The Road To Becoming a Sustainable Energy Superpower — Sec. Granholm: Full Interview — GZERO World

[00:00:00] Speaker 1: Secretary Granholm, thanks so much for joining me on GZR World. You bet. Glad to be on. Let me start by asking you about this headline piece of legislation. Not a lot of people were optimistic it was going to get done. Spend two minutes just kind of giving the thumbnail for our audience here on what it's going to accomplish. [00:00:19] Jennifer Granholm: Yeah, I mean, I think there's several pieces of this that are very important, several underlying goals. Number one is to reduce costs for people. And so this is part of the idea of lessening inflation to reduce the cost of people for their energy usage, as well as prescription drugs, etc. But in my realm, it's really giving people the opportunity, for example, to retrofit their homes, to reduce their monthly energy bills, significant incentives to be able to install heat pumps or electric appliances. Or if people are are eager to try out solar panels, there'll be a 30 percent tax tax credit on that. So there's the reduction of energy prices at home. Similarly, the reduction of fuel prices for vehicles by incentivizing the purchase of electric vehicles and for the first time incentivizing the purchase of used electric vehicles. But Ian, I think what is really exciting about this from the medium to long term strategy is that it incentivizes the manufacturing of this energy sector in the United States. I say this as the former governor of Michigan, watching all of these manufacturing jobs go overseas as we bowed to the altar of free trade, and now we're saying this president has said enough is enough. We want to partner with business to create a manufacturing sector and the supply chain for that sector in the United States for these clean energy products, whether they're solar panels or wind turbines or electric vehicles or the guts to that electric vehicle, which is the battery, which includes the critical minerals, as well as the anode, cathode, all of the materials that are now being manufactured elsewhere. So this is, to me, from an industrial strategy, this ability to incentivize the reshoring of manufacturing is a huge piece of the bill. So lowering costs, you know, incentivizing the manufacturer, and then incentivizing the deployment of clean energy across the country to be able to address climate change, significant incentives for renewable, significant incentives for nuclear, for advanced nuclear, for geothermal, for hydroelectric power, all kinds of energy that help to address the climate, the climate crisis, all three of those very important goals. [00:02:38] Speaker 1: Two, three months ago, President Biden's primary approach to the CEOs of energy companies seemed to be naming and shaming. It was beating them up. The private sector wasn't happy about that at all. Now, we're talking very much about hundreds of billions of dollars that are meant to incentivize many of those same CEOs to start investing much more in sustainable transition. Do you think it's fair to say that that former strategy was less successful than it should have been, and there's going to be more attention on the latter? [00:03:08] Jennifer Granholm: The Inflation Reduction Act is really a strategy about providing carrots to incentivize the manufacture of clean energy in the United States. The pointing at, for example, the fossil industry, the oil and gas companies, was about the price, right, the price of gas at the time and the fact that they were engaging rather than reinvesting in production. And it was they were doing a lot of shareholder buyback and the president was exhorting them to invest in production. And so this act, it doesn't incentivize fossil fuels in that same way, but it does incentivize clean energy. And those same CEOs, to your point, can diversify and to become, you know, broader energy companies and take advantage of building, for example, offshore wind platforms. If you're already doing oil platforms in the Gulf or doing geothermal since you're since oil and gas industry are very expert, have great expertise in the subsurface. And so being able to pull heat from below our feet rather than or in addition to oil, the president has called upon them to increase production right now because of the invasion of Ukraine has pulled Russian barrels off the off the market. And we have had to replace those, the oil and gas industry will be at record levels in the United States next year. But the bottom line is this act is about incentivizing the build out of clean energy. And that's very exciting. [00:04:27] Speaker 1: How long before we will be able to characterize, classify the United States as a sustainable energy superpower in your view? [00:04:36] Jennifer Granholm: This is the biggest investment, and especially when you consider that all of the funding will require public private partnerships. So there'll be private sector investment in addition to the