Quebec plans to launch legislation late this year to encourage oil and natural gas exploration and development in the province, says Natural Resources Minister Nathalie Normandeau.

At present Quebec has no commercial production of oil or gas but drilling for natural gas has increased rapidly in the past two years because the shale gas reserves of Northern New York State are believed to extend to the South Shore of the Saint Lawrence Valley between Drummondville and Quebec City.

Canada's Talisman Energy Inc. and Questerre Energy Corp. and the U.S. Forest Oil Corp. have led the exploration in partnership with several Quebec exploration firms.

Oil and gas drilling now comes under the Province's Mining and Forestry and other laws, but the government wants "to create a fiscal and legal framework that will encourage companies to invest in Quebec rather than Pennsylvania," Normandeau told Bloomberg News.

She would not give any details of the proposed legislation, but said "we won't do this at the expense of the environment."

New extraction technology is enabling development of major reserves of shale gas in the Northeastern and Southern States, though the industry has warned extraction costs are high. Big reserves have also been found in Western Canada.