09/12/2013 13:10 EDT | Updated 11/12/2013 05:12 EST

Firms push back against new NEB security deposit rules

Oil and gas exploration companies say new security deposit requirements are going to push them out of business.

The issue came up yesterday at the Prospects North conference in Yellowknife, following a speech by the head of the National Energy Board.

Under new rules, the board is requiring exploration companies to set aside enough credit to cover a worst-case environmental scenario.

Privately held Calgary-based Explor Data collects seismic information around potential resource deposits to sell to larger companies. President Allan Chatenay says the new security deposit rule won't leave companies like Explor with enough money to do business.

Higher costs

"Based on the guidelines in their current format, there's absolutely no way we could meet them," he said. "There's no way any aboriginal business here, no aboriginal corporation that wanted to drill on their own land could meet them."

Explor is currently appealing a NEB decision on one of their seismic projects in the central Mackenzie Valley

Although the NEB is already applying the new requirements, they are still under review. It's giving industry until October 31st to comment on the new rules.

National Energy Board chair Gaetan Caron says companies can appeal decisions the board makes on security deposits.

"They can apply to the NEB to have people reconsider and set a different amount," Caron says. "So in the case of Explor … the matter is before the National Energy Board for possible reconsideration."

Caron says because Explor appealing, he can't comment on their specific case.