public investment. $370 billion worth of investment in clean technologies is has never been done before. It is massive and it is likely to be double that if you consider what the private sector will be doing. And when you combine the bipartisan infrastructure law, which incentivized the advanced technologies like clean hydrogen, like carbon capture and sequestration, like long duration energy storage, battery storage, though that funding another $62 billion combined with the CHIPS Act. So there's the bipartisan infrastructure law, sort of the backbone of next generation technologies, including advanced nuclear. The CHIPS Act is like the brain because obviously you're funding the semiconductor industry in the United States. It's again, an effort to reshore that capability. And then the lungs of it is really this Inflation Reduction Act, which provides incentive for the private sector to really help to deploy this next generation technology. All three steps are such a boost to the United States and puts us in a leadership position. And so while we're you know, it's going to take some time to build up those supply chains, obviously. But the incentives in there, particularly in the vehicle side for the automakers to to bring that that that manufacturing capability into the United States is are very quick. The turnarounds there, I mean, we'll see if they're able to keep up with the timelines. But it is it is really I think people's hair is on fire to be able to meet the deadlines that are specified in the act. [00:06:21] Speaker 1: How much of a difference do you think this makes for the upcoming COP 27 summit in Sharm el-Sheikh? Do you think that the United States is now in a position to make something more of COP 27? Or are we really looking for the next year for the year after that on the on the global stage? [00:06:37] Jennifer Granholm: Yeah, I mean, it's a great question. I do think that COP gives us an ability to have some moral authority to say we are putting our money where our mouth is on this. And therefore, we are going to be still pressing our allies. But honestly, our allies are there, too, because of what has happened. You know, when you look at the the NATO allies, for example, or our European allies who understand how vulnerable we are by relying upon fossil fuels or any technologies from countries who may not whose values we don't share. And so the ability to be able to band together, to find solutions on the technology side, to make sure that countries are energy secure because they don't want to have to rely upon upon Russia, for example. So you're the Europeans obviously are moving with alacrity in this direction. Germany, I think, saw in the first half of this year a 22 percent increase in solar. They need it. It's an existential question, obviously, because they have had such a great reliance upon Russian fuel. Great Britain, they just completely decided they were going to not use any. [00:07:51] Speaker 1: No more Russian energy. [00:07:52] Jennifer Granholm: What does that tell you? They've got to move swiftly as well. So for people, it's not just a moral question, it is an it's an issue of can we get enough reliable energy for our people right now? And of course, because we're talking about the climate and every one of their citizens is experiencing experiencing these extreme weather events. So, you know, it is it has been a horrible year in terms of the war and in terms of eyes open about how vulnerable we all are when we don't create our own homegrown energy sources. But that is an accelerant as well toward the ultimate goal of getting getting to 100 percent clean electricity or net zero by 2050. [00:08:33] Speaker 1: Now, of course, when we talk about the Russian invasion of Ukraine this year, the Europeans are just doing everything they can to diversify away from Russian energy. And if that means more solar, so be it. If that means hydrogen, so be it. But there's also a lot more coal coming in and being burned by the Europeans, too. The French are not where they need to be. They've got a lot of nuclear plants that are shuttered right now. [00:08:55] Jennifer Granholm: How much is the United States doing? There is no doubt that I mean, the U.S., obviously, we are at record levels of liquefied natural gas exports. Obviously, very important for the Europeans. The president made a commitment on that. We are working with them on technology advancements. But you're right in this year, in terms of fuel switching, they have got to do what they've got to do to be able to keep, you know, keep the lights on. Totally understand that. But it does mean that their plans to move toward, you know, clean energy, 100 percent, you know, carbon free electricity are moving fast, too. And everybody looking toward the next generation of nuclear. So we've been talking, for example, with the Eastern Europeans, Poland, very interested in small modular reactors, Romania as well. There's a lot of excitement about that next