The Republican Party has made increased domestic oil production a major plank in its efforts to win the White House, claiming that more American-made energy will make Americans less dependent on foreign oil suppliers.

During an appearance Sept. 8 on MSNBC’s Hardball with Chris Matthews, N.M. Rep. Heather Wilson said increased domestic oil production would help our ailing economy by making America “less dependent on foreign sources of oil.” But when questioned about how increased drilling ensures Americans have access to that domestic supply in a global market, Wilson didn’t have an answer.

Here is the video (Wilson’s comments start at 6:30) followed by the transcript of the specific comments about off-shore drilling:

 

WILSON: The second thing he`s [McCain] going to do, in addition to keeping taxes low on small business, is to make America less dependent on foreign sources of oil. We’ve given 700 billion dollars abroad to buy oil from people who don`t like us very much. We need to be more energy independent. That will help.



MATTHEWS: How does drilling off-shore give us a separate supply of oil from the world`s supply of oil? How do we keep that from going on the world market, which drilled off-shore?



WILSON: It`s a commodity. There is a world market. But if we have to—if we can buy oil, not only oil, but natural gas, solar, nuclear, so that there is more American-made energy, we become less dependent on sources of supply that are unreliable overseas.



MATTHEWS: But why would we get that oil? Wouldn’t it be on the world market? Wouldn’t we have to bid for that oil? These are multi-nationals who do the drilling. Why would we get the oil? The Chinese could outbid us per barrel and buy it rather than we getting it. Why do you assume we would get it.



WILSON: There are three parts to the strategy. One is to increase the supply of American-made energy. The other is to reduce demand through conservation and new technology. And the third is to invest in game- changing technologies that get us beyond the gasoline engine. In the short term, we need to increase supply. We have a supply problem, and that is a critical part of the answer.




For previous NMI reports about oil drilling, I asked Sen. Pete Domenici’s office a similar question numerous times.


In May, I noticed that Domenici was using language that seemed to suggest that any oil obtained from opening up the Arctic National Wildlife Refuge would be used by Americans. Since the oil market is global, I asked his office if this meant Domenici was proposing to restrict that oil to the U.S. His spokesman, Matt Letourneau, responded in an e-mail that:

We don’t have a restriction on which companies can bid on contracts, but we do have a restriction that they must use the oil from Alaska in the US.



When July rolled around, the Senate was in a fierce debate over competing energy proposals. The Democrats insisted that a bill be passed that would regulate speculation in the oil futures market. Many believe that one of the primary drivers of the run up in fuel prices has been speculation in that market. But Republicans blocked the bill, saying they wouldn’t agree to any bill that did not also lift restrictions on off-shore oil drilling.

Domenici was a leader in that fight, and at the time used quite a bit of language suggesting that the United States had plenty of oil to meet it’s needs if the Democrats in Congress would just stop blocking the production of it.

In an interview with El Paso’s KFOX-TV, he said that current production restrictions permit the U.S. to utilize ”…on behalf of our people only 15 percent of the off-shore product that’s ours,” he said. “We’re hearing a much stronger clarion song: drill, it’s ours, let’s develop it and use it.”

I asked Letourneau again what the deal was with this kind of language, which clearly implies that oil produced domestically would be restricted to the United States. He acknowledged that new drilling wouldn’t remove the oil from the global market, but said it would have a psychological impact on the oil futures market and subsequently bring down the price:

But, he said, there’s anxiety in the market right now about where oil will be coming from in the future, which is why oil prices are going up. So opening up the outer continental shelf to production would have a psychological effect on the oil futures market, bringing down the price in the short term.

 

In this way, he acknowledged that the oil futures market is important to the price–whether its normal trading psychology he thinks would be impacted, or whether its speculative psychology, is unclear.

In the meantime, as the debate rages on, I’ve noticed prices at the pump are going down.