“Economic incentives to reduce U.S. dependence on oil imports by increasing domestic production will not reduce prices and will damage the economy. There is one world price of oil, and U.S. consumers will pay that price even if the U.S. produced all of its own oil.

“Furthermore, because the U.S. resource base is so depleted, the cost of producing domestic oil is actually greater than producing goods and services and ‘trading’ them for imported oil.

“The economic damages of trying to increase domestic production were illustrated in the early 1980s, when the U.S. instituted a series of incentives to increase domestic production. Capital investment in the U.S. oil industry skyrocketed, but because the resource base was depleted (even then), there was little gain in production.

“As a result, the U.S. economy ‘flushed’ a lot of capital investment down a dry hole, capital that could have been invested more productively in other industries, such as modernizing the U.S. auto industry.”

Contact Robert Kaufmann, 617-353-3940, kaufmann@bu.edu