From the White House to Climate Frontlines with Brandon Hurlbut
Brandon Hurlbut, our guest on this episode, wears multiple hats. He's co-founder at Boundary Stone Partners, a climate change focused government affairs firm created in 2013 that operates at the intersection of technology, finance, and policy.
He's also co-founder of Overture, an early stage climate tech venture capital firm that recently announced a $60 million debut fund, and he is an operating partner at NGP, a private equity fund focused on energy with billions of dollars under management. Among other activities, Brandon also serves on the board of directors of the Sunrise Movement, The Solutions Project, co-founded by Mark Ruffalo, and Clean Energy for America.
Before this, Brandon served in the Obama administration as US Department of Energy Chief of Staff, and in the White House as the president's liaison to the energy and environment cabinet agencies. At the DOE, Brandon oversaw day-to-day operations of a federal agency with a $29 billion budget and a 115,000 person workforce. He also served on the investment committee for its $38 billion Clean Energy Fund.
Cody and Brandon discuss the intersection of policy and innovation, including what his work at Boundary Stone entails and the types of problems they help companies navigate. They also delve into the 2024 US election, including what's at stake from a climate change perspective in the presidential, House, and Senate elections.
Episode recorded on Mar 1, 2024 (Published on Mar 18, 2024)
In this episode, we cover:
[03:10]: Brandon's unified approach to merging technology, finance, and policy on climate issues
[05:22]: Involvement with the Sunrise Movement and The Solutions Project
[09:52]: Transition from the Obama campaign to significant roles in energy and environment
[14:08]: The genesis and evolution of Boundary Stone
[21:14]: The varied advocacy work Boundary Stone undertakes to connect startups with government opportunities
[30:31]: The high stakes of the 2024 US election for climate policy and innovation
[34:42]: Potential climate policy directions and challenges in a post-2024 election landscape
[40:27]: Ramifications of a potential 2024 Trump win on climate initiatives
[43:53]: The role of Senate and House elections in shaping climate policy and legislation
[46:13]: The bipartisan appeal of hydrogen, geothermal, and permitting reform in energy policy
[50:38]: Brandon’s advice for getting involved ahead of the 2024 elections and beyond, including Climate Cabinet and Climate Power
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Cody Simms (00:00):
Today on My Climate Journey, our guest is Brandon Hurlbut, and our topic is the intersection of climate policy and innovation. Brandon wears multiple hats. He's co-founder at Boundary Stone Partners, a climate change focused government affairs firm created in 2013 that operates at the intersection of technology, finance, and policy.
(00:22):
He's also co-founder of Overture, an early stage climate tech venture capital firm that recently announced a $60 million debut fund, and he is an operating partner at NGP, a private equity fund focused on energy with billions of dollars under management. Among other activities, Brandon also serves on the board of directors of the Sunrise Movement, The Solutions Project, co-founded by Mark Ruffalo, and Clean Energy for America.
(00:51):
Prior to all of these activities, Brandon served in the Obama administration as US Department of Energy Chief of Staff, and in the White House as the president's liaison to the energy and environment cabinet agencies. At the DOE, Brandon oversaw day-to-day operations of a federal agency with a $29 billion budget and a 115,000 person workforce.
(01:16):
He served on the investment committee for its $38 billion Clean Energy Fund. Our conversation largely touches on the intersection of policy and innovation, including what his work at Boundary Stone entails and the types of problems they help companies navigate. We also spend a good part of our conversation touching on the 2024 US election, including what's at stake from a climate change perspective. Brandon breaks down the potential implications of the presidential election on climate policy and the Department of Energy, and he also touches on what's at stake in the House and Senate elections. But before we start, I'm Cody Simms.
Yin Lu (02:00):
I'm Yin Lu.
Jason Jacobs (02:02):
And I'm Jason Jacobs. And welcome to My Climate Journey.
Yin Lu (02:08):
This show is a growing body of knowledge focused on climate change and potential solutions.
Jason Jacobs (02:13):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
Cody Simms (02:26):
Brandon, welcome to the show.
Brandon Hurlbut (02:28):
Thanks for having me. I'm really excited about this.
Cody Simms (02:30):
Well, I'm excited too. I got to spend yesterday hanging out with your partner at Overture VC at the Upfront Summit all day here in Los Angeles, and so had a great time getting to know Shomik better there.
Brandon Hurlbut (02:42):
Was he taking his victory lap on closing the fund?
Cody Simms (02:47):
Hey, well, yeah. First of all, huge congrats to you on having closed your recent fund. $60 million, I believe for investing in early stage climate tech is fantastic.
Brandon Hurlbut (02:55):
Especially with the headwinds we faced last year. People thought there was going to be a recession. There was the SDB banking crisis. We're a first-time fund. So we're really proud of the accomplishment.
Cody Simms (03:06):
I hear you loud and clear there, having gone through it ourselves with MCJ. I am excited to have you on because, boy, you've got some range. We can talk about early-stage venture capital. We can talk about policy, we can talk about government. We can talk about growth equity. We can talk about Political Climate action-
Brandon Hurlbut (03:24):
Movement building.
Cody Simms (03:25):
... movement building. So-
Brandon Hurlbut (03:26):
Other podcasts.
Cody Simms (03:28):
So hey, yeah, Arnold Schwarzenegger apparently. So in light of all of that, let's pick those off all at once with a quick introduction on your end, and then we'll start diving into each of those areas.
Brandon Hurlbut (03:38):
Sounds good.
Cody Simms (03:40):
Why don't you start by explaining, right now, you have three fairly sizable main jobs, I guess would be the way to describe it. One with Boundary Stone, one with Overture, and one with NGP. Can you maybe describe a little bit about each of those, and then we'll talk about how you ended up where you are?
