Robinson Meyer: Secretary Granholm, welcome to Shift Key.
Jennifer Granholm: Thank you. Glad to be on.
Meyer: So let’s start here. Can you just start by setting the scene for us for what the Department of Energy has done over the past few years, and what it has become? Because as I think about it, and as we think about Trump again, I remember back in 2017 when, I believe your direct predecessor, Secretary Perry, took over the office, and he was very excited to talk about energy and to talk about fossil fuels and to evangelize oil and gas. And then he had to learn that at the time, DOE was really more of a national-labs-and-nuclear-weapons type of agency. I feel like that’s less true today. So can you just set the scene for us on how far we’ve come?
Granholm: I mean, I can talk about the department, yeah. But I’d love to also, at some point, talk about the outcomes.
Meyer: Let’s talk about outcomes first, and then let’s talk about the department.
Granholm: Great, great. So just at a level, I hope — I know your listeners are savvy in this space, but just to put it in perspective: It is astonishing what the Inflation Reduction Act and the Bipartisan Infrastructure Law have been able to do to build out clean energy in the United States. It is mind-blowing. If you had told me — I’m a former governor of Michigan, and when I was governor, we saw all these jobs leave, all this manufacturing gone. It was just — and the federal government just sat on its hands and did nothing, although when the Obama-Biden administration came in, they saved the auto industry. But every supply chain, every — and they were all going to Mexico, or China, or whatever.
And so the hollowing out of much of the middle class and the manufacturing, and I think this is one of the things that Trump really picked up on. But across the nation, in industrial communities, small towns that had a factory that left … So the Inflation Reduction Act and the Bipartisan Infrastructure Law have caused now, as of today — and this is so far, since the Inflation Reduction Act was only passed a couple years ago — over 950 factories to come to America or expand in America, building these products for this clean energy transition. That is just mind-blowing to me. And those announcements are announcements. Then there’s the groundbreakings, and then there’s the ribbon cuttings. And so there’s been some groundbreakings and some ribbon cuttings, but all of those are going to bear fruit over the next few years.
Meyer: So during the Trump administration.
Granholm: Exactly. And that’s, I mean, regardless of who’s in the White House, this is really great for America, that we have, now, industrial strategy that has reversed that track, that tide. So that’s, in terms of outcomes, that is a huge outcome.
The second outcome that I think is really important is how much clean generation that has happened. So this year, we will add 60 gigawatts of clean electricity to the grid. That is more than double what we have ever done — 30 Hoover Dams’ worth, is what I like for everyday folks to understand the magnitude of what we are adding. And that trajectory is going to continue as long as those incentives are in place, and it’s going to be higher next year and next year. And so the goal that the President came in with, with 100% clean electricity on the grid by 2035, and to get to net zero by 2050, by 2030 we will have — just because of these two laws, the Bipartisan Infrastructure Law and the Inflation Reduction Act — we will have 80% clean electricity on the grid by 2030, and we will have reduced GHG emissions by 40%. Now that doesn’t speak to … the reduction in GHG doesn’t even speak to what the cities and states and private sector is doing. So we’re hopeful that we can get to the half, 50% reduction by 2030.
Meyer: Do you think those trends will continue through and despite Trump?
Granholm: Yeah, this is the question of the hour. Here’s —
Meyer: And we can get more into this later, I just wanted to stress test that.
Granholm: I’ll just say, I have hope that this will continue, and I don’t think it’s irrational exuberance because of the fact that those 950 factories, 85% are in red counties, red districts. And because, you know, governors and members of Congress and, you know, President-elect Trump will be able to oversee the fruition of people hiring, steel going in the ground in these factories, it really would be political malpractice to undo those incentives when it’s creating everything that both parties have asked for, which is to reshore supply chains, critical minerals for electric vehicles and other products. It’s just, it’s doing the thing that America should do.
And so I am, I’m hopeful because of that, and I’m hopeful because of the technologies that there’s bipartisan support for. So we know there’s bipartisan support for nuclear, for example. We know there’s bipartisan support for geothermal. We know there’s bipartisan support for hydroelectric power. We know there’s bipartisan support for getting critical minerals reshored, or at least the extraction and responsible extraction and processing of them. So there’s a lot of areas that I think there’s bipartisan support for, and therefore it will be difficult for Congress to overturn or yank back from the Inflation Reduction Act.
Meyer: Let’s talk about the office. In addition to accomplishing those things — I remember in 2021, looking at the changes that were being made the Department of Energy, some of the changes that were in the Bipartisan Infrastructure Law, and thinking, DOE is going to be a totally different agency by the end of this term, or even just in a few years, than it was a few years ago. Can you talk about how the office has changed under your leadership?
Granholm: This is one of the reasons we’ve been able to achieve those outcomes, is because we restructured the department. We still have our national security mission, of course, and that’s very important. And we still have the mission to clean up the legacy waste sites from the Manhattan Project, as well. But we have completely restructured to deploy, deploy, deploy.
We still have the labs, of course, doing all of the work that leads up to deploying on the technologies that really are significant, and those missions still occur. But we were given over $100 billion through these acts, 60 new programs to restructure and focus the Department of Energy on this clean energy transition, and that has utterly changed — we’ve hired almost 1,000 people to be able to do that. We’ve created a whole new vertical, a whole new Under Secretary for Infrastructure, which is all about the infrastructure of this clean energy economy. So that change, I think, has been significant.
