Rep. Casten on tackling the US climate law’s unfinished business

Clean energy is surging onto the grid as the sector drives a revitalization of American manufacturing. But though Washington, D.C. just launched this new era of industrial policy, threats to it still loom in the nation’s capital.

The Inflation Reduction Act created long-sought incentives for domestic manufacturing and instituted decade-long support for clean energy deployment. But it left out reform to the permitting process, without which it could be impossible to actually build all the power plants and transmission lines needed to decarbonize the electricity and transportation sectors.

And as thousands of new manufacturing jobs flow to red districts, Congressional Republicans are already attempting to roll back the newly minted incentives that enabled the industrial resurgence.

To make sense of the recent progress and the remaining obstacles to a clean energy transition, Canary Media sat down with one of the leading clean-energy thinkers on Capitol Hill, Representative Sean Casten (D-Illinois). On April 27, Casten and Mike Levin (D-California) released a discussion draft of legislation intended to break the impasses on transmission permitting to speed the adoption of clean power plants.

This conversation took place in May on the sidelines of the Midwest Solar Expo near Chicago, where Casten delivered a keynote address.

The discussion has been edited for clarity and brevity.

Canary Media: Now that the Inflation Reduction Act is law, what are the remaining things we need to do for a comprehensive clean energy policy? 

Rep. Casten: The executive branch has the implementation job ahead of them. We’ve given them a lot of work, but they’re blocking and tackling and moving through — never as fast as people would like, but you want to be careful about these things.

The three big barriers to realizing the goals of the IRA are: [First], we have to make this hard U-turn on our industrial policy and how we transition through to bring these manufacturing jobs back.

The second is labor markets. We are creating more jobs than we’re creating workers in this country. We have to have immigration reform, criminal-justice reform or child care. And [none of that] feels very bipartisan right now.

If we don’t get any of those done, we’re going to basically count on the industry to keep raising wages and keep raising wages until they pull people out of other lines of work to come into this one.

The last big piece is on transmission reform. There is no serious conversation to be had about permitting reform that doesn’t begin and end with transmission. There’s no huge surge of people looking to build coal plants in this country. There is some gas, but not a ton. There’s a ton of backlog in the clean energy space. We’re not only building all of this new generation that is tied to a fuel resource that doesn’t transport — I can’t put wind in a pipe and move it to where I’ve got an easy interconnect — but we’re also building new load all over the system.

We use about as much primary energy for transportation in this country as we do for electricity generation, which means that if you start electrifying significant portions of the vehicle fleet, you need something like all the generation we currently have built over again in order to meet that load. Well, those charging stations are also not necessarily in places where you’ve got a bunch of spare capacity on the grid. So we just have to build a lot of wires, and there are responsible and irresponsible ways to build wires. But the only way we really know how to build wires in this country right now is to not build them at all.

And we know that’s not going to work.

That’s why Mike Levin and I have gone through this effort to really get the best ideas from all across our caucus and the membership and outside experts and put together this fairly comprehensive transmission permitting-reform bill. Our goal is to really have that as the marker that says, once the House and the Senate are serious about giving people access to clean, cheap, reliable energy, let’s have the vehicle in place that’s doing this right, not just the vehicle that we think might be able to get through a certain committee in the Senate, which is only incidentally connected to questions of policy.

House Republicans recently proposed their own energy-permitting reform. Do you see some kind of grand bargain possibility here?

We cut and pasted portions of their permitting bill, primarily relating to streamlining the permitting process. But almost all of that bill is really about making it easier to extract and export fossil fuels. I emphasize ​“export,” because if you took away the growth in natural gas and oil exports over the last five years, you wouldn’t have really seen any upward prices in natural gas in the United States because supply and demand were pretty stable.

But now, because the solar, wind, geothermal, efficiency and EV industries are all giving consumers things that they want and allowing them to not have to pay for oil, that industry is only competitive to the extent that they are drilling and [then] exporting overseas.

