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By Samuel R. Avro on Feb 19, 2009 with no responses

Energy Secretary Admits to Naivete Over OPEC Remarks


Energy Secretary Steven Chu had to retract a statement he made which suggested that the U.S. didn't need to get involved to influence OPEC production cuts.

“I should be quite candid, it’s more my naivete than anything else,” Chu said.

U.S. Energy Secretary Steven Chu was forced to retract a statement and blame it on his naivete just hours after he said that urging OPEC not to cut oil production was “not in my domain.”

The secretary came under immense criticism for suggesting that his department was making an about-face from previous policy which traditionally saw the Energy Department in contact with various OPEC members in order to lobby the U.S. cause.

“OPEC is going to do what they’re going to do based on their own interests,” Chu said at a press conference, adding, “I quite frankly don’t focus on what OPEC should do, I focus on what we should do.”

Later, he retracted those comments in a conference call with reporters.

“I should be quite candid, it’s more my naivete than anything else,” Chu said. “Every country would want price stability, and certainly I can do what I can do to encourage OPEC countries to promote price stability.”

Chu met last week with Chakib Khelil, the former president of OPEC and the oil minister for Algeria. In his first meeting with an OPEC member, the discussion revolved around renewable energy and not what will happen at OPEC’s upcoming meeting, according to Mr. Khelil.

“I think Chu made an honest faux pas in terms of OPEC,” Tom Kloza, chief oil analyst at the Oil Price Information Service, told Consumer Energy Report. “It’s actually refreshing to see someone speak without typed-up talking points. The past few Energy Secretaries haven’t set a high bar.”

Energy Department press secretary Stephanie Mueller said later that Chu “will continue to encourage OPEC nations to avoid price spikes.” But the Nobel-prize winning Energy Secretary “believes our primary focus should be making our country energy independent through investments in efficiency and renewable energy – investments that will create millions of new jobs while freeing us from the grip of foreign oil.”

Kloza says he hopes that the current low price of oil will be used to better stabilize America’s energy needs with the implementation of renewable fuels.

“Right now, OPEC is getting slammed fairly hard by the marketplace, but most advanced civilizations don’t seem to be intent on reducing consumption,” he said. “This year represents an opportunity to reinforce lower consumption habits -  it would be a shame if we waste this ‘cheap oil interval’. Detroit probably recognizes this (belatedly) and Europe does (via introduction of upscale diesel-fired cleaner more efficient vehicles).”

The current prices aren’t around to stay, says Kloza. “This flu-like decline in oil prices will recover when the patients (world economies) recover. We’re largely using less because so much driving is work-related and lots of people are out of work,” he said.

Chu retracted his statement during a conference call with billionaire oil investor turned alternative energy advocate T. Boone Pickens, Senate Majority Leader Harry Reid,  and others to discuss an upcoming meeting on clean energy scheduled to take place on Feb. 23. Reid, a Nevada Democrat, and Pickens said there was enough natural gas in the U.S. to replace much of the gasoline used in automobiles and eliminate or slash OPEC imports within a decade.