The Federal Energy Regulatory Commission reaffirmed a natural gas billing policy that Canada says hurts its exporters, preempts its jurisdiction and
contradicts a pledge by President Reagan to open energy trade.
In voting 5-0 to uphold the policy, FERC disregarded a request from Secretary of State George Shultz for a delay of at least 30 days to give Canada a full hearing and allow time to consider the "implications for broader U.S.-Canadian trade relations."The policy requires Canadian suppliers to U.S. pipelines to follow the same accounting rules that U.S. suppliers must follow. This forces Canadian exporters to reduce their fixed monthly charges and recover the disallowed amounts in their per cubic foot charges.
Meanwhile, a Canadian official who requested anonymity, said Prime Minister Brian Mulroney received a letter from Mr. Reagan saying he had relayed Canada's concerns to FERC but could not order it to strike down the policy because it is an independent agency.
FERC lawyer Susan Court told reporters that for the moment, administrative avenues have been exhausted, and "I'd be very surprised if we're not taken to court now."
Canadian gas shipments, valued at more than $2 billion last year, are about 5 percent of U.S. consumption, but a third of Canadian gas output.