We hired a bunch of people from the private sector to come in to understand how technology — we don’t want to take a risk. For example, through the Loan Programs Office, which I know you’re well familiar with. You know Jigar Shah, who runs that, he doesn’t take a risk, they don’t take a risk on the technology working. You know, the physics are going to work, the chemistry is going to work. The niche that they provide is great technology, do they have a business plan that is going to ensure that they’re successful in the market? So we’ve hired a number of people from the private sector to be the Sherpas on that and make it work. And the results have been really quite astounding.
Meyer: It’s really become more of an industrial policy department, in some ways, which is something that a lot of other countries have. In fact, it’s something that most developed countries have, or many of them have. Japan has one. Germany has one. But it’s something the U.S. has historically not necessarily pursued in a civilian agency. At least we have, we do DoD industrial policy forever.
Granholm: Yes, this is what’s so incredibly great about this. You know, again, I say this with my hat as former governor of Michigan: When we used to, you know, we were competing as states. States had their own economic development agencies, but we didn’t have a federal partner on any of it. It was like bringing a knife to a gunfight, and we would see, you know, we can’t compete with the industrial policy of China as a state, right? So the fact that we now have a federal strategy that enables states to enhance, but that there is a federal decision that we are going to get in the game. We’re not going to be passive and allow other countries to eat us for lunch.
Meyer: So how do we think that … how do you think that these programs will fare under the next president?
Granholm: Well, I do think because — I think they are durable, first of all, because one, we’re going to commit a huge amount of the money we were given — 98% of the programs we were given, 60 new programs under the Bipartisan Infrastructure Law and the Inflation Reduction Act. We will have at least on one round of funding, 98% of them, and we will have gotten commitments for all of these selections by January 20. So there may be a couple that we’re not able to do because they’re multi-year programs, etc., but we want that commitment. So that creates one layer of durability.
And of course, the second layer of durability is that they, these programs, are all going to stuff that Republicans have been calling for, too. So for example, there’s been a lot of curious complaints about the EV strategy of the administration because, it is said, all of the critical minerals, and China produces the batteries and the critical minerals. And that’s true. China has — but that’s why this strategy is reversing that trend. You know, China’s cornered the market on batteries, and now we’re make … I mean, of the 950 companies that I talked about, over 400 of them are batteries or electric vehicle companies that we’re building in the United States, you know, the anode, the cathode, the separator material, the electrolyte, the critical minerals, the processing of those minerals. That’s all coming back.
Meyer: Well, and there is something … So have you talked to Doug Burgum or Chris Wright? Yeah.
Granholm: Well, I hope I get a chance to talk to Chris Wright. I’ve definitely talked to Doug Burgum in my role, and in his role as governor. And he’s been an all-of-the-above guy.
Meyer: I think it’s interesting because one of the big questions I have going into the Trump administration — in addition, I should say, that there’s like, two buckets of questions, right? There’s the, as you were saying, there’s a lot of durability, if you were to look at conventional ways of assessing durability, in the department’s programs, right? A lot of these programs are bipartisan.
Something we saw during the Trump administration was that the Office of Management and Budget from the White House would publish these extremely drastic budget cuts when they proposed a budget to Congress, and there’d be all these news stories about how they wanted to cut the EPA budget by half, and they wanted to cut the DOE budget, and they wanted to cut NASA’s budget. And all these news stories would come out, and then six months later, the Republican majorities in Congress would pass a budget, and it would lightly top off all of the budgets, and all the funding would go up, because it turns out the government largely does things that Congress wants it to do, and there’s a lot of support in Congress.
That being said, it also seems like this administration is going to test the limits of impoundment and what the president might be able to stop. But once you put aside that bucket, when you hear Doug Burgum talk about what his complaints with the Biden administration’s policies are, many of them are not grounded in factual inaccuracy. I would say they’re … for instance, the big point he made during the Republican primary debate was about, if we switch to EVs, we’re going to make China more important. We’re switching from OPEC to Sinopec, is, I think, his line. That is exactly what the suite of policies that have been advanced in this bill are supposed to do.
And so one big question I have is like, are we going to learn in the next few years whether these are actual concerns to these folks and they want to preserve these programs? Because it turns out, this is how you would try to create an EV industry in the U.S. Or do they really just care about oil and gas and their concerns with supply chains, with mineral supply chains, are just kind of a tissue to cover up larger oil and gas concerns?
Granholm: I mean, obviously they’re very pro fossil fuels. We know that. But I will say all of the rhetoric has been about all of the above, an all of the above strategy. I mean everybody from Doug Burgum — I mean, all of these Republicans on the Energy Committee, they’ve all said that. So it just would be strange to turn your back on everything that you have said all of this time.
And I don’t even think, honestly, I can — This is what I would say: I think that the Trump administration, it seems, what do I know? I haven’t talked to them personally, but I, it seems from all I can, they want to reshore manufacturing. So if it’s not, if you eliminate the Inflation Reduction Act, you got to replace it with something that’s going to attract all of that investment. There has to be some industrial strategy. Otherwise you’re just ceding the territory to China, which is the thing you’re complaining about. So if you don’t like an incentive-based strategy, which is really what the Inflation Reduction Act is, I see he wants to put in a tariff-based strategy, if you just want to do all sticks. I’m not sure that’s good for the economy overall, but a blend of carrots and sticks, I’m sure most people would say are important. And so, you know, maybe you call it something else, but you got to get in a game, because otherwise our economic competitors are only too happy to see that happen. Can I tell you a quick story?
Meyer: Yes, we have a little bit of time. This is what this is for.
