A lot of the talk about oil is couched in the most absurd terms. "The US" buys oil from "the world". We need "oil independence". We need "domestic oil". Domestic drilling won't help since it will just "go on the world market" or "be shipped overseas".

Since when did this become the Soviet Union?

The US does not buy oil, excepting that purchased for the military and the strategic reserve and few other government projects. Nor does "the world" sell oil. A few nations have nationalized oil, but in most cases private companies sell oil. And private companies buy oil to sell to individuals.

And guess what, those individual in general could care less if oil is Saudi or Venezuelan or Mexican or American. The only distinctions that matter to consumers is regular or diesel, maybe premium or regular.

Here are the facts. When we open ANWR or off shore drilling, a private company will drill that oil and offer it to the highest bidder, or maybe refine it themselves and then offer the resulting products to the highest bidder. That is the free market conservatives claim to love, except when it comes to oil, or international trade, or anything populists argue shouldn't really be free.

But it works. It works very well. You may not like that oil is so expensive, but do you know why it is so expensive? Because there is too much demand and too little supply to support the old prices. At the old prices, everyone would buy more and we would have shortages. At the present prices, everyone who is willing to pay still gets oil. Amazing how that works, isn't it?

And if we drill in ANWR or off shore, even if every drop is sold "overseas" or "on the world market", guess what will happen? Prices will drop on the world market. And everyone will have cheaper oil. Oh, unfortunately it will benefit other nations as well as the US, which seems to upset some, but that is unavoidable, unless we decide to eliminate the free market and establish our own nationalized oil industry like that paragon of freedom Venezuela. But I would ask any budding Hugo Chavez who wants to make sure all the ANWR oil goes "to the US", exactly what is so appealing about communism? Is it the shortages? The crushing poverty? Or maybe the loss of freedom? Because those are the inevitable outcome of once we start down the path of destroying the free market.

Now, I do admit that domestic production does have one political and economic advantage. In the case of a politically imposed embargo, such as those in the 1970's, it does insulate us against the worst effects. However, it does not completely avoid them. Even if we produce a large percentage of oil domestically, the resulting embargo will still raise world prices somewhat, and that will draw oil from the domestic to the international market, so, again, unless we destroy the free market in oil, we will still suffer should an embargo happen, even with a large domestic industry, just not quite as badly.

No, the point of drilling in ANWR and off shore is not to "produce more oil for our nation" but just to produce more oil, period. With more oil in the world, the price is lower for all, which is good for everyone, which means it is also good for us. To hear it argued in nationalist terms is just silly. This is not an argument about fighting for what is best for the US, but what is right for everyone. We SHOULD have the freedom to drill on land we own or lease, and it is best for everyone in the world if we do. No need to even bring nationalism into it, it is the right thing for everyone, everywhere. Why is that considered a bad argument?

POSTSCRIPT

One thing to recall is that domestically produced oil may be sold overseas, but it is also more likely to be sold domestically as the transportation costs are lower. The oil form Alaska is a special case, as due to geography it is actually cheaper to transport to Japan and sell than it is to ship to any US refineries. However, by reducing the amount that Japan demands on the world market, this still reduces the price we pay for oil, so it is still to our benefit.

I just do not understand the fear that so many people have of the free market and of trade with other nations. Without foreign trade we would have no produce during the winter, would lack many types of fruit, would have very little uranium, few diamonds, and would have inadequate oil supplies. Without world trade we would be inestimably poorer. Trade is to the benefit of everyone. Even the most primate and backwards countries benefit more advanced trading partners by taking some of the grunt work onto themselves and freeing the more developed countries to do those things they do best.

This was all proved centuries ago, yet we still hear people decrying foreign trade, outsourcing or selling oil to other nations. It just baffles me.

Do you think while we are teaching children to put on condoms and be tolerant of others we could spend a week or two acquainting them with the basic of economic theory? At least can everyone read Bastiat so I can stop hearing all these absurd arguments again and again? His writing is pretty simple and he destroys these arguments in a much better way than I ever will.

UPDATE

I got a reply to both this article and to the original comment I made on someone else's blog that inspired it, and I am just stumped. People seem to be convinced that there is some cabal of oil companies trying to starve us, or that the Saudis and OPEC just randomly create oil crises. As the response to my comment said:

May I deduce then that companies that will be refining the oil are the big players (BP) of this supply and demand game and that we are at their mercy?

This is just crazy. The Saudis and OPEC don't charge the prices they do out of malice, and BP isn't playing some sort of game. And whatever "power" they have we gave them by restricting both entry into the oil industry and new exploration.

There was a time when there were more than 3 big oil companies. These sort of restrictions and government regulation is what caused the domestic cartelization of oil. No one else has the pull to get all the permissions or the money to wait out all the government processes. So if you want to reduce the "power" of "big oil" argue for less government, not more.

But instead you act as if the oil companies are bad and the government good. The oil companies are not bad, neither is OPEC, all are simply trying to turn the most profit they can on the product they produce, as do we all. Or do you who complain tell your boss "No, I don't deserve a raise this year"? We all try to make the most we can, and the oil producers are no different, but that does not "put us at their mercy".

What puts us at their mercy, if that melodramatic phrase is even appropriate, are government restrictions which keep anyone from drilling, refining and otherwise handling oil. If we could eliminate all these drilling restrictions and environmental restrictions, you would see more companies, more oil, and a general improvement.

But everyone seems to be running down the free market, so doubtless nothing I say will convince you. But, I do still have one question, if you don't want the oil "going overseas" and don't want "the big oil players" drilling it, then who on earth is going to extract this oil?

Are you seriously saying a national oil industry is the BEST choice? Or maybe the government will make a private company drill it then TELL them where to sell it.

That is not the conservative movement I joined.