Oil Import Quota Auctions

If the U.S. limited oil imports and auctioned quota tickets, it could disrupt the oil cartel and reduce imported crude oil prices. Control would be in the form of carefully watched inventories, with frequent auctions to keep inventories stable and import levels set high enough to avoid prices rising because of scarcity. If prices were stabilized, investors would be guaranteed a market for domestic energy, which could supplant imported oil as domestic supplies develop. An auction system would cause members of the cartel to work against each other rather than in collusion, and would give the U.S. an opportunity to deal with the lesser producers rather than Saudi Arabia. (DCK)