BLITZER: And joining us now from Capitol Hill, the energy secretary, Steven Chu, himself a Nobel Prize winner.

Mr. Secretary, thanks very much for coming in.

STEVEN CHU, U.S. ENERGY SECRETARY: OK. Thank you. Pleasure to be here.

BLITZER: At a time of economic recession, millions of jobs lost, a lot of Republicans are suggesting the country simply can't afford this new energy cap-and-trade legislation, as it's called, right now, because, in effect, that becomes a huge tax on the American people.

What's your immediate response?

CHU: Well, I think we can't afford not to enact this -- this legislation. First of all, both Waxman and Markey and what the Senate is going to be considering is a bill that will only start to apply after, for example, 2011, 2012. And so, once we expect to be out of the recession, employment will have recovered by 2012.

BLITZER: And what if it doesn't?

CHU: Well, I think we can always revisit, but the signs are -- you know, sadly, unemployment is a lagging indicator. There are other leading indicators that say the economy is improving, and we're going to go into positive GDP growth. So we expect the unemployment to actually improve in, let's say, the first quarter, second quarter of next year.

BLITZER: Because even some Democrats are nervous about this legislation.

Listen to Senator Max Baucus. He's a Democrat from Montana. Listen to what he said.

(BEGIN VIDEO CLIP)

SEN. MAX BAUCUS (D), MONTANA: Montana, with our resource-based agriculture and tourism economies, cannot afford the unmitigated impacts of climate change. But we also cannot afford the unmitigated effects of climate change legislation.

(END VIDEO CLIP)

BLITZER: He understands the need, but he says the cost is going to be really high.

CHU: Well, I think what you have to do is put this in context. Exactly what are the costs going to be?

So, there have been numerous estimates of the costs. I think the most reliable ones are, for example, the ones coming out of the EIA and the Department of Energy, the Congressional Budget Office, both of those nonpartisan organizations that are just trying to get at the facts and the truth -- and also the EPA.

So, the highest estimate of the cost for an average family of four, that it might cost 48 cents per day in order to enact Waxman- Markey up to 2020. So, this is a cost that you have to weigh against -- so this is less than $200.00 a year.

That cost has to be weighed against the cost of, what if we don't do something? And the cost if we don't do something is that the world is going towards a carbon-constrained environment. Many, many countries are beginning to recognize that they have to reduce their carbon intensity.

BLITZER: Well, what about China and India? Do you have a commitment from those two countries?

CHU: China is actually investing incredibly heavily in cleaning up their energy sector. I talked with Premier Wen Jiabao about two months ago, and he said if we continue with business as usual, the effect of climate change on China and the world would be devastating.

BLITZER: Let's talk a little bit about the price of a gallon of gas. It's gone up 18 cents in the last two weeks alone. There's fear it's going to continue to go up.

Since taking office, the Obama administration, I've looked at the numbers. The U.S. remains about as dependent on imported foreign oil today as it was when you took office back on January 20th.

Am I right on that? Have you reduced America's dependence at all on imported Saudi or other foreign oil?

CHU: I think -- I have recently looked at the numbers also. My recollection is it has gone down a little, but it's only begun to go down. Because what we need to do, the things that will really impact our importing of foreign oil, are two things.

We have to start to decrease our use of oil, especially in personal vehicle transportation, by going to a more fuel efficient fleet. We are working hard to electrify our personal vehicle fleet. We're just beginning to do this, but we need better batteries.

In the next few years, plug-in hybrids will start to hit the market. There are a few special retrofits. But I would expect and hope that in five years, you can begin to see significant penetration of plug-in hybrid vehicles where you can drive the first 40, 50 miles without using your gasoline.

BLITZER: All right.

CHU: And so, that's another thing.

And finally, we're doing a lot of research and development on trying to turn cellulosic forms of lumber, grasses, things of that nature, agricultural waste like wheat straw, rice straw -- we're trying to turn those forms of biomaterials into fuel. Not just ethanol, but something beyond ethanol, to gasoline-like, diesel-like, jet plane-like fuel.

BLITZER: Let me make the turn finally, because we're almost out of time, to what's going on in California, your home state, right now. Some California utilities and environmental groups are urging state energy regulators to ban some of the newest, most power-hungry flat screen TVs out there. A lot of people are watching you right now on those new big flat screen TVs.

Is this something you support, passing regulations on the use of these new flat screen TVs?

CHU: Well, I'm going to -- I'm going to dodge that a little bit, because I haven't really looked at the details of what they're proposing. But it is certainly true that as you go to bigger and bigger flat screen TVs, they can consume a lot of energy.

And so what the Department of Energy is encouraging is to develop this technology in a way. If you do want your 50-or-55-inch TV, that there are new technologies that actually decrease the energy consumption of those TVs by more than a factor of two. And so there's an opportunity to save a lot of energy on those TVs.

BLITZER: Would you support a tax on some of these purchases of these TVs?

CHU: Well, again, I'd have to look at the details of this. Certainly, there's been a big push now by the TV manufacturers to make these flat-panel displays a lot less energy-intensive. The newest ones, the LED illuminated televisions, the ones that have these special reflectors so that they're capturing all the light in the back, those things are much more energy-efficient than the older plasma TVs, for example.

BLITZER: Mr. Secretary, thanks very much for coming in. Good luck.

CHU: Thank you.