Energy : Free trade and the price we paid

This paper presented a critique of the North American Free Trade Agreement (NAFTA) claiming it has eliminated and superseded Canadian energy policy and sovereignty. Seven years after the completion of NAFTA, Canadians have had their eyes opened by the recent crisis in high energy prices. It was argued that because of NAFTA, the government of Canada lacks the power to intervene to protect Canadian consumers from rising energy prices. During the winter of 2000-2001 gasoline prices rose even while crude oil was in surplus. Also, natural gas heating charges skyrocketed in Canada mostly due to California's shortage of electricity and natural gas. This report ties the crisis in gas and oil prices to NAFTA. There is no shortage of oil or gas in Canada that can justify these price hikes. The so called shortage has been merely imported through trade agreements. NAFTA has removed the power of the Canadian government to intervene in the energy sector, deregulated exports, and freed Canadian producers to meet the energy demands of an insatiable U.S. market. In addition, NAFTA ties the hands of Canadians who want to cut back exports and conserve our precious non-renewable resources. This report also showed that gas deregulation in North America has caused instability and left many gas users vulnerable to market power and monopoly. The author argued that natural gas, like electric power, needs state regulation because of natural monopoly and to protect consumers. refs., figs