The Canadian National Energy Board: Economic "Jurisprudence" in the National Interest or Symbolic Reassurance

Abstract

The author of this article offers comprehensive examination of the scope and practical effectiveness of national regulatory efforts with respect to the Canadian natural gas industry. The scope and power of the controls available to the National Energy Board, and the practical use made of them, have been described. After first setting out the general historical and political background to the passage of the National Energy Board Act in 1959, the author undertakes an examination of the NEB's general powers, advisory functions with respect to the Governor-in-Council, specific control powers over pipeline companies, import and export controls and the like. The Board's progress concerning the four major gas export complexes is appraised. This discussion is followed by detailed consideration of four major administration difficulties confronted by the regulators: the development of procedural criteria with respect to the calculation of "exportable surpluses", the protection of domestic gas markets vis-a-vis price structures, the deter mination and application of "just and reasonable" export pricing, and finally, the promotion and maintenance of mutually beneficial co-operative undertakings with the United States. It is generally submitted that the NEB, on the basis of its past performance, has proven itself unable to effectively discharge the enormous responsibility of giving effect to the national interests at stake. Its inability to solve problems relating to the uncertainty of reserve estimations and the rate at which the domestic market would expand are suggested as probable causes of this failure. Improved methods of calculating reserves, coupled with clarification of the Board's constitutional position, would do much towards alleviating some of the difficulties presently being experienced.