Granholm backs pipeline, gas and ‘backstop’ authority

By Brian Dabbs, David Iaconangelo, Peter Behr | 05/19/2023 06:54 AM EDT

Speaking at POLITICO’s energy summit, the Energy secretary supported the Mountain Valley pipeline, fleshed out the administration’s plans for transmission, and waded into the political fight over China and clean energy.

Jennifer Granholm.

Energy Secretary Jennifer Granholm. Francis Chung/POLITICO

Energy Secretary Jennifer Granholm put her stamp of approval on a fiercely contested natural gas pipeline Thursday and provided new details about the Biden administration’s strategy to support large transmission lines critical for a surge in renewable power.

“We know that there’s a real desire to have energy security in areas where there is huge demand for power,” Granholm said at POLITICO’s energy summit in Washington. “We also know that we have got to accelerate investment in clean [energy].”

Those dual objectives — maintaining energy security with fossil fuels and unleashing renewables — have punctuated the Biden administration’s policies of late. In recent months, the Biden administration signed off on the Willow crude oil project and a major Alaska liquefied natural gas project, angering environmentalists.


On Thursday, Granholm said the Mountain Valley pipeline is “on a path” to soon begin transporting natural gas, regardless of congressional action on permitting. The roughly 300-mile project is designed to move natural gas from shale fields near northern West Virginia across the Blue Ridge Mountains to the Virginia Piedmont. On Thursday, the Interior Department approved its path through a national forest (see related story).

The pipeline has been embroiled in legal and regulatory challenges, even though it’s 94 percent complete, according to its developer. In April, Granholm personally touted the project in a letter to the Federal Energy Regulatory Commission.

Granholm’s comments at the summit were repeatedly interrupted by protesters from Climate Defiance, a new environmental protest group that has targeted public appearances by White House national climate adviser Ali Zaidi. The group also blockaded the White House Correspondents’ Association dinner in late April.

Rylee Haught, a 24-year-old activist with Climate Defiance and a West Virginia native who participated in the protest, told E&E News, “I really don’t want to see the Mountain Valley pipeline go through my home state.

“We’ve already been treated like a sacrifice zone for … gosh, I wanted to say decades, but at least a century. We’re fed up and tired of it,” Haught said.

In her remarks, Granholm pledged to “quadruple down” on clean energy deployment, but she also touted U.S. natural gas exports.

“We want to be able to ensure that our allies can turn on the lights,” she said. “We know that natural gas is available right now. We have an abundance. So, we’re going to be a friend to our allies.”

The United States is set to export roughly 12 billion cubic feet per day of LNG in 2023, a 14 percent increase over last year, according to analysis from the U.S. Energy Information Administration, an arm of the Department of Energy. And Biden administration officials are planning to continue to export LNG for years to come.

Using ‘backstop’ authority?

Meanwhile, Granholm went further than DOE officials have previously in outlining administration strategy and timelines to boost the strained U.S. electricity grid. She said the federal government is prepared to use “backstop” authority to site regional and inter-regional high-voltage transmission lines to open more pathways for clean energy.

Backstop authority involves a two-step process where DOE designates transmission corridors, allowing FERC to override states on siting. It’s an idea that has faced opposition in the past from members of Congress and some utilities.

“We need to add 2,000 gigawatts of clean energy on the grid if we are going to get to these goals,” Granholm said, referring to President Joe Biden’s commitments to achieve a zero-carbon electric power grid by 2035.

“We need to essentially double the size of our electric grid” over a decade or more, including new inter-regional lines, she added.

The 2021 Infrastructure and Investment Jobs Act strengthened federal backstop authority to approve rights of way for transmission projects if the lines are located in DOE-designated top priority corridors, and states delay or reject the projects. Once DOE identifies a corridor, FERC could approve a project’s siting regardless of state objections.

“There are reasons why we might think it would be important to have that backstop authority if … the NIMBY forces — and they will — rear their heads,” Granholm said, using the familiar acronym for “not in my backyard” local opposition that has defeated many controversial energy infrastructure projects.

