What’s Ahead for U.S. Energy and Climate Policy with Adrian Deveny
Adrian Deveny, former Director of Energy and Environmental Policy for U.S. Senate Majority Leader Chuck Schumer, was a key architect of the Biden-era climate policy agenda, including the landmark Inflation Reduction Act. In this conversation, we explore Adrian's perspective on what to expect from Washington, D.C., in the years ahead, as the federal government transitions to Republican control of the executive branch and both chambers of Congress.
We discuss the likely fate of the climate and clean energy provisions in the Inflation Reduction Act over the next couple of years and whether there are viable pathways for new clean energy policy in the near term. Given the ambitious policies rolled out in recent years, Adrian also shares insights on the "unfinished business" he sees as critical. Spoiler alert: he believes we need to more than double our policy efforts to meet U.S. emissions targets.
Episode recorded on Nov 20, 2024 (Published on Jan 13, 2025)
In this episode, we cover:
[3:36] Adrian’s background and journey in the Senate
[8:26] Republican trifecta’s impact on climate policy
[11:47] Regulatory challenges, including Supreme Court rulings
[17:48] Challenges in EPA funding and appropriations
[19:53] Defending clean energy tax credits under the IRA
[24:08] IRA’s impact on manufacturing and the EV supply chain
[31:48] Bipartisan opportunities in geothermal, nuclear, and defense projects
[45:28] Debates on permitting reform for energy projects
[52:00] Future clean energy growth and market forces
[55:12] Adrian’s focus on advancing federal climate policy
Recommended Listening:
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Cody Simms (00:00:01):
Today on Inevitable, our guest is Adrian Deveny, former director of Energy and Environmental Policy for US Senate Majority Leader, Chuck Schumer. Adrian was a key architect of the Biden-era climate policy agenda including the Inflation Reduction Act.
(00:00:19):
I was interested to hear from Adrian what he thinks we should expect from Washington DC in the years to come now that we know that the federal government will soon be run by a Republican majority in the executive branch and in both chambers of Congress.
(00:00:36):
In particular, I was interested to hear his thoughts on the likely fate of the climate and clean energy provisions in the Inflation Reduction Act over the next year or two, as well as whether he feels there are viable pathways for any new clean energy policy in the near term.
(00:00:55):
Lastly, I wanted to hear what unfinished business he feels is pending given the scope and scale of what he helped roll out over the last few years. Spoiler, he still thinks we need to more than two-X our policy efforts to meet our emissions targets in the US, so let's dive in.
(00:01:15):
But first, from MCJ, I'm Cody Simms and this is Inevitable. Climate change is inevitable. It's already here, but so are the solutions shaping our future. Join us every week to learn from experts and entrepreneurs about the transition of energy and industry. Adrian, welcome to the show.
Adrian Deveny (00:01:44):
Thank you for having me.
Cody Simms (00:01:46):
Well, we have so much to unpack and you and I met each other, I don't know, maybe a month or so ago we had published an episode recounting with Nancy Pelosi's former climate lead, Russell DeGraaff, or I guess you knew him as Kenneth DeGraaff. He apparently goes by both names.
(00:02:03):
We had an episode with him where he recounted a lot of the work that happened over the last four or five years in Congress in particular from the bipartisan infrastructure laws, the Inflation Reduction Act to the Chips and Science Act.
(00:02:15):
We connected around that episode and touched base and it was right after the election, right after Trump had won the election and both the House and the Senate went Republican and we had an amazing conversation where it was about what's next in terms of what would've been the next plan from an climate policy perspective.
(00:02:38):
But now what's next in terms of defending the legislation that has passed over the last few years and I appreciate you volunteering to come on the show and talk about it here where everyone can listen and we can have this conversation for the public good.
Adrian Deveny (00:02:53):
First of all, thanks for inviting me. Your podcast is really a public service and I think it gets a lot of people listening because you guys provide not just the substantive stories but the people stories that are also so important to bring more people into working on climate more talent and get people inspired by all of the really amazing stories of folks that you bring onto your podcast. So thank you for doing your work.
Cody Simms (00:03:16):
Of course. Why don't we start with your people story then? You've been in the Senate until recently, since 2011. So for quite some time, including since 2019 working with the Senate Majority leader Chuck Schumer and driving the energy and environmental policy. Maybe recap your journey in the Senate for us.
Adrian Deveny (00:03:36):
Well, I started actually as a fellow on the Senate Energy Natural Resources Committee under, at that time, Senator Bingaman from New Mexico, and that was a short but very fun stint that really wet my appetite for working on Capitol Hill.
(00:03:54):
I was also a fellow, the Department of Energy and the Department of State briefly was able to do different rotations in different parts of the federal government, but it was actually that experience on the Senate Energy Committee where I fell in love with working in the Senate. It's an interesting institution for all of its dysfunction that we all know about.
(00:04:12):
It's also a fun place to work. In some ways, I liken it to working at a startup because each office within the Senate, each senator, they operate pretty independently as their own feed them, and so it's a relatively small number of people within any given office and so you have a lot of latitude to do a lot of work. Whereas in the executive branch, you're working in a much bigger operation.
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It's got its more complicated bureaucratic layers, much like a big company. You can have enormous influence and impact on the executive branch as well, but you have to navigate and really be a master of the bureaucracy. I really fell in love with the creativity and flexibility that you get to have working in the Senate.
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So I started as a fellow and then got my first full-time job in the Senate permanent position with Senator Merkley from Oregon as his environmental policy staffer and worked for him for eight years. He's a really inspiring member, in it for all the right reasons and big climate champ himself, so I got to work on a lot of fun climate policy and environmental policy for him.
(00:05:16):
Eventually became his legislative director for a short stint where I was working on managing his whole team policy staff and quickly realized that I was missing working on climate policy in particular. That's really what brought me to the Senate was a passion for working on climate in particular and environmental policy, but especially climate policy.
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So I was looking for ways to get back into working on climate policy and this position with leader Schumer opened up and it worked out. I was fortunate to get that job at the best possible time. I got it when the Democrats were in the minority in the Senate, but Senate got it with just enough time to really prepare for when we got into the majority in 2020, 2021. So that was my path to eventually getting into that position that I did. So much of it is due to serendipity, honestly.
