Campaigns are certainly the silly season when it comes to oil imports. Every politician points to oil imports to justify any policy idea that they support. Frankly, it is not popular to stand up and defend oil imports but I am going to. OIL IMPORTS ARE GOOD FOR AMERICA! There I said it.
But I am in good company it seems. Professor William Norhaus of Yale University agrees with me. See his brilliant article “The Economics of an Integrated World Oil Market” at http://nordhaus.econ.yale.edu/documents/iew_052909.pdf.
Economists argue in favor of a doctrine called comparative advantage. It simply means that you should buy goods and services from anyone who can do it cheaper than you can. You do not build your own car because Honda can do it cheaper. This applies especially to international trade. We don’t make our own coffee and we buy plenty of goods from Wal-Mart made in China. Each of us sells our unique services to the highest bidder and then we buy goods made by others.
The fact is that the US has used up most of its cheap oil. Whereas, the Middle East still has a lot of cheap oil. They need our technology and nearly everything else in their economies must be imported. In return, we buy their oil. (Actually, Canada and Mexico are our main suppliers of imported oil.)
Oil prices are the same in the UK (which imports virtually no oil, relying instead on the North Sea), Japan (which imports all its oil, having virtually no indigenous natural energy resources) and the US (which imports about 50% of our oil).
Now that doesn’t mean we are importing the optimal amount of oil. If we put up barriers to the development of domestic oil, we will import relatively more oil. But that’s not the fault of oil imports. Frankly, we should thank them for filling in the gap.