Rep. Sean Casten: Suppose that the Senate was confirming an agricultural secretary and somebody said to the proposed nominee, what are you going to do about food insecurity in America? And that person said, “I’m going to plant more corn.” We would all hear that and say, okay, you’re obviously a shill for the corn lobby. But that’s not actually an answer to the question. And yet when you ask someone who’s being considered for energy secretary what they’re going to do about energy insecurity in America, they say “drill, baby drill.” The purpose of energy policy should be to make sure that consumers have access to reliable, affordable energy.
Bill Loveless: This has been a crucial year in US energy policy. The passage of the One Big Beautiful Bill Act eliminated many of the clean energy incentives that were centerpieces of Biden-era climate policy.
The rollback of key climate provisions from the Inflation Reduction Act led to contentious debate over America’s energy future. And with so many shifting priorities and questions around the direction and the pace of the energy transition, it’s unclear what 2026 will bring.
So how are policymakers facing these challenges and working to accelerate clean energy deployment in a shifting political environment? What does pragmatic energy policy look like in an era of deep partisanship? And what should the policy response be to rising electricity demand in the US?
This is Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Bill Loveless.
Today on the show, we’re revisiting a conversation that Jason Bordoff had with Illinois Congressman Sean Casten, back in September.
Congressman Casten represents Chicago’s western suburbs and serves on both the House Financial Services Committee and the Joint Economic Committee. He’s also Vice Chair of the Sustainable Energy and Environment Coalition. Before entering Congress, Representative Casten was a clean energy entrepreneur and consultant, serving as CEO of Turbosteam Corporation and as founding chairman of the Northeast CHP Initiative.
Congressman Casten and Jason discussed the current state of clean energy deployment in the US, and the lawmaker shared his thoughts on the rollback of IRA provisions. They discussed how to balance energy security with affordability, and the case for grid modernization and regulatory reforms in the United States. They also talked about how to address the new energy security challenges that may arise with more rapid deployment of clean energy.
I hope you enjoy the conversation.
Jason Bordoff: Congressman Sean Casten, thanks so much for joining us on Columbia Energy Exchange. Really a privilege to have you with us.
Rep. Sean Casten: So happy to be here. Thanks so much for having me. Jason.
Jason Bordoff: I think a lot of people listening, they’’ll know of you and know of your background, but maybe not all. And so you’re unique in probably a couple of ways, but one of them is a member of Congress working on energy and climate who really comes from that world, I mean you and your father, and you have a whole family background in energy. Just tell people a little bit about your background, your family’s background and how you came to this work.
Rep. Sean Casten: So when I tell this on the campaign trail, and I just want to prop up all of my own expertise, I tell a completely true story that I was 20 years in the clean energy industry, chemical engineer by training, worked at Arthur D. Little, developing new energy technologies and took over a manufacturing company that built waste, heat recovery power plants, and then built another company to own and operate those. And all that’s true. When we told it around the family table, we started a little earlier that in 1970, well I was born in ‘71 … in 1975 my dad testified before the Senate on the bill that would become PURPA and founded a company that ultimately came Trigen Energy that was the largest district energy company in the United States. They built the third qualifying facility in the country in Trenton, New Jersey. That was a couple of Detroit diesels recovering waste heat, and then providing steam and chilled water to the municipal buildings in Trenton. Little fun fact, the plant manager of that facility was a guy named Don Leibowitz whose son Jon would change his last name to Stewart and go on to have a celebrity career outside of that. And so suffice to say, I kind of grew up thinking PURPA was a word, thinking QF was a word and thinking that ConEdison usually had an expletive in front of it.
Jason Bordoff: Hence for FERCalicious and nerding out on energy policy in a way few members of Congress can. And it sounds like we have a lot in common, not only being almost exactly the same age, but we have a house down the Jersey shore and spend a lot of time in areas not far from there. And in all the extensive preparation I do, I see that if you were going to do anything else, it would be to be part of the E Street band, which I think I have two photos in my office other than family. One is with President Obama and the other is Springsteen.
Rep. Sean Casten: Oh wow. I’ve only got one of those pictures, but I’d like the other one.
Jason Bordoff: And before we finish the hour together, given that you represent Chicago and I’m a born and raised New Yorker, you’ll need to explain to everyone listening why New York pizza is better than Chicago, which I also discovered in all of my research about you.
Rep. Sean Casten: I mean the answer to that one. And you get into politics and you’re supposed to provide things with political answers, but I got a degree in biochemistry and biochemical engineering when something is just factually true, you don’t want to get into the politics of whether you should suggest something to the contrary. And I did grow up in New York for what it’s worth. So it’s my formative pizza years.
Jason Bordoff: This is the sort of honest truth telling we want on this podcast. Okay. So now talk about the challenges of doing this kind of work in Congress at this moment. I mean, it’s hard enough to sit in a place like Columbia where I am and teach PURPA to people. These are really complicated issues. How do you view the engagement level of knowledge across all of these issues on the hill generally maybe these days? And then maybe talk a little bit about what it’s like to try to work in any sort of bipartisan fashion if that’s even possible these days?
Rep. Sean Casten:
I guess the first thing I’d note is that energy policy as much as nerds like you, and I think it’s really important and really critical and is at the core of everything we do. I mean arguably, I mean, energy policy, ag policy and healthcare policy, if we get those three right, we’ll be healthy, wealthy and wise, right? And I’ll throw in education policy, voters by and large don’t care a lot about energy policy. They care about it when there’s a blackout, but it’s something that people just assume is going to be there. And I say that because there’s not a lot of political pressure for people to come up to speed on energy policy before coming to Congress, and that’s not criticizing my colleagues. It’s just what are the things that you’re incentivized to spend your limited time learning about? And one of my biggest frustrations is that there’s no real appreciation of the value chain of the energy system.
