Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Podcast

How Jigar Shah Thinks About Risk

Inside episode 13 of Shift Key.

•
Robinson Meyer and Jigar Shah.
Heatmap Illustration/@bendroz

Jigar Shah might have more control over America’s new wave of industrial policy — not to mention its climate policy — than anyone not named Joe Biden. And he’s not even a Cabinet-level official. As director of the Department of Energy’s Loan Programs Office, which is akin to its in-house bank, Shah oversees how roughly $400 billion in lending authority will be spent. That money will help finance new EV factories, geothermal wells, carbon capture sites, and more.

On this week’s episode, Rob sits down with Shah to discuss the philosophy that he brings to his role. When financing new projects — many of which are the first of their kind — how does he think about cash flow, about technological innovation, about risk? Robinson Meyer is executive editor of Heatmap News; Jesse Jenkins, an energy systems engineering professor at Princeton, is off this week.

Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.

You can also add the show’s RSS feed to your podcast app to follow us directly.

Here is an excerpt from our conversation:

Robinson Meyer: I think one thing you’ve said often is that we have — and you alluded to at the beginning of the conversation — is that we haven’t built manufacturing in this country, basically, for 40 years. I think one note we’ve seen both from the president and from the partisan laws passed by Congress and the president — but also, frankly, from a more bipartisan set of lawmakers — is that there’s a lot of eagerness for that to change. So from your point of view as someone kind of in the weeds every day, what needs to change for the U.S. to build manufacturing and heavy industry domestically again?

Jigar Shah: Well, let’s start by saying that I think that the BIL and IRA that’s passed has been a huge success story, right? We’ve gotten 500 announcements of new factories in the United States. And so, these are communities like the one that I grew up in, that had the seventh largest steel mill in the country that shut down while I was there. And all of the people who went to high school there expected to have a job there, and they don’t. Right? These are folks who are pretty pissed off about the fact that their lot in life, really, was destined to not have family-sustaining jobs for 40 years, right?

And so now we’re giving people hope again that, for folks who have high school educations, that they can actually support their families and do these things, right? So in that perspective, we’re winning, right?

But on the other side, we still have a lot more work to do, right? So when you think about the underlying conventional wisdom, the conventional wisdom is that you’re going to start a factory, China’s going to dump product in the United States and going to put you out of business, right? And so the local bank is saying, prove to me that China’s not going to dump product and put you out of business. Those old habits die hard, right?

Now, the president has put together all sorts of belts and suspenders, but I don’t think that’s clear. I’ll give you an example. So in the EV supply chain — we have an extraordinary amount of lithium in this country. We made the announcements at Thacker Pass and Rhyolite Ridge, as well as recycling for Li-Cycle and Redwood. But we’ve got additional abilities to get lithium over in Arkansas and Salton Sea in California.

And a lot of folks are saying, lithium prices are down 70% from their highs, right? So therefore there’s no way you can make it work right now. Lithium was $5,000 a unit in 2020. Today it’s $20,000 a unit. It was as high as $80,000 — $20,000 is still 4x what it was in 2020. And so there’s a way to make it profitable, but we also have the 30D program where a lot of automakers get incentives to buy locally for domestic content.

And so I feel like there’s just so much in the IRA, that the belts and suspenders approach that the administration took is not something that most people understand. And as a result, a lot of dollars are not moving from the commercial markets. We’ve got to step in and move them.

This episode of Shift Key is sponsored by…

KORE Power provides the commercial, industrial, and utility markets with functional solutions that advance the clean energy transition worldwide. KORE Power's technology and manufacturing capabilities provide direct access to next generation battery cells, energy storage systems that scale to grid+, EV power & infrastructure, and intuitive asset management to unlock energy strategies across a myriad of applications. Explore more at korepower.com.

Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.

Music for Shift Key is by Adam Kromelow.

Green

You’re out of free articles.

Subscribe to access Heatmap's exclusive climate and energy polling, award-winning journalism, and subscriber-only events. Save $57 on an annual subscription, just $156 $99/year.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Q&A

How to Channel Voters’ Anxieties About Data Centers

A conversation with the Guardrails Alliance’s Shaunna Thomas.

The Q&A subject.
Heatmap Illustration

This week’s Q&A is with Shaunna Thomas of the Democrat-allied super PAC Guardrails Alliance, which describes itself as “not anti-technology” but supportive of AI “rules, accountability, and a government that actually represents the public.” Part of that AI accountability they’re calling for is on data centers.

After the midterms, Guardrails Alliance sent a memorandum to all House and Senate Democratic offices arguing for AI and data center accountability to be a key part of their message and plans heading into the new Congress. Described as a “playbook for how to understand and channel anxieties about AI and data centers,” the document laid out “key narratives” that they said voters who care about these issues want to see reflected and echoed by their politics. They said the push against data centers could help Democrats build more lasting political power.

Keep reading...Show less
Yellow
Hotspots

Consider the Lobstermen Affected by New York’s Empire Wind

Plus more of the week’s biggest development fights.

The United States.
Heatmap Illustration/Getty Images

1. New York City — We have a new must-watch offshore wind lawsuit with potential implications for the entire sector — and this time, it’s from lobstermen seeking damages.

  • In late October, a family of lobstermen sued Equinor in federal court claiming the company’s compensatory mitigation program is failing to adequately make up for alleged negative impacts to lobster fishing grounds in the New York Bight. According to the lawsuit, the wind project irreparably hurt fishing in previously trafficked waters. The suit also claims that Empire Wind construction destroyed lobster fishing pots and seeks at least $75,000 in damages as well as punitive damages and attorneys’ fees.
  • The lawsuit is the first I have seen involving someone in aquaculture suing for damages over negative impacts of an already-constructed wind project, and it carries outsized implications as the Trump administration remands without vacatur the construction and operations plans for other offshore wind farms. This case is far from being decided, but that doesn’t matter: It is precisely the kind of complaint that Trump officials are likely to consider as they mull revisions to operational plans.
  • An Equinor spokesman declined to comment on the case, telling me they don’t speak on pending litigation.

2. Hinds County, Mississippi — The largest proposed solar farm in Mississippi is moving forward after an appeals court rejected arguments from aggrieved local residents that it had been improperly approved.

Keep reading...Show less
Yellow
Spotlight

Data Center Developers Can’t Pay People Enough to Accept Them

Trump’s “data center dividend” appears to have backfired. Our latest poll results help explain why.

Donald Trump and data center protesters.
Heatmap Illustration/Getty Images

This year’s midterm elections called into question the efficacy of a push to pay local residents directly in exchange for building data centers.

Before the elections, I profiled the campaign for politicians to embrace the data center “dividend,” a policy idea modeled off Alaska’s Permanent Fund, which doles out checks to residents from profits off state oil, gas and mineral royalties. The Bitcoin Policy Institute, a tech policy think tank, was one of the first to trumpet the concept, but it was quickly taken up by President Donald Trump, who started raising it in speeches and on social media. “If companies want to make their Data Centers popular, pay the community, and/or individuals within the community, a ‘dividend,’” Trump posted to Truth Social on October 21.

Keep reading...Show less
Yellow