Oil Report

UPDATE 2-Obama energy pick says will fight global warming

(Adds Chu’s comments on China, nuclear power, background on Chu)

WASHINGTON, Jan 13 (Reuters) - The Obama administration will tackle the threat of global warming by seeking a cap-and-trade system to cut greenhouse gas emissions, Steven Chu, President-elect Barack Obama’s pick to be U.S. energy secretary, told lawmakers on Tuesday.

“Climate change is a growing and pressing problem. It is now clear that if we continue on our current path, we run the risk of dramatic, disruptive changes to our climate in the lifetimes of our children and grandchildren,” Chu said at his confirmation hearing before the Senate Energy and Natural Resources Committee.

Chu said the administration will push for a cap-and-trade system, which would require power plants, oil refineries and other industrial facilities to buy and sell pollution permits to spew global warming emissions.

“It speaks to the importance he views this area,” Chu said of Obama’s concerns about global warming.

Chu said he looks forward to working with Carol Browner, who Obama selected as the White House czar to coordinate climate change policy among the various federal agencies and departments. “She has a difficult task ahead of her,” he said.

Chu said China would have to be part of an international agreement to reduce emissions. The United States could bring China into the effort by providing it with technology to reduce energy use, particularly in building construction.

“If China doesn’t follow, we’ll have to relook at this,” he said.

Sen. Jeff Bingaman, who heads the Senate panel, said he hopes the committee will approve Chu’s nomination this week, with confirmation by the the full Senate next Tuesday.

Chu, who shared a Nobel Prize in physics in 1997, would leave as director of the Lawrence Berkeley National Laboratory in California to head the Energy Department.

Chu said he will work quickly to implement those parts of Obama’s planned economic stimulus plan that relate to energy, though he did not provide any details.

“Economic stimulus means we have to move fast,” Chu said.

He said the United States faces “immediate threats” because of dependence on oil. “We must make a greater, more committed push towards energy independence and with it a more secure energy system,” he said.

Chu reiterated Obama’s comments that the administration would be willing to consider expanded offshore drilling as part of a comprehensive energy policy. But he noted that the United States has only 2 percent of the world’s oil reserves and accounts for just 5 percent of global oil production.

Chu said he would also act quickly to get the Energy Department’s $18 billion guaranteed loan program for new nuclear power plant projects up and running. He said nuclear power was important in the climate change fight because it does not produce greenhouse gas emissions.

“Nuclear power is going to be an important part of our energy mix,” Chu said. (Editing by Jim Marshall)