And if you think about, suppose that the Senate was confirming an agricultural secretary and somebody said to the proposed nominee, what are you going to do about food insecurity in America? And that person said, I’m going to plant more corn. We would all hear that and say, okay, you’re obviously a shill for the corn lobby, but that’s not actually an answer to the question. And yet when you ask someone who’s being considered for energy secretary what they’re going to do about energy insecurity in America, they say drill, baby drill. And that’s an acceptable answer. And trying to get Congress writ large, and this isn’t partisan, but congress writ large to say the purpose of energy policy should be to make sure that consumers have access to reliable, affordable energy. The purpose of energy policy should not be to make sure that producers are making a lot of money except in so far as they need to be generating enough profit, all the things that has to happen to provide that energy.
And we just don’t get to that point. And I mean, I’ve had this conversation on a bipartisan basis with folks in the Biden administration as well as in the Trump administration. When you simply ask people, “should energy policy serve primarily to benefit consumers or producers?” you get a long pause and that shouldn’t be hard. And yet if you look at how our energy policy has been structured through the years, we’ve spent a lot of effort making sure that we provide tax subsidies for people to drill coal, environmental liability waivers for whatever you might have at an oil well, guaranteed cost recovery for utilities. And we spend almost no time saying, “well, what should we do to make sure that you, Jason, have the opportunity to put something on your house that will reduce your energy loads?” Not only do we not do that, but if you do that, your utility might come and say, well, if you do that, I’m going to have to spread my cost set over more rate payers and raise the rates. So I need to get a right of first refusal on that investment. And so we don’t do things that benefit consumers and that is both depressing but also an enormous opportunity.
Jason Bordoff: Do you think that’s a function of the fact that the history of energy policy back to World Wars and the 1970s was very much about energy security, security and supply availability, price. And in the last few decades there’s been an appropriate significant focus on sustainability and decarbonization, but people took energy security and affordability mostly for granted. We had a lot of abundant energy. It hasn’t been that expensive without some exceptions here and there. That might not be true going forward. And we can talk about where the world is headed and rising power demand, but do you think that’s where that comes from?
Rep. Sean Casten: I think it goes back deeper than that. I was having a conversation with a European parliamentarian. We were at the Glasgow COP. And we were talking about the fact that the UK generates almost twice as much GDP per unit of energy as the United States does, which is a shocking number. And by the way, the Danes generate even more and the Swiss even more than the Danes. And so I asked him what he thought was the primary difference and he laughed and he said, we have the same form of government. It was created by the same people. It was Ben Franklin and John Locke and Rousseau and all these people who were bouncing around. And in our case, the people had already spread it over the land and we had to figure out how to efficiently use finite resources. In your case, you’d killed all the Natives.
And so you built a pressure relief valve of “go extract more resources.” And because we are geographically blessed with all these resources, we have a long history in our country, not just an energy policy. The Homestead Act: go out, take a bunch of land, seize it. We do things in the United States that sound crazy in the rest of the world. If you buy a house, you own the mineral rights underneath the house. Go to Mexico, they don’t do that. The mineral rights are the right of the state. You own the property above that. And so we’ve built, our democracy is based on to some degree incentivizing extraction. And we’ve never totally got beyond that. We have made a lot of progress. The progress we’ve made has primarily been because at the end of the day, people preferred cheap energy. Why did coal collapse in the United States by 50%? Not because we got woke because gas was cheaper and renewables was cheaper than that and people liked the cheaper stuff. We could go faster if we didn’t have all the policy barriers, but those opportunities wouldn’t have existed but for the fact that historically we prioritized resource consumption over efficient resource utilization.
Jason Bordoff: Can you talk just about setting the scene and then we’ll come to some specific issues and the Big Beautiful Bill on other things about just this moment we’re in not just politically, but when it comes to the issue of climate change and energy, and not just in the US but in other countries, parts of Europe as well, a sort of broad sense that maybe it’s still there for some political parties or administrations maybe not even there at all, but it’s taken a backseat. You look at the corporate world, the financial institutions, it’s not sort of prominent in the way it was. The conversation today focuses on pragmatism and realism and there are calls for more of that. I’m just wondering what the words like that mean to you and what you make of this moment we’re in and how we move forward on all of our energy policy goals, security, affordability, and sustainability.
Rep. Sean Casten: My general thought is Winston Churchill that we’ve entered an era of consequences in the time of baffling half-measures has come to a close, but we’ve got an awful lot of baffling half-measures going on right now. We’ve already exceeded one and a half degrees of warming. That’s not actually what the IPCC report says, but the IPCC report says that we’re darn close. And then the fine print says we’ve got a half a degree of cooling that’s baked in because of all the soot in the air. And as that soot comes out, the warming’s going to accelerate. So we’ve already overshot, we have already locked in just in the United States that sea levels on the Gulf Coast are going to be two feet higher in 2050 than they are right now. That is not that far from now. That is within the life of a 30-year mortgage. We’ve baked that all into the system. And of course, whether it’s European wildfires or Australian wildfires or all of that is going on, and I don’t mean to be overly gloom and doom, but you can sit in this moment and say, well, it’s politically easier for me to not prioritize that issue right now. Or you can lead. That’s a choice.
I take the optimism that I have on this from the fact that in spite of certainly a political retrenchment in the United States and some other countries, in spite of a real failure, I think of a lot of our corporate leaders to say, I’m going to get people to follow me, not just I’m going to go where I think is easy in this moment and hedge my bets in spite of all that. Electric vehicles are the fastest growing vehicle class in the country. Renewables continue to surge even during the Trump administration. We now generate more power from non-hydro renewables than we do from nuclear, than we do from coal.
