The Free Trade Agreement Will Benefit U.S. Households Of the approximately 87 million households in the United States, 15 million still use oil as their primary fuel, while 45 million use natural gas as their main fuel. Oil dependence in the U.S. varies significantly by region. In the Northeast, oil provides 50 percent of residential requirements. Imports of Canadian electricity and natural gas have displaced imports of oil from other sources and saved consumers substantial amounts of money. In both the Northeast and Western U.S., Canadian hydroelectric power and natural gas have replaced more costly imported oil. The Free Trade Agreement has several provisions beneficial to U.S. consumers. Electric power imported from Canada will cost less because the Agreement will eliminate minimum price requirements. Price discrimination will be eliminated in the sale of Canadian electricity and natural gas to U.S. consumers. · U.S. consumers will be assured of continuing supplies even during shortages. There will be greater opportunity for displacing imported oil with Canadian hydroelectric power and greater use of natural gas from both U.S. and Canadian producers. Untapped Canadian hydropower potential is substantial, holding out the prospect of increased exports to regions of the U.S. that are highly oil-dependent, and thereby reducing oil imports into these regions from insecure foreign sources. Consumers should have more confidence in the availability of natural gas, which should encourage further penetration of both U.S. and Canadian gas in expanding U.S. gas markets. U.S. Department of Energy preliminary estimates indicate that, over the long-term, natural gas could displace up to 1 million bbl/day of imported oil. This is good news for gas producers and consumers on both sides of the U.S.-Canada border. 4 |