Cody Simms (00:06:11):
You've had the focus on environmental issues looks like since you went to college maybe before, but you've studied the environmental side of things through your educational path and then came into these roles in the government as a fellowship. At what point did you start leaning in on the energy side of things as well? How does that evolutionary path unfold for you?
Adrian Deveny (00:06:35):
I went to college at UC Santa Cruz and I did a degree in ecology and evolutionary biology and thought that I was going to pursue a career in conservation biology and did a lot of hard science research and moved to Brazil after graduating and was doing research in the Amazon on Golden-Backed Monkeys and was really out there in the field.
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And I was there when the 2004 election happened and Kerry lost to Bush and that had big impact on me because I felt like I was in the middle of the jungle and there were these really big things happening in the world that I was having very little impact on and it wasn't clear to me how my work was going to have a meaningful positive impact in the world.
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That's not a slight to all of my good friends who work in science and anyone who works in science, but for my own passion, I really started to feel like I wanted to shift more towards public policy on the environment generally at that time. I wanted to make that pivot first, and so I applied to interdisciplinary programs for graduate school, ended up at the Yale School of Forestry, which is now called the Yale Environment School, and that program is fantastic for making that pivot.
(00:07:50):
I went in with this background that was rooted in hard sciences, but they allow you a lot of flexibility to study basically whatever you want, and I took classes at the law school and economics program. I ended up getting a degree in economics there too, a master's in economics, but that's where I really started taking coursework in climate change in particular, you're forced to read IPCC reports and the rest.
(00:08:13):
That's where I realized this is the issue I wanted to focus on and the policy courses there are exceptional, and so that's where I made the pivot into climate and policy and then went on to work in the federal government.
Cody Simms (00:08:26):
Super fascinating. I always love hearing people's stories of how they found their way into working in this space, so thanks for humoring me with that. Let's start by first just recapping the last whatever month and a half obviously headlined by the 2024 election. Obviously, I think everyone knows the outcome of the election.
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How would you frame that from a climate and from an energy perspective in terms of what is potentially going to be different in things like the Department of Energy, the EPA, the Department of Transportation, and then of course the legislative branch, the Senate and the house? So that's a very giant question. Tackle it as you will.
Adrian Deveny (00:09:10):
For starters, I think it's pretty clear that it's a big setback for climate progress to have someone like President-elect Trump in power if for no other reason than just his rhetoric on the issue. It's damaging to how people think about the issue, understand the issue when you have someone who doesn't understand climate science at a minimum and approaches the issue quite cynically.
Cody Simms (00:09:35):
Hoax is the word used a lot, I think.
Adrian Deveny (00:09:37):
So from that perspective, it's clearly a huge setback. Substantively, we don't know what we don't know yet. We know what he is promised to do and we know some of the rhetoric that's come from Republican leadership in Congress about what their intentions are, but we don't yet know what's going to pan out.
(00:09:57):
I think it's probably safe to say that there are going to be some setbacks and losses in particular on the regulatory side. The incoming administration will have a lot of latitude to do a lot of rollbacks of Biden administration regulations, particularly the ones in EPA, but other agencies as well.
(00:10:16):
The Biden administration has had a whole government approach to tackling climate, and so they've done quite an exceptional job across all the different agencies to make progress where they can, but often the focus is at EPA since they have a lot of the big tools in the toolbox.
Cody Simms (00:10:32):
So let's talk about the EPA and maybe Department of Energy, to start. Let's save the things that actually need to be legislated into having laws changed, which is your true forte. Let's come back to that.
(00:10:43):
But starting with EPA and DOE to begin with, those are parts of the executive branch and so those mostly operate under a regulatory framework that the head of those departments can help to enforce or not enforce, is that the way to think about it?
Adrian Deveny (00:11:00):
It's grounded in statute that was passed by Congress, so it's not like they are just agencies going off and doing whatever they want. These are laws that they're following that they have to follow. They're implementing the Clean Air Act or they're implementing other laws that Congress passed.
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While the Trump administration can do a lot to roll back the Biden administration rules, what you saw in the first Trump administration was that they did have to in most cases, propose their own version of rules. They couldn't just wipe the slate clean because if they didn't repropose something, they would be in violation of the law.
(00:11:34):
That's what I would expect to see in a second Trump administration too, is that they will repropose a lot of rules that are weaker and those will get challenged in court. It will take some time to see how all of that plays out.
Cody Simms (00:11:47):
And are these often more detailed interpretations of things that are passed into law in Congress. So let's actually take a very specific example of something that I think still hasn't had total definition yet, which is 45V, which is the clean hydrogen provision. How do you qualify for the specific 45V tax credit? What are the methodologies that are allowed?
(00:12:10):
There's back and forth on is it only electrolyzed green hydrogen or can natural gas produce hydrogen if there's carbon capture qualify or not? I think that is still yet to be actually defined. Is that something that is getting defined by, in this case the DOE or the EPA as opposed to written into the text of the law of the Inflation Reduction Act that passed two years ago?
Adrian Deveny (00:12:34):
The Inflation Reduction Act, like any law, has that is not in and of itself detailed enough to be implementable for every potential use case in the market or in the complicated US economy. And so it's the job of agencies to take the language that they're given by Congress and write regulations to implement that law that accounts for all the different cases that would've been impossible for Congress to contemplate and write into the law.
(00:13:08):
And so this is the essence of what the Chevron deference doctrine was for so many decades. The courts, for many decades, deferred to agencies to reasonably interpret congressional statute because they housed a much deeper bench of expertise and they had a whole administrative procedure for taking public comment and using that public comment to inform how to structure regulations to implement the law in a way that makes sense.
(00:13:36):
That was then overturned by this Supreme Court recently and they've now moved to something called a Major Questions Doctrine, which is still being defined in real time, but the way that Justice Roberts more or less defined it was that for things that this Supreme Court deems as major questions that Congress has to specify, they have to be more specific about those rules in order for the agency to implement them.
