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Energy secretary hammered on gas prices

By Tom Cohen, CNN
updated 3:58 PM EDT, Tue March 20, 2012
STORY HIGHLIGHTS
  • NEW: Secretary Chu gives himself a high grade
  • Republicans challenge President Obama's energy policies
  • Chu says the administration's balanced approach is necessary
  • GOP Rep. Jordan alleges cronyism in Energy Department loan practices

Washington (CNN) -- A committee hearing Tuesday on the Department of Energy's use of stimulus funding kept returning to rising gas prices as Republicans hammered Secretary Steven Chu over the pain at the pump.

The partisan divide of Washington was on full display at the House Oversight Committee hearing.

Democrats on the panel repeatedly asked Chu leading questions that provided him the chance to defend administration policies, while Republicans confronted him with allegations of cronyism in Department of Energy loan programs or complaints that he and President Barack Obama don't understand what consumers face from higher gas prices.

Republican Rep. Ann Marie Buerkle of New York asked Chu to "go to the administration and say, 'The American people are hurting. They need you to do something now.' "

She and fellow Republican Rep. Patrick McHenry of North Carolina pushed Chu on what steps he has taken in his three years on the job to bring down gas prices.

When Chu noted investments to boost the use of electric cars and increase fuel efficiency standards, McHenry said those mean nothing to his constituents who have long commutes by car every day.

"I have heard nothing of a policy that will meaningfully impact the price at the pump, other than driving it up," McHenry complained. To tell people in his district facing 10% unemployment to buy a new electric vehicle "is absolutely ridiculous," he said.

Buerkle also challenged the Obama administration's contention that America has 2% of the world's known oil reserves, saying the actual amount is much greater and that expanded exploitation could reduce gas prices in the long term.

Obama has argued there is no single step or "silver bullet" to lower gas prices in the short term, saying oil costs are set by an international market influenced by rising demand in China and India as well as jitters over Middle East instability, particularly involving Iran.

With a presidential election looming, Republican leaders including the presidential hopefuls in the midst of a nomination battle have targeted Obama's energy policies. They seek to blame Obama for high energy costs, saying a failure to greatly expand U.S. oil production is a cause.

Chu repeated administration talking points that the United States is producing more oil and natural gas now than any time in recent years, and that a balanced approach that invests in innovation such as alternative energy sources is needed to remain competitive in global markets.

Despite the Republican criticism, Chu insisted the policies and programs he has pushed are the right ones at a time of changing energy needs and opportunities.

"America has reached a crossroads and members of Congress have a big decision to make: We can play to win in the clean-energy race — investing in America's workers, industries, and innovations — or we can wave the white flag and cede leadership to other countries that are investing in these industries," Chu said."

Asked about his previous comment that he deserved an A-minus grade for his performance so far, Chu stuck to it, adding it should be "a little higher" for efforts to reduce oil imports by steps such as developing electric and natural gas-powered vehicles.

When Rep. Trey Gowdy, R-South Carolina, repeatedly tried to get Chu to discuss his oft-quoted 2008 comment in favor of higher gas prices in America, the secretary refused to engage, responding several times that he had "nothing more to add to that quote."

"I'm not trying to boost the price of gasoline" as energy secretary, Chu told Gowdy. "Quite the opposite. I'm trying, as a scientist, to diversify the use of gasoline" to bring down fuel costs.

Other Republicans repeatedly asked Chu about loans made under a Department of Energy program intended to promote innovation, such as $500 million for the California solar panel manufacturer Solyndra that later went bankrupt.

Rep. Jim Jordan, R-Ohio, listed a series of loans approved for companies that had investors with ties to Obama administration officials or campaign fundraisers. Jordan asked Chu if he detected a pattern of cronyism, calling it the kind of government behavior that Americans despise.

Chu responded he didn't, and repeatedly answered "no" when asked if any of the administration officials ever lobbied him on the loan program.

Jordan then said thaT many of the companies involved had poor credit ratings, adding that if there was no political motivation for approving the loan guarantees, the only other explanation would be incompetence by Department of Energy officials.

"That's what the American people find so frustrating with the situation," Jordan said.

Chu responded that such a loan program involved high risk investments. Under questioning from committee Chairman Rep. Darrell Issa, R-California, Chu said projects or companies needed to have at least a 50% assessed chance of success to qualify.

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