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Raymond J. Learsy Headshot

Has The Energy Department Gone Completely Off The Rails?

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During the course of the Obama Administration under Energy Secretary Steven Chu, the Department of Energy has almost totally abdicated its responsibility to the day-to-day consumers of energy, be it gasoline, heating oil, diesel and on. From the inception of the Obama administration the price of oil (and in turn gasoline, heating oil, etc.) has skyrocketed from $33/barrel (for West Texas Intermediate) in February 2009 to well over $100/barrel a few weeks ago, with barely any comment about these real-time distortions from the Department of Energy; nor has it come forward with any policy initiative to forestall this dramatic rise.

On the contrary, the Department of Energy is shackled with the mindset and outlook of its Chairman, Nobel Physicist Laureate Steven Chu, who continues to live in the aerie of academia. This, while seemingly divorced from the hard day-to-day tussle of the oil marketplace and its pilfering manipulation through the restraints imposed by the OPEC cartel, the distortions brought about by speculation, and manipulation on the commodity exchanges -- all costing American consumers billions upon billions of dollars more than if the market were a true reflection of supply and demand.

Chu and the Dept. of Energy's commitment to meaningful vigilance of the oil market's excess can best be demonstrated by the Chairman's own words (quickly modified after they hit home, but core to Department's inaction over the past years): "OPEC is going to do what they are going to do based on their own interests. I quite frankly don't focus on what OPEC should do, I focus on what we should do."

This in stark contrast to previous Secretaries of Energy, such as Bill Richardson, who did not hesitate to pick up the phone and call the OPEC nabobs to comment on their ongoing machinations and how it would impact the United States and its economy, to be roundly chastised:

In the forty year history of OPEC there has never been the case of the secretary of energy calling OPEC in the middle of an OPEC meeting... we are very upset and disappointed at external pressure, we don't like it.

As though fixing quotas to manipulate prices had become a divine right. Words that then Energy Secretary Bill Richardson could share with pride for having made those calls.

And of course Chu's fateful interview with the Wall Street Journal in 2008: "Somehow we have to figure out how to boost the price of gasoline to the levels of Europe."

Since retracted, but troubling evidence of his mindset, raising the issue of how and why, given the direction of his thinking, was he ever named Chairman of the Energy Department? It's a bit analogous to someone being named Secretary of Labor after being quoted "I don't much give a damn about labor unions," thereafter retracted or otherwise.

Or Chu's reply to Rep. Alan Nunnelee in Congressional hearings this February that, "No, the overall goal is to decrease our dependency on oil, to build and strengthen our economy"; as if the here and now, with frozen homes in Maine and family budgets being ripped apart was not a core issue of his Department's mandate.

Even his battle to "decrease our dependency on oil" has been deeply flawed, as with the $500 million plus guarantees his Department misguidedly extended to the highly questionable Solyndra project, a tab that would be picked up at the nation's cost. And while the Dept. of Energy staff was busy considering the likes of the Solyndra project, Chu was busy moonlighting on such issues of "profound" relevance to the oil patch and alternative energy, by publishing highly dense papers titled "Subnanometre single-molecule localization registration and distance measurements" in such learned journals as Nature. With these digressions, focusing on what the likes of OPEC does or doesn't do, or how Solyndra was meant to make do, could well have become too much of a distraction.

But now, and unless I am missing something, comes an announcement whose timing is of such egregious inappropriateness that it appears to be mind-boggling. As though living in some far off island unencumbered by current events and political tensions, the Energy Department brazenly announced just days ago, almost on the eve of the scheduled nuclear talks with Iran in Moscow, that it would help the ailing the United States Enrichment Corporation finish its development work at its Portsmouth, Ohio facility. "Under the new agreement we will be able to move forward with critical research...while ensuring strong protections for the American taxpayer" Secretary Chu was quoted. A statement immediately to be taken to task by Rep. Edward J. Markey, (D.-Mass), "The real risk of this nuclear bailout is for taxpayers, who will be on the hook for questionable government handouts..."

Ominously the "rescue" is also being pegged as "vital to maintaining nuclear weapons and national security" almost concurrent to the nuclear talks that now seem to be going nowhere, where the point of contention is the very issue being highlighted by the Department of Energy's program, that of nuclear weaponry.

The Department of Energy's announcement and especially its timing now smacks of hubris or stupidity or both, as it may have weighed on the negotiations with Iran, reducing the chances for a peaceful outcome through the willingness of Iran to halt its own nuclear enrichment program. If that is the case, Mr. Chu has a great deal to answer for.