MSNBC Host: Energy Costs Way Too Low

The host of Up With Chris Hayes was holding court over a panel discussion on domestic energy issue and stated Energy Prices are way too low in the U.S.

Before the discussion was to start, MSNBC had to go to a commerical break. To introduce the break Chris Hayes "My sense is that the price of energy is too low at some level right now, and I want to talk about that right after we take this break."

Then when MSNBC returned from break this is the conversation that took place:

Chris Hayes: We’re talking about the massive, extractive energy boom happening in America right now and how it’s transforming our politics and how that can be made to work with a sane climate policy, which is really the difficult question. Before the break I left the question on the table about the price of energy being too low right now. Basically we see this massive amount of supply has come onto the grid thanks largely to natural gas. The price has come down, and I think we generally think, “Oh, lower prices are better.” But it seems to me there’s a lot of problematic stuff about the price coming down sharply as it is right now in terms of incentives for efficiency and et cetera.

Dan Dicker: You would want the prices to go up a lot because it would drive the next stage towards renewables, and make that at least cost-effective. Algae fuel, we talk a lot about that…

C.H.: Some people talk about that.

D.D.: Yeah. The cost is about eight and a half to nine dollars a gallon compared to gasoline as it is now. You want the prices to go up to make these a little more cost effective. Drive the technology into them. Unfortunately it’s actually going quite the opposite. You talk about increased supply here in the United States. In fact, overseas demand is dropping. We are still in the midst of an economic problem in Europe. Chinese growth is going down. Indian growth seems to be going down. In this country we’ve done better in terms of efficiencies and our demands are starting to drop, so in terms of what economically you can expect, you will expect the opposite, or at least I do over the next several years, that oil prices will in fact go lower. Natural gas you can – because we have a futures market, we look forward to the future and see what people are betting the price is going to be. That doesn’t go over 5$ an MCF until 2020 according to the futures markets. So although you might want… we have to drive the renewable argument some other way, because price doesn’t look like it’s going to do it.

Frances Beinecke: Look, the only thing that’s going to change that is if we finally put a price on carbon.

C.H.: Right.

F.B.: The externals of all the fossil fuel development are not incorporated in the current price, so the environmental effects, the health effects, the consequences to communities, none of that is factored in. We have to change that, get a price on carbon, drive it up so we can promote renewables and efficiencies first and foremost.