Granholm: So when I was finished being governor, I went to China to see what China was doing in this clean energy space, because they were cornering the market on a lot of these technologies, solar in particular. At the time, I went with Securing America’s Future Energy, an organization that is focused on competitiveness in this clean space. And we went to a presentation by a bunch of mayors in China, mayors of provinces. And as we were standing there watching the presentation, one of the mayors stands next to me, and he says, “So when do you think the United States is going to get a national clean energy strategy?” And I said, “Oh, I don’t know … Congress …” And he looks at me, and he gets a big grin on his face, and he says, “Take your time.”
Because of course, they see our passivity as their opportunity, right? So this is why what we’ve done, what these laws have done, what the president has done, is so amazing. So I get that you may have to put a different spin on whatever the new administration wants to do, but ultimately, you have to have policies like these if we’re going to be successful in reshoring manufacturing.
Meyer: What do you think is the trajectory — you mentioned 60 gigawatts of clean generation coming online. What do you think is the trajectory of clean energy under Trump?
Granholm: Well it, you know, if the Inflation Reduction Act holds, those incentives don’t go away. The developers are going to take advantage of it. I think it is inexorable that you will see continued climb of clean energy generation. I, you know, I know there’s a lot of talk about drill, baby, drill, etc. I mean, they have been drilling, baby, drilling. There hasn’t been limits on that. They may want to open up more auctions and more leases, but the private sector has to be willing to actually put the capital investment into going into those spaces. And the market is a global market, and they’re going to respond to what is happening globally. So I think clean energy … I believe strongly that if the Inflation Reduction Act stays, the clean energy investments will continue to go on that upward trajectory in a way that is astounding.
Meyer: Let’s talk about fossil fuels for a minute. As of when we’re recording this, the LNG study is not yet out. Can you give us a sense of what we might hear when that study comes out, and what the department has aimed to do with it.
Granholm: Well, I’ll just say this. I’m going to wait for the study to come out to speak to what its conclusions are, but know that for everybody listening, we were looking at what the greenhouse gas impacts are of all of the additional authorization that has been, and the current authorization that has already been approved for export. We have, we’re looking at what the impacts are from local communities who bear both the economic, the jobs, as well as the adverse impacts to that. We’re looking at what the global trajectory is of demand, and what our allies might be needing in terms of liquefied natural gas. And importantly, we’re looking at the impacts back home on the costs of natural gas. We, you know, if we are producing little over 100 bcf a day of natural gas, and you take a good chunk of that and export it, what does that do to the prices at home for those who use it? And so we’re looking at the costs at home.
So the study will come out soon. There will be a 60-day comment period, so it will run into the next administration, obviously, but I think it’s important to lay out what the study finds. Just the facts. These are, this is done by our labs. These are just facts. And I think it’s important for those commenters to comment on it so we have it for the record, and potentially a future administration could make policy based upon what the study reveals.
Meyer: LNG has been such a big hot-button issue in this administration, and to some degree it has dominated some of the discourse around these questions. Have you been surprised by the degree to which it’s dominated discourse, or surprised by the degree of the backlash?
Granholm: Yeah, a bit, because of the amount that we have already authorized for export. I mean, the pause on additional authorizations does not impact in any way, shape, or form the amount of exports we are doing. We have already built up and are exporting … we’re the largest exporter in the world, 13 bcf, you know, billion cubic feet per day. We are a powerhouse in exporting LNG, and we’ve authorized a whole bunch more that is either under construction or seeking final investment decisions, etc.
The amount we have approved is massive. And this is … this study was a pause on even more, you know. So we’ve approved an amount that is almost equivalent to what the U.S. the demand will be, you know. So it doesn’t affect any of that. We didn’t pause any exports at all. So have I been surprised? Yes, because of — But I understand politically that some things aren’t necessarily based on the actual facts. But people are afraid, maybe, that there will, that portends some callback in existing authorizations or something, which it does not.
Meyer: So often when you go back, and I’ve been going back in and looking at the climate policy and energy policy from the administration, and what the coverage of it has been at the time. And what’s been striking — and I remember observing this when I was covering these issues, but it has been really striking to go back and see it in retrospect — is that the Biden administration was doing a lot at the same time, right? It was trying to stabilize the fossil fuel industry coming out of the Ukraine energy crisis. It was trying to help clean energy. It was trying to reduce emissions. But there’d be this pattern of, the Biden administration would pass the IRA, and a lot of the coverage on the IRA focused on the fossil fuel leasing provisions in the IRA, to the degree that I was like, did they read the law? You know, are they aware of what the policies are in this law? And then Biden would approve the Willow Project, or there’d be the fight over the LNG, and that would dominate attention. That would get a lot of coverage, and it would drive a lot of attention from climate activists, too.
Did what Biden was trying to do during this administration break through? Did what this administration was trying to do, did it break through with the people who needed to hear it? Meaning on the renewable side, on both sides, on the climate side and the fossil fuel side.
Granholm: I would say no, it definitely didn’t break through. But that’s more of a comment about our media environment, right? I mean, for media, with all due respect …
Meyer: This is an interesting question. Yeah, I mean, it ties into, like, what can the government do in terms of policy? How much do people notice what’s happening in terms of policy?
Granholm: I mean, unless there’s a massive controversy, people are looking at, you know, TikTok and Instagram, and so the things that get the big, you know, generate the most clicks are the ones that have some backlash, right? So those are the things that people notice. Do they notice the good news? No. Do people know, they have any idea about the amount of factories that are coming to America, or expanding in America? No clue. No clue. So that’s a question about, how do you do that? How do you get the word out? I’ve been across the country and almost every state you know, trumpeting this, but it still doesn’t rise to the level of consciousness.
And maybe it’s because people aren’t so interested in it, but I think that people want to see — I mean, the economy was the number one issue, and if you’ve got a factory coming to your area, that should be a positive, positive thing. But people don’t attribute it necessarily to the Biden administration. Is that a failure on our part of not yelling loud enough, etc.? Or is it a failure of the atomized media that we have? It’s just it’s hard to know going forward.