You go to Europe and what Norway is now, 90% of the vehicles that are being sold in a year are electric. These are all being driven for economic reasons in the wake of the war in the Ukraine or in Ukraine, I’m sorry, the Europeans have made massive investments that they don’t have to depend on Russian gas that is in their own self-interest to invest on that efficiency and conservation. And now we’re having a conversation around, is Germany too dependent on Chinese BYD vehicles? Is the United States solar industry too dependent on Chinese solar panels? And that’s a good conversation around do we want to own the technologies of that transition? But you only have that conversation if you’ve acknowledged that the transition is well underway.
Jason Bordoff: Yeah. Well, I mean that raises a number of issues I want to come to. So what lessons do you take? I mean much of what you just said and the urgency of moving faster to reduce emissions, bring them to net zero. We’re already at one and a half or just about there. I suspect if we’d had this conversation a few years ago, you would’ve said something like that. So I’m wondering, when you reflect on the federal climate policy that you played such an important role in helping to pass in the last several years, in the early 2020s, the focus on carrots rather than sticks. We’ll take an IRA subsidy approach rather than a carbon tax or cap and trade approach. But again, coming to this moment where it feels like there’s a retrenchment or something about the urgency of the problem you described as not resonating with people and tell me if that’s wrong and your interactions with all of your constituents. What lessons do people who want to pursue that agenda need to learn as we look forward?
Rep. Sean Casten: So I would argue that subject to the degrees of freedom we had, we did a really, really good job in the IRA, the putting carrots in place creates constituencies who want to maintain those laws. And it’s been difficult for some of my Republican colleagues to justify trying to repeal those laws because so many jobs came to their districts using sticks creates a constituency to get rid of laws. The other big piece of logic in the IRA was this recognition because all those trends that I told you about, about the surge in renewables, the collapsing coal, that all happened before the IRA was passed. We also were well aware that if you have a solar panel on the roof of your house, you stop paying for electricity. You can’t get the solar panel on the roof of your house unless you own a home and you have the discretionary income to make that capital investment.
It’s a good investment, but you have to have the capital to make the investment. And so a lot of what we did in the IRA was to try to say let’s use tax policy to make it possible for larger numbers of American people to access cheap energy. And that was successful and went through, I said at the start subject to the degrees of freedom we had, the biggest limitation we had in the IRA was the structure of the Senate. Because under senate rules, it takes 50 votes to change government spending or government revenues under the Byrd Rule, but it takes 60 votes to change the incentives for the private sector to deploy capital. And so all of the things that we had recommended on the climate committee from the house, I mean I think we had 700 recommendations and 350 of ’em became law mostly in the IRA, some in the infrastructure bill.
Jason Bordoff: This was the report of the committee, the climate committee climate crisis.
Rep. Sean Casten: Yeah, so we’re batting 500, which is pretty good. If you look at those things that didn’t get into the final bill, most of it were issues where the Senate parliamentarian said those are issues of energy policy, not of fiscal policy, and therefore it would take 60 votes. And they didn’t have 60 votes in the Senate. It was a straight party line vote. And so that the Senate, because of the filibuster and the Byrd Rule, the Senate is, as structured right now in this moment, is incapable of doing energy policy. And that’s a choice by the Senate. They could change their rules, but under their rules they can’t do energy policy. And so a lot of the structural pieces that we had, I sort of described the IRA as saying, we put, you had a car that had no gas in the tank and had the emergency brake on. We put gas in the tank and the car started driving, but we still had the emergency brake on because we couldn’t change the energy policy pieces that discouraged private sector actors from doing things that would lower the cost of energy for the American people with their own capital. We could only use federal money to do it. Make me king. I can fix those problems as it is subject to,
Jason Bordoff: Are you talking about things like permitting reform, make it easier to build infrastructure…
Rep. Sean Casten: Things like that. Permit reform, change the incentives of the way that utilities make money. There’s no reason. Why do we continue to tolerate a world where if your utility lowers your cost of energy, the utility doesn’t make as much money.
Jason Bordoff:
And the solutions to that are not even necessarily the federal level at all. It’s not just 50 or 60 votes, right?
Rep. Sean Casten: Many of those are state level. We could certainly change those rules for the federally jurisdictional utilities, the BPAs and the TVA’s, we could change those for transmission. I’ve got bills to do all these things, by the way. Stay tuned on all this. There were provisions in, I want to say I think it was the 2006 Energy Act for FERC to develop performance-based ratemaking that fer has never done and Congress hasn’t pushed ’em to get it done. But why don’t we have rules that say if you reduce the congestion charges on your grid, if you help your state meet their RPS targets, if you lower the cost for your consumers, let’s give you a little higher return on equity. Right? We could do that if we are in George Bush’s words making the pie higher. Let’s make sure everybody gets a slice.
Jason Bordoff: So I want to come to several of the policy proposals you put on the table, and I have a list here of the bills related to climate change you’ve introduced. Reading, it would take up the entire podcast, so I won’t do that. But I want to just before getting to the specifics, sort of ask how you think about moving forward with those things. Because as you said, the idea that.. is it still possible to work across the aisle to get to 16 nevertheless more? I discovered before this something else we have in common. My first exposure to government was as a college intern for Senator John Chaffee of Rhode Island who was a Republican. I’m not sure it would be today. And I think you had said in an interview how around the same time you had a cast a vote for George HW Bush, a sort of inclination to try to engage across the aisle and find common ground. And I just had Carlos Curbelo on this podcast too, who obviously was involved in creating the Bipartisan Climate Caucus. We have a bunch of problems as a country, we need to address climate being one of them. But even leaving that aside, we need a lot more energy. We need power. We need to meet rising power demand, things are changing. Do you see a possibility to move forward in ways that are not purely partisan on some of the issues you just talked about?
