC had to determine the natural gas reserves that were subject to Dorchester’s certificate of public convenience and necessity. Section 7 of the NGA requires a natural gas company to obtain from the Commission “a certificate of public convenience and necessity” prior to engaging in the sale or transportation of natural gas in interstate commerce for resale.¹⁵ U.S.C. § 717f(c), (e).6 Moreover, once a natural gas company has obtained a certificate of public convenience and necessity, that gas is “dedicated” to interstate commerce, and that producer cannot abandon its supplying of natural gas into interstate commerce, unless the Commission grants it permission to do so, see United Gas Pipe Line Co. v. McCombs, 442 U.S. 529, 536, 542, 99 S.Ct. 2461, 2462, 2469, 61 L.Ed.2d 54 (1979); 15 U.S.C. § 717f(b),7 or unless that gas falls within the provisions of section 601(a)(1)(B) of the NGPA, see 15 U.S.C. § 3431(a)(1)(B).

In 1954 Dorchester acquired Pan handle Field gas reserves8 and applied for a certificate of public convenience and necessity, which the federal regulatory agency issued on February 6, 1956.9 That certificate covers the Dorchester gas wells located on gas proration units that overlap the oil proration units of the petitioners. “The initiation of interstate service pursuant to [a] certificate dedicate[s] all fields subject to that certificate.” California v. Southland Royalty Co., 436 U.S. 519, 525, 98 S.Ct. 1955, 1958-59, 56 L.Ed.2d 505 (1978). The Dorchester gas, then, was “natural gas committed or dedicated to interstate commerce on November 8, 1978, and for which a just and reasonable rate under the Natural Gas Act was in effect on such date for the first sale of such gas,”¹⁵ U.S.C. § 3314(a). See generally Dorchester Gas Producing Co. v. FERC, 571 F. 2d 823, 825 (5th Cir.1978); 15 U.S.C. §§ 717c-717d (granting federal agency jurisdiction under NGA to set “just and reasonable” rates; providing for agency hearings to establish rates). As such, it was subject to the ceiling price established by section 104 of the NGPA.¹⁵ U.S.C. § 3314; see also 18 C.F.R. §§ 154.1-.310 (1988) (federal regulations establishing and regulating rate schedules and tariffs for natural gas); id. $8 271.101(a), 271.401-.403 (1988) (establishing price for NGPA § 104 gas).

The AU established that Dorchester’s certificate of public convenience and necessity applied to — and therefore dedicated to interstate commerce — all natural gas from the subject acreage that was not casing-head gas.10 Stowers Oil & Gas Co., 30 FERC ¶ 63,017, at 65,046 (1985) (recommended decision). In reaching that conclusion, the AU considered the geological characteristics of the Dorchester acreage, the application of Texas state law to that acreage, and a 1952 gas purchase contract that preceded the Dorchester certificate. Id. The AU examined these matters only as a necessary background to applying the relevant federal statutes to these parties. Such an examination was therefore within FERC’s jurisdiction.

Because the petitioners11 contended that the Texas pricing determinations for their wells have removed all gas produced by those wells from the dedicated gas ceiling price, FERC had to determine the scope of those pricing determinations. Section 103 of the NGPA establishes a ceiling price for “natural gas” statutorily determined “to be produced from any new, onshore production well.”¹⁵ U.S.C. § 3313(a).12 The statutory determination is to be made by the “Federal or State agency having regulatory jurisdiction with respect to the production of natural gas.”¹⁵ U.S.C. § 3413(c)(1); see also id. § 3413(a)(1)(C). For the subject acreage, that agency is the Railroad Commission of Texas (RCT). See 18 C.F.R. § 274.501 (1988).

When the proceedings below began, most of the petitioners’ oil wells had received section 103 determinations from the RCT.13 The AU approached these determinations as administratively final, Stowers Oil & Gas Co., 30 FERC 1163,017, at 65,030 (1985) (recommended decision), and did not attempt to make new section 103 determinations, id. at 65,047; see also¹⁵ U.S.C. § 3413(b); 18 C.F.R. § 275.202 (1988). Instead, the AU undertook to ascertain the scope of the section 103 determinations consistent with the federal statutory language, see, e.g.,¹⁵ U.S.C. § 3313(c)(3) (barring “new, onshore production well” from being within certain pre-existing proration units). The AU concluded that the determinations covered “only casinghead gas.” Stowers Oil & Gas Co., 30 FERC 1163,017, at 65,030 (1985) (recommended decision). In order to arrive at that conclusion, she examined Texas state law provisions involving such matters as proration units and casinghead gas. Id. Again, as was the case with the AU’s examination of the Dorchester certificate of public convenience and necessity, this examination was undertaken only as a necessary background to the application of the relevant federal statutes.

