I argued that attempting to address something called "dependence on foreign oil," without defining what this means was not an honest or intelligenct approach to our problem; that the nature of the global oil market and the goal of lowering prices, in fact, depends on foreign oil or at least the behavior of foreign oil producers. A friend of mine responds:
"I totally disagree with you that drilling here in the United States would not eliminate our dependence on foreign oil. IF there is the oil that some folks are talking about under our own soil (or within our coastal limits), we could easily tell the Middle East to get lost insofar as their oil is concerned. The longer we put off drilling here, the longer we will have to allow others to drive our economy."To which I reply that even if the oil companies can drill tomorrow in Severna Park and pump a million barrels a day, ask yourself these questions:
Q. What will they do with that oil?
A. Sell it
Q. To whom will they sell it?
A. To the highest bidder
Q. Where will they find the Highest Bidder?
A. The world oil market, open 24\7\365.
IF the current suppliers of our oil want to keep selling us oil, they will have to compete by lowering their price or by lowering the supply. So what we WILL do by drilling here and now is force the suppliers to compete. We do not want that foreign supply to dry up though, because then there'll be no more competition. What we WON'T do is reduce or eliminate our "dependence on foreign oil."
Nearly a week later Martin Feldstein would write practically the same thing for Thursday's Wall Street Journal.
The alternative reality is that we close our market to foreign oil and require refineries to buy only from domestic oil companies who can only sell domestically produced oil. I don't think you really want this to happen. Closing our market will, in fact, eliminate our dependence on foreign oil, but at what cost?
Hmmmmm....closing our market to world oil supply....I'll have to explore that. It's an intriguing idea.