Granholm 'bullish' on Congress passing clean energy tax credits

Energy Secretary Jennifer Granholm said Wednesday she is "bullish" that Congress will ultimately pass some form of clean energy tax credits — particularly as Democratic Sen. Joe Manchin conducts bipartisan meetings with senators on an energy bill.

The bipartisan infrastructure law that passed last year "is sort of the spine of the president's clean energy and energy future agenda, but the tax credits are the lungs of it," Granholm told POLITICO's Sustainability Summit. "They absolutely need to pass and I am feeling actually pretty bullish about it at this very moment."

The clean energy tax credits were part of Democrats' broad budget reconciliation package that collapsed in the Senate last year because of opposition from Manchin. Those credits included extensions of long-held incentives for renewable sources such as wind and solar, but would also subsidize new technologies including nuclear and clean hydrogen.

Manchin has said he supports tax credits for clean energy, but has voiced opposition to expanding credits for electric vehicles.

Granholm indicated Wednesday that updating the nation's mining regulations to help increase U.S. production of critical minerals — a top priority for West Virginia's Manchin — could help convince him to support incentives for electric vehicles.

"We've got to be responsible in terms of how quickly we can permit and how much we've got to move on doing extraction in the United States," she said. "If we address those things, I think he understands the importance of bringing down the price of electric vehicles because they're so much cheaper to drive [and] they're so much cheaper to maintain and to own over the course of the lifetime of the vehicle."

The Energy Department recently announced a $3 billion funding opportunity under the bipartisan infrastructure law for U.S. companies to invest in processing the mined materials to make batteries for electric vehicles.

"That piece of things, if we're able to get that in the ground, helps to resolve the issue that he's been rightfully concerned about," she said of Manchin.

Manchin has broadly championed working with Republicans to craft energy and climate legislation that would benefit both renewable sources and fossil fuels. He has led four meetings of a bipartisan group on the topic in recent weeks, though so far those meetings have not yielded any breakthroughs.

Granholm pointed to existing Republican support for technologies like clean hydrogen, advanced nuclear and carbon capture that could be included in any legislation.

"I just think there are some pieces that can go along with renewable energy tax credits," she said, adding that many Republican-led states are already expanding renewable power.

Democrats are also considering a smaller version of last year's Build Back Better bill that would likely include clean energy incentives and could pass with only party-line support. Manchin is expected to meet with Senate Majority Leader Chuck Schumer later on Wednesday to discuss that effort.

Democratic lawmakers are also debating price-gouging legislation that would give the Federal Trade Commission greater authority to probe oil companies' actions to determine whether they are contributing to high gas prices.

Granholm said Wednesday that she supported that legislation, but she also blamed the oil price increases on Russia's invasion of Ukraine.

"Let's just be clear about the reasons for these prices being elevated — it is because Russia was a great exporter of oil on the global market and when countries like the United States and others rightfully said that we are not going to be funding Vladimir Putin's war and we're not going to accept any of those barrels," Granholm said.

The Biden administration has ordered the release of 1 million barrels a day from the Strategic Petroleum Reserve to help ease price spikes that have lifted gasoline prices to record levels and has called on the domestic oil and gas industry to increase production.

But Granholm conceded Wednesday that the SPR release alone will not be enough.

"Ultimately, what we need to do — the strategy that will work best — is to reduce demand by moving to electrification," she said. "And that's why the holistic strategy that the president has put forward, which is to try to do as much as we can with the biggest tool we have — which is the Strategic Petroleum Reserve — to increase supply now as other supply is coming online and at the same time accelerate this move to electric transportation, which also obviously addresses the climate crisis."

And rather than put Biden's climate goals in danger, Granholm said, people should see the high prices for fossil fuels as the best reason to speed the shift to renewable sources.

"The immediate issue with the volatility in prices, as well as the notion that we are held hostage as a globe — the globe is held hostage to what Vladimir Putin's doing or what OPEC is doing at any time — that this acceleration is critical," she said, adding that when gas prices average $4.57 per gallon it further makes the case for the acceleration to clean energy.

"Most people see this moment as the reason to accelerate to clean, homegrown American energy, and that's what we're pushing," she said.