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Energy Secretary Chu Tries to Walk Back His Desire for Higher Gas Prices

Posted By Rory Cooper On March 13, 2012 @ 5:30 pm In Featured | Comments Disabled

In a stunning round of questioning this afternoon, Energy Secretary Steven Chu said he no longer wishes for gas prices to rise to historic levels, as he has previously and repeatedly promoted. At a Senate Energy and Natural Resources Committee hearing, Senator Mike Lee (R-Ut.) asked Secretary Chu: “So are you saying you no longer share the view that we need to figure out how to boost gasoline prices in America?” Chu responded: “I no longer share that view [1].”

Secretary Chu continued: “When I became Secretary of Energy, I represented the U.S. government. Of course we don’t want the price of gasoline to go up, we want it to go down.” Chu walking back his long-held view that high gas prices will incentivize consumers to choose expensive fuel alternatives was similar in tone to President Obama who last week said he did not desire high gas prices in an election year.

(Keep in mind, even at those high prices, Europeans have not switched from gas-powered cars to ones that run on biofuels or electricity.)

However, Secretary Chu and President Obama’s policy actions are not consistent with this expedient change of heart.

White House press secretary accused critics of cherry-picking this quote saying: “I know that it’s part of the fun for folks to find these quotes and suggest that they have some deeper meaning. And maybe that would be the case on Day One of the presidency…But we’re in the fourth year of this presidency.”

Yes, this quote may have had deeper meaning on Day One of the presidency if members of the media had been interested in vetting the Secretary before his confirmation. The quote was printed by the Wall Street Journal in December 2008 between the time Chu was nominated and the time he was confirmed.

Since 2008, Secretary Chu has twice defended the remark on two rare occasions when the media asked him about it. In March, 2011 [2], Fox News’ Chris Wallace repeated the Secretary’s remarks to him and asked: “[I]s the gas spike an opportunity for more green energy?” At that time, Chu did not refute his earlier remarks and instead said: “What I have been doing is developing methods to take the pain out of high gas prices.”

On February 29, 2012 [3], less than two weeks ago, Secretary Chu was asked in congressional testimony by Rep. Alan Nunnelee (R-Miss.) if it was his “overall goal to get our price” of gasoline lower. Chu responded: “No, the overall goal is to decrease our dependency on oil, to build and strengthen our economy.”

Today, Chu noted that reversing his desire for historically high gas prices was economically driven. Chu said: “We went through a terrible recession, a worldwide recession and we’re recovering, but the recovery is fragile. And so as I’ve said, another spike in gasoline prices can put that recovery in jeopardy.”

This is true. Skyrocketing gas prices will weaken an already anemic recovery. However, the original quote from Chu was from late 2008. This was smack in the middle of the financial crisis when the economy was falling off a cliff. Was that a good economic time to push higher gas prices?

President Obama himself has joined Secretary Chu in openly desiring high energy prices (see Heritage Video here [4]), noting that electricity rates would “necessarily skyrocket [3]” under his energy agenda, and noting to CNBC’s John Harwood that high gas prices are helpful if adjusted “gradually [3].”

Obama and Chu’s actions match their own words. Even today, President Obama continues to call for raising taxes on oil companies, which will absolutely be a cost transferred to the consumer at the gas pump. The Congressional Research Service (CRS) said the President’s proposal would “decreas[e] exploration, development, and production, while increasing prices and increasing the nation’s foreign oil dependence [5].”

Obama argues that oil companies receive favorable treatment, a claim thoroughly debunked by the Congressional Budget Office [6] just last week and here at The Heritage Foundation [7]. Liberal allies like Governor Martin O’Malley (D-Md.) have joined this chorus even more directly, calling for an increase in state gas taxes [8], which will be directly paid by working families.

And yet, the only answer from Obama and Chu are more subsidies and stimulus for alternative energy companies that attempt to produce much more expensive power which is unable to power nearly any cars currently on the road. Despite this massive infusion of taxpayer cash, companies like Solyndra, Beacon, Abound, Fisker, Ener1, the Volt, etc. continue to fail and leave Americans on the hook.

For example, Obama and Chu gave $465 million [9] in ‘stimulus’ taxpayer money to Tesla Motors which is run by the 63rd richest man on Earth, Elon Musk, to build a battery-powered sports car that retails for $130,000, and which becomes permanently inoperable if the battery is left unplugged for too long [10]. This is not the answer to our pain at the pump.

As gas prices climb, President Obama and Secretary Chu will continue to walk back their statements, but they can’t walk back their record. Every action, from blocking the Keystone pipeline, to the drilling moratorium to costly new regulations [11] impacts us at the pump. With other global and market factors, prices will rise even quicker now, jobs will be lost, and the economy will suffer.

The question isn’t whether Secretary Chu wants higher gas prices today. It is why has he wanted them all along?


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/03/13/energy-secretary-chu-tries-to-walk-back-his-desire-for-higher-gas-prices/

URLs in this post:

[1] I no longer share that view: http://www.politico.com/news/stories/0312/73934.html

[2] In March, 2011: http://blog.heritage.org/2011/03/21/energy-secretary-chu-embraces-high-gas-prices-again/

[3] On February 29, 2012: http://blog.heritage.org/2012/02/29/morning-bell-white-house-wants-to-keep-gas-prices-high/

[4] see Heritage Video here: http://www.youtube.com/watch?feature=player_embedded&v=ma1gwZYw1cY

[5] decreas[e] exploration, development, and production, while increasing prices and increasing the nation’s foreign oil dependence: http://blog.heritage.org/2012/03/02/president-responds-to-the-inaudible-cries-for-higher-gasoline-prices/

[6] thoroughly debunked by the Congressional Budget Office: http://blog.heritage.org/2012/03/07/cbo-debunks-myth-that-tax-code-favors-oil-over-renewables/

[7] The Heritage Foundation: http://blog.heritage.org/2012/02/28/wind-subsidies-vs-oil-subsidies/

[8] calling for an increase in state gas taxes: http://www.baltimoresun.com/news/maryland/politics/blog/bal-miller-throws-cold-water-on-gas-tax-hike-suggests-special-session-20120313,0,6486499.story?track=rss

[9] Obama and Chu gave $465 million: http://www.teslamotors.com/about/press/releases/tesla-gets-loan-approval-us-department-energy

[10] if the battery is left unplugged for too long: http://jalopnik.com/5887265/tesla-motors-devastating-design-problem

[11] costly new regulations: http://blog.heritage.org/2012/03/13/morning-bell-obamas-new-regulations-cost-billions/

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