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And that is incredibly problematic because Congress is not actually equipped with the right staff and resources and administrative procedures formalized public comment to do it to the level of detail that is really required in this regulatory process.
Cody Simms (00:14:19):
So in theory, this is where a executive branch that wants fewer regulations can, in theory, point to the text of the law and say, this is undefined how this should work. We therefore absolve ourselves of needing to require a regulatory compliance around this thing.
Adrian Deveny (00:14:40):
I imagine you'll see a lot of cases like that and then now the Supreme Court is going to have to figure out how they want to interpret their new major questions doctrine for every new case that they decide to take.
(00:14:52):
That's why I say it's something that's happening in real time. There's going to be so many potential cases that they could take up, so it's hard to really speculate how to work out in any given case.
Cody Simms (00:15:03):
So that's some of the potential change happening at the departmental level in the executive branch. Another one that I think of all the time is these federal agencies through the Inflation Reduction Act were granted significant either lending or grant-making capabilities for clean energy projects. Are they required by law to actually provide those funds as allocated?
Adrian Deveny (00:15:28):
Yeah, that's pretty standard issue. Appropriations law, there's a term called impoundments, which is basically a term of art that refers to what the agencies cannot do, which is they can't impound the funds that have been appropriated, they have to spend the money if it's appropriated by Congress, it's not considered optional.
(00:15:49):
There's very specific rules around that, but please don't ask me what they are because I'm not an expert in impoundments, but they exist and the options for this administration are obviously going to be the test the limits of that to some degree, but there is an incentive for them in cases that Congress doesn't rescind money that they have appropriated. That's one other option.
(00:16:11):
You could imagine that when you have a lot of industry who's benefiting from different grant programs and loan programs and tax credits coming out of the woodwork and saying, this is helping the US economy, this on-shoring a lot of manufacturing jobs, there's a way of framing this type of work and these investments in an America first type of a way that this administration could be sympathetic to.
(00:16:38):
You could see a lot of that funding being continued to go out but with a slightly different messaging, a slightly different twist in terms of what types of grantees they might select. It is up to the agency's discretion in a competitive grant solicitation to choose which grants are the winners based on their own criteria. That's a similar thing where they have discretion on setting some of the criteria for how they give preference to some grantees over others.
Cody Simms (00:17:05):
And can choose certain technology preferences based on the new administration?
Adrian Deveny (00:17:10):
Yeah. And some of that'll be specified in the statute and some of it won't. That's where they will have some flexibility and latitude and I think that you could see a lot of programs continue to move money from certainly the infrastructure bill but potentially the Inflation Reduction Act as well.
Cody Simms (00:17:27):
Super helpful. Just high level framing of where we are from an executive branch change and then I guess those are scalpel answers that we just walked through, and then, of course, if you take something like the Project 2025 plan potentially there's whole cloth removal of entire departments that also could be coming our way, which I guess we don't know yet.
Adrian Deveny (00:17:48):
The challenge there is that departments are created by acts of Congress, generally speaking. And certainly, in cases where departments have been created by acts of Congress, it would take an act of Congress to eliminate them. If there's a department or agency that was not created by an act of Congress then it could also be undone without one.
(00:18:08):
But certainly in any case where it's been created by an act of Congress, they would've to go through Congress and that's not easily done. It's really hard to close an entire agency. Generally speaking, agencies build up bipartisan support over time. Maybe it's not universal bipartisan support.
(00:18:27):
There could be a majority of the Republican Party that takes issue with the EPA, but there will be enough members in these tight margins who would not want to see it be completely eliminated. That's for sure. So I don't think we should expect to see the elimination of any major environmental or energy related agency in the Trump administration. I would be surprised to see that.
Cody Simms (00:18:51):
Let's move over then to talk a bit about some of the recent actual pieces of legislation. Part of what I hear is are there going to be repeals or significant shifts in some of the key provisions of let's take the Inflation Reduction Act in particular since that was the one that passed through budget reconciliation was not bipartisan legislation to begin with.
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We've heard EV tax credits thrown around and the media is like, oh, maybe these things will go away. I've heard Republican members of Congress saying, please don't take away many of these provisions because they're helping our local constituencies.
(00:19:30):
How would this scenario actually play out and what is the work to be done to help as many positive clean energy provisions stay active as laws in the first place? And I guess there's the congressional side and then there's the executive branch side, which we talked about a minute ago, which is the agencies interpreting them in different ways.
Adrian Deveny (00:19:53):
On legislation, just to back up a little bit, there are basically two ways of undoing or changing past legislation. One is the normal way, which is through the Senate. You need 60 votes for most legislation, meaning you need democratic support in order to make changes to a bill or pass a new law.
(00:20:15):
And then there's budget reconciliation, which is how we pass the Inflation Reduction Act, and that only requires a simple majority. It's usually a partisan exercise in this congress coming up, they have really tight margins in the house in particular. It won't be easy for them to cobble together the votes that they'll need to pass a reconciliation bill.
Cody Simms (00:20:36):
Reconciliation, like any bill, has to pass both chambers.
Adrian Deveny (00:20:39):
It has to pass both chambers and it's a pretty complicated process, but it does have to go through both chambers.
Cody Simms (00:20:46):
It also has to pass. You have to pass a budget every year, yes?
Adrian Deveny (00:20:51):
You don't have to pass a budget every year, actually. You have to pass an appropriations bill every year, which is sometimes confused with the budget. The appropriations bill is the annual discretionary funding bill of the federal government.
(00:21:07):
When people refer to a budget, when we're talking about a budget resolution passing, which is these top-line numbers and it's supposed to pass every year, but it doesn't always happen and it doesn't shut down the federal government in the way that not passing a federal appropriations bill shuts down the federal government.
(00:21:24):
The budget sets top-line numbers for appropriations, but it doesn't actually provide specific funding to any particular federal programs. Reconciliation is a wholly separate thing. It's not required to pass ever and often doesn't happen unless if there's a trifecta of one party in power. And reconciliation, you can think of just a money bill either spending a revenue that's on top of the annual federal appropriations process.
