NEB MOVES TO SPEED GAS EXPORT APPLICATIONS
Canada's National Energy Board is seeking industry comments on proposed rule changes designed to speed natural gas export applications.
NEB is considering a change that would no longer require a guarantee from producers that buyers will take gas at volumes specified in a contract. Current rules require export contracts to include penalties if buyers don't take gas at agreed rates.
The board also is proposing changes in its preheating process to give gas users in Canada enough time and information to prepare for a hearing on export applications.
Deadline for submissions on the proposals is Oct. 15.
Exporters will still require a contract to get a long term export license. But they no longer will need to demonstrate that gas must flow at predetermined rates and will not have to second guess the market.
NEB Chairman Roland Priddle said that previous regulatory changes may not have kept up with rapid developments in natural gas markets.
Federal Energy Minister Jake Epp said the proposals reflect "changing regulatory requirements for an industry that has adapted to new competitive realities of the natural gas market."
CALIFORNIA SALES ISSUE
Meanwhile, the Canadian Petroleum Association has repeated a request that NEB examine long term contracts covering gas sales to the California market. CPA asked the NEB to withhold new export licenses until old contracts held by its members are fully honored.
The CPA request has been opposed by a number of companies, including several members of the association. The Alberta Petroleum Marketing Commission and Independent Petroleum Association of Canada also oppose the CPA request.
CPA Vice Pres. Hans Maciej said the principle of sanctity of contracts and noninterference by regulators are crucial to a market responsive natural gas industry. He pointed out that 37 intervenors filed comments on the CPA request, and only two were absolutely opposed to it.
NEB has not responded to the CPA request for a quick hearing on the issue.
Alberta producers and California buyers last month agreed to a new 1 year contract that cuts prices to producers by about 15% (OGJ, Aug. 19, p. 25).
CPA says policies by the California Public Utilities Commission aimed at cutting gas prices violate the Canada-U.S. Free Trade Agreement.
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