U.S. energy chief: Climate action 'at the tipping point'
U.S. Energy Secretary Jennifer Granholm says Congress has now made it possible for the federal government, states and others to get serious about reducing the greenhouse-gas pollutants that contribute to a radically changing climate.
Granholm spoke Tuesday, Aug. 9, at the start of a one-day tour of energy innovations in Oregon. Her audience in Portland included Gov. Kate Brown, U.S. Sens. Ron Wyden and Jeff Merkley, and the chief executives of Portland General Electric and Daimler Trucks North America.
"I cannot imagine a better time to be in any of our positions than right now. This is the tipping point," Granholm said after a quick tour of Electric Island, the supercharging station that PGE built on Portland's Swan Island across from the headquarters of Daimler Trucks.
"What a time to be serving, because now we have the tools to actually meet our aspirations: 100% clean electricity and net-zero emissions by 2050."
Granholm referred to three bills Congress approved in the past few months and President Joe Biden has signed or is preparing to sign:
• The Infrastructure Investment and Jobs Act (HR 3684), which Biden signed Nov. 15 to provide $1.2 trillion for fixing highways and bridges. It included $7.5 billion for electric vehicle charging stations across the nation. Oregon will get $52 million earmarked for existing corridors, including the West Coast Electric Highway that connects three Pacific Coast states and the Canadian province of British Columbia. (The Oregon Transportation Commission has committed $100 million.)
• The CHIPS and Science Act (HR 4346), which Biden signed as Granholm spoke. It provides $52 billion for incentives for domestic manufacturing of semiconductors — many of which are made in China and other Asian nations — and $200 billion for research into advanced technologies. Intel, Oregon's largest private employer, has four plants in Hillsboro and Aloha.
• The Inflation Reduction Act (HR 5376), which the Senate passed Aug. 7 and the House is expected to repass soon and send to Biden. About half the money ($370 billion) is in the form of tax incentives for carbon-reduced energy — such as purchase of electric vehicles and installation of solar panels — and other measures to cushion the effects of climate change, such as prolonged droughts and severe wildfires.
"These three bills — this one-two-three punch — allows us to demonstrate to the world that America is determined to be a warrior in the fight against climate change," Granholm said. "I'm so happy to be suited up for battle. It is a great day to be a warrior against climate change."
'Moving like lightning'
A Democrat who was governor of Michigan from 2003 to 2011, Granholm complained about the slow pace of federal decision-making under Republican and Democratic presidential administrations in her 2011 book, "A Governor's Story." She cited one example from the Energy Department, which she now leads.
But in the case of the $7.5 billion in federal funds for electric-vehicle charging stations, Granholm said her department provided guidance to states as soon as Biden signed the infrastructure legislation — and all the states have submitted plans.
"We are moving like lightning. The money will flow starting this fall," she said. "We are moving fast. There are a lot of big problems, big budgets and big legislation. But we understand the urgency of the moment. We are on a mission."
Granholm praised Portland General Electric — whose chief executive, Maria Pope, sits on the secretary's advisory board — and Daimler Trucks North America for Electric Island, the supercharging station PGE set up in 2021 for quick recharging of battery-powered buses and heavy-duty trucks made by Daimler Trucks. John O'Leary, its chief executive, was in the audience.
"It is one of the hardest sectors to decarbonize, and you are taking this on as a mission. This bill obviously is going to help you," she said. "We do want to make sure we are electrifying all aspects of transportation."
According to the Environmental Protection Agency, transportation accounts for the largest share of U.S. greenhouse-gas emissions at 27%.
Among Granholm's other Oregon stops were ESS Inc., in Wilsonville, which has an agreement with PGE to manufacture long-term energy storage, and Oregon State University in Corvallis.
Brown, who introduced Granholm, said she had no complaints about the federal response to states under the current administration.
"It has to be an all-hands-on-deck effort. Congress and the Biden-Harris administration are extraordinary," she told reporters afterward.
"But this country was not electrified overnight," she added.
Just as it took President Franklin D. Roosevelt's New Deal to bring electric power to underserved rural communities, "the same is true with electrification of our transportation system. We need a federal partner — and the good news is that we have a strong federal partner in the Biden-Harris administration and with these two amazing senators."
Long-term tax breaks
As chairman of the Senate Finance Committee, which writes tax legislation, Wyden got the committee not only to reshape energy tax incentives to focus on carbon reduction — not oil, gas and coal — but to extend many of those incentives for 10 years or longer. The oil depletion allowance, for example, has been in the federal tax code for more than a century, but solar and wind incentives often were renewed only before they were set to expire.
"One of the biggest problems in weaning away from a business-as-usual energy policy is that oil had permanent tax breaks, but renewables had temporary tax breaks," Wyden said.
"All of these are permanent. They are technology-neutral. That is how we got this bill going.
"In the past, particularly in the Finance Committee, it was all about picking winners and losers.
Some of those tax breaks had a shelf life just a little longer than a carton of eggs — they had no predictability. This is a beginning that people with permanent incentives can build on for years ahead."
For example, the tax credit for installation of solar panels will be 30% — subtracted directly from taxes owed — for the next decade, then taper off to 26% in 2032 and 22% in 2033. Without the pending bill, the credit was set at 26% this year and 22% next year before it ended in 2024. (The federal credit was created in 2006.)
For purchase of electric vehicles, the tax credit is $7,500 for a new model — though domestic-content restrictions on batteries will be phased in, so some cars will not qualify — and $4,000 for a used vehicle. (Oregon has a separate rebate program of $2,500 per vehicle, administered by the Department of Environmental Quality. Low- and moderate-income households can qualify for up to $5,000 more under a law that Brown signed in 2021. It is not a tax credit.)
Oregon has met a 2020 goal of 50,000 electric vehicles on the road.
The federal incentives appeared off the negotiating table when Sen. Joe Manchin, whose West Virginia is a major coal producer, walked away. But Wyden said Congress had to salvage something, and Manchin came to an agreement with Senate Majority Leader Chuck Schumer that enabled all 50 Democrats to vote for the overall legislation, with Vice President Kamala Harris as the tie-breaker. No Republicans voted for the bill.
More work ahead
Wyden and Merkley said they were convinced a different approach was needed after the 2010 failure in the Senate of a House-passed climate-change bill, which would have capped greenhouse-gas emissions.
"We are going to try something other than sticks and hammering on people," Wyden said.
Merkley said the incentives would lead to more domestic manufacturing: "We are incentivizing 'made in America' and good-paying jobs."
Wyden and Merkley acknowledged that more needs to be done, given the increased severity of heat domes — Oregon has had two such sieges this year, on top of the June 2021 event that resulted in about 100 deaths — plus prolonged drought and catastrophic wildfires. Merkley said virtually no one at town hall meetings these days raises doubts that something is changing for the worse.
Merkley had offered his own version of climate-change legislation. He said the pending bill would boost the projected reduction in greenhouse gases from 27% to 40%, but that's still short of the 50% Biden has proposed to reduce those pollutants from 2005 levels by 2030.
He said the next step, once Biden signs the Inflation Reduction Act, is for federal agencies to find ways to achieve the rest of that target.
"Congress has done its job. The president is going to be signing the bill," Merkley said. "Then the president's team is trying to go beyond it because of the size and urgency (of climate change) and the need for bold action."
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