Meyer: Well, I think if it is a failure of the atomized media, it is a rather ominous sign for politics that tries to build things in the future. You’re the governor — you were the governor of a state that had ties to the fossil fuel industry, not in that it was extracting fossil fuels, but in that the main export, it uses them, right? What do you think Democrats should understand about the fossil fuel industry? And like, not only Democrats in government, but rank and file Democrats?
Granholm: Well I think, first of all, I think it’s important to understand the word transition. You know that we are in a transition from a molecule-based fuel system to an electron-based fuel system, to electrify. And that electrification, obviously, is so much more healthy for the planet, and it creates huge job opportunities. But the transition period, you know, we have 26 years between now and 2050, when we need to get to net zero — and notice it says ‘net zero.’ The fossil fuel industry is going to continue to exist. The net means that we have to find the technologies that reduce, obviously, greenhouse gas emissions from that fossil fuel industry.
People, also Democrats, understand, if they live in one of these states, that the fossil fuel industry provides a huge number of jobs, good paying jobs, and so you can’t just come along and say, get rid of all of that, because you’re talking about people and people’s economies and communities and towns. So it, there has to be a vision of build, build, build on the clean, and that market will expand, so that you can have a reduction on the fossil side. But I don’t think that we’re going to be fully rid of all fossil because I, and I think the technology will allow for us to clean up the fossil fuel side of things.
Meyer: Do you think that the voters, that rank and file Democrats — even beyond Democrats, just the type of voters the Democrats want to talk to — do you think they see this link between fossil fuels and their livelihoods and their economies? A link that Republicans are very eager to point to, but that I think Democrats sometimes avoid. Do you think that people see fossil fuels and associate their economic well-being with it?
Granholm: No, I don’t think they ,,, unless they live in one of those communities, right? I don’t think they necessarily link … I think people are really interested in reliable power, yeah, and they’re interested in how much that reliable power costs. That’s, for most people, they’re not looking, when they flip on the light switch, is it something that’s coming from natural gas-powered? Or is it something that’s coming from solar? People like the idea — and I can say this as a former governor, communities love the idea of creating jobs that are future-facing, that their kids will stay for. And the next generation, the Gen Y, Gen Z, they’re, you know, they don’t want to work in an industry that is polluting the planet. Many of them, I mean, some of them — of course, I don’t want to generalize. But for the most part, communities embrace these industries of the future. And so I think that is something that people listen to, and they understand that this transition is happening, and it is not just like flipping a light switch, that there has to be a glide path so that the communities that have powered us for the past 100 years can be part of powering us for the next 100 years, but using clean. But that transition period has to be one where you are sensitive to the fact that these many rural places feel very threatened.
Meyer: Democrats did a lot to help the fossil fuel industry during this administration, to stabilize it — after the pandemic, to stabilize it, after Ukraine, there was a Defense Production Act in the beginning to help the fracking industry. There was the use of the Strategic Petroleum Reserve to stabilize gas prices and oil prices. After Ukraine, the response they got from the fossil fuel industry was nothing but vitriol, nothing but, Biden doesn’t want us to drill. We hate the tone coming out of this administration. We’re not happy with this at all. Did Democrats do too much for the industry? Should they not have done what they did?
Granholm: Well, I don’t think Democrats … I don’t think we did it for the industry. We did it for the people. So for example, on the Strategic Petroleum Reserve, you know, gas prices were bumping up to $5 a gallon because of the dearth of supply globally as a result of Russia’s fuel not being on the market. So we wanted to make sure that people in the United States and around the world, but people in the United States in particular, weren’t paying for Putin’s war, and so releasing more supply obviously brought that down. I mean, today we’re $2 under what it was during that height. So it worked. And we have replenished the Strategic Petroleum Reserve at a price that was much more favorable to taxpayers. So it wasn’t, that wasn’t about saving the industry. That was about saving people’s pocketbooks.
We did help our allies on liquified natural gas exports, and they were reeling as a result, a couple of years ago, as you know, as a result of the war and Putin weaponizing natural gas. So that had an impact on the industry. It helped the industry. But our the strategy really is what’s going to help people here in the United States.
Meyer: There’s two different attitudes toward the fossil fuel industry, as — I’m going to generalize a little bit, but when I look at climate folks, folks who work in this professionally, who think about these issues day to day, whether they’re activists or engineers, I think people’s attitudes break down into two camps. And one of those camps is that the fossil fuel industry is a big enemy. They’re a big enemy of the transition. They’re going to fight the transition at all costs. They’re going to do everything they can to preserve fossil fuels. And just look at their support of Donald Trump, right? What they want from the Trump administration is shoring up demand because they want to lock people into fossil fuels.
And there’s another point of view that says, Well, you know, it’s not great, but the obstacles to the transition are more along the lines of technology development and deployment. And the fossil fuel industry, in the meantime, actually does provide a lot of energy for people, and you can’t ignore that. Where do you come down between those two camps?
Granholm: Well, I definitely think that industries tend to preserve their self-interest, right? And so the fossil fuel industry is all about fossil fuels. And so if they view another type of energy, cleaner energy, as a challenge, then they’re going to do everything, which — I mean, that has proven throughout history to have been the case.