(00:21:51):
Historically it usually is mostly tax policy, but the Inflation Reduction Act included obviously a lot of other policy outside of tax policy grant and loan programs in a lot of different federal agencies. That'll be the other tool that they'll be considering to do any kind of legislating next Congress since they do have a trifecta, so it's an option available to them, but it's hard to do when you have really slim margins.
(00:22:15):
We had a really hard time passing the Inflation Reduction Act in the episode that you had with Kenneth. He told that story and it was a really tough slog. We only had a 50-vote majority so to speak, so we had to keep all Democrats plus the vice president being the tie-breaking vote to pass the Inflation Reduction Act.
(00:22:34):
All it took was one holdout vote to grind the whole thing to a halt. They'll have their work cut out for them next Congress as well because they'll have some members who have demands that they'll have to navigate.
Cody Simms (00:22:49):
Who are likely to be the Joe Manchins of the Republican side, the people who are in the middle of swinging things?
Adrian Deveny (00:22:57):
It's always hard to predict, but there was a letter that was organized by Representative Barbarino who had 18 house members sign on that called for not including clean energy tax credits and reconciliation tax bill next year. You could look to those folks as potential people who would hold out against changes and that's on the house side and their motivations are going to be pretty diverse.
(00:23:29):
For some, they'll have bought into the policy and sort of the ideological case for on-shoring a clean energy economy and having US leadership of the clean economy, but for a lot of them it'll be pretty parochial. You just have huge investments now across the country basically in every state of the country.
(00:23:51):
Massive investments, especially in manufacturing and especially in the EV supply chain that not only translate to a lot of jobs, but their permanent manufacturing jobs and those manufacturing facilities also lead to a lot of other economic development for communities.
Cody Simms (00:24:08):
This has been both private money where projects are cropping up because industry's putting them there, but also a lot of public money like the Loan Programs Office where they've lended significant amounts of capital to stand up a factory or stand up a recycling facility or something like that. That's all money flowing into those local geographies with local job impacts and presumably done in concert with local politicians.
Adrian Deveny (00:24:37):
Exactly. Yeah. The tax credits get most of the focus because most of them are uncapped, and so companies really can make investment decisions based on those because it's not a competitive process. They just know that if they build the facility, they will get the incentive and so that for a good reason gets a lot of the focus.
(00:24:56):
But you're absolutely right. The Loan Program has been instrumental, especially for projects that require a lot of capital and have a hard time getting commercial debt but require more than just venture capital for the scale of what they're trying to do. People don't realize the scale of what we did in the Inflation Reduction Act just on the loan program's office.
(00:25:21):
It was hundreds of billions of dollars of loan authority and they've already announced over 50 billion in loans since the start of the Biden administration. That's not a trivial amount of money being invested.
Cody Simms (00:25:38):
15 billion announced yesterday to PG&E, I saw.
Adrian Deveny (00:25:41):
That's not even included in my 50 billion figure because that 50 billion figure, I crunched those numbers a few days ago.
Cody Simms (00:25:49):
Okay, well, there you go.
Adrian Deveny (00:25:50):
I'm already out of date. I had it at 55, so we're now at 70. That's real meaningful money and in terms of manufacturing facilities, there are a couple really great resources that I check all the time just to do a pulse check on how things are going out there in the economy and one is the Clean Economy Tracker and the other one is the Clean Investment Monitor.
(00:26:12):
They use similar publicly available data. They display it in different ways, but really useful resources for those that aren't aware of those two. On manufacturing alone, it's over $270 billion of investment that's been made since the IRA passed, most of which is in Republican districts, over 70% of which is in Republican districts.
(00:26:32):
So for those members, even if you don't care about climate, you care about these jobs, you should care about these jobs. These are real jobs, important jobs to these communities. A lot of these communities are communities that really need these investments are going to benefit a lot of communities that have been left behind over the course of the last many decades.
(00:26:52):
And so it's hard to ignore those types of investments. When you have North Carolina alone on manufacturing, it's now approaching $10 billion of manufacturing investments just in that one state. It's transformative.
Yin Lu (00:27:08):
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(00:27:27):
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(00:27:45):
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Cody Simms (00:28:09):
If we look even to the next six or nine months, I think republicans have been quite clear that the top priority is extending the 2017 tax cuts and figuring out essentially how to pay for those, how to fund those even if you don't take a cynical lens, which is there are members of these chambers who don't believe in climate change and don't want clean energy policy just because politically, they don't want to stand for it.
(00:28:36):
If you put that away and you just say, hey, let's say everyone's going to be pragmatic and they just have different goals and the Republican's goals is extending these tax cuts, are the Inflation Reduction Act provisions the easiest place for them to go to try to find money to extend these tax cuts?
Adrian Deveny (00:28:52):
I don't think it's easy, for the reason I just said you'll have a lot of members who have these transformative investments in their districts. They're going to be going to their leadership and saying, I'm all in on these tax cuts, but I have this facility that I need to stand up for and salvage, and those facilities really are there because of these tax credits and other investments from the Inflation Reduction Act.
(00:29:18):
That's a story that's being told over and over again by these companies to members of Congress that they are in these districts because of the way that the Inflation Reduction Act was designed. If you look at the EV tax credit as just one example that gets a lot of attention. We got a lot of flak for how that tax credit was designed.
(00:29:37):
It had very strong domestic content requirements and prohibitions on any components coming from foreign entities of concern, which mostly means China, and so it's not easy to have a model vehicle be eligible for that credit, and despite that or in part because of that, you have all of these companies making massive battery manufacturing investments in the US and also investments in critical minerals processing to go into those batteries.
(00:30:08):
That's happening because of the way that that credit was designed and also because of a manufacturing credit that goes to the manufacturers for producing those.
Cody Simms (00:30:17):
In fact, just unpacking that, if the goal had been, let's just scale EV adoption in the US as fast as possible, obviously, you wouldn't have wanted that there because you want as cheap of EV as possible, and so you want to flood the market with Chinese EVs.
(00:30:29):
The goal was two parts, right? It was how do we get EVs as fast as possible while building resilient supply chains that can support the American economy, and so it's the combination of those two things.
