Houston (Platts)--17Jun2011/538 pm EDT/2138 GMT

Canada's national government might be willing to assert a greater regulatory role in the development of the country's shale gas resources, an area in which the country's individual provinces' traditionally have taken the lead.

In remarks Thursday before the House of Commons, Environment Minister Peter Kent said the federal government could step in to prevent the release of a toxic substance from a shale gas site.

"Indeed, the federal government has an interest and can involve itself when a threat is perceived and reported," Kent said in response to a question from an opposition member of Parliament.

Unlike the US, where shale gas drilling has grown in significance over several decades, Canada is just at the onset of its own shale revolution.

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To date, only one province, British Columbia, has seen significant shale gas development although several provinces, in both eastern and western Canada, the nation's historic energy-producing region, are grappling with developing the best way to regulate the budding industry.

Provincial and territorial governments share with the national government the responsibility of protecting the environment, while the provinces and territories have the primary responsibility for overseeing the extraction of resources within their own borders, Melissa Lantsman, a spokeswoman for the environment minister, said Friday.

Under the terms of the Canadian Environment Protection Act, Environment Canada is responsible for putting into action measures to protect air and water quality, and wildlife habitat, she said.

In his remarks, Kent said the CEPA gives the department the authority to regulate toxic substances, "and where required, we will intervene."

Tom Huffaker, vice president of policy and environment for the Canadian Association of Petroleum Producers, said that Kent "was clarifying his authority" to regulate the release of chemicals used in hydraulic fracturing of shale gas wells into the environment.

"I can't unpack everything he might have in mind, but it doesn't look a dramatic statement to us," Huffaker said. "The federal government does have some authority over toxic chemicals, but I did not hear him saying he was asserting new regulation over fracking."

He said Environment Canada's regulatory authority extends to requiring producers to maintain records of chemicals used on their drilling sites.

Questions surrounding whether producers should be required to release information about chemicals used in fracking -- and how much and what sort of information should be released -- have figured prominently in debates over the drilling completion technique in the nation to the south.

"Most of the issues raised around fracking in the US have been raised in Canada," Huffaker said, noting that each province has responded to these issues in its own way, according to its history and traditions.

For example, Quebec, which historically has little history of energy production, in March called a halt to shale gas production until more studies can be conducted on the potential adverse environmental impacts of fracking.

Huffaker said that, like its counterpart in the US, the Canadian gas exploration-and-production industry is moving toward accepting the concept of disclosure for frack fluid chemicals.

"It is a live issue in Canada. We are not there yet," he said. "We're not sure whether there should be a law or whether it should be a voluntary system within the industry."

But John Bennett, executive director of the Sierra Club of Canada, said he thinks the federal government should take the lead in establishing national standards for shale gas drilling.

"We think there needs to be more work done on the environmental impact before it takes hold in Canada," he said.

Bennett said that with a rapidly expanding technology like shale gas drilling, the federal government is in the best position to perform the basic science needed to establish safe and effective regulations.

"The federal government has the responsibility for promoting the exploitation of natural resources," he said. He pointed to the western Canadian tar sands, where the national government had taken the primary role in the development of environmental regulations.

--Jim Magill, jim_magill@platts.com