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DEC 8, 2021

Good morning from Seattle. I’m headed to Salt Lake City today to moderate a panel at the American Clean Power Association conference. Will you be there?

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Send your energy photos, ideas and more to news@ciphernews.com.

HARDER LINE COLUMN
U.S. climate and energy laws push rest of world, IEA chief says
BY: AMY HARDER

The recently passed infrastructure law will have a ripple effect worldwide and encourage other governments to invest in new clean energy technologies, Fatih Birol, executive director of the International Energy Agency, told Cipher in an exclusive interview.

“It is definitely one of the critical moments in the U.S., but also global energy markets,” Birol said in a virtual interview from the agency’s headquarters in Paris last week as part of Cipher’s Newsmakers series.

“I believe many of the colleagues in the U.S. may not see it. But if you are outside of the U.S. like me—working with many governments, talking with the different heads of governments, heads of companies, and so on—they see if the United States goes for electric cars, if the U.S. goes for carbon capture and storage, if the U.S. puts money in the hydrogen applications, there must be something in it. So, ‘it's a winner,’ they think.”

The clean energy provisions of the infrastructure law and the Build Back Better bill, which lawmakers are still debating, have been pared back from initial aspirations of President Biden and some Democrats. But they both still represent historic levels of government investments in clean energy.

The infrastructure law is putting more than $100 billion in climate and clean energy programs, including nearly $40 billion in energy research and development alone within the Energy Department.

That’s equivalent to doubling the energy R&D budget for five years straight, according to ClearPath, a nonprofit organization focused on clean energy innovation policy.

“This is the largest investment in new clean energy technologies in R&D in the last 40 years,” Spencer Nelson, ClearPath’s senior research director, told Cipher.

But the infrastructure law is just the beginning for Biden and many congressional Democrats. The Build Back Better (BBB) legislation, which passed the House before Thanksgiving and is awaiting action by the Senate, would put some $500 billion toward clean energy. The BBB would pour $2.2 trillion of federal spending over 10 years into a host of issues, climate change being one of the most prominent.

Its fate is uncertain due to opposition by congressional Republicans and a couple of key Senate Democrats, particularly Sen. Joe Manchin of West Virginia, which is rich in coal and natural gas.

If the BBB doesn’t pass, “the pace of the progress will be much smaller,” Birol said.

The infrastructure law and BBB are designed to work in tandem. Here’s an example of what that means:

The infrastructure law pours $8 billion and $3.5 billion, respectively, into building hubs that will support first-of-their-kind facilities making clean hydrogen fuel and capturing carbon dioxide emissions from the ambient air (called direct air capture).

The Build Back Better bill would provide tax credits for more developers to build clean hydrogen and direct air capture facilities.

“What the BBB provides is a pull from the market side,” said David Hart, director of the Center for Clean Energy Innovation at the Information Technology and Innovation Foundation.

If the BBB doesn’t pass, “it raises the risk of some of those demonstration projects not leading to commercial projects,” Hart told Cipher.

At least one entrepreneur says she would stick with it, despite the headwinds such a failure of passage would suggest.

Jennifer Holmgren is CEO of LanzaTech, a company using new technology to turn pollution, including carbon dioxide emissions, into usable products ranging from sustainable aviation fuel to yoga clothes.

Although based in the United States, most of LanzaTech’s current business is outside the U.S. The infrastructure law “will allow us to build plants here,” Holmgren said in an interview from LanzaTech’s headquarters in Skokie, Ill. (Stay tuned soon for the debut of our “Innovators” video series with Holmgren.)

“We’re not going to fail” if BBB doesn’t pass, Holmgren said. Echoing Birol, she said it would slow things down. “The question is, how fast can we go?”

Birol says he is keeping in close touch with U.S. lawmakers on both sides of the aisle urging passage of the Build Back Better bill.

Birol’s intergovernmental agency was first founded by wealthy nations in the aftermath of the 1970’s oil crisis to protect energy security. The group covered 45% of global energy consumption when Birol became executive director in 2015; today it’s close to 80%.