Rep. Sean Casten: It is difficult. I’m not going to lie about that. There are small bore issues that you can work on that are more geographically specific. As an example, Randy Feenstra from Iowa and I were working to try to get the SOO Green line installed that would bring cheap wind from Iowa into higher price markets in Chicago, would lower the cost for my consumers and would help businesses in his district. So you find those situational opportunities. I think the challenge we face is only coincidentally a partisan challenge. And I got to give some numbers on what I’d said about the UK before. Take the US GDP, divide it by our total primary energy use. We generate a little over $200 of economic activity for every MMBT of primary energy. The Brits generate $360. The Danes generate over $500. The Swiss generate over $600 that suggests on its face, since they have access to the same technologies comparably – leave the Swiss out, their economy is weird. But certainly the Danes and the Brits have similarly structured economies that suggests that we could either double or triple the size of our economy without using any more energy. Or if you prefer we could cut our energy use and therefore emissions by a factor of two or three or maybe even more since the stuff we displace is the expensive stuff and have the same standard of living. That’s a hell of an opportunity. But if we were to do that, think about the massive wealth transfer that would happen from those parts of America that depend on coal mining, that depend on oil extraction to those parts of America that benefit when the price of energy goes down. And once upon a time you could have a senior Democrat like Tom Dashell representing the Bakken Shale. Now that’s John Thone representing the Bakken Shale. Once upon a time you could have districts like mine in the Chicago suburbs where decent amount of industrial activity really wants the price of energy to be cheap.
You could have that represented by someone like Henry Hyde who used to have my seat. Now it’s represented by me. And so a commitment to a consumer focused energy policy. If we do nothing else, decimates Appalachia, decimates the Gulf Coast because those parts of the country are dependent on industries that can’t compete against clean energy. And one of the things that we tried to do in the IRA was make sure we were prioritizing those transition communities so that we didn’t leave them behind. And so you saw a preferential investment in battery facilities in those communities and solar manufacturing facilities. And when you look at those stats out of the Biden administration that so many of the projects, the majority of the projects were in red parts of the country. That wasn’t because it was a political decision. It was because we wanted to make sure that we didn’t leave people behind who otherwise are left behind.
That challenge doesn’t go away if all of a sudden we have a Democrat representing the Dakotas. Again, there still is this question of equity between extractive America and consumptive America in our own Democratic party. We don’t want to lose any more seats than the Republicans are already causing us to lose in Texas. So what sorts of things should we be doing to make sure that the people who represent those communities don’t feel like they’re at odds with their party’s energy policy? These are solvable problems, but they’re big meaty problems we have to talk through and we have to think about, do we want to live in a world where energy is cheap? Sure. Do we want to live in a world where there are large numbers of men in New Orleans and Texas and Kentucky and West Virginia and Wyoming who are now unemployed and angry at the government? No. Right. And we can do both, but we have to be intentional about it and I think more thoughtful than we’ve been as a nation so far.
Jason Bordoff: Yeah. It’s an important point. And we have a very significant effort underway with resources for the future and the Bezos Earth Fund and some others on this question of economic activity and fossil fuel dependent economies. And it is a hard challenge in the same way that 30 years ago when we talked about expanding trade and globalization and there are winners and losers and as long as policy helps the winners compensate the losers, everyone can end up better off. We didn’t necessarily do a great job with that compensating the losers part. And I think that’s generally true,
Rep. Sean Casten: And I think there’s some optimism there because global trade, I think a strong case can be made that we brought cheap stuff into the United States, but we didn’t think at all about what was going to happen in those communities and we lost a lot of the high margin into the value chain. In this case, if we bring cheaper energy to America, sure, I’d love to be manufacturing the solar panels, but I’d vastly prefer to be the country that has access to cheap electricity because of all the things downstream that are going to happen if you have that. So I think this transition is a much easier one to manage that political pressure. We just have to be intentional about it and have to be honest that there’s nothing there is dignity in being a coal miner. Doesn’t mean we should keep doing it, but let’s honor that dignity and make sure that those people are treated with the dignity that they’ve earned.
Jason Bordoff: And you talked about the adverse impacts on those communities and not even from trying to move to zero carbon sources of energy, but you’ve talked several times already in the discussion about making energy cheap, thinking about affordability for people. And so how would you respond to someone who says energy is really cheap in a world where we’re focused on energy security and affordability and now there’s growing concern about the dominant position China has in a lot of these supply chains, but gasoline’s not that expensive. What is it, three 20 or something? National average natural gas is really cheap here compared to other parts of the world. There’s a sense in which America’s fortunate to have all of this abundant hydrocarbons be the largest producer in the world. And so I often hear people, so to say, wait, why are we switching to all this other stuff? Climate might be one super important reason I think it is. But if you’re just talking about affordability and security, why does being the largest oil and gas producer in the world not give us that?
Rep. Sean Casten: Well, I would submit to you that 90% of the country doesn’t give a damn what it costs to buy a standard cubic foot of natural gas or a rail car full of coal because it’s not particularly useful to them. They want to know how much of my paycheck goes to keeping my home warm, keeping my beer cold, getting me to work every day, which is that downstream end of energy. And all of those fossil fuel sources cannot compete with free if you upgrade the efficiency in your house. I don’t think there’s anybody who would argue that a well insulated home has a higher energy cost than a poorly insulated home. There’s nothing different there than if you have an electric vehicle in your driveway that doesn’t consume gasoline in a solar panel on the roof so that you don’t have to pay for the electricity to generate it.
