US Energy Secretary Steven Chu found himself on the hot seat once again Wednesday, as congressional Republicans pinned him down about past comments on the value of higher energy prices (previously it was coal). Representative Cliff Stearns (Republican, Florida) asked Chu about a remark he made last year suggesting that the United States would benefit from European gasoline prices. It’s worked for Europe, but gas prices are a touchy issue on Capitol Hill.
In light of the current economic crisis, Stearns asked, would Chu still seek to raise gas prices on American families? Chu said such a policy would be “unwise.”
“You can’t honestly believe that,” Stearns pressed. “You want Americans to pay for gasoline at European prices?”
“No.”
“Doesn’t that sound a little bit silly, in retrospect?”
“Yes.”
The exchange came as Chu and two of President Barack Obama’s other top environmental appointees, Environmental Protection Agency Administrator Lisa Jackson and Transportation Secretary Ray LaHood, testified before the House Energy and Commerce Committee on Wednesday. At issue was the leading climate bill, spearheaded by Chairman Henry Waxman (Democrat, California), which would reduce US greenhouse gas emissions by roughly 80 percent below 2005 levels by mid-century.
It was a chance for the administration to really weigh in, but the trio largely played it safe, explaining in broad terms that the legislation aligns well with the president’s priorities. And in Chu’s case, playing it safe translated into a wholesale surrender on energy prices, a leading argument for opponents of cap-and-trade regulations.
Jackson was able to counter with a new EPA analysis of the legislation suggesting that the impacts on families are manageable. And the Union of Concerned Scientists later released their own analysis indicating that, despite an initial bump in prices, energy efficiency could actually produce upward of $1.6 trillion in cumulative savings between now and 2030. Others have talked about offsetting the spike in energy prices with other public benefits, or even distributing money back to consumers.
Regardless, the purpose of cap-and-trade or a carbon tax is to build environmental impacts into the cost of dirty energy, which boosts the prices of conventional fuel and makes clean energy – including cleaner coal – more viable. As fossil fuel prices continue to rise down the road, the price of renewable energy should theoretically drop thanks to economies of scale, and then remain low because the fuel (wind and sunshine, for example) is free.
Although nobody doubts where the Obama stands on the issue, some environmentalists think it’s time for the administration to turn up the heat on Capitol Hill. “The president has done a good job selling it to the public,” one environmentalist said during the hearing. “But they can and certainly should be more aggressive in making the case to the Congress.”