Odd Lots Podcast Summary: Jennifer Granholm on What Will Survive of Biden's Energy Legacy

Bloomberg's Odd Lots Podcast delves deep into the intricacies of finance, markets, and economics, bringing expert insights and engaging discussions. In the episode titled "Jennifer Granholm on What Will Survive of Biden's Energy Legacy," released on December 26, 2024, hosts Joe Weisenthal and Tracy Alloway converse with Energy Secretary Jennifer Granholm about the Biden administration's energy policies, their durability, and the future trajectory of the U.S. energy landscape.

1. Introduction and Setting the Stage

Joe Weisenthal opens the discussion by highlighting the significant focus the Biden administration has placed on energy over the past four years. He remarks, “We've probably done more energy episodes than any other topic, or at least close.” This sets the tone for an in-depth exploration of energy policies and their long-term implications.

2. Achievements in Energy under Biden Administration

Jennifer Granholm proudly states at [05:12] that the administration achieved “energy dominance,” primarily driven by the invasion of Ukraine, which reduced Russian oil in the global market. She explains how releasing oil from the Strategic Petroleum Reserve helped stabilize gas prices, keeping them “just a little above $3 a gallon” ([05:12]).

Moreover, Granholm underscores the dual progress in both expanding traditional energy sources and investing in clean energy technologies. She highlights significant investments in manufacturing and deployment of clean energy solutions, attributing the success to strategic funding from legislative acts like the Inflation Reduction Act and the bipartisan Infrastructure Law.

3. Evolution of the Department of Energy (DOE)

At [06:42], Granholm details the transformative changes within the DOE. Historically a research and development-focused agency with national security responsibilities, the DOE under Granholm's leadership has pivoted towards deployment and manufacturing. She mentions the creation of the Undersecretary for Infrastructure, Clean Energy Infrastructure position, led by David Crane, to bridge research with market success.

Granholm proudly notes that “99% of the programs that we were given have issued at least one round of funding” ([06:42]), showcasing the department’s efficiency and adaptability in executing newly allocated funds.

4. Impact of Government Shutdowns on DOE Initiatives

When questioned about potential government shutdowns on [09:16], Granholm assures that the DOE’s loan program and deployment operations can withstand temporary closures. She emphasizes their proactive measures to continue funding commitments despite political uncertainties, ensuring that “we are preparing for a lapse” and can still execute critical projects ([09:16]).

5. Political Durability of Energy Policies

Tracy Alloway probes the sustainability of Biden’s energy initiatives in light of the incoming administration ([10:33]). Granholm expresses optimism, citing bipartisan support and significant investments across various states. She notes that “85% of the funding is going to red states and red districts,” making it politically challenging to reverse these initiatives ([10:33]).

Granholm also highlights the substantial private sector investment accompanying public funds, stating, “For every $1 of public money, there are $6 of private money” ([10:33]). This private backing increases the likelihood of sustained progress irrespective of administrative changes.

6. U.S. vs. China in Clean Energy Manufacturing

Addressing the competitive landscape, Granholm asserts the importance of domestic manufacturing to avoid reliance on foreign powers like China. She states, “It would be really foolish to trade our reliance upon oil from OPEC for a reliance upon technology from China” ([13:17]). Granholm emphasizes the necessity of building and maintaining a robust U.S. manufacturing base to ensure both energy and national security.

7. Enhancing the U.S. Energy Grid

Tracy Alloway and Granholm discuss the critical need to upgrade the U.S. energy grid ([19:08]). Granholm advocates for a comprehensive national grid akin to the national highway system, emphasizing the importance of connectivity between regions to optimize energy distribution. She introduces innovative solutions from national labs, such as dynamic line rating and grid-enhancing technologies, which can significantly increase grid capacity without extensive new infrastructure ([22:06]).

8. LNG Exports and Their Implications

When discussing LNG exports, Granholm clarifies that a recent study put a temporary pause on authorizing new LNG terminals to assess their impact ([28:57]). She explains that existing authorizations remain unaffected, ensuring continued LNG exports without disrupting current operations. Granholm underscores the balance between meeting domestic energy needs and contributing to global energy markets, highlighting the U.S.'s role in producing cleaner natural gas compared to other exporters ([28:57]).

9. The Rise of Data Centers and Clean Energy Opportunities

The surge in demand for data centers, driven by advancements in generative AI, presents both challenges and opportunities. Granholm shares insights on how the DOE is coordinating with tech giants to ensure that data centers are powered by clean energy, avoiding the burden on everyday citizens. She mentions partnerships with hyperscalers to develop clean power solutions, predicting the addition of significant gigawatts to the U.S. electric grid to meet this new demand ([33:53]).

10. Transition Lessons and Organizational Change

In reflecting on her tenure, Granholm emphasizes the strength and adaptability of the DOE team. At [36:09], she expresses immense pride in the department's workforce, highlighting the successful reorganization and expansion of the team to meet new deployment missions. Granholm credits the department’s success to the “unbelievable smart professionals” and the collaborative spirit within the DOE ([36:36]).

11. Closing Thoughts and Future Outlook

As the conversation wraps up, Granholm remains optimistic about the continuation of Biden’s energy legacy. She believes that bipartisan support, coupled with substantial public and private investments, will ensure the persistence of clean energy initiatives. Granholm envisions the U.S. maintaining its leadership in both traditional and renewable energy sectors, fostering innovation and manufacturing growth domestically ([40:35]).

Notable Quotes with Timestamps

• Jennifer Granholm [05:12]: “We certainly have achieved energy dominance, that is for sure... gasoline today is hovering just a little above $3 a gallon.”

• Jennifer Granholm [06:42]: “99% of the programs that we were given have issued at least one round of funding.”

• Jennifer Granholm [10:33]: “It would be political malpractice to undo that.”

• Jennifer Granholm [13:17]: “If we want to be energy secure, if we want to be strong as a nation... we are not going to be a weak nation.”

• Jennifer Granholm [19:08]: “We should be thinking about it like we do our national highway system, honestly.”

• Jennifer Granholm [28:57]: “This pause to do the study about whether more LNG should be authorized did not impact any of the build out of existing authorizations.”

• Jennifer Granholm [33:53]: “This new demand is going to be built out. It's probably going to be built out largely with clean energy.”

Conclusion

This episode of Odd Lots provides a comprehensive look into Jennifer Granholm's perspectives on the Biden administration's energy policies, their achievements, and the challenges ahead. Granholm's insights reveal a strategic approach to balancing traditional energy production with aggressive investment in clean energy, all while navigating the complexities of political transitions and global competition. The discussion underscores the enduring nature of energy issues and the imperative for sustained, bipartisan efforts to secure the U.S.'s energy future.