Steven Chu: We Can't Think About Gas Taxes In A Recession

stephen chu

Raising the price of gas with a tax just wouldn’t be “politically feasible” says Department of Energy chief Steven Chu in an interview with the FT.

Last fall, before Chu was appointed to the DOE, he advocated for U.S. gas prices to rise in line with European prices. His argument, as is ours, was that it would be a smart way to nudge the consumer towards efficient automobiles. 

It might encourage efficiency, but Chu realises a gas tax isn’t something that would fly with the American public, saying “Certainly, now in a recession, we can’t be thinking about additional taxes on oil.”

A tax on oil might not be necessary, anyway. “The price of petroleum will rise naturally,” says Chu. The costs of recovering more oil will rise, as we tap unconventional sources like deep off shore, and tar sands for oil. Plus, “developing countries will continue to develop,” and “just supply and demand says prices will go up.”

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