Inslee Claims Clean Energy Mandate, Outlines Ideas for Sector

2/1/13Follow @bromano

Washington Gov. Jay Inslee says he has a “mandate” on clean energy and outlined “eight general ideas” to advance the sector, but he offered little in the way of specific new policies to his stalwart supporters at the Washington Clean Technology Alliance policy conference.

“We were the first state to really elect a governor who made a big deal of that during the campaign,” Inslee told the audience of about 200 earlier this week. “So this is a mandate of sorts from the people that we should move forward on clean energy.”

Inslee says technology, public attitudes, leadership from the White House and Pentagon, and an urgent need to act have combined to make this “the season for clean energy in the state of Washington.” He promises “a fairly aggressive statement and action plan,” and while he put a little more meat on the bones of his policy priorities, he says he’s still not ready to unveil all the details.

Additional policy support cannot come soon enough, as private investors are shying away from cleantech here and across the country. Cleantech investments in Washington, Oregon, Idaho, Montana, and Wyoming c0mpanies in alternative energy, storage, recycling, smart grid, transportation, and wastewater treatment declined 67 percent in the fourth quarter of 2012 to $15 million. For the full year, investment was nearly $51 million, down 70 percent, and represented only 1.5 percent of the national total of nearly $3.3 billion, according to the latest report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association based on data from Thomson Reuters.

“We’ve had a very small piece of the pie even when it was booming in 2010, 2011,” says Stephen Sommerville, who lead’s PwC’s emerging companies practice in Seattle. “I think the broader issue is we don’t really have critical mass in this region.”

Inslee uses the term “cleantech” to describe a very wide range of energy efficiency and conservation activities.

For example, he recounted a pre-dawn visit last weekend to J.M. Martinac Shipbuilding in Tacoma where the 184-foot Northern Leader slid into Commencement Bay packed with technologies that will make it 20 percent more efficient than other ships in the cod-fishing fleet. “This is probably the world’s most fuel-efficient long liner,” Inslee says.

“That ship’s there because Congress rationalized the fishing industry in the North Pacific,” he says. “As a result of that policy, we created a demand, and a steady state so that fishermen and women could go to the banks and borrow money to build these next fleet of ships. … That’s what we’re going to do with policies in the state of Washington. We’re going to create demand that will assist the financing of these capital intensive projects in the future.”

Some of Inslee’s eight ideas could help address capital and new-company formation in cleantech and other sectors as well.

He wants to create a tradable research and development tax credit that could be a source of funds for pre-revenue companies, which would sell the credits to mature businesses that have state business and occupation tax obligations. “It is a small and worthwhile investment,” Inslee says, noting similar programs have been successful in states including New Jersey.

Inslee also repeated his call for a system to accelerate commercialization of research and inventions from Washington’s universities.

“If we did this at one half the rate the University of Utah did this, we would create hundreds of millions of dollars of economic opportunity in the state of Washington, and I intend to do this,” he says. “We have some kind of artificial inhibitions in our ability to commercialize, to take what the scientists have discovered and actually start a small business. We’re going to remedy that.”

Related to this, Inslee wants to “invest our state resources into research, development, demonstration, and deployment of clean technology,” make “public investments of research dollars in our public research institutions,” and build an education system that will “focus on [science, technology, engineering, and math] degrees like a laser beam.”

“This is a horrendous situation now,” Inslee says. “We have 600 students waiting to get into the UW engineering school last year with jobs lined up for them, couldn’t get in.”

Former Defense Secretary and Texas A&M president Robert Gates, speaking before Inslee at the policy conference, argued that the evisceration of federal and state support for scientific research is short-changing America’s future. And while a nearly $1 billion state budget deficit will make discretionary spending increases difficult, Inslee’s proposal holds promise for cleantech supporters who want to see state government become an early adopter of local products and services.

Demand for new renewable energy projects has slowed in part because most Washington utilities are on track to meet the goals of the state’s voter-approved renewable portfolio standard. Inslee wants to see incentives for renewables expanded. “There’s multiple ways to do that,” Inslee says. “We’re going to do it in multiple ways.”

Inslee with Rick Duggan at Martinac Shipbuilding

Inslee also wants Washington to work more closely with the Department of Defense, the largest single energy consumer in the world. He says Martinac is ready to build hybrid-electric tugboats for the Navy, and that he was planning to meet with Secretary of the Navy Ray Mabus in coming days.

Washington will also become a center of excellence for aviation biofuels, Inslee says. Boeing, Alaska Airlines, Washington State University and several other organizations made a public push in that direction almost two years ago through an initiative called Sustainable Aviation Fuels Northwest.

He also envisions a transportation system planned and built with “the goal of reducing carbon pollution throughout the system.”

“We aren’t doing this today,” Inslee says, “but are going to be doing it in the near future.”

Photo of Inslee by Michael B. Maine. Photo of Inslee with Duggan via Flickr.

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

By posting a comment, you agree to our terms and conditions.

  • jdurocher1973

    As a business owner in Seattle I can say I am extremely leery of the idea of “public money” (read: more taxes on WA businesses) going down the clean energy rat hole. If Inslee is wrong and there ends up being no true market for clean tech, then we will have wasted millions that otherwise could have been used by companies to find true market demand for their innovations – a huge setback for Washington competitiveness long term. Anytime I hear the government trying to stimulate a new market to life, I groan because history shows it’s mostly an expensive and wasteful proposition.

    • http://www.edutek.net/kofi Baba Kofi Weusijana

      As a person living in Seattle I am extremely leery of the idea of “public money” (read: more taxes on WA business people not as broke as the rest of us) NOT going to save the environment we all depend on. If Inslee is wrong and there ends up being no true market for clean tech, it will be because we continued to rely on non-renewables like fossil fuels. Fossil fuel corporations have 5 times more oil and coal and gas in known reserves than climate scientists think is safe to burn. We have to keep 80% of their fossil fuels underground to keep the earth in livable shape. It time that we have all hands on deck for the survival of human civilization.

      Report after report has shown that investing in clean energy, efficiency and other sustainable technologies can be even more profitable than fossil fuels (http://www.forbes.com/sites/mindylubber/2012/03/20/investors-are-making-money-on-renewable-energy/). It’s a growing market, with over $260bn invested globally last year, and a safe place for institutions to invest (http://www.reuters.com/article/2012/01/12/us-clean-tech-investment-idUSTRE80B1NX20120112).

      • jdurocher1973

        That’s a fine observation but it assumes Washington State taxpayers are going to make a dent in this global issue – and at what cost? We simply don’t have the financial resources in this state to do this alone. A better investment by Inslee would be in working with other states, and nations, to address the problem together. Not spending gobs Washington taxpayers money on experiments.