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Steven Chu: DOE working to wean U.S. off oil, not lower prices


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The Energy Department isn’t working to lower gasoline prices directly, Secretary Steven Chu said Tuesday after a Republican lawmaker scolded him for his now-infamous 2008 comment that gas prices in the U.S. should be as high as in Europe.

Instead, DOE is working to promote alternatives such as biofuels and electric vehicles, Chu told House appropriators during a hearing on DOE’s budget.

But Americans need relief now, Rep. Alan Nunnelee (R-Miss.) said — not high gasoline prices that could eventually push them to alternatives.

“I can’t look at motivations. I have to look at results. And under this administration the price of gasoline has doubled,” Nunnelee told Chu.

“The people of north Mississippi can’t be here, so I have to be here and be their voice for them,” Nunnelee added. “I have to tell you that $8 a gallon gasoline makes them afraid. It’s a cruel tax on the people of north Mississippi as they try to go back and forth to work. It’s a cloud hanging over economic development and job creation.”

Chu expressed sympathy but said his department is working to lower energy prices in the long term.

“We agree there is great suffering when the price of gasoline increases in the United States, and so we are very concerned about this,” said Chu, speaking to the House Appropriations energy and water subcommittee. “As I have repeatedly said, in the Department of Energy, what we’re trying to do is diversify our energy supply for transportation so that we have cost-effective means.”

Chu specifically cited a reported breakthrough announced Monday by Envia Systems, which received funding from DOE’s ARPA-E, that could help slash the price of electric vehicle batteries.

He also touted natural gas as “great” and said DOE is researching how to reduce the cost of compressed natural gas tanks for vehicles.

High gasoline prices will make research into such alternatives more urgent, Chu said.

“But is the overall goal to get our price” of gasoline down, asked Nunnelee.

“No, the overall goal is to decrease our dependency on oil, to build and strengthen our economy,” Chu replied. “We think that if you consider all these energy policies, including energy efficiency, we think that we can go a long way to becoming less dependent on oil and [diversifying] our supply and we’ll help the American economy and the American consumers.”

Tapping the Strategic Petroleum Reserve — as some congressional Democrats have advocated — is on the table but may not fit this situation, Chu added.

“Remember that the fundamental reason why we have an SPR is to deal with an interruption in supply,” he told reporters after the hearing. “What happened in Libya was an interruption in supply. We’re very concerned about what’s happening in Iran and so we’re working with the [international Energy Agency]. We’re also looking very closely at all these concerns.”

A DOE spokeswoman later clarified that the department is working with the IEA on monitoring global oil supply and prices, not on a specific release from the reserve.

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Dec 15, 2008

Obama Energy Pick Backs Higher Gas Tax

ABC News’ Teddy Davis Reports: Barack Obama’s pick for Department of Energy secretary backs higher gasoline taxes, a position which puts him at odds with the president-elect.

"Somehow we have to figure out how to boost the price of gasoline to the levels in Europe," Steven Chu, the director of the Lawrence Berkeley National Laboratory, told the Wall Street Journal in September.

Chu said he favors gradually ramping up gasoline taxes over 15 years to nudge consumers into buying cars that are more fuel efficient and homes which are closer to work. Chu spoke with The Wall Street Journal in September but the newspaper did not publish the gas tax comments until last seek, shortly after the Nobel-prize winning physicist had been identified as Obama’s nominee for Energy secretary.

Chu is not alone among energy experts in thinking that higher gasoline taxes could tamp down demand and spur development in alternative energies.

Raising the federal gasoline tax, however, has been dismissed by Obama.

The president-elect acknowledges that gas prices have come down since the summer when they reached $4 per gallon. He worries, however, that the overall economic downturn makes American families ill-equipped to shoulder higher prices.

“Putting additional burdens on American families right now, I think, is a mistake,” Obama told NBC’s “Meet the Press” in an interview which aired on Dec. 7.

Lee Schipper, a project scientist with the Global Metropolitan Studies program at U.C. Berkeley, hailed Obama’s nomination of Chu as Energy Secretary and praised his colleague’s support for higher gasoline taxes.

“I can imagine in the hearings Chu facing problems because he dares say, ‘higher prices,’” said Schipper. “But I think there is no solution that does not involve higher prices.”

Schipper, who shared a lab at Berkeley with Chu from 1972-74, estimates that the average cost of gasoline in Europe at present is somewhere between $7-9 per gallon.

Schipper thinks Obama’s concerns about not placing additional burdens on America’s families can be addressed by agreeing to rebate all — or close to all — of the money raised by higher fuel taxes.

“The answer is: raise the price of gasoline and give all the money back,” said Schipper.

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It's all part of the plan, as Obama stated:

But yesterday:

Yeah, he wants them to go up, and yes, Mr. President....you have no sense.

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We can not artificially lower the gas price over a long period of time. Its going up. Period.

We should be focused on weaning ourselves off oil (not entirely, but not how we use it now).

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We can not artificially lower the gas price over a long period of time. Its going up. Period.

We should be focused on weaning ourselves off oil (not entirely, but not how we use it now).

Why can’t we do both? As we search for better and alternative sources, tap into what we have to help.

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