This Sunday, I'll be debating former CIA chief James Woolsey at a "conservative summit" in Washington, D.C., sponsored by the National Review. The topic: "Resolved: That the federal government should act to reduce America's dependence on foreign oil." James Woolsey, of course, will take the affirmative. 

Unfortunately, it seems as if there's no room for new attendees, so if you're not already registered for this weekend confab, you probably can't get in. There is a good chance, however, that the debate will air live on C-SPAN (either I or II). So if you've got nothing better to do at 10:30 am EST Sunday, you might want to tune in.

The last time I tangled with Woolsey directly, it was during a hearing of the House Armed Services Committee in July 2005. Both he and I were part of a four-member panel to testify about the Chinese National Oil Company (CNOOC) bid to buy a controlling interest in UNOCAL. Woolsey argued that the merger was the first shot of WWIII. I argued that it's no business of ours whether UNOCAL stockholders sell their shares to CNOOC and that it's no skin off America's nose one way or the other. For those who missed the resulting fireworks, let me just say that I tore him apart and did so in grand style. I fully expect to do so again this weekend.

Each of us will have five minutes at the NR event to state our case. That's a tall order. There is a lot that can be said — and has been said — about the alleged evils of foreign oil. Rather than get too deep into the policy weeds (that can wait until the Q&A), I think I'll use the few minutes I have at the start to say something like the following:

The case for importing oil is the same as the case for importing, say, computer chips. If it’s cheaper to buy something from abroad than to produce it here at home, then the economy in general — and consumers in particular — are made wealthier by imports. Governmental interventions to discourage energy imports are, by definition, government interventions to discourage the use of cheap energy.

Mr. Woolsey contends that the government must act because foreign oil supplies are increasingly subject to disruption. True enough. But that’s why market actors are busily stockpiling oil in private inventories. They are saving oil for a rainy day in the hopes of making a profit if and when that disruption occurs. Private investors are also sinking increasingly large sums of money into oil futures in order to hedge against other investment bets and to diversify equity-heavy portfolios. This has further increased the stock of oil held off the market for future use. 

Many petroleum analysts, such as Philip Verleger and William Brown, think that private inventory buildup and the surge of dollars into oil futures markets is responsible for a large part of today’s price. How large is unclear, but Brown thinks that oil would sell for around $27 a barrel today were this not going on. Think of this as an oil tax — imposed by the market itself — to account, in part, for the possibility of future supply disruptions. In short, what makes James Woolsey think that the market isn't already hedging sufficiently against the possibility of import disruptions?

And let's not forget that a supply disruption anywhere in the world will increase the price of crude oil everywhere in the world. Accordingly, even if we imported zero oil, we would still be just as economically vulnerable to a terrorist attack on Saudi oil-producing facilities as we are at present.

Mr. Woolsey's argument that dollars spent on oil imports funds Islamic extremism is only partially true. Oil revenues in the Middle East are established by global supply and demand, so even if the U.S. spent no money on Persian Gulf oil, producers would see the same revenue coming in the door — all things being equal. 

Regardless, there is no correlation between oil profits and Islamic terrorism. A thorough examination of oil prices from 1983 to present compared with data concerning Islamic terrorist attacks (both in frequency and in body counts) reveals no relationship between the two whatsoever. We'll soon be publishing the regression analysis to prove it.

In sum, foreign oil is cheap oil. Market actors have every incentive to take the risks of supply disruption into account when they buy products from abroad. Consumers can hedge against these risks, if they are so interested, in any number of ways. Government has no business doing for us what we can do for ourselves. Conservatives have no business embracing government dictates about what oil companies can buy and sell absent Mr. Woolsey's consent.

I probably can't pack all that into a five-minute opening statement, but we'll see.