You have to have the capital, but you also have to have the capital to build a coal plant. And what we’ve seen in the market dynamics over the last two decades is that investors have said, I like the return on a capital investment that produces a lower cost energy source that makes money during more hours of the year than making the investment in a gas plant in a coal plant that’s going to have a lot of hours of the year when it’s getting squeezed out of the market because the wind, the solar, the geothermal, the nuclear is all cheaper. So clean and cheap are the same thing here. And whether or not our energy costs are cheaper than the Europeans has something to do with differential tax policy has something to do with differential resource access. It’s an entirely separate question of have we designed our energy policy to make sure that energy prices are as low as possible for energy consumers? And the answer to that is a resounding hell no.
Jason Bordoff: And how do you respond with someone who hears that and says, wait a minute, if this stuff is so great, it’s so cheap. Why is pulling back these IRA tax credits so problematic? Why does it change the trajectory – as the Rhodium Group just said it will – for how much solar and wind we’re going to deploy? Why does it need all that support?
Rep. Sean Casten: Well, number one, the surest way that you can tell that somebody has never spent any time in the energy industry is that they think energy markets efficiently allocate capital, right? We have massive distortions on what we subsidize. I’ll give you just a quick example because some of the subsidies are less explicit. April, 2020, middle of COVID, well, the start of COVID, everybody stopped driving gasoline prices collapsed in the United States because there wasn’t demand. The price of oil collapsed, and that was a huge challenge for domestic oil and gas producers. Donald Trump responded to that by calling the Saudis and saying, we are going to take military aid out of Saudi Arabia unless you curtail production to raise the price of oil because our oil producers need the price of oil to be higher. The Saudis flinched, the price of oil went up the cover of Bloomberg Business the next day, Fox Business the next day praised Trump, the deal maker for protecting our oil industry.
Fast forward two years later when we’re in the peak of all the inflation rebound, Biden is now in the White House, and a number of us, myself, Congressman Tom Malinowski, Congresswoman Susan Wilde, put together a bill and called on the Biden administration to say, do exactly what Trump just did with the Saudis and pressured them to bring it down and we could not get the Biden administration to do what Trump had proven worked. And a part of their concern, they didn’t say this explicitly, but the subtext was, we’re looking at midterms coming up and we can’t afford to lose the members that we have in those extractive parts of the country.
And so there you have a direct example where our government directly intervened to raise the price of energy to benefit producers and our government directly chose not to intervene to benefit consumers. And that was a Republican who I do not celebrate, who I do not venerate, who I can’t wait to have out of office again, who understood that United States policy can have a direct impact on the price of energy and a government who I have a lot of respect for president have a lot of respect for who chose not to use that tool. And their common interest was that they had to be very careful about the economic interests of energy producers rather than consumers.
Jason Bordoff: Yeah. It is a bunch of ways in which I think we haven’t quite wrapped our heads around. We’ve spent 50 years obsessing about what it means to be an import-dependent consumer country, and other considerations come up when you realize you’re the largest producer in the world.
Rep. Sean Casten: Yeah. Yeah. And I say that in response to your question of, so now, well, why aren’t people deploying these without subsidies? Because they can’t count on our government to prioritize the consumer. I would also point out on the subsidy side, most of the subsidies that fossil energy receives are designed to lower the marginal cost of production for fossil fuels. You get away from some of your environmental compliance obligations that would raise your marginal cost where you have tax subsidies tied to how much you extract. The overwhelming majority of subsidies for clean energy are to lower the cost to make the initial investment. How do I make it possible for you to have an EV? How do I make it possible for you to have a solar panel? Because I don’t have to worry about the fact that once you have the solar panel, it’s always going to make sense for you to run it as long as the sun is shining.
I do have to worry about the fact that once you have a coal plant, there are a lot hours where it may not make sense for you to run that. And so we subsidize both, but we subsidize them in very different ways. And when we build those clean energy assets, which maybe we have to subsidize to bridge the capital gap, you don’t have to subsidize it anymore. The fossil sector, you have to keep subsidizing it all the time as long as we have competitive markets that keep innovating and keep providing technologies that are providing better value, better service, and lower pollution.
Jason Bordoff: And the other question that I often hear come up in response to some of what you just said is, especially in a world of great power competition and rivalry and fragmentation and issues like economic, national security, economic security are front and center now in even a bigger way, why are we going from all of this domestic energy? We’re a net exporter, we produce more than we need, to being heavily dependent, particularly on China in supply chains. You talked about solar and EVs and batteries and obviously where all the critical mineral refining and processing is. So how do you address that concern? And you hear it on the Hill all the time, we don’t want to go from dependence on the Middle East to dependence on China, that sort of sentiment.
Rep. Sean Casten: It is a interesting conversation. It’s also a category error. I spent a lot of time in the energy industry. I built a lot of steam turbines. I don’t ever remember any policymaker being upset about the fact that we don’t have any casting plants in the United States that are making castings for steam turbines that are used in our nation’s coal plants and gas plants and steam plants. I don’t recall anybody raising concerns about the critical minerals that get used in electrostatic precipitators on the back end of coal plants or in the catalytic converters of our cars. Right. I’m not saying that to say a both-sides thing. I’m saying that because I think we didn’t have that conversation because we understood that the value of the energy was the energy, not the thing that you build. So it can then operate and provide you with energy for 30 years.
So yes, if I could have everything, I’d like to have all of that value added in the United States, but if I had to choose between what country will control the manufacturing of an asset that will take a year to build and a year to permit and get commissioned, and what country will extract the 2030 years of value out of that asset once it operates, I’ll take door two every time. And so the reason I say it’s a category error is if we are concerned about extracting oil from countries with shady human rights records and all sorts of other foreign policy concerns where we have to extract that oil every second of every minute of every hour of every day to keep our economy running, we can’t say “and I’m also concerned with the fact that we might have to mine something once and ship that on a truck so that we never have to do that oil thing again.” It’s orders of magnitude of different volumes.