Adrian Deveny (00:30:41):
Exactly. It is true that China started making investments in the battery supply chain and the solar supply chain before us, and they went bigger than we did. We started making really big investments during the Recovery Act, but we were a little bit behind them and we were at a smaller scale than them, and so they got off to a stronger start.
(00:31:05):
We have some catching up to do, and that was a real mission in thinking about how to design this policy was to ensure that we could stand up a US supply chain and not have dependence on a Chinese based supply chain for solar and for critical minerals and for batteries in particular where we legitimately do have a global dependence on Chinese production right now, and we felt it was very important to break that dependence for national security reasons and economic security reasons.
(00:31:37):
So that's how it was designed and you're seeing the results. I mean when you have over $270 billion of investments in these supply chains since the passage of that bill, that's the market responding to this policy.
Cody Simms (00:31:48):
What I'm taking away from this is if the very near term goal on the Republican side is going to be how do we extend these 2017 tax cuts and on the Democrat side, and it sounds like some Republicans is how do we make sure these clean energy tax credits that came online with the Inflation Reduction Act stay active because they are driving jobs and they're driving local economic benefits.
(00:32:12):
The work that any listeners can do to help defend those credits, those Inflation Reduction Act era tax credits would be engage local businesses, engage local representatives and get stories told and get local representatives on board with the progress that's happening in their district. That feels like the work to be done right now. Is that right or is there other things that people should be doing?
Adrian Deveny (00:32:38):
At the end of the day, members of Congress first and foremost are there to represent their constituents in their district or in their state, so it matters a lot when they hear from a company or other stakeholders in their district that are building facilities, creating jobs and having a real impact, and they hear those directly from their constituents.
(00:33:01):
As much as people are cynical about how Congress works and maybe that feels transactional, the truth is that members of Congress are responsive to their constituents, whether they be businesses or individuals, those voices are going to really matter disproportionately than if it's a business coming from some other state that doesn't have any presence in their district or in their state or an individual.
(00:33:25):
So for any company that is building a facility in a member district, those companies are telling those stories already. Hopefully, that's not rocket science. I think any company who's doing that should already know that and does already know that those are stories they have to tell.
Cody Simms (00:33:43):
Hopefully in particular, highlighting the specific clean energy policy tax benefits they're getting that help them build that thing in the first place, making sure that the actual legislation also bubbles up into the conversation.
Adrian Deveny (00:33:55):
Exactly. The unfortunate nature of the Inflation Reduction Act was that it was a partisan process and it was a partisan process in part because we knew that the scale of what we needed to accomplish on climate was such that it would be too much to hinge on trying to land Republican votes for something of that magnitude.
(00:34:19):
But when you rig it into its component parts and you think about all of the industry that supports all the various component parts and the amount of investments that they've been making in Republican districts, I hope, I think it makes it quite resilient and over time more and more bipartisan because of just the economic impacts it's having in real communities, especially in red states and districts.
Cody Simms (00:34:41):
Well, we've seen that with the Affordable Care Act, which was it was villainized for quite a long time and has increasingly become something that people don't want to see go away.
Adrian Deveny (00:34:51):
People draw this analogy a lot, and I think the one way that it's not quite the same, maybe it's actually two ways that it's not quite the same. The Affordable Care Act, I think was more villainized than the Inflation Reduction Act was.
(00:35:06):
After the Affordable Care Act passed, members of Congress when they were having in-state meetings or town halls, they would just get bombarded by people who were really upset about it because of the amount of organization there was on the other side to oppose it.
(00:35:23):
So it had a lot of negative energy initially, but then over time it had a lot of organic positive support in part because healthcare is incredibly personal to people and everybody has a story about someone in their life that has got extremely ill, and certainly, for those of us who lived in the years before the Affordable Care Act where there wasn't protection for pre-existing conditions, there were just a lot of people who were left bankrupt if you had a severe medical issue and you didn't have health insurance through your work.
(00:35:59):
There were so many people whose lives were fundamentally changed in a very, very personal way, and I think that that will happen with time with these kinds of investments from the Inflation Reduction Act, but there isn't anything that's quite as personal as healthcare. That's just a human reality.
Cody Simms (00:36:20):
You're right. Hopefully, over time, as more and more people know, people who work at the local battery factory or who work at the local solar farm or whatever, that ends up just becoming part of everyday life for people as opposed to it being this weird thing that was foisted on us by the Democrats.
Adrian Deveny (00:36:36):
Getting a really good job is also transformative or having your electricity bill go down in your house by hundreds of dollars because you could be a low-income person and you're benefiting from home Energy Rebate program, the Department of Energy that can be transformative to your life.
(00:36:54):
It just takes a little bit more time for that impact to happen and for those people to come out and really fight for this bill. So I wish we had just had four more years for this bill to be implemented because then I really think that resiliency would've set in and we would see a lot more lives change.
(00:37:10):
I mean, a lot of these manufacturing facilities are announced, but they're under construction, so you don't yet have people's lives changed with the permanent jobs. They're definitely coming, but they haven't yet been hired, and so we would've really benefited from a few more years of this taking hold, but we have to play with the hand that we're dealt, as they say.
Cody Simms (00:37:31):
On that note, so far the conversation has been help people see the local benefits they're getting. There's got to be also a more active defense plan, I would think, underway as well. Are there specific things that the Democrats are trying to do to help these policies stay active?
Adrian Deveny (00:37:50):
The legislative process is likely going to be a partisan reconciliation process, so most of the action is going to be on the Republican side of the aisle. They will have their work cut out for them because they will have members who are from all different sides of the ideological spectrum that they'll have to manage.
(00:38:10):
They'll have members with these big investments in their states or districts that they'll have to manage, and people who have all kinds of demands that aren't related at all to energy and climate policy. The bills that they're contemplating aren't just related to energy and climate policy. They're related to immigration, they're related to broader tax policy, but it'll mostly be an intra-party negotiation amongst the Republicans.
(00:38:33):
That doesn't mean the Democrats are completely sidelined. They have relationships with Republicans and to the extent that they can forge relationships around specific ideas, I'm sure you're going to see members on the democratic side outreach to Republicans and try to forge some options to salvage whatever they can, but really most of the action is going to be on the Republican side.