We hold that FERC’s jurisdictional decisions in these proceedings had an adequate basis in law.

C.

The petitioners contend that, even if FERC had jurisdiction to examine state law issues, it should have abstained from doing so. They assert that FERC should have deferred to Texas authorities on these issues, citing primarily to the principles of Burford-type abstention.

Burford-type abstention is deference by a federal court in order to avoid needlessly interfering in state activities. See Burford v. Sun Oil Co., 319 U.S. 315, 317-18, 327, 63 S.Ct. 1098, 1098-99, 1104, 87 L.Ed. 1424 (1943). See generally 17A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 4244 (2d ed. 1988). For several reasons, however, the principles of that abstention should not control this case. First, the procedural posture here is markedly different from the one that caused concern in Burford. Burford involved a federal court’s review, under diversity and federal question (due process) jurisdiction, of an RCT order concerning oil well spacing. Burford, 319 U.S. at 316-17, 63 S.Ct. at 1098-99. The federal court’s review, moreover, would have preceded any review of the order by the state courts designated to review such orders under Texas law. Id. at 325-28, 63 S.Ct. at 1103-04. Finally, there was no federal statute or regulation at issue in that case.

By contrast, the proceedings before FERC involved a federal regulatory agency operating in the area of its expertise. The federal agency was clearly acting within its jurisdiction, and it was taking Texas statutes and regulatory determinations at their face value. A federal regulatory issue was the issue before FERC. This is not Bur-ford, and FERC was not required to have deferred.14

III.

We turn next to our review of the federal agency’s findings of fact and of its decisions.

A.

The NGA and NGPA explicitly provide the scope of our review for the findings of fact, stating in identical language that “[t]he finding of the Commission as to the facts, if supported by substantial evidence, shall be conclusive.”¹⁵ U.S.C. § 717r(b) (section 19(b) of the NGA); id. § 3416(a)(4) (section 506(a)(4) of the NGPA). Here, the Administrative Procedure Act provides an identical standard. See 5 U.S.C. § 706(2)(E).

“[Substantial evidence] means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216-17, 83 L.Ed. 126 (1938)). That is, “it must be enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury.” NLRB v. Columbian Enameling & Stamping Co., 306 U.S. 292, 300, 59 S.Ct. 501, 505, 83 L.Ed. 660 (1939).15 It is, therefore, “something less than the weight of the evidence,” and an agency’s finding may meet the standard in spite of “the possibility of drawing two inconsistent conclusions from the evidence.” Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966). This standard “frees the reviewing courts of the time-consuming and difficult task of weighing the evidence, it gives proper respect to the expertise of the administrative tribunal and it helps promote the uniform application of the statute.” Id.

FERC made findings of fact concerning the geological characteristics of the subject acreage and of the Panhandle Field generally, the events that prefaced the parties obtaining their various leasehold interests and Dorchester obtaining its certificate of public convenience and necessity, and the geological and production realities of the various producing wells on the subject acreage. The petitioners contend that some of these findings are not supported by substantial evidence.

Specifically, the petitioners attack the ev-identiary sufficiency for the AU’s finding that they were producing gas from above the gas-oil contact, see Stowers Oil & Gas Co., 30 FERC 1163,017, at 65,048 (1985) (recommended decision). This finding formed a basis for FERC’s conclusion that the petitioners were producing dedicated gas from a Dorchester proration unit. The AU stated that her basis for that finding was “the totally persuasive evidentiary presentation of the expert witnesses sponsored by [FERC’s] Enforcement Staff and Dorchester.” Id. The AU, furthermore, declared that the presentation’s “conclusions, based on accepted scientific principles of geology, chemistry, and reservoir engineering, leave no doubt that most of the gas produced by most of the [petitioners] is not casinghead gas ... and that most of the [petitioners] are producing gas which would otherwise be produced by Dor-chester.” Id. We find that the AU relied on the extensive evidence and arguments presented by the various parties in reaching her recommended decision. See id. at 65,033-43; id. app. C at 65,051-65.

The petitioners also object to the AU’s use of “secondary evidence” to ascertain the gas-oil contact in specific wells. Furthermore, they cite expert testimony that they contend contradicts the expert testimony relied upon by the AU. In the final analysis, however, the petitioners’ arguments point at best to the presence of some conflicts in the evidentiary record. In the light of our scope of review, that is simply not enough. After a review of the record as a whole, we conclude that the findings of fact are supported by substantial evidence.

B.