Jason Bordoff: Yeah, I think that’s a point well taken. And I’m just wondering whether you think in addition to, well, I hear everything you just said and that struck me. We didn’t really talk too much about how the steel for oil and gas pipelines was heavily dependent on imports as well, but we’re talking about a lot of things differently now, semiconductors and chips and a whole range of things. So I’m wondering if part of the answer to your question, do you think might be the world has changed and people are not thinking in the same way about in China in an era of today as they did unlike a more copacetic geopolitical era. Might that explain part of it or not?
Rep. Sean Casten: My initial pushback is that I think there’s a lot of false equivalents that if your goal is to protect expensive energy from competition, the Chinese minerals is a useful argument. You don’t have to believe it to make the argument. You just have to persuade people. And so I think it’s important to shut down the argument as a completely separate matter. Should we generally be concerned where there are parts of our economy that depend on critical minerals where the geological deposits are more or less exclusively located in countries that we have some geopolitical concerns with? Sure we should. That’s an appropriate conversation. It was certainly a conversation we had in the twenties when the oil industry was being built out and it’s no less relevant today. So we can have that conversation while at the same time recognizing that we’re talking about orders of magnitude differences, which in some cases doesn’t matter.
If that’s a critical mineral that you can shut down one entire economy by limiting their access. It doesn’t matter that there’s not a lot of it. It’s critical. So yes, that’s an important foreign policy question. Like I said, it’s orders of magnitude difference. And if we can solve that issue, whether with statecraft or foreign policy, et cetera, et cetera, then I think our next focus should be are we the country that’s got the highest margin part of the value chain and on balance, I’d rather be the country that’s turning those rare materials into high value products that’s turning the electricity they generate into even higher value products than the country that’s running a mine.
Jason Bordoff: Well, and that’s a sentiment that’s shared in lots of countries and emerging markets and elsewhere, which is both sensible but potentially a risk, right? If every country puts export restrictions on everything to say, we’re not going to export nickel or copper, you got to build the batteries here and do the refining and processing here, it does start to get expensive and lead to some geopolitical conflict. But do you think you mentioned sort of the statecraft responses to that. The idea that we see this administration taking equity stakes and setting price floors in a rare earth, mine MP materials or both sides of the aisle have a sense that we’re in an era of where it seems there’s support for the state being more involved in private enterprise to try to deal with what are broadly seen as national security risks, although they’re not always incredibly well-defined. How do you feel about that trend we’re seeing?
Rep. Sean Casten: Deeply uncomfortable. I think there’s a healthy conversation to have around what parts of the value chain would we like to have in the United States. We certainly had this with all of the solar tariffs. Is it more important that we can rapidly deploy solar energy in the United States, or is it more important that the panels be manufactured in Ohio, even if that means we’re going to pay more for them? Do we like slave labor in China? Of course not. Do we benefit from having cheaper stuff? Yes. How do we think through that trade? What is the role of the state in bridging that? And is that in the healthy version of that conversation is that’s a very targeted tariff policy, human rights policy, statecraft, all the rest of that stuff. There’s a real dangerous conversation we’re having now of let’s just have taxpayer money invest in these companies and try to control them. And that’s a slippery road to a lot of things that have not worked well for a lot of countries in the Soviet block. Not to put too fine a point out. And as recently as a year ago, my Republican colleagues were making a lot of noise about how we had to ban any ability for the US government to contract with state-owned enterprises. That was a very direct assault on Chinese involvement in various parts of the global supply chain. And now I guess Intel is a state-owned enterprise
Jason Bordoff: And is that different in kind from say, the CHIPS Act or the idea that government needs to support these companies? You’re particularly talking about having an ownership stake, having the potential to influence decisions, push companies to be less DEI or more environmental or something like that. That’s the risk you’re identifying?
Rep. Sean Casten: Totally different. I mean, the CHIPS Act was basically saying, how do we get the private sector to invest in projects in the United States, and we will give them some form of leverage. We’ll give you a tax credit, you’re going to have to put up a lot more money than we put up. If I give you a 30% investment tax credit, you’re going to have to come up with 70% of the money. But how do we leverage tax policy to bring that back and how do we think through, if I can manufacture something in El Paso with $10 an hour labor and you can move that plant to Ciudad Juarez and do it with 80 cents an hour labor, how much is lost for the community in El Paso that loses that plant? And is that worth the $9.20 cents that manufacturer got to their bottom line? Would it be worth a tax policy that gave them $8.20 cents to incentivize ’em to keep that plant to the United States and then they could build it? That’s a healthy trade.
I realize I should have picked numbers that were easier to subtract in my head, but you get my point. So that’s healthy trade. That’s very different from saying we want to put federal money into these companies where we’ve got some kind of a governance stake. We’ve got some kind of ability to directly affect your equity going forward, because if I decide to suddenly sell down my position, it’s going to put you in a horrible position and might I use that to extract some political favors? That’s so far down the road towards crony capitalism. I think the closest we ever got to that prior to this intel deal, at least in my memory, was in the GM bailout. But in the GM bailout, the government gave preferred equity that had a stipulated repayment schedule that was baked into certain milestones. So we saved GM, but markets knew that GM sources of cash going forward we’re going to have to involve this repayment obligation. And so it didn’t introduce uncertainty into the thesis of an investment in gm. I think we’ve just invested massive uncertainty into the investment, not just of Intel, but what do you do if you’re Samsung right now? Do you come asking for your 10%? Do you say, I can’t invest in the United States anymore because they’re going to try to force me to take 10%? I don’t know. Right? But none of that is good for having a vibrant dynamic US economy.
