ABSTRACT
Security of supply of natural gas has, therefore, been guaranteed in Canada by government fiat rather than by arrangements between private parties using available market mechanisms. When the National Energy Board was created in 1959, the National Energy Board Act empowered the Board to regulate natural gas exports and imports in a manner that reflected the policy recommendations made by the Borden Commission. The "exportable surplus" policy for natural gas was originally used by the federal government to promote the construction of the TransCanada Pipeline to bring western natural gas to eastern Canada. It was understood that only after eastern markets were connected, would additional natural gas exports be allowed. The costs of a government regulation on exports whose purpose is to protect domestic natural gas requirements are related to the size of the inventory of natural gas that sellers are required to set aside specifically for the domestic market and the "quality" of that inventory.