(00:38:58):
All that said, there is a huge role for civic society for the public to engage and make their voice heard, and that's of course happening whether it be businesses or anyone else in civil society.
Cody Simms (00:39:10):
So that is the how do we defend the existing provisions. Is there any room for going on offense in the next few years at all?
Adrian Deveny (00:39:20):
Definitely. People sometimes forget about the not too distant history of past Republican trifectas where I don't want to overstate what can be done. I think on net, there will probably be more setbacks than progress. That's almost certain when it comes to climate policy, but that doesn't mean you don't try to put some points on the board any chance you get.
(00:39:46):
As we were talking about before, every year there is an appropriations bill that does have to pass, otherwise the federal government does shut down appropriations bills have to pass with 60 votes. Those don't go through budget reconciliation, and so that means that the party in the minority often has quite a lot of leverage in those negotiations.
(00:40:09):
And you can't land huge wins usually in these appropriations negotiations. But what's at stake is funding for Department of Energy, grant and loan programs, research programs, as well as deployment programs, environmental protection agency programs, USDA programs, department of interior programs, all the government funding is at stake, and it's a lot of money that we're talking about here.
(00:40:33):
So that'll be an area of work where there's some real opportunities. And then every year there's also a defense authorization bill and the Department of Defense is the biggest energy consumer in the world, and people don't necessarily focus on that bill from the energy environmental community.
(00:40:52):
But in fact, the Department of Defense does some really creative stuff on first-of-a-kind investments in clean energy technologies. And so that's happened and those types of provisions have been authorized in every defense authorization bill that I've paid attention to. Some of the most cool stuff I think happening in the aviation space is happening as a result of Department of Defense Investments.
(00:41:19):
They're investing in landed wing aircraft that would reduce the fuel consumption of planes by more than half potentially, and that would be game changing if that became a commercialized technology, just as one example. And they're very well-positioned to be an early investor in that kind of technology because it has clear defense applications, but also it could transfer over to commercial applications as well.
Cody Simms (00:41:47):
So I'm hearing with both the appropriations pathway and something like the defense spending authorization pathway, it's a matter of trying to attach or push ideas into things that are already going out the door, things that are already going to pass. Can you essentially attach some kind of climate provisions or climate legislation into those things?
Adrian Deveny (00:42:10):
So as one example, in 2020, although there wasn't a Republican trifecta, then it was still under the Trump administration, it was Republican senate and a Democratic house that end of year appropriations bill included some non appropriation stuff. So it included a bill to phase out HFCs. This is basically like a cap and trade bill for HFC phase out.
(00:42:34):
It's pretty remarkable actually. It had bipartisan support because our US manufacturers saw a competitive advantage relative to Chinese manufacturers. US manufacturers were just ahead of the Chinese manufacturers on phasing out HFCs, so it was in their interest to do that. And so Republicans, that was their entry point into being able to support the HFC phase out bill, and that's now law.
(00:43:01):
I sometimes put things in terms of singles, doubles or home runs. That was a solid double in my mind. The IRA was obviously a home run. Usually, we're fighting for singles in a divided government or in a Republican trifecta, but sometimes you can hit some doubles and that's worth doing.
Cody Simms (00:43:17):
It strikes me you're talking about the Republican trifecta. The Democrats had a trifecta recently, and during that time is when the bipartisan infrastructure law passed, I think. Is that accurate?
Adrian Deveny (00:43:29):
Yeah. The back story to that bill was that we were focused on as soon as we got the trifecta moving a reconciliation bill that included first and foremost in our strategy was climate, but it became much broader and it sort of became known as build back better.
(00:43:49):
But that was initially put on pause because of COVID and we had to pass the American Rescue Plan first, which was the first reconciliation bill that we passed. And then as we were negotiating, once that was behind us, we started negotiating the build back better, the reconciliation process for that, and we had a bipartisan gang form that insisted on trying to do a bipartisan infrastructure bill first.
(00:44:14):
And our members, Manchin Sinema, others who are part of that gang, they wanted to try to work on an infrastructure deal that would cover as much bipartisan policy before we moved to a partisan reconciliation bill. So that one was done on a bipartisan basis basis. Republicans came to that negotiation in part because they were trying to fend off a partisan reconciliation bill, and they were hoping that that would be the only bill that we would pass and that we wouldn't be able to land the partisan reconciliation bill.
(00:44:44):
We obviously wanted to do both. We had no choice but to start with the bipartisan bill because we didn't have the votes. We were told by enough members that they weren't going to vote for a partisan bill until they could get a chance to do a bipartisan one first. So that's why that was sequenced in that way.
Cody Simms (00:44:59):
So I asked that question wondering if now going into a Republican trifecta, if there are any climate or clean energy or energy type of legislation pathways that would be broadly bipartisan, and two things that jumped to my mind, I'm interested to hear your feedback. One, I think just basically died yesterday, which is permitting reform feels like one where there should be bipartisan support.
(00:45:28):
People want different things, but it feels like something that should be able to get out the door. And the other is something around, and I haven't heard this brought up, but it feels like we're about approaching the time when it feels like this will start to bubble up something in the climate resilience, creating funding to help disaster recovery, disaster relief or proofing ahead of extreme weather events.
(00:45:55):
Both of those feel like things that shouldn't be controversial. I'm curious to hear anything you think about that over the next two years, call it, between now and midterms, there might actually be able to be across the aisle work on.
Adrian Deveny (00:46:09):
Well, first of all, the bipartisan infrastructure bill, that authority expires in 2026, so that is in the timeframe of this Republican trifecta Congress, so they will need to revisit that bill. Now, there's an open question as to what the scope or the level of investment they might consider revisiting, but there's a lot of opportunity there.
(00:46:35):
Obviously, that was all negotiated on a bipartisan basis, so you could imagine there's some real opportunities for continued progress on an infrastructure bill reauthorization. Usually, that is pretty narrow in scope to just highway investments, transportation transit investments. The bipartisan infrastructure bill broadened it to include a lot of other types of programs on resilience.