Brandon Hurlbut (03:57):
Sure. I see it as one job and that one job is to bring technology, finance and policy together to solve climate change. And I do that in a couple of different ways. So on the policy front, I co-founded Boundary Stone a little over a decade ago, and it has now scaled to over 100 climate clients with over 50 policy wonks. It's a really great model because most of the DC firms do access-based lobbying. We're very different.
(04:33):
We hire people that have run these very important programs at the DOE and the EPA and Transportation and the White House and have deep policy expertise on climate. It's climate only. And then on investing on mobilizing that capital and technology, I do that with both Overture, which I co-founded, and we do the early stage climate tech seed series A. And then NGP is growth equity. So they're looking for more of the series C, series C. It really all hangs together. When I'm talking to somebody in climate, they either need early stage capital, later stage capital, and they almost all have government policy issues. So in one conversation, I'm usually in service of all of those companies.
Cody Simms (05:22):
And in addition to that, you do work with the Sunrise Movement, you're on, I believe, the board of directors there. And you have been hosting a podcast for a while with, I believe it's sponsored by Arnold Schwarzenegger or something like that, and you were, I think, a co-founder, or at least on the board of what's now Clean Energy for America, which was clean energy for Biden in the lead up to the 2020 election. Share a little bit more about each of these activities too.
Brandon Hurlbut (05:46):
Yeah. I really believe, Cody, that in order to address climate change, we need all of those things to work together. Whenever we've had the biggest crises in humanity, we've solved it by government, the private sector, the media, all of those are tools to solve this issue.
(06:07):
So Sunrise Movement, I think everybody that is benefiting from the IRA and the bipartisan infrastructure law should be thanking the Sunrise Movement because they really moved that over to new window. If you think about where we were in the Hillary Clinton campaign in 2016, and the way that she talked about climate and the policies around it were mainly these incremental tax credits versus when the Sunrise Movement came out with the Green New Deal, and they went and they marched into Nancy Pelosi's office with AOC and took it all by storm, they really shifted the debate. They made it, A, a priority in DC that climate get addressed because it was not the priority.
(06:48):
Democrats mainly focused on things like healthcare. And by making the Green New Deal and putting that stake in the ground, they made net-zero by 2050, like the moderate consensus democratic position. That was not the position of the Democratic Party in 2016. And so it made the IRA and bipartisan infrastructure while all those things, did we get everything we wanted? Is it everything we wanted in the Green New Deal? No, but it's a lot more than we were asking for a few years earlier.
(07:19):
And so I think they get a lot of credit. And that's what I really see as the tools and addressing climate going is you got to have that outside game, that movement, that political advocacy, grassroots support, putting that pressure on the inside game. And then that inside game is important. How do you move those levers with the different members of Congress?
(07:39):
So this platform that I've built, I can touch it all. I can be on the movement side with Sunrise. I can be helping on the inside the Beltway stuff with Boundary Stone, and drawing attention to it with the podcast Political Climate, which we're bringing back very soon for this very important election year. So it allows me to have an impact on all parts of the ecosystem.
Cody Simms (08:01):
And I think I missed one, which was you support Mark Ruffalo's climate action nonprofit as well.
Brandon Hurlbut (08:06):
The Solutions Project is really amazing. It was ranked by Fast Company as one of the very top nonprofits in the world. We have an executive director. Mark Ruffalo is really great. He has a salt of the earth on this interview he did with Jon Stewart before Jon Stewart stop doing his show. He said, "Mark, sometimes you have these people that are influencers, celebrities or whatever, and they do some activism on the side."
(08:31):
Mark is an activist who happens to do acting on the side almost. I mean, it's in his core. But what's really great about The Solutions Projects is we raise money, and then we re-grant it to frontline organizations. And Mark can shine a light on that with his media platform along with Don Cheadle who is on the board with us..
(08:51):
But when people meet Mark and Don and then they see Gloria, the executive director, they come for Mark and Don. And then they realize Gloria is the real star. She's one of the most talented persons I've ever met in my life. She used to run a frontline organization here in LA, very much tip of the spear in the frontline communities. She has lived it, breathed it. Now, she's built this incredible organization that has raised considerable money that is being redistributed to these frontline groups. And so I'm really proud to be a part of it, and Gloria somebody that everybody listening to this show should know.
Cody Simms (09:24):
I love it. Thanks for sharing more on that. And that's what this podcast is for, is for people to discover and learn about new things, new ways they can get involved, and if it so meets their fancy to dive in and try to get engaged there. I want to get to your own origin story, for lack of a better term. You had a really, really big job, not that you don't today, but a really, really big job in the Department of Energy during the Obama years. Explain a bit about that role and then also how you got there.
Brandon Hurlbut (09:52):
That's right. So I joined the Obama campaign very early days. I was one of the first hires, changed my life. I met Shomik where we later founded Overture together. I met my wife, and then we won. And I went into the White House the first year, and I was the president's liaison to all of the energy and environment cabinet agencies.
(10:15):
So I worked every day with the secretary of DOE, Interior, Agriculture, EPA, Transportation Departments. Really exciting time to be in the White House that first year of Obama. My office and Cabinet Affairs functioned as the nerve center between those secretaries and the West Wing. So we were in the middle of everything.
(10:34):
But I really found that I loved what was happening at the Department of Energy. I loved Steve Chu, this Nobel Prize winning scientist. He recruited the top technical talents in the world to come work at the DOE. People that normally wouldn't go serving government came to the Department of Energy because in the science and technology world, he's like the Beatles. He is beloved. People don't know him much in the political world, but science technology, he is the top.
