Steven Chu Forced to Recant Belief in Higher Gas Prices

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The indignities are piling up for Steven Chu, the Nobel laureate Secretary of Energy whom environmentalists applauded as one of Obama’s best cabinet picks. His security detail won’t let the lifelong cyclist bike to work. And on Earth Day, he fielded questions like this one (via Talking Points Memo) during a House hearing on the proposed climate bill. Texas representative Joe Barton asked Chu where oil comes from, and the Energy Secretary delved into plate tectonics. Barton boasted afterward that he had "baffled" Chu.

I had a webcast of this hearing streaming in the background, and my ears perked up when I heard this exchange about gas prices between Chu and Florida Republican Cliff Stearns (starts at the 32:30 mark):

Stearns to Chu: Last September you made a statement that somehow we have to boost the price of gasoline to the levels of Europe, which at the time exceeded $8 per gallon. As Secretary of Energy would you speak for or against any measures to raise the price of gasoline?

Chu: The Secretary of Energy, especially now in today’s economic climate, would be completely unwise to want to increase the price of gasoline. We’re looking forward to reducing the cost of transportation in the American family. This is done by encouraging more fuel efficient cars. This is done by developing alternative forms of fuel like biofuels that can lead to a separate source, an independent source of transportation fuel.

Stearns: You can’t honestly believe that you want the American people to pay for gasoline at the prices the level in Europe.

Chu: No we don’t.

Stearns: Your statement that gas prices ought to rise to the level of Europe, doesn’t that sound a little bit silly, in retrospect, for you to say that?

Chu: Yes.

Chu’s tongue may be tied for political reasons, but holding gas prices — and the gas tax — steady is going to make any push for transit a whole lot tougher.

  • As The Oil Drum’s peak oil update indicates, gas prices won’t stay low forever. The push for transit will come when a critical mass of voters realize there are limits to how much longer they can use driving as their main mode of transport. Faced with the prospect of being stranded in their homes, unable to get to their jobs or shop for food, they will demand alternatives, and those alternatives will get funded, even if we’re a much poorer country. I’ll make a rash prediction: In a decade, dropping the phrase “car free” into a conversation will no longer mark you as a freak.

  • Larry Littlefield

    I’m not worried about what Chu says.

    Because Congressman Anthony Weiner is going to deliver higher federal gas taxes and boatloads of federal money to fully fund the MTA capital plan.

    That’s why he opposed congestion pricing and tolls, because it was just a Republican conspiracy with a fake deadline to prevent funding transportation the right way, with a higher gas tax, which he and his fellow Democrats would enact.

    That that’s why I’ll vote for Weiner for Mayor, when he delivers. You have until the new federal budget in October to make good, and show you aren’t just a pandering sleazeball. Got that Anthony? Tick, tick, tick.

  • mike

    Disappointing, but that’s par for the course for the Obama administration thus far. Lame, lame, lame. For once I’d love it if people spoke their minds!

  • john

    Sad, disappointing and happens too often once Uncle Sam signs your paycheck. Too bad we’ll allow forces beyond our control to dictate our future.

  • anonymous

    Build automated group rapid transit on existing highway lanes or on highway medians and locate GRT stations at existing transit hubs, park-and-ride locations, corporate parks and population centers. GRT will get people to their destination faster than conventional mass transit but with the same efficiency advantages from passenger density that mass transit has over private vehicle usage. The service convenience means GRT will be more desirable than conventional mass transit, while the fuel and space efficiencies mean it will be cheaper to operate than a fleet of personal vehicles, after a modest initial investment.

  • Carbs

    No gas tax, no carbon tax either. It’s real clear that Obama is not going to try to tax end users — drivers, homeowners etc. Any price signal is going to be via cap and trade, which will make gas more expensive because refiners will pay more for their direct carbon emissions. But gas tax revenue will go down because gas taxes, unlike sales taxes, are fixed. After the windfall from selling carbon credits, Wall St will reap the profits from reduced carbon use. But be happy. Ray LaHood will announce some kind of chump change bike project funding and a few nonsensical high speed rail projects to keep the Streetsblog types from complaining too much.

  • James

    Hopefully Chu is just sipping the Kool Aid and not guzzling it. For someone in his position, he has to tow the party line. It’s part of the job description. Remember when Ray LaHood was shut down after proposing a VMT tax?

    It’s up to us to move the window of what is acceptable forward so that people in position like Chu’s can say what they really think.

  • So, are we not counting the last two oil wars, the human or monetary toll, in the price of gas? Gasoline doesn’t cost 2 bucks a gallon.

  • Ian Turner

    Actually, Obama’s campaign promise was for a “cap and trade” system, but when you looked at the details, it was actually a carbon tax in all but name. The idea was something like this:
    1. Require permits for carbon emissions.
    2. Sell permits by auction.
    3. Adjust the number of permits to maintain a particular auction price.

  • Sam

    Without higher fuel prices it will not work. It is just not true that you can do it only with regulation.

    Moreover, the fuel tax is very much a win win win : taxing import, diminishing the deficit temporarily (people start using less fuel) and lowering greenhouse gasses.

    Also the biofuels issue is frightening. Biofuels shift the subsidy from the desert to the corn belt, but both are not good for the environment.

  • If he said anything else about the gas tax he would get an inconspicuous tap on the shoulder. Obama already said that the gas tax hike was an off-limits message for the public.

    Also, doesn’t look like he gets “Texas Humor”. I’ve lived in Texas. When jerks like that try to baffle you with a smart question your supposed to say something really funny and self-deprecating.

    And Sam, the reason I thought Biofuels was frightening was because we’re increasingly burning all the corn as fuel. Consider that a significant percentage of the world population depends on our corn as their primary food staple, and many of those people happen to live in mineral/oil-rich areas. I don’t suppose anyone else thought of that do you?

  • Also, doesn’t look like he gets “Texas Humor”. I’ve lived in Texas. When jerks like that try to baffle you with a smart question your supposed to say something really funny and self-deprecating.

    Does it work? I mean, is there anything he could have said that Barton wouldn’t have been able to spin as “I sure showed up this Yankee egghead”?

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