I will say there are a couple of actors, several of the majors, who maybe have a little more of the luxury of being able to do investments in technologies that allow for a clean energy transition. That’s encouraging. I mean, when I … there’s a big oil and gas conference in Houston every year. And the first year I went, I was like, you guys, you should transition to be diversified energy companies, not just oil and gas. You guys have all of the resources. You’re the richest companies around. Why don’t you being … why aren’t you investing more in geothermal, for example, because you have the skill set. You’ve got, you use rigs, you go, you understand about extracting energy from beneath the surface. You’re experts in the subsurface. You got skill set. This began the big blowback. How dare you come and tell us what we should be doing? But it’s just realistic, and to be fair, some have, a lot have not.
Meyer: Some that got into it have now backed off of it, too, is the other thing, too. Because they’re just, the business is so … like, even if some leaders in the company are like, well, electricity looks like the future, we should get into it, the profit pattern’s totally different. The margins are totally different. So they then wind up getting back out, because fossil fuels just can be very profitable.
Granholm: This is why, to me, this transition, we have to almost overbuild on the renewable side, so that it is, so that it were, we just have so much momentum there. And the cost, when you overbuild, you’re scaling, your costs come down, and it becomes a game of cost, right? Our natural gas is so cheap, and so that’s why it’s a difficult thing.
Meyer: Right. This is like, in some ways, the good and the bad, right? Is that we have all this cheap natural gas, which means we’ve had fairly cheap electricity, right? And that means we attract a lot of industry that is not going to Europe. For instance, China also has cheap electricity because they subsidize it. They burn a lot of coal at state subsidy. They do a lot of generation. I know it’s just a tricky … it is tricky.
Granholm: The whole thing. It’s complicated. It’s not binary. I mean, really, we have to think about it: Where do we want to be in 2050? We want to be at net zero. How do we get there? How do we back into that? And I think the electricity grid side of things will come along very, very quickly. You know, it’s going to be difficult to decarbonize heavy industry, and we’re working on strategies to do that. You know, the building sector — really, really important to be able to address that. So, bottom line is, it’s complicated.
Meyer: Clean energy and electricity, let’s move on. So I think, as recently as 18 months ago, the word on electricity demand, on electricity markets, and what was happening in electricity in the U.S. was, yes, these AI companies are going to come along. They’re building a lot of data centers, but they’re not going to slow down the transition. I think that might have changed a little bit, that consensus might have changed a little bit since then, or I think it’s a little less clear, let’s say. What’s your view?
Granholm: I think first of all, we know the demand is going up, and data centers are a part of that. So is electrification of transportation. So are all these 900 factories coming on. So there are a number of reasons —
Meyer: Right, AI remains a relatively small percentage …
Granholm: — at the moment. But it’s, but there is no doubt that it’s a growing part of it. We have managed increases in demand in the past, and we will continue to do that going forward by adding all of this additional power, which is why, you know, we just need to continue to build generation. But what our conversations with the hyperscalers on these data centers — first of all, we believe that it’s really important to have these data centers, the AI data centers, in the United States, for national security reasons. We need to hold on to that. And if that’s true, and they build out these data centers, and they need another, whatever, 20 gigawatts of power for the data centers — bring your own power. BYOP. So bring your own clean power. Your shareholders and your commitments to clean energy, all of them have commitments like that.
So this is why you’re seeing these really interesting announcements coming from Google and Meta and Amazon, etc., partnering with geothermal companies like Sage and Fervo, partnering with small modular reactor companies like Kairos, are turning on power. So it’s, to me, very exciting that, not only that there may be, there’s an additive component to this. And there’s a willingness on the part of the data centers to actually pay a green premium for those, that addition, those additional electrons.
Meyer: Do you hear that they are willing to … is the willingness to pay that green premium durable? Because I do hear concerns that basically, once Trump comes in, or in a year from now, these companies are going to want to keep building AI data centers. They’re going to be starved for power, and they’re just going to build natural gas because it’s not coal, and they need the energy.
Granholm: I think that there will be some temptation to do that. And I think that while nuclear reactors, for example, are being built, they may rely, there may be some reliance on natural gas to be able to power — natural gas combined, perhaps with CCS, for example, carbon capture …
Meyer: Yeah, Exxon just made this announcement. It’s going to try to get into that.
Granholm: Yes, exactly. But these companies themselves have made commitments. I mean, Amazon’s commitment to clean has been part of their ethos. So they can’t just rely upon that. They have got to bring their own.
And let me just say one other thing, is that bringing their own and paying a green premium for that, they recognize the backlash of adding demand on a grid that is socialized across the rate base. They recognize, they do not want to have protests because people’s rates are going up because of this data center. And data centers, of course, they are fantastic for construction jobs, but they don’t employ a huge number of people. There are ripple effects, of course, in an industrial cluster, but they’re worried about the backlash — as they should be, and therefore bringing their own power and paying for it is a part of the strategy.
Meyer: Thinking more broadly, the Biden administration came in, and you came in with an interest in fixing issues in the U.S. innovation and deployment chain, let’s say, and in the chain of innovations, or the chain of scientific research, as it goes from the lab and the national labs to eventually the marketplace. And one big criticism, including from one thing that Jigar talks about the Loan Programs Office is trying to do, is make sure that when we invent technologies here, they don’t get then exported abroad, sold abroad, and then made somewhere else and commercialized somewhere else. Today, in 2024, is that chain working? And what are the biggest problems with that chain as you see them?
Granholm: Well, there’s so many, there’s so many opportunities for solving the biggest problem. So for example, we launched eight Earthshots to be able to reduce the price for this next-generation technologies like enhanced geothermal or floating offshore wind platforms or clean hydrogen. If we can reduce the cost of those technologies by 90% — and that’s what a lot of the labs are working on — that makes them irresistible.
