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