Robinson Meyer

And so the moral of that story, it seems to me, is that LPO's job, the thing that makes it different from the rest of the private sector, is that it can lose money. And it can lose money on worthwhile projects, or it can decide that basically it doesn't need to make money in a short period of time. It doesn't need to respond to the conditions of the spot market at any one moment.

You mentioned earlier that LPO has made money, that it's been making money recently. There's like two famous stories about LPO, which is that in 2010, it made a $465 million loan to Tesla. But also, at around the same time, it made a $535 million loan to this company, Solyndra, which went bankrupt relatively quickly and became a big issue in the 2012 campaign.

One question I've had about LPO for the past... few years, is like, you know, the Tesla story is great. The Solyndra story is obviously haunts the office. Not anymore. Did we overlearn the lesson of Solyndra? Like, is the fact that LPO is making money, that's great, right? It's good that it's making money. We're running the government like a business.

But like, LPO's job is not to run the government like a business. So... Did we overlearn the lesson of Solyndra? Like, should LPO, if it is doing exactly what it's supposed to be doing, should it be losing money?

So Biden came into office promising to do big things. This is like a theme you keep returning to. And as you were saying, he went to the climate people and he made a set of promises to them and he went to labor unions and made a set of promises to them and said, we're going to bring back jobs. He said, we went to the justice people and said, we're going to get pollution out of your communities.

And the Inflation Reduction Act, which is like the signature partisan bill of his administration, tries to do a lot of these things at the same time, right? It's a decarbonization, an environmental bill. It's a justice bill. It's also a manufacturing bill. How do you see all of those impulses brushing up against each other in the bill and in the Biden administration's policy writ large?

It has grants for environmental justice. It does a few different. I think if we were talking maybe two years ago, Biden officials would be describing it a little differently.

I think looking back on the past three years of LPO and on what's followed the Inflation Reduction Act, there's obviously been this boom in clean energy and clean manufacturing that's happened across the U.S. But when you look at the numbers from LPO specifically... They suggest that there's a lot of dry powder sitting in LPO. So LPO has $400 billion of loan authority.

I think it's issued $54 billion of loans. I think $19 billion of that has come after the election, and you should correct me if any of this is wrong. And I believe there are 200 applications with over $300 billion of loans waiting to get dispersed, waiting at your office. So what has gone into that holdup? Why haven't there been as many loans issued from their offices? There could be.

Why is there so much dry powder at the end of the Biden administration in this very important program?

Let me just say, like, voice the other side of that argument, though, which is something I've heard from companies that are applying for LPO, is that the process is really arduous. It's much more arduous than the private banks, which on the one hand is good, right? Like, that is making use of the Department of Energy's experts.

It's making use of its ability to kind of put its stamp of approval on certain big projects. But something I've heard that's related to that is, like, if you go to a bank and you ask for a loan, you can usually get a sense in a few months of whether you're going to get that loan.

But when you go to LPO, it can take a few years to even get a sense of how far you are in the pipeline, of whether you're going to be approved. And those years represent millions of dollars of planning investment. They represent burned runway. They represent a lot of lost executive salaries, right? Was there too much process here to make sure that all of these loans were airtight?

The LPO isn't only just teaching them how to do big things. They're actually doing something else, which is that I think the office and the Department of Energy more broadly have followed through on a set of promises made by the Biden administration at the beginning of its term, right? That this wasn't only about doing big things in America. This isn't only about big manufacturing projects.

This is also about making good on pledges to labor. This is about making good on pledges to communities that have suffered under pollution for so long. Something that LPO has done a lot of is to make sure that communities benefit from projects.

There's a critique from Ezra and others that when you add all those other pledges, all those other requirements to these big projects, you know, you require labor standards, you require community input. It's not that those things are like not worthwhile, but they slow the projects down.

And it takes time to do the planning for all these different aspects of a project when what the ultimate end goal is making sure there's a battery plant. After running LPO for three years, what is your sense of it? And should we have the same requirements? Should we try to make all the same pledges next time?

Well, I think that this is exactly the question, right, is where does thoughtfulness and process begin? Because you're describing things that are not requirements per se.

However, I think if you go to a company and you're like, you know, you should really have a community meeting to figure out what the community wants, that's going to read to a company much more like a requirement than maybe they're going to feel like they're being voluntold.

How would you get the dollars out the door faster next time then?