President bush has asked that we allow drilling in ANWR, and off the coasts of Florida and California, for the sake of lowering the price of Oil. He’s making an argument that what is driving high oil prices is short supply. This argument is one that is refuted by OPEC, and many economists, but it’s undoubtedly part of the equation.
I still think speculation is what’s driving insane prices, through loose regulation on trading of oil futures (more here).
But I’m willing to consider throwing Bush a bone here. I’m perfectly willing to allow both coastal drilling and drilling in ANWR on the following conditions that apply to all oil from these sites:
- Cannot be exported to any other nation either by the producer or any reseller. (We export to Canada and Mexico)
- Current exports cannot be increased.
- Must be sold at cost (i.e. cannot be traded on the futures market, and cannot be marked up for profit), I might be willing to allow markup if all profits are donated to universities explicitly for developing alternative fuel sources.
- All drilling operations are audited and inspected to insure no inflation of costs to drill the oil.
In addition within 5 years:
- We import no foreign oil whatsoever.
- All oil produced from US sources may only be sold in the US and all surplus must be held in reserve, not sold on the world market.
- All oil produced from US sources must be priced only by US demand, not by world market pricing.
Effectively what I’m saying is that if we want to remove dependence on foreign oil and drive down fuel prices, we must remove ourselves from the world oil market. If we’re going to drill additional sources in the US, this is the only acceptable reason to do so.
Of course, this would cause incredible losses for multinational oil companies. And we all know that’s not going to happen.