DOE issued a notice of intent this month to proceed with the designation of the corridors, which are parts of the U.S. where transmission lines become stressed now or may become overloaded in the future, particularly if new wind and solar power project construction takes off. Areas of high transmission congestion will be identified in a DOE study due out in late summer.

DOE expects that in September “the corridors process will open up,” Granholm said, and utilities, transmission developers, states or localities could apply to have a specific power line project or projects declared a “corridor.”

That would qualify them for several billion dollars in federal grants and loan guarantees through funding in the infrastructure act.

“Once a corridor has been designated, that opens up a whole array of funding opportunities,” she said.

“A state or local community could raise their hand and say, yeah, actually build that transmission line through here or it could be a developer. … It could be a combination of players that really want to see a transmission line run through them. And then, of course, we also have the ability to have backstop authority through FERC if, in fact, things get sticky,” she said.

The China controversy

Granholm also said the U.S. is starting to reverse a pattern in which American capital and intellectual property flow out of the country and into China.

She cited an example of Ford Motor Co.’s deal in February to license technology from Chinese producer Contemporary Amperex Technology Co. that would be used in battery production at a $3.5 billion factory in Michigan.

Under that deal, she noted, “they’re getting the [intellectual property] from China. It’s going in one direction — toward us.”

The Biden administration has faced criticism from Republicans who have called for investigations into whether federal subsidies for clean energy are supporting China. Ford’s plans, for instance, have been attacked by Republicans and Sen. Joe Manchin (D-W.Va.) for relying on technology licensed by a Chinese company for batteries.

Granholm said the Biden administration was hoping that the Inflation Reduction Act would launch production of EV battery components within the U.S.

“Honestly, we want it here. We want to be able to have our own energy security here,” she said.

As new battery production facilities open in the U.S., union auto workers would have a “huge opportunity” to organize and expand their workforce, she added.

“I don’t think we should be satisfied with saying, ‘We’ll give this component to China,'” said Granholm. “We’ve seen what it’s like to rely — when any country relies on one supplier. It makes you vulnerable. And so if we’re going to be strong, we have to develop our own American-made energy — the whole thing, soup to nuts, and that’s what’s being incentivized through the Inflation Reduction Act.”

In the solar sector, however, bipartisan members of Congress and some U.S. equipment manufacturers have criticized the Biden administration, saying it has not pressed hard enough to ensure domestic production of solar panel components, which are predominantly made in China.

For instance, the Treasury Department released guidance last week on a bonus tax credit offered in the IRA for solar panels made with U.S.-manufactured equipment. The guidance rewards panels for using American-made solar cells by making those panels more likely to receive an extra 10 percent credit.

Some groups, like the Solar Energy Manufacturers for America Coalition (SEMA), called the guidance a “missed opportunity,” arguing the guidance should also have included upstream components like polysilicon and wafers used to make solar cells.

“China is producing 97 percent of the world’s solar wafers — giving them substantial control over both polysilicon and cell production. We fear that this guidance will cement their dominance over these critical pieces of the solar supply chain,” said Mike Carr, SEMA’s executive director, after Treasury’s guidance was released.

Administration officials point out that the domestic content adders are part of a larger suite of IRA tax credits that includes an incentive for making clean energy components like polysilicon and wafers in the United States.

Granholm’s defense of how the Biden administration has managed Chinese influence over clean energy also dovetailed with comments at the summit from Jigar Shah, director of DOE’s loan office.

Shah during an earlier panel said that his office was capable of making sure that recipients of clean energy loans did not have “direct ties to authoritarian regimes” or executives with “poor track records.”

“This is not new for the Loan Programs Office. … We do background checks on everybody,” he said.

“But I think we also have to recognize that America wants to attract foreign direct investment,” Shah added. “We want to attract some of the best and brightest companies from around the world to invest here in the United States and create jobs here in the United States. So I think we can do both: attract foreign direct investment and avoid folks who have track records that are ones we want to stay away from.”

Reporter Shelby Webb contributed.