The most refreshing thing I’ve read all week:

The economic case for energy independence has always been nonsensical. It is not possible to shield American consumers from rising prices at the pump simply by replacing foreign oil with domestic oil. Why? Because regardless of where the oil is produced - Oman or Oklahoma - its prices are set by the global market.

From a piece by Shikha Dalmia on the Reason Foundation’s site. She lays out the case for why nationalistic scaremongerers are all wrong when it comes to proper policy in regards to oil.

After giving a history of attempted (but ultimately failed) market manipulation by various entities, she details why the incentives for every party involved are to bring more oil into production for the world market. Dalmia also explains how, in the end, this buying and selling between nations leads to more global stability.

Thus whatever other arguments there might be for boosting domestic oil production, national security is not one of them. While this might seem counter-intuitive, it is really part of the overall logic of trade: The mutual dependence that trade breeds fosters peace because it gives hostile trading partners an incentive to refrain from acting on their hostility. Energy independence would weaken that incentive.

technorati tags: oil, trade