And that’s, making these advanced technologies irresistible is part of the strategy. And that includes, you know, nuclear reactors. So we have a whole office of technology transitions led by Vanessa Chan, who came in from outside, and she has overseen all these liftoff reports for these clean technologies that have, really, industry benchmarks about where we should be and when we should be there. We feel really good about the trajectory of these technologies as a result of that work, and the work that’s being done by the labs.
There are a number of knotty problems, though, that are beyond those particular technologies. One of the knottiest problems, honestly — and I mean knotty, K-N-O-T-T-Y — is the grid getting the connection through. And I think that that is a problem that we’re working on, using AI to solve. But there needs to be a much greater emphasis on how to get the RTOs and the ISOs to get more power online.
Meyer: What technology in the clean energy … actually, let me just ask one follow up, which is, do you think that those Earthshot programs will be sustained through the next administration?
Granholm: I do because, I mean, if there’s a big support for hydrogen, for example. So how do we get the cost of hydrogen down? I think you can cherry pick, I suppose. But you know, carbon management is one of the Earthshots. So how do you reduce the cost of that so a lot of the technologies have support?
Meyer: Thinking across the full spectrum, full portfolio of technologies that the DOE has supported or gotten engaged on in the past four years, what technology are you most excited about?
Granholm: Well, I’m certainly super excited about the deployment of solar that has just been, just a rocket ship, which is very, very cool. I personally love, and would love to see a greater investment by the next — we would have done this if we had the opportunity to serve — I think, a greater investment in geothermal, enhanced geothermal. I think that has huge promise, to be able to do that. And I would also want to see a greater investment, a consistent investment in the grid. So we got, there’s $70 billion that is focused on the grid through these laws. And we were able to do spot efforts, to do reconductoring and get more power across existing lines, to do grid-enhancing technologies, to do undergrounding, all of that. But a consistent investment in the grid, kind of like what we have for the Highway Trust Fund. If we had a, we have a national grid, it’s, you know, the transmission and distribution miles, 7 million miles, and 75% of the grid is over 25 years old. We need a consistent investment for both to deal with these extreme weather events, cyber, and make, just making sure that we are upgrading the poles on which this electricity is carried.
Meyer: It is so different, and it’s interesting compared to highways. Because highways, it is a form of transmit, right? I mean, yeah, we move energy around on the highways. Highways are this big national system. The highways are also publicly owned. The grid is not. Do you think that’s an issue?
Granholm: Well, some of the grid, I mean, you know, it depends, right? I think that we just need to think about it differently. Electricity is just a fundamental human need, like transportation on a road, or even more importantly. So I just think we have to think differently about how we support the grid and this scattershot … and I know it’s, obviously it’s a federalism issue, as well. But we have a system like that for the roads, and we should take a look at that. There’s state roads, and the money goes to the states and they do it, and then there’s federal roads, you know, federal highways. I think we can borrow lessons, I’ll just say that, from what we have done with other infrastructure to support the grid.
Meyer: Looking back, I think one of the big promises, one of the big claims that Biden made coming into office was that government was going to do big things again. It was going to intervene and help the economy in big, strategic, supply-and-demand-oriented ways, right? It was going to bring back factories. It was going to bring back jobs. It could, government could be a major force for good in people’s lives, and that this would not only be good for the country in a kind of broad way, but also help defeat Trumpism.
Obviously, Donald Trump is about to be president again. But I also think the Biden administration did go much further in its economic policy than maybe the Obama administration did outside of healthcare. What did you learn from this go around? What did you learn from this outing at trying to do economic and industrial policy at the federal level, and trying to do big things with the government’s power?
Granholm: You know, when I was done being governor, I wrote a book about this. It’s called The Governor’s Story, where I was lamenting the fact that we didn’t have national strategy to be able to create jobs in our states. And the fact that the troika of laws — I would include the CHIPS and Science Act, as well — but there are three basic laws that are the basis for this table of industrial strategy, and that it has worked so well.
I feel like, you know, all of the folks who have in the past been total free market, “free market” players, government shouldn’t be involved, we shouldn’t be picking, “winners or losers,” or all of that, and allowing all these other countries to take our jobs. I think people have now seen this play out, the fact that you don’t have any hands on and other countries are playing. And I have, I have learned, and I hope others see that had, the government can play an enabling role for actually creating jobs in this country and making us competitive. Who knew policy actually works?
Meyer: I hear that …
Granholm: I hear a “but” coming.
Meyer: Kamala Harris, still, though, did not win the presidential election. So I think, to some degree, the Biden administration has proved you can do these things, and that they elicit a response. I think, unfortunately, what it’s also demonstrated is that this might be somewhat disconnected from political outcomes. So what lesson do you learn from that?
Granholm: I mean, yeah. Lesson A: It works, yeah. Lesson B: How do you, how do you communicate that in a way that people understand that it’s working? How do we, yeah, how does that happen? It’s that. It’s back to the question we started to talk about at the front end. I wish I was a great communications guru and I could tell you how to do it. It’s one of those things that you almost have to, because it was so soon, in the results-bearing part of this strategy, meaning that you haven’t, people haven’t been hired for all those factories yet because they’re still under construction, or they’re still being contracts.
I still feel like it’s not over yet. The story’s not over yet. In the immediate, yes, there was a communications gap because people didn’t believe it. And I think people are angry, and they don’t trust government to begin with. And so if you’re coming in as a candidate saying that your government’s bad and they don’t believe you, and I’m going to fight for you, that’s a more compelling message than, yeah, we we have all these factories that are just starting. You need to wait a few years, but it’s gonna happen, I swear. So how do we communicate that? You’re in the communications business — tell me.
