Biden Picks Former Gov. Jennifer Granholm for Energy Secretary
President-elect Joe Biden announced yesterday that he intends to nominate former Democratic Michigan governor Jennifer Granholm to lead the Department of Energy.
Over the past decade, Granholm has advocated a major role for DOE in spurring regional economic development in clean energy industries, inspired by the role the department played during Michigan’s recovery from the economic crisis of 2008. Her nomination marks a departure from the Obama administration’s selection of physicists for the job, but is simpatico with Biden’s plan to use R&D as a lever for mitigating climate change and for driving industrial redevelopment as the U.S. emerges from the COVID-19 pandemic.
If confirmed, Granholm is likely to give renewed attention to DOE’s applied energy programs, which support a variety of R&D efforts and subsidy programs in areas such as renewable energy, energy efficiency, nuclear energy, and carbon reduction. She will also oversee the federal government’s largest portfolio of fundamental research in the physical sciences, DOE’s network of 17 national laboratories, and activities to maintain the U.S. nuclear weapons stockpile, which, along with cleanup of Cold War nuclear production sites, occupies the bulk of the department’s budget.
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Views forged in Michigan’s economic struggles
Born in Canada and raised in California, Granholm received her bachelor’s degree from the University of California, Berkeley in 1984, majoring in political science and French. She received a law degree from Harvard University in 1987, after which she built her legal career in Detroit. She was elected Michigan’s attorney general in 1998, and then governor in 2002, serving two terms.
As governor, Granholm oversaw a state economy centered around the U.S. auto industry, which was under severe pressure from production offshoring and foreign competition. Confronting the issue with diminished tax revenues, she focused her efforts on education and economic diversification, seeking to build up new industries in areas such as clean energy, advanced manufacturing, life sciences, and homeland security and defense. Initiatives launched during her governorship included Michigan’s 21st Century Jobs Fund in 2005, which leveraged tobacco industry settlement money to spur development in new industries; the Renewable Energy Renaissance Zone tax incentive program in 2006; and the No Worker Left Behind program in 2007, which paid for community college or technical school tuition for unemployed and underemployed workers.
When DOE selected Michigan State University in late 2008 as the site for the Facility for Rare Isotope Beams (FRIB), a nuclear physics user facility, Granholm hailed the decision as a “perfect complement” to the 21st Century Jobs Fund’s emphasis on building capacity in cutting-edge fields. She also emphasized its more immediate benefits, estimating that the facility would create thousands of construction jobs and hundreds of long-term positions. FRIB is now nearing completion and is expected to open for science operations in early 2022.
The FRIB news was one of the few bright spots at a calamitous moment for the state, as the national economic collapse of 2008 threatened to ruin the auto industry. During this time, Granholm first became acquainted with Biden when she stood in as his opponent during practice sessions for the 2008 vice presidential debate. Shortly after Barack Obama’s victory in that year’s election, Granholm lobbied to be nominated for energy secretary, citing her efforts to foster jobs in clean technology and renewable energy. That role ultimately went to physicist Steven Chu, but she did serve as a member of the economic advisory team to Obama’s transition. Recalling the team’s first meeting with Obama in her memoir, she wrote, “I would do everything I could to influence how the forthcoming stimulus package would be structured so as to support a ‘rust-to-green’ strategy for Michigan.”
After Obama took office, Granholm worked closely with his administration as it oversaw the bailout of the auto industry orchestrated in the waning days of the Bush administration. Meanwhile, in February 2009 President Obama signed the American Recovery and Reinvestment Act, a $787 billion stimulus package, which Granholm recalled as providing resources for her economic agenda that the state legislature was unwilling to provide. At an event in Detroit, Biden personally announced $1.35 billion in DOE grants spread across 12 battery and electric vehicle projects , amounting to more than half the total awarded for those technologies.
Granholm’s second term as governor ended at the beginning of 2011, just as stimulus projects were beginning to take root. In her memoir, published later that year, she wrote, “After eight years helping to lead a desperately struggling Michigan, I know where I stood: convinced of the need for active, strategic economic planning, led by the government.
Granholm sees DOE role in regional development
After leaving Michigan’s governorship, Granholm took a position at the University of California, Berkeley’s public policy school, teaching courses on “state budgets, clean energy jobs, diversifying the economy, and leadership.” She is also affiliated with the Berkeley Center for Information Technology Research in the Interests of Society and has served on the advisory boards for the “future of work” initiatives at MIT and Carnegie Mellon University.
The final chapter of Granholm’s memoir outlines her views on economic policy and innovation, which she has also promoted through articles and speeches, including one to DOE staff members in 2013. A central tenet of her vision for U.S. economic planning is her sense that other nations actively intervene to promote their own industries and advantage them against foreign competitors. Accordingly, she has argued the U.S. needs to more aggressively defend its businesses as well as promote the growth of new industries and better equip the domestic workforce.
To guide federal funding, she has proposed a variation on the Obama administration’s “Race to the Top” initiative in education, which required states to implement reforms to gain access to a federal grant fund. Through a “Clean Energy Jobs Race to the Top,” states would compete for funds by assessing their strengths and weaknesses and proposing regional energy technology development strategies, with projected job creation as a key scoring metric.
More broadly, Granholm has argued that support for R&D should be coupled to support for manufacturing because the two activities feed off each other. She remarked in 2011 , “People don’t realize that, they think, ‘Oh, well, we’ll just be a sort of service nation, and we will just do the design, but we won’t do the manufacturing.’ The engineers have to see what these products look like coming off the line. Pretty soon the research and development centers will move as well, unless we get serious.” She has also said government is well-positioned to survey the “value chain” surrounding local industries and support regional clusters of businesses that work on related technologies. As a model, she has cited Michigan’s experience attracting investment from companies that work on different components of lithium-ion batteries for electric vehicles.
However, some companies Granholm has spotlighted as success stories for Michigan subsequently ran into failure. The lithium-ion battery company A123 Solutions received a little more than half of the $249 million in stimulus funding that DOE awarded it before declaring bankruptcy in 2012 and being acquired by a Chinese company the following year. The move was cited at the time as part of a broader trend of Chinese companies moving into Michigan and gaining access to automotive technologies and know-how. The company ultimately survived and expanded its footprint within the U.S. Granholm also touted auto supplier Merrill Technologies’ move into wind turbine technologies, which stemmed from a partnership with Dow and Oak Ridge National Lab, but that project never materialized . In one case, Granholm blamed DOE after United Solar Ovonics waited for 19 months to hear back on a loan guarantee application before it decamped from Michigan and opened a plant in Canada. The company soon went bankrupt.
Granholm has argued, though, that the government must be willing to accept the risk of failure. “If you place no bets, you lose every time, and other countries are playing bets aggressively. If we are not in the game, we will continue to be bystanders to the loss of jobs,” she remarked in 2011 when discussing the widely publicized case of Solyndra, a California-based solar cell company that failed after receiving a DOE loan guarantee of more than $500 million. She has also explicitly rejected the idea the government should not back particular industries. In her memoir, she recalled arguing with her husband in favor of “picking winners,” saying,
Businesses do it all the time — they invest to capitalize on their strengths and their needs. ... What’s the problem with the U.S. government being smart and strategic, too? We definitely have to pick industries, like autos, that are central to our national manufacturing, energy, and defense infrastructure. Hell, yes.