Canadian National Energy Board Rejects Request for New Rules

The Canadian National Energy Board has rejected a request for new rules for Scotian offshore natural gas projects. This is a victory for industry officials who claimed the proposed changes threatened hundreds of millions of dollars in drilling and development activity.

The provincial government of New Brunswick on Canada's east coast, wanted the federal regulatory agency to impose a "Canada too" policy. It requested public scrutiny of all short-term export applications, ensuring any gas sent to the United States would be surplus to Canadian needs and that Canadian buyers would have a fair opportunity to bid on the gas.

Officials from companies such as EnCana Corp., which plans to spend C$1.1 billion by 2005 developing its Deep Panuke natural gas field offshore Nova Scotia, said New Brunswick's request was a step back toward regulation and would curtail activity. The NEB panel said there was no direct evidence that Canadian buyers did not have access to Scotian gas on the same terms as those focused on export markets. However, the national energy watchdog said it would enhance monitoring of Eastern Canadian gas markets and publish periodic reports. The first report is scheduled to be out no later than July 31, 2003.