(00:46:57):
It gave a lot of money for resilience investments in the Department of Interior, and it included a bunch of energy department demonstration money. So that's where the hydrogen hubs, in fact, all of the Office of Clean Energy Deployment was created through bipartisan infrastructure bill and all the different DAC hubs, the hydrogen hubs, the other various programs that were in that bill were pretty transformative and definitely worth revisiting.
(00:47:20):
As one example, they didn't do demonstration hubs for geothermal in any meaningful way. There was a small amount of money, but it was very small compared to the other hub programs. But you can imagine geothermal being a pretty compelling hub model because of the need to co-locate multiple industrial or commercial facilities around a large network geothermal hub.
(00:47:43):
And you have the incoming chairman of that committee, Mike Lee, of the Energy Committee being pretty supportive of geothermal energy and the incoming Secretary of Energy also being supportive of geothermal energy. So that, to me, is an interesting area of opportunity permitting reform for sure. I think there's going to be continued interest in that.
(00:48:02):
I definitely don't agree that it is non-controversial, it is very controversial in part because permitting reform means a lot of different things to a lot of different people. Some of it can include things that are quite controversial depending on where you sit related to reforms to NEPA or the Clean Water Act or mandatory leasing of oil and gas or fast track approval for LNG export.
(00:48:27):
All of that at various points in time have been described as under the umbrella of permitting reform. But from the democratic position, while there was a recognition that we do want NEPA to move more quickly and more efficiently, and there were a lot of proposals put on the table, most of the emphasis was actually on what are the barriers to deploying more clean energy.
(00:48:47):
And for clean energy deployment, the barriers really mostly sit around how do we build more transmission so that we can integrate more renewable energy? And so the policies being proposed in federal permitting reform had a lot more focus on FERC policy and how do you build out more transmission infrastructure, inter-regional transmission lines and intra-regional transmission lines.
(00:49:09):
And that was controversial on the Republican side because it had opposition from a lot of the investor owned utilities. So there was plenty of controversy all across the board depending on which specific policy.
Cody Simms (00:49:22):
It feels like there are three big levers in permitting reform that certainly have strong opinions and advocates on either one of them. One is like you said, how do we increase transmission line capacity and timeliness. Another is how do you enable things to happen more quickly, but still maintain the rigor of environmental reviews so you're not destroying natural ecosystems unnecessarily.
(00:49:48):
But also potentially figuring out how to streamline those processes so they're not too onerous and blocking clean energy progress. And then it feels like the third big controversial lever is, well, if you're going to streamline things to make it easier to do clean energy transmission, does that also apply to oil and gas pipelines and things like that? And that's where things butt heads.
Adrian Deveny (00:50:08):
I think that's a pretty good way of synthesizing it. They're all obviously various other cats and dogs, but I think that's a pretty good way of describing it. But all that being said, I do think that there's a lot of bipartisan appetite to try to continue to make progress on permitting reform.
(00:50:24):
In general, I think it is true that in an era of clean energy being clearly now the cheapest resource for electricity production, the theory is that doing permanent reform in an area where we need to just build a lot of clean energy would be net beneficial.
(00:50:42):
But there's a lot of specifics in terms of how that plays out. That complicates the discourse, for sure, on Capitol Hill. They got really close, I should say. I mean, it just recently fell apart the negotiations on Capitol Hill that have been going on for months now.
Cody Simms (00:50:57):
We also saw the Inflation Reduction Act fall apart multiple times too. Something falling apart doesn't, to me, necessarily mean it's over.
Adrian Deveny (00:51:03):
It is over for the year. And the reason why that's pretty definitive is that the Inflation Reduction Act was its own bill that either passed or didn't pass. It wasn't going to shut down the federal government.
(00:51:12):
It wasn't up against a hard deadline, so it could keep getting life-breathed into it. The deadline that they're up against right now is that Congress is about to adjourn. They need to pass an appropriations bill to keep the federal government open, and so that bill, hands are down.
Cody Simms (00:51:27):
So they were trying to staple it to the appropriations bill.
Adrian Deveny (00:51:30):
They're trying to staple it to either the defense authorization bill or the appropriations bill.
Cody Simms (00:51:34):
The same strategy we were talking about 10 minutes ago?
Adrian Deveny (00:51:36):
That's the strategy. That'll be the strategy for permanent reform next year. It won't be a bill that passes on its own. It'll either be attached to the defense bill or the appropriations bill, almost certainly.
Cody Simms (00:51:45):
Where do we expect to see energy policy focus over the next few years? And love to hear your thoughts on this. Obviously, expansion of oil and gas clearly seems like is going to be a focus.
(00:52:00):
But in addition to that, it seems like things like nuclear, geothermal, hydrogen have been technologies that the Republican Party has tended to be more in favor of potentially than not. I don't know if that's just me reading weird tea leaves or what, but curious to hear where you think there are technology lanes that were likely to see tailwinds.
Adrian Deveny (00:52:25):
Yeah, I'd start with what I just said, which is that the market right now is different than it was 10 years ago in the sense that wind and solar are now clearly the cheapest electricity generation resources in most parts of the United States.
(00:52:40):
That matters a lot in the sense that those market forces will continue to deploy those technologies. But what's exciting to me, so even if they don't enjoy Republican support, I think we'll still see some amount of progress. Not to say that policy doesn't matter, but I'm still somewhat optimistic there.
Cody Simms (00:52:58):
Dare we use the word inevitable.
Adrian Deveny (00:53:00):
Dare we use the word inevitable.
Cody Simms (00:53:02):
Given the name of our podcast here.
Adrian Deveny (00:53:03):
But a few days ago, the IEA just unveiled a report on geothermal energy showing their projections for geothermal, showing it to be competitive cheaper than nuclear and coal and other baseload resources in the 2030s, a very rapid acceleration of deployment of geothermal, and there is a lot of synergy with the oil and gas industry there.
(00:53:29):
You're seeing some big investments from oil and gas companies in geothermal, and a lot of those jobs are very transferable. And so I think as a result of those synergies and of those cost declines, you're seeing a lot more Republicans being supportive of geothermal, and I think that's one area of clean energy tech that is going to grow in its bipartisan support. The same is true for advanced nuclear. While the costs aren't quite there yet in terms of being cost-competitive, it's still going to be very bipartisan in support.