(11:00):
And so I wanted to go work with Arun Majumdar, Cathy Zoi, Dave Danielson, Eric Toone, all these household names and climate industry. I knew that the DOE and the people working there during this historic time were going to be the foundation of this new economic development, climate tech development.
(11:18):
So after my first year in the White House, I went over there, helped implement the Recovery Act by standing up SunShot, standing up ARPA-E [inaudible 00:11:26]. Steve Chu. I served on the investment committee for the loan program office. During that historic time, we're doing all of those deals. And then also we had Hurricane Sandy, Fukushima, BP oil spill. So I was there during some pretty big crises if you're only listening to the show, it's for the all the gray hairs came from. Then, you can see if you're watching. But, yeah. I essentially had to work with everybody in the industry code, whether they were coming to the DOE for Recovery Act money during a time when the financial markets had collapsed or there were some crises where we had to collaborate together to solve. So it was a really privilege to be a public servant, especially during that really important time.
Cody Simms (12:08):
How did energy become the area you focused on and you casually land in a big job in the DOE, like that doesn't just happen. Was this an area you had a significant amount of background in or you just had proved your medals and stripes on the campaign trail such that you were seen as a rising star operator, and they found a great role for you and this was the right fit?
Brandon Hurlbut (12:29):
I always wanted to have impact. From the time I could remember, I used to read the newspaper when I was six years old. When my grandfather would come home, I had to live with my grandparents for a little bit and bring the Chicago Tribune home. And I just could not wait to read that newspaper.
(12:44):
So I always was oriented towards impact. And I started that by after college, getting into politics. I worked on political campaigns. That was how I saw having impact. But after working for some progressive candidates and losing some races, I felt like I needed to get another. And so I went to law school. That's how I got to DC. I went too Georgetown.
(13:04):
And then I racked up all this student debt. So I was like, "Okay, I got to pay some of this off." So I went to one of these big corporate firms, and they had Environmental Defense fund early days as a client. And so I got to work on it. And that's where I really started paying attention to what was happening on climate. This is back in 2005 or so.
(13:24):
And I liked their approach at EDF. It was more about trying to make this attractive to consumers. And so I started reading more. I was reading Tom Friedman and all this stuff back then, and I was like, "Okay, I really think I want to dedicate my life to this issue."And then Obama announced he was running for president. I left the law firm. I joined the campaign. And when we had to submit our resumes after we won for the transition team. I highlighted this work that I'd done with the Environmental Defense Fund as a lawyer. And so that's how I got onto the transition team for energy environment personnel. And then I advocated to play that role in the White House next, and that's how it all started.
Cody Simms (14:03):
That's awesome. What a good story. Well, thank you for sharing sort of the background and the origin story. And then Boundary Stone, I believe you founded it a little over 10 years ago now in 2013. Let's dive into that a bit more deeply. What does a political, how would you describe it, advisory firm, I guess? How does it work? What do you do? What do companies who come to you looking for assistance typically look for help with?
(14:26):
Is it navigating the existing policy environment? Is it lobbying for future policies? Is it working through permitting requirements on a project they already have underway? Is it a little bit of all of the above? Share a bit more.
Brandon Hurlbut (14:42):
Yeah. So when I started the firm, I really wanted to bring climate tech policy and finance together under this platform. But in 2013, we were coming out of the clean tech 1.0 hangover where people got wiped out. If you said, "I want to raise a clean tech fund in 2013 like you were treated like a leopard," people like a rat in front of you, right? There was not as much of an industry, and climate was not a policy priority in DC.
(15:11):
So it was an interesting time to start a company that was going to bring all those things together. But we grew the company every single year, and I had to wait a little bit on developing the venture fund until the timing was right, because 2013 was the worst time. So we just started growing the advisory business. And the advisory business does really three things.
(15:34):
It's really, one, policy design. So we had Q-Cells came to us a couple years ago and said, "We cannot compete with these Chinese panels on price." We're hoping to work with you on the tariffs. Our team said, "Actually, the tariffs aren't the best politics." Let's come up with a tax credit that will just make your domestically produced solar panels as cheap as the Chinese panels. So our team worked with them to create this solar energy for America tax credit, and then worked with the senators from Georgia, Ossoff and Warnock to introduce that tax credit, and then worked with the Senate to implement that or to advocate for it.
(16:16):
And so that ended up becoming the foundation of the 45X, advanced manufacturing production tax credit in the IRA. And the folks in the Senate really liked that. They started building in other parts of it like critical minerals.
(16:30):
So we do do that design. We do advocacy. And advocacy can have sort of three legs of the stool. One is lobbying when you need it. If you've got contact government officials, we have lobbyists that can do that. It's stakeholder organization management. You always in advocacy want to get other champions to advocate on your behalf, other allies.
(16:52):
So our team will work with NGOs, other industry partners, labor unions, environmental justice groups to build that stakeholder coalition. And then strategic communications, how do you influence what policymakers are reading that where they form their opinions and judgments?
(17:10):
So that's really the advocacy piece. So once we determine there's a policy we want to advocate for or how to implement a certain policy, so the congress passes a lot of policies, sends those over to the executive branch and it's up to the DOE or the Treasury Department and how they want to implement that, and we will advocate for an implementation that would help the industry and our clients.
(17:31):
And then the third bucket is just really advisory on just sort of what is. So we're doing a lot of that right now. We launched this big project and had a webinar recently about election 2024. Many people are wondering what could happen with the election and what are those impacts on the IRA and the bipartisan infrastructure law and such. So that's not really, you're trying to influence something or you get a certain outcome.
(17:55):
It's just a what is, right? So what are the impacts? What does this mean for me? And with the advisory business, what we really try to do is just help leaders make more informed decisions. So we can plug in our analysis to what they're doing is they're planning for the next couple of years, or they're wondering about the impact on something, and we just help them make better decisions.