As the urgency of climate change has grown, IEA’s mission has shifted to tackle the problem. Its clout has grown, too. Birol was even named one of Time’s 100 most influential people this year, nominated by President Biden’s Chief Climate Envoy John Kerry.

“We hope that they [U.S. lawmakers] understand that pushing clean energy is not only important for addressing the climate challenges, but to prepare U.S. economy for the next chapter of the energy industry,” Birol said. “It will be a huge competition and [the] United States, to be honest with you, is not the only country that pushes the envelope when it comes to clean energy technologies.”

Q&A
IEA chief Birol on U.S. leadership, fossil-fuel prices and more
Amy Harder sits down with Fatih Birol, executive director of the International Energy Agency, for an exclusive interview. Watch to hear Birol on the importance of U.S. climate leadership on government policy, the need for a clean energy mix to decarbonize the global economy and why we must reduce the supply and demand for fossil fuels.

Amy’s Lunchtime Reads
and Hot Takes

Elon Musk Comes Out Against Federal Electric-Vehicle SpendingThe Wall Street Journal
My take: It’s convenient Musk is opposing government support for electric vehicles and charging stations after Tesla received hundreds of millions of dollars in government support years ago. To tackle climate change, we need everyone driving electric cars, not just the wealthy who can afford Tesla’s. But, sure, from a market dominance perspective, one can understand Musk’s perspective.

Groups join to support New Jersey offshore wind powerAP News
My take: This is promising to see—and probably necessary to get massive projects built. But wind energy developers be warned: Clean energy doesn’t make you immune from local residents who still bristle at the idea a developer of any kind would fund a group supporting its projects.

France: the battle over wind power stirs up the electionThe Financial Times (paywall)
My take: How do you say NIMBYism in French? I was not aware of the anti-wind sentiment apparently popular among some right-leaning politicians in France, though the article notes the population is generally supportive.

EU Weighs Giving Some Gas and Nuclear Projects Green Investment LabelBloomberg
My take: This is a tough pill for a lot of folks to swallow, but it would make the transition smoother.

Want a new EV delivered to your house overnight?Canary Media
My take: This is so cool, and I would try it out for sure. We need more ideas like this that make it easier to give up the idea of car ownership in favor of car-sharing.

Europe's Hydrogen Ambitions Risk Boosting Power PricesBloomberg
My take: This gets at the point I made in a recent column: We need to make sure there is enough clean energy to go around!

More of what I'm reading:
  • Indian demand for air-conditioning heats up climate fears — The Financial Times (paywall)
  • Huge $2.6 billion green hydrogen project planned for EuropeCNBC
  • Ending gas financing for Africa will be a fatal blow, says Senegal — Reuters
  • High Gas and Coal Prices Keep Renewable-Energy Rollout on Track — The Wall Street Journal
DATA DIVE
Record-breaking cleantech investments
Source: Funding includes energy research, development and demonstrations within the Energy Department. The light blue bars are estimated appropriations, the infrastructure law and estimates from the Build Back Better legislation as passed by the House.

The infrastructure law and the still-pending Build Back Better bill would inject record-breaking amounts of federal funding into energy research, development and deployment.

(You can see the one-time bump in funding from the 2009 Recovery Act, which at the time was a historic amount of clean-energy investment.) 

Most of the funding on this chart comes from the infrastructure law, though, as we note in the accompanying column, the clean energy tax provisions in the BBB function best when paired with the R&D funding from the infrastructure law—and vice versa.

AND FINALLY...
Coal Running
My take: These shots are taken from a recent run near Cougar Mountain outside of Seattle (remember it from our inaugural edition?). It’s one of the lushest places I’ve ever run, so I was surprised to learn that it was home to an expansive coal-mining operation more than a century ago. Plaques like this dot the park, teaching passersby about the economic engine coal once was here and the environmental toll it left. It’s a reminder that the arc of our energy systems is long—unless we intentionally speed them up with new government policies, which is what we need to do now!
Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.
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