Four years ago, Energy Secretary Steven Chu said flatly that he wanted to see motor fuel, heating oil, natural gas, and other prices rise. In fact, he said that he wanted to see motor fuel prices rise to levels that Europeans pay. No one noticed then. People are noticing now.

What the energy secretary wants

Steven Chu, Secretary of Energy. Photo: US Department of Energy

Steven Chu made that European prices remark shortly before he became energy secretary. Investors Business Daily has a full history of the energy secretary’s remarks:

1. In 2008, Chu said specifically that “somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”
2. In 2011, the energy secretary said this: “the price of gasoline over the long haul should be expected to go up.”
3. And earlier this week, he told a Congressional committee that his “overall goal” was not to bring fuel prices down. It was “to decrease our dependency on oil.”

Motor fuel prices have risen nine percent in one month alone. Since the man now holding office as President took that office, those prices have more than doubled.

We now have the energy secretary on record, saying that this is what he wants! At the same time that he says that the world’s oil producers can “pick up the slack” from a total embargo by Iran, he seems not to want them to take up any slack. (Whether they would be willing, or not, is another story.) The next question is: why not?

Why energy prices are so high

A free market must always prepare to substitute new products for old products that are either obsolete or no longer available. That’s why our society does not worry about wood shortages, for example. But as long as a product is still available, it does not become obsolete until people discover or invent another product that is cheaper, more effective, or both.

“Alternative energy” has been a favorite subject for energy secretaries to discuss since President James Earl Carter Jr. first set up a Department of Energy. Inevitably, that Department has sponsored, or run, several enterprises having a mission to develop alternatives to gasoline and other “fossil fuels.” Anyone who has lived long enough can remember their names. The first such name was the Synthetic Fuels Corporation, or “Synfuels.” It was a bad idea then, and it’s a bad idea now for the government to try to second-guess the market. Synfuels became a national scandal after its chief executive officer, John McAtee, complained that his salary of $150,000 was not enough for him to live on.

Bear in mind that this was $150,000 in 1981. The price of gold was about $587 then. It is nearly $1700 at last report. Therefore the equivalent salary today would be at least $450,000. Note that the base pay for executives at Solyndra, Inc., in 2010 was $400,000 per year. This means that the sponsorship, set-up, and favoring of “public-private partnerships,” government contractors, and the like, that say that they exist to develop alternative energy, is nothing new for that department. And one other thing is not new: not once has any of these enterprises produces one single useful product. If they had, we would be using it today.

President Ronald Reagan, of course, removed all regulations, not only on price but also on what oil explorers, extractors, or refiners could or could not do. Oil fell to $10 a barrel. That’s equal to $30 a barrel today, using the prices of gold as a guide. That, then, is the base price. Oil need not cost more than that. So if it does, something is keeping it higher.

If a Department of Energy has any legitimate role at all, the energy secretary should ask himself why oil is at such a premium, and costs more than three times as much as it should. Yet, as he said out loud, the current energy secretary shows no such concern.

What does the energy secretary hope to gain

Dr. Chu, or his boss, can have one of two things to gain from a higher base energy price. First, the energy secretary has more excuses to fund more government-sponsored enterprises like Synfuels (1976-81 and following) and Solyndra (2009-11). Solyndra is not the only such enterprise today. This is damning enough for this energy secretary and the man now holding office as President. President Carter had only one such enterprise to his shame. Obama has more than he can count.

Second, the energy secretary’s boss gains more power to move UN Agenda 21 forward. Specifically, he has what seems to be good reason to urge all Americans to move to the cities, and to re-make those cities to look and work like close, self-contained communities, like college campuses and the towns that many colleges reside in. The residents of such communities typically get around in them on foot, or perhaps by bicycle or bus, and almost never by automobile. This might be another outcome that Mr. Obama wants: that no person, except a law-enforcement officer, a member of a first-response profession, or a member of a favored social circle, own or drive a private automobile.

Four years ago, the energy secretary was probably brazen enough to avow something like that. Indeed he might as well have said that, when he said that motor fuel prices in America should rise to the levels that motorists see in Europe. Today he is not so brazen, but still willing to say that he does not care how high motor fuel prices rise.

Today former Speaker of the House Newt Gingrich (R-GA) said that Energy Secretary Chu should resign. That’s the least that should happen. More broadly, the American people need to decide whether they want to force their fellow citizens and lawful residents, or let others force them, to live the way the energy secretary and his boss seem to want them to live.

Related:

• Oil prices, embargoes, and lies
• UN Agenda 21: subtle hint from the EPA

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