Are there scenarios where we would compromise with the Republicans? Of course there are. But we have to be honest in the conversation. If your goal is to look out for the interests of U.S. consumers, then why are you digging holes in everybody’s yard and exporting that precious American energy overseas? Shouldn’t we use that for ourselves as Americans?

That’s a fascinating point. Renewables are inherently local products — you can’t ship those electrons overseas. Is that a stronger contrast now with where the oil and gas industry is heading?

The oil and gas industry is increasingly an export industry. We’re building all these [liquefied natural gas] terminals right now. Is it hard to permit those LNG terminals? Yeah. Is that a problem? Well, it’s a problem if you’re a European trying to wean yourself off Russian gas. But is that a problem for U.S. consumers? It’s only a problem for U.S. consumers to the extent that the price of natural gas is now indexed to volatile European markets when it used to be set domestically. So let’s be honest about what problem we’re solving.

When the Senate attempted energy-permitting reform last year, a lot of the criticism from the climate advocate community wrote off the whole thing as a dirty Manchin fossil fuel giveaway. That perspective may have missed some very real needs on the clean energy side for permitting reform. How do you strike that balance?

I was publicly supportive of the package that came out of the Senate. I wasn’t supportive because I loved every piece of it. It was about 55%–45% in the right favor, in my view. If we can find a way to get to 70–30, 80–20, 100–0, I’d rather have that. But yes, there were some pieces of that plan that made some long-overdue reforms in our transmission permitting. And the pieces that we liked of that plan, Mike and I have put into the plan that we’re doing.

But we could do better. The giveaways to oil and gas — when you have an industry that’s massively oversubsidized and is struggling to compete, I’m not totally persuaded by the arguments: ​“If we just gave them more subsidies, they could compete.”

Now we’re seeing this rise of clean energy manufacturing, especially in the Southeast. I’m curious — what would your definition of success be for this? 

It’s an interesting question — what’s the metric? Because I don’t think it’s just tied to clean energy. It’s a broader industrial-policy question of how we bring back a robust manufacturing sector in the United States. The CHIPS and Science Act: That’s about bringing back manufacturing in semiconductors. The infrastructure law has a whole lot of Buy-American incentives. And yet in the world we live in today, huge parts of the solar value chain — there isn’t manufacturing in America for any of that. And this ain’t just solar. If you wanted to build a coal plant today, where are you going to get the castings for the steam turbine? You can’t get those in America, either. So this is not about clean energy versus dirty energy. This was a whole series of decisions made to outsource manufacturing in the U.S.

And large portions of America viewed that as positive because it meant that we got cheaper stuff. If we’re saying our measure of success is low inflation, and we’re just going to ignore Rust Belt cities that have been depopulated, where there’s no Walmart anymore, the church is shut down, you’ve got meth labs — that’s not a costless transition, even if it led to cheaper stuff.

If we can bring back jobs, maybe it won’t be to the same communities, but bring it back where now you’ve got good quality of life for people who’ve gone to all levels of formal education, finding some satisfaction and some dignity and some pay in the manufacturing sector — that’s a pretty good thing.

Do you think it’s viable to hope that one day, all the batteries that we use on the grid and in our cars are made in America?

Selfishly, as an American, I want the high-value-add stuff in America. Do I care so much about where the mine is? Not really. But I care about where the upgrading is because that’s the stuff where we should have a competitive advantage. If we have good mineral deposits here, OK, that’s one conversation.

Do you have any other score cards for American clean energy manufacturing? Like, is it better to pull away from the supply chain rooted in China or just try to make as many good jobs in America as we can? 

I’m an inherent free-trader. But free trade that’s regulatory arbitrage is not free trade. If Country X just has inherently better talents at producing Technology Y, that’s where Technology Y should be produced, whether it’s China or Congo or Mexico. If the only reason why Country X is able to do that is because they pay below-market wages or they pour battery acid in the ocean, stuff we wouldn’t allow here, that’s just a regulatory-arbitrage question. You can never be totally pure about that, but I just want to make sure we don’t lose the value of free trade in the course of saying we want a robust manufacturing sector in the U.S. Anybody who does business in the U.S. should be held to our standards. And if you can hold to those standards and compete, God bless.

