‘we Have All This Money That's Ready To Flow’: Finance Executives Fret At Slow Ira Rollout

The Biden administration’s massive energy and climate programs hold big benefits for the economy — but the rollout needs to speed up, one energy finance industry executive said Wednesday.

“I think it hasn’t been implemented fast enough,” George Bilicic, managing director at asset management firm Lazard, told POLITICO’s Energy Summit, though he acknowledged the difficulty in rolling out major legislation that requires new regulations guiding its deployment, such as the Inflation Reduction Act.

Energy Secretary Jennifer Granholm later acknowledged that the real-world impact of Biden’s massive spending initiatives has been slower than some would like.

“We may have gone to a few groundbreakings, but we haven’t gone to a huge number of ribbon cuttings yet,” said Granholm, who like other members of Biden’s Cabinet has crisscrossed the country to promote projects funded by Biden’s programs. “Because it takes a while to build the actual factories.”

The administration is facing pressure to dole out hundreds of billions of dollars ahead of the November election — or else risk a return of former President Donald Trump, who has vowed to roll back many of the programs and incentives. According to POLITICO’s analysis, spending as of April had totaled less than 17 percent of the $1.1 trillion that Biden’s climate, infrastructure, technology and pandemic relief laws had provided for direct investments on climate- and energy-related needs.

The Treasury Department has released a series of guidelines since the climate law passed that set the rules for implementing another huge part of that agenda — the clean energy tax credits of the Inflation Reduction Act. But questions around many of the provisions remain.

For one, industry and environmental groups are closely watching for final rules regarding the tax credit for production of clean hydrogen. Climate activists have expressed concerns that hydrogen production could worsen rather than ease greenhouse gas pollution should the tax rules be too flexible.

Bilicic cited hydrogen Wednesday as an area where rules need to be clarified so that capital can begin to flow. He also signaled worries among investors that a change in power in Washington could lead to parts of the climate law being repealed under a future administration.

“If it looks like it was going to go away, it would freeze things,” he said. “When we were waiting for the IRA to be passed, things were frozen because people did not know the basis upon which to invest and then it was passed and then people invested. And so that would be one of the issues.”

Sam Mar, senior adviser for philanthropy Arnold Ventures, told the POLITICO audience that the fact that the IRA passed with only Democratic votes was a pitfall for the law, which the party passed through a legislative maneuver known as budget reconciliation. That makes it “a more risky situation” for efforts to reverse.

Mar also pointed to issues with permitting and building major infrastructure projects that poses a challenge.

“We have all this money that's ready to flow and can't flow because we can't build things fast enough in this country,” Mar said, which could leave investors “holding a bag of money.”

Brian Dabbs contributed to this report.