my post on Peak Oil. I have been listening to all sorts of people saying how we have to keep drilling so that we don't have pay more for oil. It is a great argument, other than the fact that it is not true.
Every time you hear the argument for drilling somehow linked to the price of oil, remember back a few months ago when I wrote the following: "We produce 7% of the world's oil, while consuming 24%. Simple economics say that we can have a lot more influence on price of oil by managing our demand rather than our production."
(Actually these stats show that we produce 5.8% of the world's oil, and consume 22.8%)
Oil prices are set on a global market, whether we drill in the gulf or not, it isn't going to affect the worldwide price of oil much. What we consume will tremendously affect the price of oil, and the Saudi's know it.
A better argument is that oil prices are currently too low. They don't price oil for externalities, such as national security, global climate change, and the risk of environmental disasters like the gulf oil spill. Including these costs in the price of oil would be a free market approach to reducing oil consumption.