Cody Simms (18:15):
Well, we're going to spend a bunch of time in this conversation on the third piece there, which is that what is. What is potentially going to happen with the election and what might the implications be. Before we go there, I want to double click in on a couple of these areas that you were talking about around the policy design and the advocacy side.
(18:30):
On the policy design, it strikes me, you mentioned with 45X, for example, working with Senators Ossoff and Warnock, they didn't come into office until 2020. Boundary Stone was founded seven years prior to that. It strikes me that on policy design, you have to have sympathetic policy makers in office to get stuff actually done. How involved do you get on the electoral side of things in the first place to try to get the right policy makers in office for the policies that you're hoping to see be enacted?
Brandon Hurlbut (19:01):
We don't really get involved in the electoral side. Boundary Stone is really policy design, advocacy, and advisory. The electoral and political stuff is separate. So that's what I really do with clean energy for Biden. I help start that. You mentioned and turned into Clean Energy for America. So that's really the vehicle to get involved in the elections. But yeah, Boundary Stone is really policy wonks and experts that help you engage and navigate with the current government, whatever that government is, whether it was the Trump administration or the Biden administration.
Cody Simms (19:36):
And is it mostly federal policy focused?
Brandon Hurlbut (19:39):
It is mostly federal policy focused today, but we're going to be able to make some announcements coming up where Boundary Stone will be able to scale even more rapidly. And state local is an area of interest for us. I believe that if you have a change in political control across the federal government, the states, the blue states will band together, form regional compacts, coordinate policies. We want to be in the middle of that.
(20:05):
Plus, a lot of this happens at the state level. A lot of federal money gets sent to the states. There's PUCs and whatnot that have big impacts on our industry. So we want to expand into state local markets. So look for that to come. Also, internationally, this is a global problem, and we want to start working with other countries and build the Boundary Stones of Europe and other places. So we are going to be active on that.
Cody Simms (20:27):
So I'm hearing you say electoral advocacy, not really purview of Boundary Stone. That's the purview of a Clean Energy for America, for example. Policy design very much in your purview. And that would require finding an elected official in the federal government who could beat your initial architect and sounding born together, and then ultimately your conduit for navigating whatever legislative body they sit in to help that be realized ultimately. And then, let's talk a bit about the advocacy side, which is more helping to broadly, I guess, evangelize why something matters, doing the lobbying work ahead of a policy. Is that the right way to think about the advocacy work you do?
Brandon Hurlbut (21:14):
It can be, but it can also just be on advocacy, helping a company, whether it is a startup or a Fortune 500 company or anything in between, partner with the US government to help scale the company. And you can partner in many different ways. And so what we really do, our clients are across all parts of the climate ecosystem, from power generation storage to building decarbonization, to clean transportation, to industrial emission reduction.
(21:47):
We work with all of those climate technologies, and there are really innovative ways that you can partner with US government. Sometimes, it can be a grant. That's usually what people think of first. There's all this money out there. How do I get some of that grant money? We can help with that because a lot of the stuff is new. These are new programs, the Office of Clean Energy Demonstration, many of these programs, and the Inflation Reduction Act are new, and they're implementing it in real time.
(22:09):
And so how can you help shape that implementation to enhance your technology and help your company grow? So we do a lot of that, but there's also other tools like public-private partnerships. There can be partnering with a national laboratory on technical assistance. There can be government financing programs like the Loan Program Office or the Department of Agriculture has the Rural Utilities Services Loan Office.
(22:36):
So we can help you with debt products with the US government. So there's lots of different ways. There are government convenings where things happen, like the ARPA-E conference where they bring investors and others together. And if you can address that conference and be a part of it, you can raise the profile of your company that can lead to things. So my advice is always that the US government will play a role in your business, whether you like it or not, because this is a highly regulated market. There's been this historic activity.
(23:09):
The fossil fuel companies, they've been doing this for century. They are always in there advocating and lobbying and a part of the conversation. For our industry, you need to be in the flow. There are always immediate opportunities or almost always immediate opportunities that we can think of for a company to work with the US government on, but getting into the flow can create opportunities down the line in the future that you don't even know about until you get into that conversation.
(23:35):
So it's really about helping facilitate between the US government and these climate technology companies. The way I often frame it, Cody, is that if you think about these sort of capitals, industry capitals we have in this country, you have Silicon Valley, which is one language. You have DC with the US government, and they're talking about deputy assistant secretaries and all these different bureaucratic terms.
(24:02):
That's a whole another language, right? And then you have New York, Wall Street, finance, that's another language. So what we're really trying to do, Cody, with Boundary Stone is bring all of that together, translating between the Silicon Valley, climate tech entrepreneurs and companies, and industry to the DC inside the Beltway, policy minds, to financing centers like New York, and helping those entities work together to grow and scale the industry and solve climate.
Yin Lu (24:34):
Hey, everyone. I'm Yin, a partner at MCJ Collective. Here to take a quick minute to tell you about our MCJ membership community, which is born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019 and have grown to thousands of members globally. Each week, we're inspired by people who join with different backgrounds and points of view.
(24:54):
What we all share is a deep curiosity to learn and a bias to action around ways to accelerate solutions to climate change. Some awesome initiatives have come out of the community. A number of founding teams have met, several nonprofits have been established, and a bunch of hiring has been done.
(25:08):
Many early stage investments have been made as well as ongoing events and programming like monthly women climate meetups, idea jam sessions for early stage founders, climate book club, art workshops and more. Whether you've been in the climate space for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and click on the members tab at the top. Thanks, and enjoy the rest of the show.
Brandon Hurlbut (25:35):
That makes sense.