Cody Simms (00:54:00):
You think specifically advanced nuclear, like new reactor technologies as opposed to scaling out existing known large light water reactor type technologies.
Adrian Deveny (00:54:09):
Advanced nuclear is a pretty broad term, but I think that both are true. We'll likely see from this administration, continued support for both. There's actually a tax credit in the Inflation Reduction Act to support existing nuclear reactors staying online. We did that obviously from the perspective of this is an important clean base load resource that if you retire it, you're going to see an increase in emissions.
(00:54:34):
It won't only get backfilled by clean energy. It'll get backfilled by some combination of clean energy and likely natural gas generation. So that was an important way to preserve an area of clean energy on the existing grid. I would be very surprised if Republicans repealed that provision because there's just strong bipartisan support for that industry.
(00:54:56):
I think people see the future of nuclear, particularly new investments in nuclear is more in the quote advanced nuclear space. And again, advanced nuclear can mean innovations around the safety in nuclear facilities or the generation technology itself.
Cody Simms (00:55:12):
Let's do one more topic. I put this to the end because it's a hypothetical and we are living in a reality with a Republican trifecta right now. If the opposite had happened and you were looking at a Democratic majority right now, what's still left to be done on climate? What would you have wanted to do?
Adrian Deveny (00:55:37):
I always start by talking about how far we've come and how far we have to go to meet our climate goals, President Biden's climate goals. So his climate goal for the United States was to reduce emissions by roughly 50% by 2030, and to get to net-zero by 2050.
(00:55:57):
The Inflation Reduction Act got us to roughly 40% emissions reductions by 2030. So that's an improvement from the trajectory we were on. So we were on track for 30%. We got to 40%. Our goal was 50%, so we were basically halfway to our goal.
(00:56:15):
What that means is that had Democrats won a trifecta, we would've had to pass another Inflation Reduction Act sized bill just to meet our 2030 goal, and we're now going to be 10 years away from 2035. So budget reconciliation bill is a ten-year bill. So we would've actually been solving for a 2035 target, a new 2035 target, and we expected an incoming Democratic administration to ratchet up the ambition from 2030 to 2035.
(00:56:46):
So we would've probably had to have passed a bill that was actually more like two to three times the size of the inflation Reduction Act to meet our new 2035 goal. So we had a lot of work cut out for us in the best case scenario to be on track for the long-term net-zero by 2050 target. That's a tough target to meet. We weren't on track even in the best case scenario, it would've been really hard to get on track.
(00:57:14):
What does that actually mean with any level of specificity? It means a lot of everything we were falling behind in every sector of the economy that has emissions associated with it. In the industrial sector, that's one of the sectors of the economy that we did have policy in the Inflation Reduction \act to decarbonize industrial, but it wasn't nearly as granular and sophisticated in how it's targeting specific areas of the sector in the way that we had policy for the power sector.
(00:57:44):
So there was a lot of thinking around how do we develop policy in particular to decarbonize the industrial sector, and it has this co-benefit of the first bill. The IRA was all about ensuring clean energy jobs. You could imagine a second bill being very focused about having a robust supply chain for clean heavy industry, clean heavy steel, clean heavy cement, and creating a lot of great manufacturing jobs in the United States that were also, by the way, jobs in the clean economy for low carbon steel and cement and positioning the United States to be the leader in those heavy industries that have a very long and storied history in our country as being important drivers of local economies.
(00:58:24):
I think that would've been a really important pillar of another round of legislation. But the truth is we had a lot of work to do in every other sector too, in the power sector, in the transportation sector, the building sector, the land use sector. Each of those have their own discrete challenges.
(00:58:42):
Our approach to the IRA, which wouldn't have been all that different I don't think, to a new bill, is that you have to break down the economy into its component parts and look at every sub sector and sub sub sector, understand what the bespoke decarbonization challenges are and design policies to tackle those specific challenges.
(00:58:59):
And so you really have to do that kind of deconstruction and reconstruction work to think about how to do this type of climate policy. It takes a lot of analysis and a lot of policy design work, and it's complicated, a lot of emissions modeling work.
Cody Simms (00:59:14):
So what's next for you? How do you spend your time now? You've been out of the Senate now for six or nine months, something like that. Where are you focused?
Adrian Deveny (00:59:22):
I left the Senate with a promise to myself that I was always going to work on what I care the most about, which for me is thinking about the future of federal climate policy. Anybody who signs up for working on federal climate policy, it's a long and complicated and windy journey because we never going to solve this problem in one bill or in one Congress.
(00:59:48):
You're just signing up for life because getting to net-zero by 2050 is basically a lifelong journey. That's assuming we can even get on that track, which is a very hard track to even get onto. I'm always thinking about looking ahead, and I love thinking about policy design.
(01:00:04):
That is what I am most passionate about, so that's what I'm working on with most of my time. I always think about what's coming up next in federal climate policy and how do we get the best results that we can, because sometimes that's a defensive question and sometimes it's an offensive question, and sometimes it's both.
Cody Simms (01:00:21):
Well, Adrian, thanks for all the work you've done. Thanks for obviously being in the midst of passing the most landmark climate legislation of our lifetimes, I guess probably ever, because climate legislation is a relatively new category. I'm really looking forward to hearing how your work evolves and government ebbs and flows.
(01:00:41):
And as changes happen again, it always feels longer looking forward than it seems to feel looking backward in terms of these periods of time. But as these periods of time come again and hopefully, you have opportunities to construct more work in this space, we can't wait to see what's next for you there. And again, thanks for all of your work.
Adrian Deveny (01:01:03):
I really appreciate you having me on. Thank you so much, Cody.
Cody Simms (01:01:07):
Inevitable is an MCJ podcast. At MCJ, we back founders driving the transition of energy and industry and solving the inevitable impacts of climate change. If you'd like to learn more about MCJ, visit us at mcj.vc and subscribe to our weekly newsletter at newsletter.mcj.vc. Thanks and see you next episode.