Jason Bordoff: A conversation like this about affordability, energy security, energy geopolitics, I think for a long time was mostly about global oil markets, concerns about the Middle East, opec much more focused now on the power sector and concerns about affordability seem more focused on electricity prices sometimes than oil and gasoline prices. So I’m wondering how you think about the coming challenge of rising electricity demand, how real it is? Is it exaggerated and overstated and sort of what the right policy responses to it are?
Rep. Sean Casten: The demand rise is real. Our economy is electrifying. If you look, oil use in the United States is basically the same as it was 15 years ago. In spite of rising population, in spite of rising economy, I mentioned coal use is down. Gas is increasingly an export commodity in the US. Yes, gas demand is up, but on the margin, new gas goes to export markets, not to domestic use. And some of that’s because we invested in efficiency. Some of that’s because really energy intensive manufacturing moved to,
Jason Bordoff: I mean, we’re still consuming a lot of gas, right? I mean, exports are growing, but…
Rep. Sean Casten: Yes, no, we are. But gas is the only fossil fuel where domestic consumption is still growing. Domestic consumption for oil is not growing. Domestic consumption for coal is shrinking drastically and demand for energy is rising dramatically. It’s just that we’re increasingly consuming electricity and we’re increasingly using non-fossil sources to generate that electricity. And some of that is investments in efficiency. Some of that’s deindustrialization, some of that’s reindustrialization bringing some of these manufacturers on plant back on shore or near-shoring that use electric loads, of course AI, electrification of vehicle fleets. And on the power side, we had this very, and I’ve still never seen, maybe you’ve seen a good explanation of why for basically a hundred years with a couple little wiggles in the line, power demand grew by two to 3% a year in the United States, and then it totally flatlined from 2008 to 2020.
I’ve seen lots of explanations. None of them are totally intellectually satisfying to me. And now of course it’s shot up again. And because the electric industry is so capital intensive and because we still regulate the electric utility industry for the most part in a way that says if you deploy capital, I will give you a guaranteed return of your capital. That means that when we were in this anomalous period where demand wasn’t growing and therefore you didn’t need to build a lot more capital, you were amortizing all those investments out and there was no upward pressure. Now that we’re suddenly having to build all this new capacity, if we’re going to build it in that regulated paradigm, you’re forcing rates to go up. And from a lot of perspectives, that’s a good thing. I’d like to be in an economy that’s growing, and I like that it’s growing in ways that are less carbon intensive than the way it used to grow.
But we still need that physical plant. And that’s true if you’re building a coal plant. It’s true if you’re building a wind farm, someone’s got to build something and no one’s going to build that something unless they have a reasonable expectation, they can get their capital out of it. And so that dynamic is real. We also have such massive opportunities to cut it down. We’ve woefully underdeployed all these grid enhancing technologies that would slash our line losses by as much as 50%, which means we can use those wires more. We’ve done an atrocious job at building transmission wires that would lower the cost of power. Virtually all the transmission we build in this country is for reliability. Virtually none of it is for cost reduction. That’s a choice that falls out of policy decisions. But if we make the opposite choice, then all of a sudden we could be deploying capital that exists to lower people’s cost of energy instead of deploying capital that must be amortized and raise your price of energy. So we’ve got a real opportunity if we’re smart about it, but the demand growth is real, and the consequences of building capacity to meet that demand growth follows naturally from that. We just have to decide what it is we’re going to build.
Jason Bordoff: And the consequences of not meeting that demand growth, particularly for some of these massive tech companies, who view the leadership in AI as existential, is enormous and they have a lot of capital to spend. And there’s a what, five, six year backlog for new gas turbines, a lot of excitement about nuclear, but even optimistically, that’s still kind of far away. So I’m wondering how much of a headwind, how much sand in the gears you think pulling back the IRA support in the Big beautiful bill actually, how different is the outlook for renewables now given that the power’s got to come from somewhere? And as you said, it still looks pretty attractive in terms of an economic investment?
Rep. Sean Casten: Well, and I haven’t looked at this chart recently, but I’d be amazed given how sticky it is, if it’s changed much. But at the end of ‘24, there were about 2000 gigawatts of generation that was trying to get interconnected to the grid. And for your listeners, we have, what, about 1100 gigawatts of generation? So 2001 to connect, which would roughly three x increase in our grid capacity. Not all of that will go through, but there were 2000 that was sitting there waiting to get approval to interconnect of that 2000 gigawatt, one was coal, 85 was gas, and the balance was all solar, wind and storage. And so the market was telling us, and those trends, again, the IRA accelerated them, but the basic trends that would also have been true if we looked before the IRA, what markets want to build is the stuff that doesn’t have a marginal cost because it’s got a better investment thesis.
I am, I’m concerned about the equity impacts of repealing the IRA because when you take away the ability to provide tax credits, refundable tax credits to people who don’t have disposable capital, then we’re saying only wealthy people can access cheap energy. On my bigger concerns with what the Trump administration has done is things like shutting down the offshore wind plant that was 80% complete off the coast of Connecticut because that sends a signal to capital people who are willing to write billion dollar checks that you should not invest in the United States unless you’re willing to bribe the president. Doing things like shutting down the loan guarantee to the grain belt express that in energy was going to build that would’ve brought cheap energy from the plain states into Southern Illinois. Those decisions to shut those down are being driven by an anti-competitive motivation, not an anti unclean motivation, an anti-competitive motivation because the biggest threat to the domestic gas industry, the domestic coal industry is cheap energy. And so those pieces, some of which were accelerated by the IRA, some of those were just general policy of a more thoughtful administration. Pulling those back doesn’t stop us from building new generation, but it overtly preferences that we will build the most expensive stuff.