Cody Simms (25:36):
That's a super helpful distinction to me. When I think of policy advocacy, I think of whether it's on the grassroots side, like the work you do with Sunrise to go advocate for here's what the policy landscape ought to be or on the more either grass tops or tops tops advocacy of political lobbying and pushing for policy. But you're talking about actually advocating on behalf of the startups themselves or on behalf of the climate tech companies themselves.
(26:04):
This company needs to advocate to the government to work with the LPO for a loan or to pursue a grant application or to qualify for a tax credit in some way, shape, or form. And it's actually helping the startup being their advocates in navigating that broad landscape that they may be otherwise unfamiliar with. Am I internalizing this correctly?
Brandon Hurlbut (26:26):
Yeah. I'll give you a great example, Cody. And it's a good example of how Boundary Stone and Overture work together. So at Overture, our first investment was in Antora, which is a thermal battery technology. They essentially use renewable power to heat up these blocks. It releases heat to do process heat for industrial processes like [inaudible 00:26:51] and iron.
Cody Simms (26:51):
We've had them on the pod. So folks will listen to the archive with Antora. It's a great episode.
Brandon Hurlbut (26:55):
Fantastic. Fantastic. So Overture, that was our first investment ever, was Antora. So we make the investment. Then we bring in the Boundary Stone team, which they get as part of the Overture investment. And so our Boundary Stone team looked the landscape analysis of what are the opportunities for Antora to partner with the US government?
(27:20):
And we looked at the 45X tax credit because if they could get that tax credit, that would be really beneficial for them. But they weren't eligible for it because in the US Congress, they hadn't contemplated that type of technology. If you've met many of these members of Congress, that shouldn't be a surprise to you. So what we developed was a public policy advocacy campaign where we got stakeholders involved who care about industrial emissions, and there's these different entities. This is very confusing for a startup, like, "How does that happen?"
(27:53):
You have the DOE with all the technical expertise that is a part of that conversation. You have the Department of Treasury where you've got some policy folks, but you've also got the IRS lawyers, and they're pretty risk averse. They just don't want to be sued. Then you've got the White House in John Podesta's office that's overseeing all of the IRA implementation.
(28:13):
So what we were able to do is help educate folks in the government to say, "Look, industrial emissions are a big problem. You're trying to solve them." You could catalyze that by allowing some of these technologies like thermal batteries to be eligible. And also the technology is moving fast, and we advocated like be over inclusive, cast a wide net because you don't want to be too prescriptive in how you're implementing this and give all these other new technologies that might evolve and develop over the next couple of years a chance to compete. If you catalyze them, some winners will emerge, and you'll make a big progress in industrial emission reduction. And so that argument prevailed. And when the Treasury department released their guidance last December, thermal batteries were specifically called out as being eligible.
Cody Simms (29:00):
Eligible, that's great. I hear similar type of pathways right now being contemplated around 45Q for non-direct air capture or carbon point source capture solutions, right? 45Q currently doesn't contemplate any kind of solid carbon capture, whether it's a biomass or bio-oil or any of that type of thing. If you're sequestering carbon in that way, it's not 45Q eligible. And I hear a lot of startups like saying, "Hey, we need to help extend 45Q to be inclusive of these other carbon capture methodologies in addition to just direct our capture or point source capture." So that would be an example where these startups potentially could come to you and say, "Hey, help us figure out how to do this. Am I thinking about this the right way?"
Brandon Hurlbut (29:45):
Absolutely. I think any startup or essentially any climate company can come to us and say, "What are our best opportunities with the US government to partner that can help my company? And Boundary Stone will help." They'll basically be able to tell them here are our short term, medium term, long-term opportunities and work with the company to figure out a strategic plan and how to execute on that.
Cody Simms (30:09):
Okay. So let's go to the third pillar. You mentioned Boundary Stone does, which is just help organizations understand the current state of things. And particularly the big state of things that's up in play right now is the 2024 election. I would love to hear your thoughts on what's at stake in the 2024 election from a clean energy perspective.
Brandon Hurlbut (30:31):
There's a lot of stake. During the debt ceiling negotiations last year, the House Republicans tried to repeal the IRA. So the consequences and the stakes are high in 2024. And we are doing a lot of thinking. There's a lot of nuance in this. What I see out there, a lot of hot takes like, "Oh, if Trump wins, the whole thing will be repealed, or if Biden wins, everything will be safe."
(31:00):
There's a lot more nuance to that. So we have over 50 policy wonks going through every single one of these provisions and providing very nuanced analysis. But at the high level, I think we can likely expect divided government because if you look at the Senate, the Democrats currently have the majority, but the map is not favorable. So that could easily become Republican. The House is a coin toss. It's four seats. There are five to 10 competitive seats just in New York and California.
(31:34):
There's an easy pathway for the Democrats to get there, but it's going to be really close. And then I think the presidency is going to be a nail biter. So when you've got two of these three chambers are essentially a jump ball or maybe all three, I think you likely end up with some split. And I think that there are certain provisions of the IRA under that that are more safe than... Well, I would say if it's split, the IRA is safe. If you have Trump and a Democratic House, democratic House is far along. But if the Republicans sweep and they have unified control of the government, I think there are provisions of the IRA that are more safe than others. And that's where we've gone into this very detailed analysis.
Cody Simms (32:21):
Let's start with presidential real quick and pick each of the two candidates. Let's start with President Biden, the incumbent. At some point, it was later than this time in the 2020 cycle when really clean energy for Biden got really up and running. Biden wasn't even the candidate at this point yet in the 2020 cycle. And it was some point thereafter that climate change became core to his platform.
(32:43):
It really I think was summer of 2020. When should we expect the 2024 policy platform to come out? And do you expect more climate legislation and more climate change emphasis in that, or do you expect that the Biden administration will basically say, "Hey, we did that in the last cycle. We're going to focus on a new priority for 2024."