Meyer: Well, do you think it was a mistake to communicate so many of these changes, so many of these policies were communicated through manufacturing — I mean, it’s what we’re doing right now. Not many voters actually work in manufacturing. We have a largely services-dominated economy. Was that a mistake?
Granholm: I’m sort of manufacturing-centric.
Meyer: I was gonna say, in some ways, because of governor of Michigan, you have an anomalous …
Granholm: Totally. This, yeah, it’s not, it’s not how everybody else sees it, for sure. And I totally, I totally hear you on this. So here’s, you know, here’s another data point, is that — or factor: Part of the Inflation Reduction Act and the Bipartisan Infrastructure Law was to give people the ability to weatherize their homes, to have rebates for appliances that made them pay less on their bills. The cool thing about this was that, is that 49 out of the 50 states have said, yes, I want that program, and they’re applying for the funding to make that happen. But it’s just happening now.
Meyer: I was going to say, I remember looking at the timelines for this and being like, they’re not going to get that out by the election.
Granholm: Yeah, I mean, it’s just, the four-year period of time is just such a speck on the timeline that’s necessary to actually see it to fruition.
Meyer: What do Democrats need the government to do that it cannot do, or that it has not been able to do?
Granholm: Besides communicating these, the successes, and making sure that we can move more quickly on …
Meyer: Communicating, or, yeah, maybe it’s that these were great rebate programs, and also, the law passed in August 2022, and we’re just getting them out now, right? Like, it took two years to get through that whole process.
Granholm: Yeah, and that is a, that’s an issue, I think, that government has to deal with. In general, when you have a new program, you’ve got — rightfully so — all of the oversight, and making sure. And then the states have — if you push something through to the states, this is the same thing with the NEVI program, the vehicle program went to the states.
We have oversight on the federal level. States have oversight on the state level. It’s a new program. So, for example, for electric vehicle chargers, the NEVI program was to get these chargers to the hardest spaces, the spaces where no private sector entity would go, where there was no electricity. So the contracts took a while to figure out, and how to get them, and the states had to figure out their own processes. So they’re starting, we have 24,000 coming online from the NEVI program. But again, they will come online over the next couple of years — years. So the slowness of the systems, that is an inherent challenge.
If you move too fast, though, then you end up making mistakes. You don’t want to see some wrongful spending. So it is, I mean, government takes, the government, wheels of government, eventually they’ll get it right. There’s a lot of oversight. You want to make sure there’s no waste, fraud, and abuse, but it may not happen on the convenient timelines of a four-year term.
Meyer: I understand how, you go slow, and it avoids mistakes, and you get your one shot to do things, I will say, looking back, the times when the government has been able to pass policies that resulted in political wins — and specifically, when Democrats were able to expand the government’s powers in ways that result in political wins, to build things, do big things, they did them pretty fast. The 1930s, like, the New Deal was a program, right? Yeah, all the LBJ programs were relatively fast.
Granholm: Yes, I totally agree. And in history, there was less concern about a lot of the stuff that, yeah, that there have been embedded processes. I mean, it’s, I think, immediately, of the DOGE efforts to try to reduce bureaucracy. And honestly, there is truth to that. There should be some reduction of the steps it takes to get something accomplished. And there needs to be sort of a value-stream mapping of the bureaucratic systems. This is true.
We need to speed up permitting. We know we need to do that. And you know, the friction, the litigation, the NIMBY issues, in addition to the the government’s internal processes, it’s just too much. So can there be streamlining to make things move more quickly? There can be, and I think that should be a focus, as well, for Democrats, not just Republicans.
Meyer: After four years at the nerve center of decarbonization in the government, what do you think is the biggest obstacle to decarbonization, and to doing the energy transition?
Granholm: I think right now, I mean, I would say the most immediate big obstacle is that we have 3.7 terawatts of clean energy waiting to get into the queue, to be, build out that generation from the transmission point of view. If I could tackle one thing, one thing quickly, it would be the interconnection queues.
Meyer: Wow. And so you would be willing to pay, you would be willing to make other concessions to handle transmission?
Granholm: I would be. And then the, I would, there’s one other thing I would say, is, I would want to invest much more in baseload power, baseload clean power. So bigger investment in geothermal, bigger investment in hydroelectric — even distributed hydroelectric, you know, making dams where they don’t already exist, stuff like that that really are … you know, I believe nuclear is a really important part of the clean energy future. And those nuclear reactors, small modular reactors, I think are really important. I’d continue to invest in them. I would also continue to invest in fusion.
Meyer: There’s a big tradeoff that the administration has kept dealing with, I think, or that it has kept running up against during the past four years, and to some degree, is really inherent in the design of the Inflation Reduction Act, which is, when you decarbonize, when you seek to make this transition happen, do you optimize for deployment and commercialization, or do you optimize for reducing emissions?
I think the clearest version of this tradeoff is with the hydrogen tax credit, where there is a tradeoff between getting as many electrolyzers out there as possible, trying to build as much electrolyte electrolysis capacity on the grid as you can, versus making sure that those electrolyzers don’t indirectly increase emissions across the national economy. In that case, but even more broadly, how do you come down? If there’s a tradeoff between deployment and reducing emissions, where do you come down?
Granholm: I don’t like the binary choice. I will say this: I’m very big on actual deployment, knowing that there will be continuous improvement on the technologies that are being deployed, including GHG emissions. I just think that people need to get used to, I mean, you know, when you put out a product for the first time, there’s always going to be things that you want to improve on, and because the overall goal is to reduce emissions, that’s got to be a primary thing of the product that is being put to market. So I think both have to happen, but the deployment is is utterly priority for me. Get it out, and then improve.
