(CNSNews.com) - Former Treasury Secretary Larry Summers, who served during the Clinton administration and as director of the National Economic Council during the Obama administration, said Thursday that natural gas is a “good thing,” and the more of it we produce, the better and more secure we’ll be, because it will replace coal.
“We need to recognize that whether the issue is energy security or whether the issue is climate, natural gas - despite being a hydrocarbon - is a good thing, not a bad thing, and the more of it we produce, the better we’re going to be, the more secure we're going to be, and actually, because it often will replace coal, the less hydrocarbons and carbon dioxide we will be emitting into the air,” he told CNN’s “The Situation Room with Wolf Blitzer.”
Summer said that “nobody can be happy” about OPEC cutting oil production.
It's hard to know what would have happened if President Biden had not taken that trip. At that time, I thought it was the reasonable thing to do, recognizing there was enormous uncertainty as to how it would play out. This is not good news we've gotten from OPEC. It increases the risks with respect to inflation. It increases the risks with respect to recession. The sense that Saudi Arabia is in collaboration of some kind with Russia can't be a happy one for Americans.
On the other hand, Wolf, oil prices did not spike today. They did not spike yesterday. Some of that is because people thought something like this was going to happen. Some of that was because some of this output contraction is sort of meaningless.
People reduce their quotas, but since they weren't producing up to their previous quotas anyway, it didn't really matter when they cut their quotas, but I do think there's got to be nervousness about what's going to happen to the price of oil and that's just something we've got to be braced for.
Look, for over any reasonable horizon, over anything more than the next year, the way we've got to think about this is not managing with a fire drill every time we have some oil price problem. It's reducing our fundamental dependence on unstable and problematic parts of the world for our energy, and that means Senator Manchin's permitting policies.
Whether it's permitting pipelines or permitting more natural gas production or permitting more electricity transmission, need to move as rapidly as possible. That means we need to move to implement as many parts of a shift to renewables as possible.
And that means we need to recognize that whether the issue is energy security or whether the issue is climate, natural gas, despite being a hydrocarbon, is a good thing, not a bad thing, and the more of it we produce, the better we’re going to be, the more secure we're going to be, and actually, because it often will replace coal, the less hydrocarbons and carbon dioxide we will be emitting into the air.
Blitzer said a Biden administration official told CNN that the OPC decision may raise gas prices in the U.S. by a few cents.
“If we get by with a few cents that'll be a good outcome,” Summers said. “It may happen, but I certainly would say that from -- from here a few cents would be something I'd have to regard as a good outcome. Look, I think the administration has done a good job in being prepared to aggressively use the Strategic Petroleum Reserve, and they may need to do it again.
“I think beyond that there's not a lot that they're going to be able to do to affect gasoline prices in the short run, but I think over time they're going to be able to put in place a regimen that will enable Americans to drive at lower cost. Frankly, some of what happens to gasoline prices are going to depend on whether we have a recession or not,” he said.
Summers predicted that “the more severe a recession we have, the lower gasoline prices will be, but that's hardly anything that we're hoping for, very much something we're hoping against.”
As to whether the U.S. is heading towards a recession, the former Treasury secretary said, “I think it's more likely than not that some time in the next year or 18 months we will have a recession.
“I think that's a consequence of the excesses that the economy has been through, and historical experience suggests that the kind of inflation we have rarely returns to normal levels, to target levels of around 2% without some kind of a recession,” Summers said.
“Now, I don't think that means we're going to have something like we had after COVID or something like we had during the financial crisis, but I do think that we had a period of very substantial stimulus, and I think the other side of that is likely to be a downturn,” he said.