Brandon Hurlbut (33:07):
I think you're right that they're going to run on the historic accomplishments that they achieved in the first term and this manufacturing Renaissance that is taking place across the country due to the Bipartisan Infrastructure Law and the Inflation Reduction Act.
(33:24):
So there's a lot of great stuff to run on. And as we get deeper into the campaign, I think that will start to penetrate more with people. But I think there is a demand for, okay, what's the vision going forward as well? I know other senators are working on that as we speak. The Inflation Reduction Act is an imperfect tool because it had to be done through this reconciliation process to avoid the filibuster and have a 50-vote threshold. So that limits you in many ways as to what you can do using that reconciliation tool. It's really just tax policy is the vehicle.
(34:01):
So I do think there are things that we're seeing. We have these historic cost declines on the technologies or cost parity for many of them. We have this existing IRA and BIL to accelerate these deployments with all of the incentives that are in there. But we're also seeing things like interconnection cubes are jammed up. We're seeing some friction in the system that is still prohibiting us to go as fast as we need to go. And I think in the vision going forward, we're going to have to address some of those pain points to deal with those issues that we can scale as fast as we need to.
Cody Simms (34:42):
If I looked at what some of the big policy goals out there, I would hope we would see in 2024 and beyond, it would be enabling transmission to move faster. So I guess that's permitting reform probably. It would probably be more emphasis, this is a controversial one I'm sure for some, but more emphasis on getting nuclear projects out more quickly and on time and on budget.
(35:08):
It would be figuring out what's going on with offshore wind and why are these projects underwater right now? And then I'm curious what's happening with geothermal. What's happening with that sort of hydrogen hub, efforts that feel like I don't really have my finger on the pulse of. And then beyond that, it seems like a giant sweeping amount of legislation on resiliency and dealing with the effects of climate change, not just trying to also move forward on emission's reduction.
Brandon Hurlbut (35:36):
I think you're right, Cody. One of the things I've been wrestling with is can we deal with all of those things with some incremental approaches where we strengthen FERC here or whatnot to deal with the transmission issue? But the other thing I've been thinking about is that with these climate technologies, the system that we have right now and never contemplated anything like this, never contemplated distributed energy resources, a two-way dynamic flex grid.
(36:07):
And so the things that keep me up at night are can we enable this technology innovation under the current system where we have eight electricity markets, 50 public utility commissions, monopolies in a third of the country or whatnot in the regulated market? I'm wondering, are we going to have to address some of these structural issues that we have to get to the scale that we need? All the things you're talking about are all symptoms of maybe a larger problem.
(36:38):
I'm not sure, or maybe they are things that we can just turn some knobs here and there. It's hard to do big bold structural reform in Washington DC especially with the divided government. So we may have to go with the approach of incremental knob turning here and there, but I'm hoping that people are listening to the show. Let me know because I want to help figure this out. I'm talking to some people about it. Some of the best minds around this I'm working with like Brian Deese and others, but we got to figure this out. And I don't know the answer to that.
Cody Simms (37:09):
I'm hearing two kind of realities at once from you. One is, boy, there should be more of a think tank like effort to really rethink bold, big policy. And now is the time, frankly, to try to start implementing that into whatever the 20 24 administration becomes. I'm also hearing from you that maybe what is really the important thing here is so much progress was actually made in the last cycle with the Inflation Reduction Act, Bipartisan Infrastructure Law, CHIPS Act, etc. And those things just need time and support in the federal government to continue to flower.
(37:48):
And so the critical thing to happen isn't a bunch more policy. It's keeping advocates in the DOE. It's keeping advocates in the Department of Ag. It's keeping advocates in the existing branches of government that are going to help these policies have sympathetic members of the administration helping them get implemented in the real world.
Brandon Hurlbut (38:14):
Yes. I mean if you think about when I was at the Department of Energy, we had the Recovery Act. That ushered in a decade where the price of solar, wind, lithium-ion batteries and LEDs decreased dramatically. I expect that the IRA and BIL will have the same impact on some of these other technologies that we're testing.
(38:37):
How are we going to have sustainable aviation? How are we going to have sustainable shipping? Some of these ones where we don't have the answer yet, totally, I expect that those costs will come down on those technologies from all of the investment. But we're still dealing with even with historically cheap solar and wind, how do we get those electrons to where they need to go. And you raise the transmission issue, we need to solve that because with all the cheap solar, we can't get it built because it's stuck in a queue for years or then that drives up the cost for the developers. That's a problem.
(39:08):
And we have all of this opportunity with distributed energy resources, all of these flat rooftops all over the place, and it's the soft costs that are killing it. But other countries like Australia don't have that problem. So how can we enable more DERs? And Harvey just thinks it's like a lot of this Byzantine approach where at NGP, we invested in Voltus, which is demand response. And Greg Dixon would always say, "There's one FAA. There's one transparent competitive market." The way we have it with these ISOs and RTOs, there's an FAA of the Northeast. There's an FAA of the Southwest. Can we do all of this? Can we really enable a distributed energy two-way dynamic grid under that sort of construct? I don't know.
Cody Simms (39:56):
Let's take the opposite scenario here. Ignore House and Senate for now, purely executive branch. Should Trump win, that means the executive branch changes. Leadership at the DOE changes. Leadership at the Department of Ag changes, etc. Presumably things like the Loan Programs Office that we all know is doing a ton of work in this space right now changes. What happens purely with executive branch change at the major departments in terms of the ability to continue to progress.
Brandon Hurlbut (40:27):
So if you're listening to this show and you're wondering whether you should get involved in the politics and the elections and you're wondering, "Should I write a check? What I should do if Trump wins?" Last time, we had Rick Perry as the secretary of the DOE. Rick Perry, he's from Texas. They have wind, and he's something that you could work with.