Meyer: Do you think … are the technologies ready, at this point, to think about reducing emissions? Or do we just need to deploy a lot?
Granholm: Well, if you’re talking about electrolyzers, we still have to get these hubs up and running. And this is another thing, waiting for guidance on the tax credit associated with hydrogen is, is a whole ‘nother thing. But, but the bottom line is, once they’re, I mean, the whole point about doing hubs, for example, in hydrogen, and using fuels that are either renewable or natural gas with carbon capture or nuclear — the bottom line is, we’ve got to get these hubs, are the places where we’re going to experiment about what works and what doesn’t work. We’ve got to get the products in the hands of those who are going to be using them so that we can learn from them. New technology requires deployment in order to learn, in order to improve.
Meyer: Looking back on the IRA — and to some degree, this troika of laws, but really the IRA — what is your biggest regret about how they played out?
Granholm: My biggest regret is that there wasn’t, we weren’t able to get consistent investment in the grid through the IRA.
Meyer: From the, from the point of view of the law being designed …
Granholm: Yeah, from the design of it. That could be something that that is worked on in the years to come.
Meyer: What’s your biggest regret on implementation of the law? Speed, clearly,
Granholm: Speed, yeah. Trying to get through all of the hoops that you need to get through to do it, right? Why was it so slow? Again, because of all of — let me just say, I’m super proud of the work that our team has done, and the fact that we will have 98% of the funding out from these rounds of funding. That is amazing.
Meyer: I’m going to ask you what you’re proudest of.
Granholm: But it is, I regret we weren’t given the opportunity to serve in a second term to make sure that we were able to carry this forward, and that people can see that the benefits of these laws actually create an industrial strategy that reshores manufacturing, and it generates clean electricity and creates opportunity for communities all across the country.
Meyer: Ultimately, the IRA did a ton of industrial policy through the tax code, and then it did a ton of grants and loans through DOE. And I think there could be criticisms of the speed of DOE getting loans out, let’s say.
I mean, something I’ve heard from companies is like, look, LPO is — $400 billion of loan authority, they only got out $54 billion. That number might go up a little bit in the next few days. But I’ve also heard criticism that we tried to do all this stuff through the tax code, and it just took a long time to get that tax guidance out, and we were trying to jam a lot through a relatively small tax policy office. What would you change … if there were to be another attempt at industrial policy, be it on climate or anything else, right? Because we want to do … like, Democrats do want to have goals for other sectors of the economy. What would you change about that implementation, or that way of writing the law, to make sure that industrial policy is effective in the U.S. government as it exists?
Granholm: It’s hard for me to sa,y this is a process that I would remove from the system, because it, we have so many technologies, so many agencies involved, and I think that there needs to be a comprehensive look at it. I do think that in a next iteration, incentivizing or removing waste streams from permitting has got to be a priority to get this stuff deployed. As I say, incentivizing investment in the grid has got to be a priority. Incentivizing investment, specifically, in baseload clean technologies.
Meyer: How would you incentivize those things without just winding up in another slow process.
Granholm: So tax code’s a little more efficient, yeah. So the tax code, I think, gets the private sector to sit up and take notice, and move, yeah. And so doing it through the tax code, as opposed to grants or loans, that happens, assuming that folks are but the guidance —
Meyer: This time it did take long, a long time for the guidance to come.
Granholm: Yeah, for some. I mean, for like, solar stuff that we’ve, you were used to, instead of being incentivized in the tax code, that all obviously went very quickly and will continue to move. But it’s just, it’s the startup of these things where we haven’t written guidance before, where it’s a technology that has subsets of supply chains, what’s involved that, you know, and you have a small office. So I’d invest in the office to be able to expand the ability to get these through a little more quickly. But I think that ultimately, even though it takes a little bit of time, it works, and it will work, and we will see the benefits of this over the next few years, and I hope people recognize the incredible courage that it took for Joe Biden to act, create industrial policy in America where we had not done it before.
Meyer: What are you proudest of?
Granholm: I’m proud to work for this administration, for this president. And I’m really proud of our team, that we have been able to do so much in so short of amount of time, with all new programs. It is an amazing, amazing thing to have been in this position at this time. I feel so utterly lucky, and I hope the next guy sees it for the jewel that it is.
Meyer: I think you’re in this role for another 35, 36 days.
Granholm: I think it’s like 26 working days.
Meyer: After that, what sort of problems are you thinking of next?
Granholm: Oh, I’m still thinking of all of these problems. I’ll still be active in this space in some way, shape, or form.
Meyer: Is there a particular set of problems you’re eager to tackle?
Granholm: I don’t know what’s going to … I have no idea what I’m going to be doing next, but it’s got to be in this basic work. In the clean space is where I will be.
Meyer: So at the end of every episode, we ask — Jesse and I, my co-host, do an upshift or a downshift. You just pick one. And an upshift, you pick something from the news or something that you’ve encountered recently that either is making you feel more upbeat about the energy transition, or more downbeat about the energy transition, about our ability to make it happen, about its ability to, our ability to decarbonize the economy. And so to conclude, I wanted to ask you, do you have an upshift or a downshift to share with us?
Granholm: My upshift is that I am optimistic about the durability of these programs that I think, regardless of who’s in the White House, it is inexorable, this clean energy transition — because, because the Inflation Reduction Act has made investing in America irresistible, because there’s bipartisan support, and because of all of the mayors and the governors and the members of the, members of the private sector who have raised their hand and said, We got this. We’re taking the baton.
Meyer: Secretary Granholm, thank you so much for joining us today.
Granholm: I appreciate it. Thank you, Rob.
