Stanford Energy is brought to you by the Precourt Institute for Energy
A bipartisan energy infrastructure bill is still possible
By Sasha Mackler and Arun Majumdar, Opinion Contributors
Senate Majority Leader Mitch McConnell (R-Ky.) has indicated that the Senate will soon take up the Paycheck Protection Program and other relief measures to assist millions of workers unemployed due to the COVID-19 pandemic. But once passed, policymakers should transition from survival-based support programs to stimulus policies to kick-start the economy, create millions of new jobs, and position the U.S. for long-term economic prosperity.
House Democrats have passed major energy infrastructure legislation, President Trump has expressed interest in an ambitious infrastructure bill, and the key Senate Environment and Public Works Committee has already passed significant legislation. While these various approaches have many important differences, the need to create jobs and prime the economic pump in an election year suggests a bipartisan economic stimulus deal with energy at its core could still happen.
Energy is a key element of infrastructure for modern economies and is uniquely positioned to create jobs and growth. While the energy industry employs about five percent of the U.S. workforce, the energy sector has created more than 10 percent of all new jobs over the past five years. As countries around the world transition to a low-carbon economy, modernizing the U.S. energy system will not only put many Americans back to work, but also position the country for stronger economic competitiveness and environmental security for decades to come.
A 2016 Council of Economic Advisors report determined that the 2009 stimulus legislation which included $90 billion in clean energy investments and tax incentives “leveraged approximately $150 billion in private and other non-federal capital for clean energy investments.” The study found the 2009 energy stimulus also created 900,000 job-years in clean energy in 2009-2015 alone.
But the 2009 bill was far from perfect. We can do better now based on important lessons and including both Republican and Democratic priorities. The federal agenda should now focus both on the economy and lowering emissions. Fortunately, the lane that accommodates these priorities is wide when it comes to energy infrastructure.
Increasing investments in energy efficiency has proven a huge creator of new jobs, while generating consumer savings and increasing U.S. competitiveness. Just since 2015, 915,000 new U.S. energy jobs have been created, with over 40 percent of them in energy efficiency. Expanding the Low-Income Home Energy Assistance Program, the Weatherization Assistance Program, and federal and state building energy efficiency programs has the potential to create millions of additional jobs and improve the quality of life for many Americans.
But Republicans and Democrats must also invest in advanced information technology infrastructure that can monitor these efficiency achievements. The data collected should be shared and analyzed for further advancements and to reduce investment risk. Performance-based standards for buildings can be an important driver; and a silver lining is the fact limited use of many buildings during the pandemic is an ideal time for these upgrades.
Electrification of transportation is a major global trend in which batteries are the key component. Today, there is a global race to build the battery “giga-factories” to supply this industry, but if the U.S. remains passive, most EVs and batteries will be manufactured overseas. It is in the American economic and security interest to create a strong national battery supply chain, and not merely rely on imports — an issue which should bring the parties together.
But private sector investment in electric vehicles and other advanced energy production needs large market demand, long-term predictable policy, and manageable risks. Initial markets could be developed by requiring all government EVs have batteries made here with majority-U.S. content. Since the electricity grid is critical infrastructure, all grid upgrades and electricity storage systems should be American made, an area of growing consensus between Republicans and Democrats. While government procurement of clean tech is a proven approach to launching new markets and technologies, foreign companies could participate if they create a U.S. supply chain and become part of the American business ecosystem.
There are other advanced energy sectors where policies that align technology, markets and finance could drive massive economic benefits while cutting emissions. Technologies of interest to the private sector that also have policy support from both Democrats and Republicans include: long-duration storage for increased clean energy adoption; low-cost small modular nuclear power; carbon-free hydrogen infrastructure for industrial decarbonization; and carbon-dioxide removal and management infrastructure that includes both agricultural and chemical approaches.
America is facing an inflection point as we seek to jumpstart our economy and create millions of new jobs even amid fresh security concerns over reliance on global supply chains. Domestic infrastructure investments and the looming clean energy sector transition present huge new opportunities. The House, Senate and administration can — and should — all work together to capture this unique moment before the election.
Sasha Mackler is director of the Energy Project at the Bipartisan Policy Center. Professor Arun Majumdar is the co-director of the Precourt Institute for Energy at Stanford University and was founding director of the Advanced Research Projects Agency – Energy.