The AU concluded that the petitioners were producing dedicated gas from Dor-chester’s reserves and selling that gas at a price above the price ceiling dictated by section 104 of the NGPA. In so concluding, the AU examined Texas state law matters involving proration units, contract language, and the definition of casinghead gas. The definition of casinghead gas played a significant role in the AU’s analysis, for she concluded that the reserves covered by Dorchester’s certificate of public convenience and necessity did not include casinghead gas and that the scope of the petitioners’ section 103 well determinations was limited to casinghead gas. Therefore, once casinghead gas was defined, it was possible to ascertain whether the petitioners had produced gas dedicated under Dorchester’s certificate or within the scope of their own well determinations.

1.

We have concluded that FERC had jurisdiction to examine these state law matters. We have concluded also that FERC need not have deferred to the state agencies or state courts. The petitioners, however, expend considerable energy contending that FERC’s interpretation of Texas state law, even if within its jurisdiction, is without foundation.

“Unlike factual findings, questions of law are freely reviewable by the courts, and courts are under no obligation to defer to the agency’s legal conclusions.” Pennzoil Co. v. FERC, 789 F. 2d 1128, 1135 (5th Cir.1986). That scope of review is unchanged, of course, when the agency’s conclusions of law are based upon relevant state law rather than federal law. See Wolf v. Gardner, 386 F. 2d 295, 296 (6th Cir.1967) (court of appeals not required to accept cabinet secretary’s conclusions of law based in part on state family law); Baber v. Schweiker, 539 F.Supp. 993, 995 (D.D.C.1982) (mem.) (“substantial evidence” deference “does not attach to an agency’s interpretation of state law”).

Nevertheless, even if not compelling, legal interpretations on a matter by administrative bodies having expertise in the area are “helpful” to reviewing courts, Erickson Air Crane Co. v. United States, 731 F. 2d 810, 814 (Fed.Cir.1984), and “the courts are to give some deference to the Commission's informed judgment” on such legal issues, FTC v. Indiana Fed’n of Dentists, 476 U.S. 447, 454, 106 S.Ct. 2009, 2015, 90 L.Ed.2d 445 (1986). Generally, then, when a court reviews an agency’s careful and studied conclusions of law pertaining to a matter clearly within the agency’s expertise, the court will affirm those conclusions if they are reasonable, cf. Chapman v. United States, Dept. of Health & Human Servs., 821 F. 2d 523, 527 (10th Cir.1987) (agency’s interpretation of statute entrusted to its administration limited to whether construction is “reasonable”), although an agency’s “order may not stand if the agency has misconceived the law,” SEC v. Chenery Corp., 318 U.S. 80, 94, 63 S.Ct. 454, 462, 87 L.Ed. 626 (1943).

2.

The petitioners contend primarily that FERC erred in its conclusion concerning the definition of casinghead gas under Texas state law. The petitioners take the position that all gas produced from an oil well is casinghead gas. For the petition ers, then, the crucial distinction is the state statutory classification of wells into “oil wells” or “gas wells.” For this position, “any well that produces one barrel or more of oil to each 100,000 cubic feet of gas,” Tex.Nat.Res.Code Ann. § 86.002(6) (Vernon 1978), is an oil well, and any gas produced from that well is casinghead gas.

The Texas statutory definition of “cas-inghead gas” is “any gas or vapor indigenous to an oil stratum and produced from the stratum with oil,” id. § 86.002(10). Although on its face this definition is consistent with FERC’s position, the petitioners argue that their position is the correct interpretation of the legislative intent behind the statute. They point emphatically to a 1940 opinion of the Attorney General of the State of Texas, Tex.Att’y Gen.Op. No. 0-1760 (1940), which concludes that “the term ‘casinghead gas’ applies to all gas produced from any ‘oil well’ as defined in [the Texas statutes],” id. at 4. The petitioners contend that Texas law has consistently followed this definition, as illustrated by RCT documents and by such Texas court decisions as Read v. Britain, 422 S.W. 2d 902 (Tex.1967).

FERC contends that the Texas state law definition of casinghead gas is that found upon the face of the statute. In addition, FERC points to the fact that the RCT regulations — presumably meant to clarify any interpretative problems found in the statute’s plain language — virtually repeat the statutory language. The RCT regulations define casinghead gas as “[a]ny gas or vapor, or both, indigenous to an oil stratum and produced from such stratum with oil.” Tex.Admin.Code tit. 16, § 3.69 (1986) (RCT; Oil and Gas Div.; definitions). Finally, the AU also noted the administrative hearing had shown “this definition [to be] supported by persuasive expert scientific and engineering testimony.” Stowers Oil & Gas Co., 30 FERC 1Í 63,017, at 65,046 (1985) (recommended decision).

In determining whether gas was “produced from the stratum with oil,” the AU referred to the gas-oil contact point. Id. at 65,048. The AU determined that “Dor-chester’s proration unit is that portion of the reservoir above the gas-oil contact which lies beneath each 640-acre unit assigned to a Dorchester well.” Id. (emphasis added). The AU concluded that gas production coming from above the gas-oil contact is not casinghead gas and, therefore, is gas dedicated to interstate commerce. Id.

