Energy Secretary Chu Wimps Out Again

Includes: CLNE, FSYS, WPRT
by: Michael Fitzsimmons

Most of my followers are very familiar with my opinion of Energy Secretary Stephen Chu: he should resign his office. Why? Because Chu doesn’t understand that America’s biggest energy and economic problem is our addiction to foreign oil imports and the resulting daily drain of U.S. wealth away from our shores. Any U.S. Energy Secretary who is “agnostic” about the only domestic fuel (natural gas) that can be scaled up to solve these problems should be fired. Top that off with Chu’s agreement that “clean coal” is actually possible and, you have an Energy Secretary who has certainly risen to the level of incompetence.

Why bring this up now? Yesterday Secretary Chu and the U.S. Department of Energy announced $300 million in “Clean Cities Grants to Support Clean Fuels, Vehicles, and Infrastructure Development.” Here’s the announcement on the DOE website. This link shows a map of the U.S. and how the awards will be distributed across the country.

You’re probably saying,” Fitzman – this is exactly what you have been pontificating about, now you get it and you’re still not satisfied?” No, I am not and I’ll tell you why. Because $300 million is a small drop in a big bucket, that’s why.

It’s clear the U.S. government started a very obvious and wrong-headed policy of rewarding failure and punishing success. This has been the case for years. However, in Bush’s last year it rose to a new level of obscenity that President Obama has not only continued but expanded:

  • Record deficit spending
  • Billions for bonuses for a fascist bailout of “executives” who bankrupted their firms
  • Cap-and-trade legislation that rewards coal, the dirtiest of all fuels
  • Billions for “cash for clunkers” to reward those who bought inefficient vehicles
  • Billions for U.S. auto companies that for years built vehicles that greatly increased American addiction to foreign oil and CO2 emissions

The list goes on and on. Bush’s second term marked a grand transition from capitalism to fascism. Meanwhile, those who did what they should (saved and invested money, bought efficient vehicles for example) were punished. Savers are now getting 0.25% for their money market funds, and a whopping 1% for a year CD. Then there is the fact that their investments are going nowhere fast – the S&P500 is essentially flat over the past decade, and the promises of 401k security was shattered in the recent bear market.

There is reason for hope. Over the past few years, the on-land shale discoveries in America have validated Robert Hefner’s testimony before Congress during the energy hearings of the 1970’s: the U.S. has abundant natural gas reserves. One would think American government officials would jump on such great strategic news and quickly move to exploit this wonderful American economic advantage over the rest of the world, especially China. But, we know Chu is “agnostic” about natural gas. Federal Reserve chief Bernanke is supposed to be our “top-level” economic and monetary official, yet has anyone ever heard Bernanke mention the importance of abundant domestic natural gas supplies and the importance of abundant, cheap, and clean energy that could (if Congress would simply ACT) solve America’s number one economic woe – its dependence on foreign oil? Not a peep. Once again, they punish success: the natural gas rig count has been cut in half, and natural gas prices are under $3.

So, while the recent announcement is certainly good news, it’s not good enough. The awards should have been $3 billion, not $300 million. That said, companies like Clean Energy Fuels (CLNE, up $1.87 on Thursday), Fuel Systems Solutions (FSYS, up $1.40) and buy rated Westport Innovations (WPRT, up $1.65) will likely benefit from this program as a lot of the money will go toward NGVs and CNG refueling stations. Here is Westport’s press release.

If President Obama and Energy Secretary Chu are serious about reducing foreign oil imports and reducing CO2 and particulate emissions, they need to get serious about doing so. They need to stop chanting “clean coal” and instead shut down coal plants such as the TVA coal plant in Kingston, TN, that has devastated the Tennessee River valley with its release of its toxic heavy metal fly ash into its waters. They need to get serious about NGVs and CNG refueling and invest significant funds into a nationwide program to build out the infrastructure. More importantly, Obama and Chu need to be working behind the scenes to insure that H.R. 1835 (the so-called “natural gas act”) is not only passed by Congress, but is substantial enough to reduce foreign oil imports and kick the natural gas transportation initiatives into high gear.

America can solve the economic, environmental, and national security problems facing our country. We can do so by leveraging our greatest weapon against foreign oil imports: our abundant natural gas reserves combined with our world leading natural gas pipeline distribution grid. By solving our energy problems, we’ll solve our equity market and currency problems. It doesn’t even take visionaries to do as all the facts are clear and out on the table: natural gas is much cleaner than coal and oil, it’s abundant, and it’s cheaper. All that is needed now are leaders that are not bought off by the coal and oil lobbyists. We’ll soon find out with H.R. 1835 if those leaders will step up to the plate.

Disclosure: The author owns WPRT.

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