OVERNIGHT ENERGY: Chu, White House rebut gas price claims

“We definitely feel the pain that every American and every business feels when the price of gasoline goes up,” he added, pointing to efforts to increase domestic production, boost energy efficiency and diversify energy sources away from petroleum.

But Republicans are seeking to capitalize on comments by Chu to allege that the Obama administration wants higher prices, or at least doesn’t want them lower.

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Chu, when he was director of Lawrence Berkeley National Laboratory, told The Wall Street Journal in late 2008 that “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” and said he supported gradually increasing gasoline taxes over 15 years to coax consumers into buying more efficient cars.

Chu backed off support for higher gas taxes during his Senate confirmation process to be Energy secretary in early 2009.

Republicans have nonetheless pointed to the comment about Europe again and again as gasoline prices rose in recent weeks, and also dusted it off during last year’s price spike.

And over the last 48 hours they have seized on comments by Chu Tuesday before the House Appropriations Committee during an exchange with Rep. Alan Nunnelee (R-Miss.).

Chu was touting administration efforts to boost vehicle electrification, natural gas and other steps to reduce reliance on oil when Nunnelee asked “But is the overall goal to get our price . . . ”


Chu interrupted, “No, the overall goal is to reduce our dependency on oil, to build and strengthen our economy,” with alternative sources and efficiency.

While Chu added that this will help consumers, Republicans on Capitol Hill and on the presidential campaign trail have nonetheless seized on the comment to allege the administration's goal is not to lower prices.

The president used a speech on energy in New Hampshire Thursday — his second in a week’s time — to emphasize that he’s aware of pain at the pump.

He warned that there’s no silver bullet in the short term while emphasizing that avoiding high prices every year will require a mix of oil-and-gas development, alternative sources, efficiency and tamping down on market speculation.

Republicans, however, have hammered the White House on energy, alleging the administration’s domestic drilling policies are too restrictive, among other criticisms.

House Speaker John Boehner (R-Ohio) on Thursday repeated the criticisms of Chu, but stated that he doesn’t believe Obama wants higher prices — at least for the moment.

“Well it was Secretary Chu who made it pretty clear that his goal was to have higher energy prices. I think that’s what a lot of our members were cuing off of,” Boehner said at a press conference when asked about claims by Republican lawmakers that the administration wants to increase pump prices.

“I’m not sure the president believes that higher energy prices are what he wants. And clearly after my discussion with him yesterday, I think he would prefer to see lower gas prices, at least for the election year,” Boehner said with a smile, referring to Wednesday's meeting between Obama and congressional leaders.

NEWS BITES:

Dueling CRS reports on oil tax breaks and gas prices

Expect to hear a lot more about two Congressional Research Service reports that lay out the consequences of eliminating oil-and-gas industry tax breaks.

President Obama called on Congress Thursday to vote in the coming weeks on a proposal to eliminate billions of dollars in tax breaks.

After Obama’s speech, House Speaker John Boehner (R-Ohio) immediately pointed reporters to a March 2011 CRS report on the issue.

“On what would likely be a small scale, the proposals also would make oil and natural gas more expensive for U.S. consumers and likely increase foreign dependence,” the report says.

Boehner’s office highlighted the report to bolster the long-time GOP argument that eliminating oil tax breaks would raise gas prices. Republicans hope the specter of higher prices will resonate with consumers who are already paying a premium at the pump.

But a second CRS report released in May 2011 casts doubt on the report Boehner’s office is touting. The report, requested last year by Senate Democrats, says that the repeal of five key oil industry tax breaks would have little to no impact on gas prices.

“[T]here is little reason to believe that the price of oil, or gasoline, consumers face will increase,” the report says about repealing one of the tax breaks, a finding it echoes with respect to the other tax breaks the agency evaluated.

The price of oil, which is tethered to gas prices, "is determined on world markets and tends not to be sensitive to small cost variations experienced in regional production areas," the report says.

No votes scheduled on repealing tax breaks

Though President Obama urged Congress to eliminate oil-and-gas tax breaks in the coming weeks, Senate and House aides say no votes have been scheduled.

Senate Majority Leader Harry Reid (D-Nev.) signaled Thursday that he’s open to voting on legislation to repeal oil industry tax breaks.

“Well, we’ve done it before. No reason not to do it now,” he told The Hill in the Capitol.

But a Reid spokesman said Thursday afternoon that there were not yet specific plans to vote on the measure.

House GOP leadership aides did not say whether they will bring an oil tax break repeal measure to the floor. An aide to House Majority Leader Eric Cantor (R-Va.), when asked if Republicans would bring such a measure up, replied, "Did the President say how he expects that to lower gas prices?"

But House Democrats are likely to force votes on the issue, as they did several times last year.

While Republicans control which bills come to the floor, Democrats can ensure votes on tax breaks during debate on separate legislation through a procedural maneuver called a "motion to recommit."

Energy officials hosting conservation conference

The White House is holding a conference Thursday “to spotlight community-driven conservation efforts and how to build on their success” at the Interior Department.

Interior Secretary Ken Salazar, Environmental Protection Agency Administrator Lisa Jackson and White House Council on Environmental Quality Chair Nancy Sutley will attend the event.

IN CASE YOU MISSED IT...

Here's a quick roundup of Thursday's E2 stories:

- Obama asks Congress to vote down oil industry tax breaks
- Gingrich says Obama should fire Energy secretary for remark about gas prices
- Koch brothers accuse Obama campaign of intimidation tactics
- Bingaman launches uphill battle with 'clean' power proposal
- Republican senators warn of ‘competitive harm’ from oil rule
- Amid rising gas prices, Obama to call for vote on killing oil tax breaks

Please send tips and comments to Ben Geman, ben.geman@thehill.com, and Andrew Restuccia, arestuccia@thehill.com.

Follow us on Twitter: @E2Wire, @AndrewRestuccia, @Ben_Geman

This item has been updated to clarify the exchange between Rep. Nunnelee and Chu.