I’m also intrigued by the implications of where the jobs are going. The Battery Belt of Tennessee, Georgia, South Carolina — these are not states that have actively prioritized climate policy or EV adoption or renewables adoption. But they’re getting these billion-dollar investments as a result of the IRA. And yet, we saw the Republican members of the House voting to rip up all these tax credits in their debt ceiling proposal. What do you make of the politics of having so many of these new clean energy investments going to red districts? 

I think there’s a real danger when we define Americans [at any level] lower than just Americans. Either we’re all in this boat together, or we’re not. Do I disagree with the votes that some of my colleagues took? Sure. Does that mean that I want to make their constituents destitute? I would be a horrible person.

Let’s bring jobs to America; let’s recognize that we’re all in this boat together. If there’s a shortage of jobs in a community, and we can help a plant come there, and now there’s not a shortage of jobs — that’s awesome. Are those of us in Congress going to advocate for our own districts? Of course we are, and we’ll fight to do that. But let’s not be jealous of someone else’s success.

Fair enough. To put it another way, do you think spreading around the benefits of the jobs could strengthen the long-term coalition that supports climate action?

Yes. You know, upstate Illinois is blue, downstate Illinois is red, but there’s a lot of wind in downstate, which is creating a lot of jobs that otherwise have been lost from the decline of coal.

That’s a good thing, right? It’s a good thing politically, because now you’ve got a set of constituencies in those parts of the country saying, ​“This is what I want.” But also, to my sort of Boy-Scout-y point before, it’s a good thing nationally, because we’re providing opportunities to communities that were at risk of being left behind in this transition.

You asked me how to define success. Let’s talk about how to define failure. If we go 10 or 15 years from now to tours of the Gulf Coast or Appalachia and it’s like going to rural Colorado and visiting old abandoned ghost towns where the silver mine used to be — that would be failure. But that’s the trajectory we’re on for those communities that depend on making something that nobody wants anymore. Finding ways to make sure that those communities aren’t ghost towns, but are reborn anew — that’s a good goal.

That’s evocative. We don’t want to let fossil fuel communities become the next generation of ghost towns. In terms of the longevity of this transition, are you worried about Republican legislators trying to revoke the IRA?

Because they’re tax credits, it’s very hard for them to undo it. Look, I would love to find a way to undo the crappy Trump tax bill; we haven’t found a way to undo that, either. [Tax law] tends to be durable, for better or for worse.

Because the business community doesn’t like to give up the tax credits?

You’ve started planning for it, and once you’re planning for it, is this a takings violation? Because you started building in reasonable anticipation — it just gets very hard to undo that. Also, because it’s carrots. It’s one thing to say, ​“I will hit you with a fine if you do X.” We can repeal that law, and nobody’s saying, ​“Darn it, you were supposed to fine me!” On the other hand, if we say, ​“I will cut your tax bill if you do X,” and then you do X, that’s a harder piece to undo.

I think there will continue to be some performative nonsense around IRA repeal. But I don’t think it’s going to be repealed.

What gets you the most excited about the outlook for clean energy adoption?

We’re winning, right? We’re not winning fast enough. But 30 years ago, coal was 50 percent of the grid. ​‘Twas ever thus — King Coal. It’s now, what, 17 percent? [Editor’s note: In a forecast updated after this conversation, the EIA put coal at just 16 percent of the U.S. energy mix for this year.] Coal was this unholy alliance between miners and coal utilities; you’ve now got AEP pushing back on the West Virginia state legislature, saying, ​“Don’t force me to run my coal plants; I’m losing money on it.”

All of that is because we’re building all this stuff that is cheaper and cleaner, and we’re meeting the reliability needs. All of that’s happening. EV sales are going up. The biggest concern we have in EVs is that the demand is growing so fast we can’t meet the supply. Our problems are really good problems right now. We need to move faster. But I’m hugely encouraged by the progress we’ve made over the last four years. Now we’ve just got to hit the accelerator. Or alternatively, if that’s uncomfortable, take off the emergency brake.