(40:52):
I do not believe we get somebody like Rick Perry running the DOE again. I think it's going to be a Trump second term will be purists and just loyalists. They have kicked out the Liz Cheneys and all of these other people that were business-minded conservatives. And now, it is just deep loyalty to Trump. And I think you get into the Marjorie Taylor Greenes, the Lauren Boeberts. So Trump presidency on his impact on the executive branch would be really hard. I think things like the Loan Program Office, the last time they had that, they didn't do really loans, right?
(41:33):
So if you're expecting to get this cheap debt for your project, they didn't do that last time. If you look at the new things like the Greenhouse Gas Reduction Fund over at the EPA, the $27 billion fund, I don't think they're going to do much with that, right?
(41:49):
So the thing that's different about this election versus 2016 is if Trump were to win, you do have lots of applicants in the queue for all of this money. And I think we could go out and organize them to go to Republicans in the Congress and whatnot to say like, "Look, if you don't mess with this, we will build this project in your district, and you'll get these jobs and these benefits." And if you aggregate all those up, it might be compelling, and that's our best chance to influence that executive branch. But I wouldn't want to roll the dice on that. The impacts on the DOE, the EPA, the Transportation Department and who he would bring in, who he's surrounding himself with right now and listening to are not the folks that he had in that first term.
Cody Simms (42:40):
So I'm hearing that the things that are law, like tax credits and stuff, are not subject to executive branch changes per se, but things that are discretionary, like the federal government loaning money or funding projects, those potentially, even though budgets may be allocated there, they're not required to actually use those budgets.
Brandon Hurlbut (43:02):
They are required. This is when I talk about the different languages between Silicon Valley and Wall Street. In DC, there's the Antideficiencies Act, and this is where you really get into this nuance, Cody, of like, "Okay, the Office of Clean Energy Demonstrations new office at the DOE, which has tens of billions of dollars, was created under the Bipartisan Infrastructure Law, not the Inflation Reduction Act.
(43:26):
So that had 19 Republican senators appropriated that money for that office to be used in that way, those appropriators expect for that money to be allocated, distributed, and they're required by law to do it. Now, Trump is just shown he doesn't really care about the law, right? That's not a priority for him. So legally, he has to. But will he? I don't know.
Cody Simms (43:52):
Okay. Let's shift from executive branch to talk about legislative branch and sort of the differences you hinted on earlier between the Senate election and the House election. Senate controls budget, so thus controls budget reconciliation, I assume. Is that accurate?
Brandon Hurlbut (44:09):
Well, they both have to pass the budget together, which is why passing a budget has now become, we're in this government shutdown. They just had to extend it right now. It's like passing a budget has become... It used to be something they did routinely. Now, it's very hard for them.
Cody Simms (44:27):
And so things that our law can get overturned by a unified House and Senate. Yes?
Brandon Hurlbut (44:33):
Yes. Yes. And I've talked to some senators and I've asked, "What are the Republicans saying behind closed doors, the Republican senators," because you have to understand the House and Senate are very different, and this current version of Republicans in the House is even more extreme than what we dealt with with Obama.
(44:56):
Remember, you had a tea party, that was pretty bad, but nothing like what we're dealing with right now. I mean this version of the House Republicans, one, they can't govern themselves at all as we've seen. And two, it is like a very radical anti-government extremism. It's actually very dangerous. I mean, many of those Republicans didn't want to certify the election. They don't believe Joe Biden is the president, fights the fact that they count the votes so many times.
(45:22):
The House is a massive threat. But let's say even with the Republican control of the Senate, what I've been told is that people don't think that there's 50 votes even with the Republican control of the Senate to overturn the entire IRA.
(45:39):
There is a few buckets of tax credits in the IRA. One is the renewable energy tax credits, the ITC, PTC. Those have been bipartisan support for a long time. Even under Trump's last month in office December of 2020, they extended those tax credits. So those are pretty politically safe. And then you get to these newer tax credits around manufacturing like the 45X and whatnot. Those are becoming even more politically safe every day because these manufacturing facilities are being built in Republican districts.
(46:13):
The Battery Belt is in the southeast of this country. So I feel like those are getting more safe. And I think behind closed doors, Republicans, those tax credits are enough of them do to keep it safe. And then you've got these consumer tax credits like the EV tax credit, the heat pumps. Those are probably the most vulnerable, but those are only 10% of the IRA.
Cody Simms (46:33):
What policy areas in the entire sort of clean energy, renewable energy, emissions reduction space are most bipartisan? I will take a shot at it. You tell me if I'm wrong or right.
Brandon Hurlbut (46:48):
Yeah. Go for it.
Cody Simms (46:49):
Hydrogen, geothermal permitting reform, those are the ones that jump to my mind.
Brandon Hurlbut (46:57):
Yeah. I think bipartisan means Republicans support and Republicans are tied to the fossil fuel industry. So if they can preserve existing assets in the fossil fuel industry, Republicans like it. And so hydrogen does that. You would need to use the infrastructure that we have, the pipelines and whatnot. So that's why that has bipartisan support.
(47:23):
Geothermal, you need to drill. So drilling techniques that the fossil fuel industry has used could be adapted with geothermal. So, yeah, I think you're right. Permitting reform, this is an interesting one because Republicans have always supported that, and Democrats use permitting to obstruct fossil fuel development.
(47:42):
That was the lever that they could use to stop fossil fuel plants being built in environmental justice communities. So, historically, Democrats have been supportive of all those regulations. But now, there's an education going on to say, "Look, the staff that you've had historically, which we understand because who wants these toxic pollutants in your community, but it's now preventing the good stuff from being built." And there's education awareness going on around that.