generation nuclear that we are working with these other countries on as well. [00:09:53] Speaker 1: How much are you engaged at all with Chinese leadership on the energy side right now to talk about what both countries are actually doing? Have we lost those contacts, especially since Taiwan? I know they're not traveling with the pandemic. How problematic is that? [00:10:09] Jennifer Granholm: Yeah, I mean, we need to re-engage those conversations. There was a chill after what was happening with the kerfuffle around Taiwan. But I am confident that this area can be an oasis of diplomacy since the world needs these solutions. And so we are hopeful that we can re-engage with the Chinese on the discussions regarding next generation. For example, clean hydrogen, super important. All of my counterparts across the world, the energy ministers in all of these countries, are looking for the solutions to bring down the price of electrolyzer-based hydrogen, hydrogen that is derived from renewable sources. And we want to be able to be able to be able to be able to be able to find the solution to making sure we have long duration energy storage for renewables so that we can rely upon clean baseload power. So we want to be able to engage, I think, with the Chinese once on this, I think, you know, it's good to have diplomacy in areas where you know we all need to move in a direction. And I'm hopeful that we can re-engage with them on this. [00:11:22] Speaker 1: Let me also just ask you at least a little bit about the Middle East, since we haven't touched on it yet. Of course, there was also a kerfuffle about whether or not President Biden was going to make a trip to Saudi Arabia. Do you think that from an energy perspective, these relations are becoming more constructive long term or not really? [00:11:40] Jennifer Granholm: No, I think they are. They want to be leaders in hydrogen, in clean hydrogen. Now, they may derive their hydrogen. I mean, they could so easily derive their hydrogen from solar, solar powering the hydrogen process, and that would make them enormously popular, I'll say, among folks who want to be able to use hydrogen as a clean source. They also could create hydrogen from natural gas. That's a little more problematic in terms of the CO2 emissions and the methane potential leakage, so they'd have to address that. But they have professed to us repeatedly that they want to be a leader in clean hydrogen. They also want to obviously do solar, enormous resources there. If you can turn that solar and the excess solar, if they don't need all that solar into hydrogen, that would be an amazing economic opportunity for them. [00:12:33] Speaker 1: Do you think that Americans, on a bipartisan basis, understand the need for global leadership as we fight a climate that is increasingly becoming very dangerous for all of us around the world? [00:12:53] Jennifer Granholm: Yeah, I do think people understand it. I mean, they know it is global climate change. It is not just climate change in the United States and that we've got to do our part by leading by example. We have to do our part by working in partnership with countries who would love to partner on technology roadmaps to get to their goals of getting to net zero by 2050. I think they know how critical it is that China, for example, reduces its CO2 pollution and we need to continue to press on countries that are big emitters. We are as well, but the fact that we've been able to take this action and can reduce, can say by all accounts that we'll be reducing our CO2 emissions by at least 40%, the goal is to get to 50% by 2030. We want to challenge other countries to meet that same, that meet those same kind of numbers and obviously it's not just us, it is the globe. And I will say this, I do think that in China and in India, in all of these countries, but I mean, you see the heat waves that are happening. It is not going to be acceptable for leaders in any country to ignore that. And people around the world understand what is causing these extreme weather events and they are going to demand action. There's only so long that people can stay under a weeks long, months long heat dome that is killing people before people rise up. And so, you know, every country has to do their part. [00:14:23] Speaker 1: Secretary of Energy, Jennifer Graham, thank you so much for joining us. Secretary of Energy, Jennifer Graham, thank you for joining us. [00:14:28] Jennifer Granholm: Secretary of Energy, Jennifer Graham, thank you for joining us. [00:14:29] Speaker ?: Secretary of Energy, Jennifer Graham, thank you for joining us. Secretary of Energy, Jennifer Graham, thank you for joining us. Secretary of Energy, Jennifer Graham, thank you for joining us. Secretary of Energy, Jennifer Graham, thank you for joining us. Secretary of Energy, Jennifer Graham, thank you for joining us. Secretary of Energy, Jennifer Graham, thank you for joining us. Secretary of Energy, Jennifer Graham, thank you for joining us.