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Secretary Chu’s Insidious Economics of Energy

Obama and Chu are water-boarding American consumers in ethanol and regressing us to the Middle Ages

By: Daniel Horowitz (Diary)  |  March 2nd, 2011 at 04:32 PM  | 

RESIZE: AAA

Earlier today, Energy Secretary Steven Chu reiterated his insouciance to the plight of the American consumer of oil and gas.  Chu told members of the Senate Budget Committee that there is no need to tap into the Strategic Petroleum Reserves because it will be corrected by spare world oil capacity:

“we have spare capacity, we expect naturally that the market forces will take care of this.” “But we are concerned and we will watch it very carefully.”

Well, it is nice to know that Chu actually has faith in the free market.  It is just a shame that the market of “spare capacity” is controlled by Saudi Arabia and not our own energy production- thanks to Chu and his boss.  Imagine if George Bush had refused to release the Strategic Petroleum Reserves in 2006 out of deference to the market forces.

The broader issue is that we are only discussing the strategic reserves because the Obama administration has malevolently extirpated our domestic energy production of oil, gas, and coal.  But fear not, Secretary Chu has a long term solution for high oil prices.  This is what he told reporters following the Senate hearing today:

“We monitor the situation very closely and we’re very sensitive to what’s going on, but again, we have to fix this problem,” Chu told reporters. “What we’re doing in terms of fuel efficiency, what we’re doing in terms of developing electrification of vehicles, what we’re going in terms of advanced biofuels is the real solution. All those things actually moderate the price of oil.”

We all know that there are two sides of economics; supply and demand.  Obama and Chu plan to destroy our supply of efficacious energy but promise to cut prices by slashing demand for oil.  Unfortunately, on some insidious level, Chu is correct.  If the government subsidizes and mandates the use of ‘alternative energy’ like solar, wind, ethanol, grass, woodchips, and dung- there will no longer be a demand for oil.  After all, if we can’t purchase oil, it cannot be sold at a high price.  Then again, we will regress to the Middle Ages and the price of oil will become a moot point.

The sad reality is that Obama and Chu have always dreamed of high gas prices so the voters would acquiesce to their proposed green hell and high speed rail projects.  During a 2008 interview with CNBC, Obama implied that he didn’t mind high gas prices, but would have preferred a “gradual adjustment”.  In December 2008, Steven Chu told the Wall Street Journal, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”  It hasn’t taken him too long to figure out how to consummate his goal on both the supply and demand sides of the economy.  And it doesn’t involve any deference to ‘natural market forces.’

Cross-posted to Red Meat Conservative

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COMMENTS

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  • Goldwater_Conservative

    2012 election. My candidate in the GOP primary will be the one that best articulates not only the problems Obama is causing this country in energy prices, but also has the best free market, job producing solution to the problem. This is the issue that can unite a super majority of the american people and Obama has a big glaring hole in this department

    • http://redmeatconservative.blogspot.com/ dhorowitz3

      This is why Erick said last nigh that any support for ethanol by a presidential candidate should be an automatic DOA.

      • http://www.plumbbobblog.com Plumb_Bob

        The Republican party should have been making it clear since 2001:

        “High gas prices are the Democratic party’s STRATEGY. They plan to produce them DELIBERATELY.”

        If the American public ever figures out that this statement is literally true, the Democratic party will not win another election in 10 years.

  • tennman

    Do you think for a minute that we’re going to let the Saudis be put out of the oil business by reducing our oil energy usage or that they will allow that to even happen? What else do they have to offer the world? Unless the demand for sand skyrockets then they’ve got nothing else to offer. The plans and implementation of alternative energy sources will crawl at a snail’s pace until the Mideast runs out of oil.
    If all of this oil is available why are they jackin’ with the prices (besides the obvious answer)?

    • http://www.plumbbobblog.com Plumb_Bob

      What the heck does any American politician care about the Saudis??? You’ve got an insane conspiracy theory stuck in your brain. It’s pure delusion.

      The plans and implementation of alternative energy sources are crawling because as energy sources, they BLOW. No wind or solar plant of any size can survive without enormous government subsidies, and as soon as those subsidies end the operators abandon the plants like a bad date. Basically, wind and solar plants exist solely as a means of milking the government. Hydro power, which is in use throughout the US northwest, proves that electrical producers are more than willing to use renewable sources WHEN THEY MAKE ECONOMIC SENSE. They will not use wind or solar because they do NOT make economic sense.