In examining whether it was reasonable for FERC to have adopted its position, we note that although the authority for that position may not be unopposed, it is certainly well represented in Texas law. In addition to the statutory and regulatory language already quoted, there is virtually overwhelming support for FERC’s definitional position in Texas judicial opinions handed down after FERC issued its orders. See Amarillo Oil Co. v. Energy-Agri Prods., Inc., No. C-6649, 32 Tex.Sup.Ct.J. —, -(Mar. 8, 1989; slip op. at 12) (holding that “the statutory definition of casinghead gas is not ambiguous”); Dorchester Gas Producing Co. v. Harlow Corp., 743 S.W. 2d at 250-51, 258 (upholding instruction charging jury that “the classification of a well by the Texas Railroad Commission does not determine whether gas produced from a well is casinghead gas”). The Texas statutes and regulations, moreover, as a whole are consistent and harmonious with FERC’s position. See, e.g., Tex.Nat.Res.Code Ann. §§ 86.093, 86.097 (Vernon 1978); Tex.Admin.Code tit. 16, §§ 3.10(a), 3.13(a)(1), 3.13(b)(4)(B), 3.69 (1986); RCT, Special Rules Governing the Panhandle District, II, at rules 1-3 (drilling rules).

FERC’s position finds further support in a recent order of the RCT establishing and clarifying regulations designed in part to prevent improper production of gas, by oil well operators, from horizons that produce only gas. See Final Order Adopting and Clarifying Rules and Regulations for the Panhandle Fields, RCT, Oil & Gas Docket No. 10-87,017 (Jan. 11, 1989).16 The RCT adopted verbatim the Texas statutory definition of casinghead gas. Id. at 7. Also, the RCT found that “[operators can generally use information” from several sources “in an attempt to determine the gas-oil contact in an individual oil well; but the contact cannot always be determined, and can vary substantially across the field.” Id. at 4.

The fact that the gas-oil contact point cannot always be precisely determined apparently led the RCT to state that “regulation of the field is best implemented without reference to an absolute gas-oil contact level,” id. at 13. The petitioners contend that this language precludes FERC from using the gas-oil contact to determine whether gas being produced was dedicated gas. We disagree. The RCT order merely states a preference, for practical reasons, for regulation constructed without referencing a gas-oil contact. In fact, “[t]he [RCT] has zoned the Panhandle Field reservoirs) into separate gas fields and oil fields” and “[RCT] field rules require that an oil well be perforated only in levels, sands or strata productive of oil.” Id. at 5. This example of the RCT’s continued recognition of separate producing horizons is consistent with the concept of a gas-oil contact. We hold that it was reasonable in this case for FERC to have used a gas-oil contact in determining whether dedicated gas was being sold.

We find overwhelming support for the reasonableness of FERC's definitional position. Not only is that position supported by the sources we have noted, but many of the sources cited by the petitioners are inconclusive or ambiguous. Cf. Dorchester Producing Co. v. Harlow Corp., 743 S.W. 2d at 250-51 (addressing statement found in Read v. Britain, 422 S.W. 2d 902, 903 (Tex.1967), concerning casinghead gas). For example, the 1940 Attorney General’s opinion states that “[t]he statutory classifications of ‘sour gas’ and ‘casinghead gas’ are not absolutely clear,” Tex.Att’y Gen.Op. No. 0-1760, at 2, but reasons that the legislature intended “to restrict the term ‘casinghead gas’ to gas which is produced with oil from an ‘oil well,’ ” id. at 3. The opinion also states, however, that “the Legislature evidently considered that where gas is produced as a necessary incident to the production of oil from an oil well, the value of the oil produced would warrant the use of the casinghead gas ‘for any beneficial purpose.’ ” Id. at 4 (emphasis added). Such statements, together with the opinion’s definition of casinghead gas as “gas produced with oil from an oil well,” id. at 3, demonstrate the ambiguity of the opinion as it was cited by the parties before FERC. Furthermore, after FERC had concluded its proceedings, the Texas Supreme Court explicitly disapproved the opinion, on the grounds that it failed to follow the plain meaning of the statutory definition of casinghead gas. See Amarillo Oil, — S.W. 2d at -, 32 Tex.Sup.Ct.J. at — (slip op. at 12).

Upon review, we find that FERC’s con-casinghead gas. See Amarillo Oil, 32 Tex. Sup.Ct.J. at—(slip op. at 12).

C.

The petitioners also contend that FERC erred in its conclusion that casinghead gas was the only natural gas covered by the section 103 well determinations for the petitioners’ oil wells.