When Gov. Jay Inslee appointed Michael Fong to serve as the new director of the Washington State Department of Commerce in April 2023, the Evergreen State got a seasoned leader with national experience.
Formerly of the U.S. Small Business Administration, the Spokane native and University of Washington graduate brings more than two decades of public service in leadership levels to Commerce. He has also held leadership positions in Seattle, King County and Snohomish County. He served as senior deputy mayor of Seattle from 2017 to 2021.
“Under Gov. Inslee’s leadership, the Department of Commerce is at the forefront of tackling the state’s most pressing issues,” said Fong. “We’ll continue to lead the nation as an equitable, inclusive place to live, work and thrive.”
In the following exchange, Fong outlines the progress that Commerce has made and discusses his priorities for the next two years.
What were your three biggest economic development project wins of the past year?
MICHAEL FONG: As the nation’s leader in aerospace and aviation, Washington has achieved significant wins in the area of green aviation technologies. This was made possible with the implementation of sustainable aviation fuel (SAF) credits that serve as incentives for companies wanting to explore new, clean energy fuels and technologies.
These credits are paying dividends. Two weeks after the 2023 legislation was signed into law by Gov. Jay Inslee, the Dutch company SkyNRG announced plans to invest $800 million in a new sustainable aviation fuel production facility in Washington. The new facility will create 100 permanent jobs and produce 30 million gallons of SAF annually.
E-Jet® fuel producer Twelve is planning a new SAF plant in Moses Lake, Washington. When completed, the plant will produce fuels using the company’s CO2Made® carbon transformation technology that replicates photosynthesis at an industrial scale. It will further the state’s goal of being a leader in new energy sources with a corresponding reduction in the use of fossil fuels. Clean energy legislation requires greenhouse gas emissions in Washington to be reduced 45% by 2030 and 95% by 2050, and innovative companies like Twelve and SkyNRG are helping us meet these ambitious targets.
Of course, sustainable aviation fuels are just a small part of the state’s clean energy transformation. Two innovative companies in Moses Lake are shaping the future of EV battery manufacturing. Sila Nanotechnologies and Group14 Technologies manufacture black powders (anode active materials) that improve the performance of EVs. Group14 Technologies is constructing its second commercial-scale battery material factory to meet increased demand in the electric vehicle (EV) market. The 1 million-square-foot Moses Lake campus will be home to the world’s largest factory of advanced silicon battery materials for EV programs. The facility will employ 200 workers when completed.
What are your top priorities for the next 24 months?
FONG: We have three:
- Build up our toolset to access federal funding. IIJA, IRA, and CHIPS Act funding represents a historic investment in our nation’s future. Economic leaders in the state are working closely with communities, businesses and regional partners to access these funds to spur innovation and growth across the state for years to come.
- Continue to grow our hydrogen economy. Innovative uses of hydrogen provide new economic opportunities and help us meet our goal of decarbonizing the economy. Washington partnered with Oregon to create the Pacific Northwest Hydrogen Hub, which received a federal designation as a national Hydrogen Hub. This designation provides the region with a pathway for research, development and manufacture of hydrogen technologies across platforms and sectors.
- Stay laser-focused on innovation. Washington State is home to some of the world’s most innovative technology companies — Amazon, Expedia and Microsoft, to name a few. The state has driven change in nearly every industry, from the factory floor to the way we shop. We are fortunate to have a robust ecosystem that supports innovation, not only vertically within a sector but across sectors. An excellent example of this is the maritime industry, which is benefiting from advances in the tech sector and battery storage to electrify fleet vessels, including the state’s ferries. Our job at the state level is to continue building a business-friendly environment that promotes collaboration and innovation to make it possible to move products from the research lab to the marketplace quickly.
Are there any major infrastructure projects going on now that will spur more commerce in Washington?
FONG: Washington is the most trade-driven state in the nation. Investing in our infrastructure is critical to the growth of our economy. Additional capacity at our key maritime terminals can help us build needed capacity. Northwest Seaport Alliance terminals provide 58,000 jobs in our region and $12 billion in economic impact. The new Port of Seattle Terminal 5 includes the biggest cranes on the West Coast and can serve the largest ships. The Port of Seattle expects this will increase capacity by 40%.
The state is on year eight of a $70 billion investment in infrastructure to ensure that goods continue to move through the state quickly and efficiently. This includes the addition of new major transportation corridors, charging stations on major highways, light rail that connects major cities throughout the Puget Sound region, fast ferries and electrification of our existing ferry fleet.
Broadband is another priority and key to providing digital equity statewide. Having sufficient bandwidth is no longer a luxury but a fundamental right. The Department of Commerce’s Broadband Office is spearheading this effort to deliver high-speed internet across the state to ensure equitable access and inclusion.
In recent years, there has been substantial investment at our gateway to the world, Seattle-Tacoma International Airport. The Port of Seattle manages the airport and recently wrapped up a new 1-million-square-foot expansion of its terminals, including a new International Arrivals Facility that doubles passenger capacity. Over the next five years, the airport will invest more than $4.6 billion on projects to modernize operations, increase capacity and improve the experience of travelers.
What is Washington’s best-kept secret?
FONG: Our diversity — in our geography, climate and residents — is perhaps our best kept secret. Eastern Washington is less densely populated than the western side and is drier and hotter in the summer and colder in the winter. The areas around Spokane, Tri-Cities, Vancouver and Walla Walla are becoming technology hubs in their own right. Western Washington, which includes the Puget Sound region and Seattle, is more mild in climate, thanks to the mountain ranges that lie to the east and west. Approximately 60% of the state’s population lives on the west side.
Our population is equally diverse. In one Seattle neighborhood, it is said that 59 different languages are spoken by residents. We have a rich history of celebrating our divergent cultures in our arts, festivals and events, honoring the past while looking to the future. We have a unique pioneer spirit in Washington, an independence and self-reliance that helped build our diverse and robust economy. Whether a business is located in a quaint rural town or an eclectic urban center, the state has a long history of questioning the status quo and leading the way with new ideas, many of which have changed the world.
What is Washington doing to promote more FDI?
FONG: Attracting foreign investment is one of our key strategies to grow and diversify our economy. We have representatives in offices around the world to share our competitive advantages with businesses and potential investors. We have expanded our network of FDI offices to include Canada, Japan, Korea, Taiwan, Germany and France in recent years and are considering other markets going forward. Access to global markets is essential for attracting FDI as it provides opportunities to promote the state’s investment climate, infrastructure and business environment to a wide range of potential investors through our offices and the many trade shows we participate in.
Has Washington garnered any major FDI wins in 2023?
FONG: British Petroleum is investing $1.5 billion into its Cherry Point refinery to help the energy company meet its net-zero climate goal. Whatcom County is one of five locations worldwide where BP is planning new low-carbon projects. The county is also the site of a planned green hydrogen and SAF fuel production facility, which will generate between 1,000 and 2,000 jobs, according to estimates.
Did the state pass any new incentives this year?
FONG: One new incentive is a per-gallon price credit for SAF with lifecycle greenhouse gas emissions that are at least 50% lower than traditional jet fuel. The incentive increases for each 1% reduction in lifecycle greenhouse gas beyond 50%, up to a potential incentive of $2 per gallon. To spur additional investment in clean technologies and manufacturing, the state has implemented several new measures to improve site readiness, promote industrial symbiosis and streamline permitting major projects around the state.