Jason Bordoff: If there, in your view, it’s still economically attractive, you’re bringing up these issues of can you get permits to build? Can you rely on permits to build? And so at a broad level, there seems to be support on both sides of the aisle abundance movement to make it easier to build. What do you think the prospects for that are the ability for maybe something to happen in Congress on permitting? What does that look like? And I assume it’s necessarily some sort of compromise that is about oil and gas as well as clean energy and all of the above.
Rep. Sean Casten: The dynamics of the compromise that was there at the end of the last term are a little harder to come by now because virtually everything that the Republicans wanted in exchange for the compromise, which was a weakening of environmental enforcement, don’t consider the climate impacts of LNG export and production. They’ve basically given themselves all those things through other either administrative or legislative actions that they’ve gotten with their majority. So at this point, what is there to compromise on? There were the other pieces that we wanted to go out there and get done. We’ll see, but it’s going to be, let’s just say this has not been a Congress that has seemed predisposed to compromising with Democrats. Having said all that, there are things we could do very much in an abundance construct that we should have done years ago. In any given year in the United States, we build 10 to a hundred times as many miles of high pressure gas distribution as we build of high voltage electric transmission.
The primary reason is because FERC has sole source authority for gas pipelines and nobody has sole source authority for electric transmission. So if we just gave FERC the same permitting authority that they have for gas, all the same laws would apply, all the same interveners could still petition. You can’t just lose at one county level and then petition the county next door. And if you lose their petition, the county next door and gum up the whole process, you want to do that in the name of abundance. You want to do that in the name of cheap energy. You want to do that in the name of making it easier for corporations to build these. I don’t care. But that’s the right policy to do, right? And yes, I’ve got bills for that as well, and we’ll be bringing ’em forward. But these sorts of things shouldn’t be partisan except for the fact that I keep coming back to those are the things you do if you want to prioritize cheap energy for consumers. And that’s in the current moment is a very partisan idea.
Jason Bordoff: How likely do you think it is and do you think there should be a government shutdown? And this probably is not top of the list of implications, but for people thinking about energy and climate and what should they be thinking about in terms of the implications of that?
Rep. Sean Casten: Do I think there should be a shutdown? Absolutely not. Do I think there should be the amount of pain imposed on the American people that’s implicit in the proposal that Mr. Johnson has just put out as the condition of a shutdown also? Absolutely not. So we’re going to have to see how the next few weeks play out. I am more uncertain about the prospect…
Jason Bordoff: And when I say, do you think there should be, I sort of meant is it the view that it’s time for Democrats to stand up and not sort of concede to in the way people perceive Schumer and others did last time?
Rep. Sean Casten: I think the single stupidest thing we can do is to view this through a partisan lens of who would be blamed for causing pain. I just don’t want to vote for causing pain. And if we’re going to vote for a bill that’s going to strip people’s healthcare away, that’s going to make everyone sicker. That’s not something that we can vote for. There’s a way through there. What I was starting to say about my nervousness, the moment is more that the Congress is no different from anybody else’s office. Ultimately, the currency is trust. And when we’re sitting there saying, watching the Trump administration choose not to disperse funds consistent with law, consistent with congressional intent, not be pressured by the Republicans to defend the prerogatives of Congress, it’s a lot harder to say what exactly are we fighting for? What concessions would we make that would actually be enforced in the absence of some commitment on oversight or others? And I can imagine ways to solve that, but I think it’s difficult for a lot of us in Congress to think about if you don’t have that trust, how certain can we be that in the next two weeks, there’s not going to be a tremendous amount of pain imposed on the American people because the White House can’t be trusted with the American People’s Bank account.
Jason Bordoff: I’m going to bring it to a close. You’ve been very generous with your time, but I can talk to you for hours. But is there anything in particular we haven’t talked about that you just wanted to make sure to touch on or lead people with? We’ve covered a lot.
Rep. Sean Casten: Well, I always feel like I hate ending these, particularly when we’ve dealt with such heavy topics without some note of optimism. And I would just point out that we’ve had plenty of times in our history when we’ve been close to losing this republic. We’ve had plenty of times in our history when we prioritize the robber barons over the man and woman in the street. And what’s always striking now, being a member of Congress, traveling abroad is a little bit of a different vibe than when I was a civilian, shall we say. And what other countries are most jealous about of the United States is not the leaders we elect, but the character of the American people that we’ve gone through stresses like the Civil War that would’ve broken other countries. And we survived it as a union and we survived it and held fast, ultimately messily and completely. But ultimately, we held fast to those principles that the rest of the world’s jealous about. And so I think in this moment as well, the optimism is if Americans simply express the character that we know they have, we’re going to be fine.
Jason Bordoff: It’s a great note to end on. I’ll just in closing, say, as someone who’s built an institute that views our mission as providing expertise and analysis to help decision makers and policy make the best decisions they can, I always appreciate people who are such active consumers of that and take energy and climate policies as seriously as you do. And thanks for your leadership on all those issues, and thanks for spending so much time with us today.
Rep. Sean Casten: Well, thank you for breeding voters who think that energy policy is their top issue. It’s my surest path to higher office.
Jason Bordoff: Good. We will listen to Springsteen and Pizza in New York soon.
Rep. Sean Casten: Awesome.
Jason Bordoff: Sean Casten, thank you so much for being with us today.
Rep. Sean Casten: Take care.
Bill Loveless: Our thanks to Congressman Casten for joining the podcast. And as we close out our tenth year of Columbia Energy Exchange, thank you for listening.
The show is brought to you by the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs.
The show is hosted by Jason Bordoff, and me, Bill Loveless. Mary Catherine O’Connor, Caroline Pitman, and Kyu Lee produced the show, Gregory Vilfranc engineers the show. For more information about the podcast or the Center on Global Energy policy, please visit us online at energypolicy.columbia.edu or follow us on social media at @ColumbiaUEnergy.
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