Cody Simms (48:13):
The thing I'm hearing on permitting reform that I'm picking up on is the idea that those of us working in clean and renewable energy, we're no longer the outsiders. We are the energy industry, and we're actually blocking progress of energy projects moving forward that can result in increased solar production. It's driving up costs of solar projects, et cetera, because we can't get these transmission lines complete.
Brandon Hurlbut (48:39):
Absolutely. And to your point, Cody, the industry has start acting like they are the industry because something I run across sometimes is you have some of these leaders are more libertarian. I get that. And so they think of themselves as like, "Oh, I don't want to get involved in that political stuff," or I have a project being built in a Republican state and the governor's Republican, and I don't want to get crosswise with that elected official because that person could influence what's happening.
(49:14):
But that's not how the fossil fuel guys plays. They're always in it. They're always giving. They're actively engaged. They're in DC. They're supporting these campaigns. The competition plays this game. And my advice to clean energy industry is you got to get in it, and you got to get involved. And there are ways to deal with like I got to be sensitive to this Republican governor that can be addressed. But it really is the industry needs to step up and start building political power and exerting political power.
Cody Simms (49:51):
Is there no way to speed up connectivity of clean energy projects without some quid pro quo of expanding gas and oil pipelines as well?
Brandon Hurlbut (50:04):
Depends on what happens in the elections, right? If it's a divided government, you're going to have to compromise. And the Republicans will advocate for fossil fuel interests. And then on my Sunrise and progressive side, the origin of progressive is progress. So we may not get everything we want. But you got to take what you can get, live to fight another day. Yeah. It depends on how the elections shake out as to what the contours of that deal would look like.
Cody Simms (50:38):
What advice do you have for people who are hearing this and realizing, "Oh, I guess I probably should get involved?" Where should people jump in?
Brandon Hurlbut (50:45):
I think Clean Energy for America is a great start because it really is the home for the industry workforce. There's other great organizations like Climate Power that are really active on this. And so reach out to me, brandon@boundarystone.com, and I will get you to the right place. There's also state, we have to think about the states.
(51:06):
The Republicans are very good about they are very strategic with their resources. We tend to just focus on this big presidential campaign, and we've sent all this money in. And then it goes on TV or whatnot. And the Republicans are better infrastructure building, I found.
(51:22):
And so they have drawn these maps in the states that influence then how the Congress is drawn and drawn those maps. And so there's a great group out there called Climate Cabinet, Caroline Spears, she is dynamic. And so, she is the one out there like hearing the torch on state elections really matter. PUCs really matter to your business.
(51:43):
So Caroline is the best place to go to figure out how can I have maximum impact. She knows which legislative chamber with two seats change, they flip. And if you look at what happened in Minnesota and Michigan, when we got unified democratic control of those states, what happened? They passed big ambitious climate legislation, right? So if that really matters and Caroline is where you should go for that.
Cody Simms (52:09):
Well, I will double down on each of those recommendations. We've had Caroline and Climate Cabinet on the pod. We've had Climate Power on the pod. And actually when I first started getting involved in this whole space back in 2020, I hosted my first fundraiser through what is now Clean Energy for America. And there's a ton of infrastructure there to get involved and get active in the electoral side on the presidential campaign.
(52:34):
I'll add one more, which is I'm co-founder of a group called Climate Changemakers that also organizes and advocates and helps people get involved in electoral focused issues around the elections as well as policy advocacy, but the electoral side too. So there's a lot of places out there for people to jump into. And now is the time to do it.
Brandon Hurlbut (52:54):
Thank you for saying that, Cody. We need everybody to steer from the rooftops.
Cody Simms (52:59):
Brandon, what else should we talk about? What else do you want to chat about before we wrap up today?
Brandon Hurlbut (53:05):
I'm like a radical collaborator. I just love working with people. And so I hope you heard on this show, this platform. I think anybody that's listening can plug into some way. So if you have early stage deals, you're an entrepreneur, you're looking for series A seed investment, come talk to us.
(53:24):
If you're an investor and you've got those deals and you want to bring in this government edge into a deal, come talk to us. If you are a company seeking growth equity, and you're ready to really scale, come talk to me. If you want to get involved in the politics there, if you have policy needs, you want to understand the impacts, go to Boundary Stone's website. There's this navigator for the election 2024 impacts.
(53:45):
We did a webinar. You can watch it, but come talk to us. We have a whole product that we're rolling out around that. If you have some needs and partnering with the federal government, come talk to me. We'll have Political Climate coming back. And so, we'd love guests for the show, and we're really excited. I've really seen this industry and movement grow over the last 15 to 20 years, and it's exciting. And it's a great community too. I mean, everywhere I'm out there working with people on climate, they're in it for something bigger than themselves, and that's really an awesome thing to bond around.
Cody Simms (54:19):
Well, Brandon, thanks for all that you do on all of these different vectors, and thanks for joining us today to share more about them.
Brandon Hurlbut (54:25):
Such a privilege, Cody. Thank you for having me. We'll have you on Political Climate.
Cody Simms (54:29):
I love it. Let's do it. All right. Thank you.
(54:31):
Thanks again for joining us on My Climate Journey Podcast.
Jason Jacobs (54:35):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem-solving capacity.
Cody Simms (54:45):
If you'd like to learn more about MCJ Collective, visit us at mcjcollective.com. And if you have a guest suggestion, let us know that via Twitter @mcjpod.
Yin Lu (54:58):
For weekly climate op-eds, jobs, community events, and investment announcements from our MCJ Venture funds, be sure to subscribe to our newsletter on our website.
Jason Jacobs (55:07):
Thanks, and see you next episode.