      Meanwhile, the productivity of the Mideast oil field has peaked, and is dropping. OPEC’s ability to control the price of oil, never really all that much of a threat, has ended. The US is sitting on about twice as much oil as the entire world has in known reserves — that’s not an exaggeration — but can’t develop that oil because it’s on federal land and the brain-addled DEMOCRATS refuse to allow the development. We could be the next Saudi Arabia, but won’t be unless we manage to throw the insane Democrats the hell out of government permanently.

  • macjedi

    by forcing us to do as he says, not as he does. What he does not understand is that no matter how long he chants ‘green energy’, there is no entrepreneur (or genie) that can deliver it in either theory or fact. The amount of energy we need is FAR in excess of any fantasy about any of current alternative energy sources. This problem is NOT solvable without a quantum shift in energy generation technologies. That kind of change will not come about by wishing or harassing the public with meaningless taxes and restrictions. Only free market forces rooted in Liberty and ownership will allow and nurture creative minds to produce what we need.

    Of course, since most of this energy crisis is manufactured, the real motivation of Obama and his elitist minions is to simply gain control on many levels. And destroying individual Liberty is a progressive’s badge of honor.

    • msctex

      n/t

  • NeoKong

    insouciance…extirpated …?
    I had to look them up.
    But I digest.

    Haley Barbour was saying the same thing just the other day.

    Mississippi Gov. Haley Barbour, a potential presidential contender, accused the Obama administration Wednesday of favoring a run-up in gas prices to prod consumers to buy more fuel-efficient cars.

    Barbour cited 2008 comments from Steven Chu, now President Barack Obama’s energy secretary, that a gradual increase in gasoline taxes could coax consumers into dumping their gas-guzzlers and finding homes closer to where they work. Chu, then a Nobel Prize-winning professor, argued that higher costs per gallon could force investments in alternative fuels and spur cleaner energy sources.

    “This administration’s policies have been designed to drive up the cost of energy in the name of reducing pollution, in the name of making very expensive alternative fuels more economically competitive,” Barbour said during a U.S. Chamber of Commerce breakfast across the street from the White House.

    With this administration high energy prices are not a problem but a feature.

    • http://redmeatconservative.blogspot.com/ dhorowitz3

      for the inconvenience. I guess it really is quite simple. These guys don’t give a @#$% about consumers! No need for a dictionary there.

    • http://redmeatconservative.blogspot.com/ dhorowitz3

      In regard to Barbour, it’s good to see that he is attacking this issue, as every presidential candidate should. I just wish that he would disavow his fondness for farm subsidies like ethanol, which contribute to the higher prices in energy and food commodities.

      • acat

        And the game, in the Iowa primary, is to appeal to farmers and farm-product folk. Barbour likely doesn’t care if corn goes into tortillas, ethanol, or high fructose corn syrup as long as the farmers come out and caucus for him…

        On one paw, I dislike that he’s pandering .. on the other paw, I respect that he’s playing the game to win.

        Mew

        • http://redmeatconservative.blogspot.com/ dhorowitz3

          A real conservative needs to go into Iowa and lay down the law like this. We will not subsidize you, however, we will abolish the death tax and repeal the onerous FDA takeover bill of 2010 that increases the cost of food production.

          • acat

            I don’t see it happening this go’round.

            Mew

          • phenne

            …. but I need to wish hard for somethin’

          • edintexas

            When you find a Republican with the cojones to do that, you will find one who is not on the so-called “national stage” (certainly not one who hopes for higher office, anyway). Maybe one day….

  • ag8tor

    that Chu and Obama are “bowing” to the enviro-extremeists. These nut jobs are helping this nation right into the poor house. We definitely need a Republican, Tea Party or other CONSERVATIVE with the spine to say Departments of Energy and EPA, “You’re Fired”. Trump has come closest to being that person right now, like him or hate him, that has a real understanding as to the “business” of the world’s economy. He has already proposed that we put a 25% tax on all goods imported from China. He also has stated he would find a way to lift the bans on oil and natural gas exploration within the US and it’s coastline. He may not be presidential material but he get’s it as to how we need to fix this economy and how far removed from the public this administration is.