Reducing Oil Imports to Lower Prices: Is President Obama a Neanderthal Protectionist?

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Thursday, 31 March 2011 05:14

The description of his strategy in a Washington Post article suggests that he is. According to the article, President Obama wants the United States to reduce its dependence on foreign oil because the price is high.

This strategy makes no sense in the current context because there is a world market for oil. Increased production of oil in the Gulf of Mexico or Alaska has no more impact on the price that people in the United States pay for their gas than increased production in Venezuela or Saudi Arabia. The only way that focusing more on domestic production would substantially reduce the price of oil relative to the rest of the world would be if President Obama plans to put export restrictions on U.S. oil.

Of course since the U.S. doesn't have enough oil to ever be close to self-sufficient, this would be impossible in any case. The Post should have pointed out to its readers that President Obama's strategy for reducing the cost of oil does not make sense.