On Wednesday evening, the Senate Energy and Natural Resources Committee released long-awaited text for permitting reform legislation. The bill, sponsored by Senator Joe Manchin (D-W.V.), represents the potential endgame of a deal he worked out with Democratic Party leadership back in July. That deal locked in Manchin’s support for the Inflation Reduction Act—which was critical to its passage—but now the check has come due and passage of Manchin’s priorities remains far from guaranteed.
The new legislation, titled the “Energy Independence and Security Act of 2022,” makes a number of significant changes. First, it sets time limits on environmental reviews for major energy and natural resources projects under the National Environmental Policy Act (NEPA). This includes a two-year cap for projects that require full environmental impact statements and a one-year cap for more limited environmental assessments. In both cases, timelines are described as “targets,” so agencies may still have some flexibility around the limits.
Second, the bill gives authority to the Secretary of Energy to declare transmission line projects to be “in the national interest,” thereby expediting certain permitting processes. Much of the existing electrical line network in the United States is decades old and increasingly outdated. Moreover, it’s been difficult to connect newer energy sources, such as solar and wind developments, to the existing grid. Potentially hundreds of millions of tons of CO2 emissions reductions could be at stake if these growing challenges aren’t addressed.
Third, the bill requires federal agencies to approve permits for the Mountain Valley natural gas pipeline—a major priority of Manchin’s given its economic impact on his home state—and gives a boost to interstate hydrogen pipelines by clarifying FERC has jurisdiction in this area.
Finally, the bill sets a stricter statute of limitations for bringing legal challenges against projects, and it creates a new White House priority list of energy projects designated to be of national importance.
So far, environmentalists are largely opposed to the legislation. Some are going so far as to call the agreement made between Manchin and party leadership over the summer a “dirty deal.” However, this opposition is a bit perplexing. First, according to the R Street Institute, 65% of energy projects with federal permits in process are renewable-energy related. Only 19% are fossil fuel projects, and 16% are electricity transmission projects (which, as noted, can benefit renewables). Similarly, the Mountain Valley pipeline, despite being a fossil fuel project, may end up reducing carbon dioxide emissions on balance, since natural gas is cleaner than coal.
Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi will next have to decide whether to insert the permitting language into a continuing resolution to keep the government funded. That legislation must pass by the end of the month or else government agencies will run out of cash. Schumer continues to promise he will force a vote on the combined legislation. However, Pelosi has been more ambivalent, and opposition among progressives appears to be gaining steam.
Already, more than 70 House members have signed a letter asking for the two pieces of legislation to be separated. At least five senators have signed a similar letter, and Democrat Tim Kaine recently stated he cannot support the provisions to approve the Mountain Valley pipeline, given he wasn’t consulted and the pipeline runs through his state of Virginia.
Regarding those who want permitting reform separated from the continuing resolution, Manchin has stated “They’re not gonna get it.” However, that means Republican support will almost certainly be necessary, and currently that too is up in the air.
Some Republicans have expressed resentment towards Manchin for having compromised on the Inflation Reduction Act, and now they see no reason to back him up even if it’s for policy they broadly support. His West Virginia counterpart, Republican Senator Shelly Capito, has released her own version of permitting reform legislation, and some in her party are rallying behind that.
Others are criticizing the legislation for not going far enough. For example, law professor James Coleman of Southern Methodist University has argued that there is not enough in the bill to thwart frivolous lawsuits, which are one of the main impediments to renewable energy development. Perversely, the shot clocks for environmental reviews could even exacerbate litigation delays by leading to rushed analysis that is harder to defend in court. Stricter limits on litigation may be needed if Manchin’s bill is to be impactful.
A further danger for Democrats is that if permitting reform fails, this will discourage future deals with Manchin on Democratic priorities. Manchin was a key roadblock with President Biden’s Build Back Better legislation. If they renege on the Inflation Reduction Act deal, the potential for future deals could easily unravel.
There is much to like about the new permitting reform legislation, including the transmission line and hydrogen pipeline reforms. Whether the bill goes far enough to rein in excessive litigation is unclear. Whatever happens, this legislation would only represent a small step toward addressing the much bigger problem of America’s increasing culture of opposition to infrastructure, development and building.
As Alec Stapp of the Institute for Progress recently stated on Twitter, “My worry is that policymakers will say this bill ‘fixed permitting,’ and then we don’t get any more reform for years.”