August 2024 Vol. 79 No. 8
Features
Inside infrastructure: Energy permitting reform legislation once again on the table
By Eben M. Wyman , Wyman Associates
EDITOR’S NOTE: Eben Wyman is a veteran advocate for key underground utility and pipeline associations. He can be contacted at eben@wymanassociates.net.
The need to update and improve the arduous process of obtaining the permits needed to get critical infrastructure projects off the ground is a longtime priority among supporters of American energy, especially advocates of infrastructure transporting fossil fuels.
Over the years, permit reform has become increasingly partisan, where the push to expand and improve infrastructure systems is growing by a range of industries and their allies in Congress. Those efforts have been met with resistance to support any transport of fossil fuels and for stronger regulations in the name of public safety and environmental protection.
As the nation struggled to free itself from harmful impacts of the COVID-19 pandemic, multiple laws were enacted that provided unprecedented federal investments in American infrastructure. The Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) are injecting hundreds of billions of dollars in infrastructure investment, and in clean energy manufacturing and deployment across the country.
However, despite this momentous influx of needed capital, the federal permitting process continues to choke opportunities to update the energy infrastructure. While there has been no shortage of policy proposals to streamline federal permitting, the fact that, now, renewable energy projects will benefit from an improved permitting process has transitioned permit reform into a bipartisan issue.
Although late in the game, at least in terms of the 118th Congress, two energy leaders in the U.S. Senate have once again presented bipartisan legislation aimed at updating the permit process. But make no mistake, passage of the “Energy Permitting Reform Act of 2024” is anything but certain, especially in a closely divided Congress during a presidential election year that seems to be changing by the day (or hour).
Permitting reform for energy projects, particularly natural gas pipelines, is needed for several key reasons.
Expediting project timelines
It’s no secret that current permitting processes are lengthy and complex, leading to significant project delays. This is especially true when constructing natural gas pipelines. These delays hinder the timely delivery of energy and can interfere with supply chains and market stability. Delays have exacerbated supply chain problems in the wake of the pandemic, where formidable workforce capacity challenges, materials and supply shortages, and other impediments to refurbishing American infrastructure, plagued construction and manufacturing industries.
The time needed to secure a federal permit for a fossil fuel project compared to a renewable energy project can vary significantly due to differences in regulatory requirements, complexity and political considerations.
For example, permitting a natural gas pipeline can take several years. Obtaining approvals from multiple federal agencies, such as the Federal Energy Regulatory Commission (FERC), the Environmental Protection Agency (EPA), and the U.S. Army Corps of Engineers can be problematic. The process often involves detailed environmental impact assessments, consideration of public comments and the potential for legal challenges. Because of this, it is not uncommon for natural gas pipeline projects to face delays of five to seven years, or more.
When it comes to producing American energy, the Bureau of Land Management (BLM) oversees the permitting process for oil and gas drilling on federal lands. Timeframes certainly vary, but many industry experts indicate obtaining permits can often take two to four years. This commonly includes obtaining leases, conducting environmental reviews under the National Environmental Policy Act (NEPA), and securing necessary and seemingly endless state and local permits.
At the same time, renewable energy projects generally face shorter permitting periods compared to fossil fuel projects, although the timeline can still vary. For example, “utility-scale” wind and solar projects on federal land overseen by BLM can take one to three years to permit, once NEPA reviews, discussions with landowners and the interested public, and securing all land use authorizations are complete. Projects on private land can offer faster timelines, depending on state and local regulations.
Offshore wind projects can face longer permitting times due to the involvement of multiple federal agencies with oceanic jurisdiction. But many put offshore wind projects in the same five to seven year permitting timeframe.
So, while renewable energy projects generally have shorter permitting times, delays to the process can still be significant due to similar regulatory and procedural hurdles. Efforts to streamline permitting processes aim to reduce these timelines for both types of projects while balancing environmental and public health considerations.
Expediting the permit process is expected to carry several other benefits associated with:
- Costs. Prolonged permitting timelines and delays to the process increase costs for developers and project owners, resulting from expansive planning and compliance requirements. Higher costs can translate to higher prices for energy consumers in the long term.
- Energy security. More-efficient project permitting is critical to ensure a stable and reliable energy supply. Streamlined processes will help meet growing energy demands and respond to emergencies and/or more supply disruptions.
- Economic growth. Natural gas pipelines are essential for transporting energy to industries and consumers. Expedited permitting will spur economic development by facilitating initiation of energy projects, creating jobs and stimulating investment in related sectors.
- Environmental considerations. Modernizing the federal permitting process can incorporate better environmental protections and technologies. Faster permitting will likely encourage the use of newer, more efficient technologies that can reduce emissions and minimize other environmental impacts.
Overall, energy permitting reform is necessary to balance the need for numerous environmental and safety reviews with the demand for timely and cost-effective development of energy infrastructure. This balance will be essential for maintaining energy reliability, affordability and environmental protection in the future.
However, recognizing the stubborn partisanship in an unpredictable election year and the limited time remaining in the 118th Congress, the chance of enacting robust permit reform legislation will be an uphill journey. That said, when top leaders of the Senate Energy and Natural Resources Committee introduced the Energy Permitting Reform Act in July, industry took notice.
Committee Chairman Sen. Joe Manchin (I-W.V.) and Ranking Member John Barrasso (R-Wyo.) introduced the bill, which includes essential judicial reforms supported by industry for a long time. It also covers other measures to accelerate permitting of power transmission and energy production on public lands and offshore.
What the legislation includes
Judicial review. The bill would shorten the timelines before, during and after litigation related to a wide range of federal authorizations for energy projects, without changing any existing rights to pursue legal challenges. It would establish a 150-day statute of limitations from the date of a final agency action on a project and require courts to expedite review of legal challenges. Specifically, the bill would set a 180-day deadline for federal agencies to act on suspended or revoked permit authorizations.
Onshore energy and minerals. The bill would accelerate leasing and permitting decisions for all types of energy projects on federal lands, without sidestepping existing environmental and land-use laws. Among a range of reforms, the bill would facilitate:
- eliminating duplicative permit requirements for oil and gas production on non-federal surface land
- ensuring that lease sales include oil and gas acreage
- streamlining environmental reviews for low-disturbance renewable, electric grid, and storage projects
- modernizing geothermal leasing and permitting processes
- setting deadlines and doubling production targets for renewable energy permitting on federal lands
- setting deadlines to process applications to lease federal coal
- ensuring mining projects for critical minerals are allowed to use federal land
Offshore energy. The Manchin/Barrasso bill would require the Department of Interior to hold at least one offshore wind lease sale and one offshore oil and gas lease sale per year from 2025 through 2029. These sales would be subject to minimum acreage requirements without bypassing environmental reviews. These provisions will help ensure that both offshore wind and offshore oil and gas leasing will be afforded between now and the end of the decade.
Liquefied natural gas (LNG) exports. The bill also sets a 90-day deadline for the Department of Energy (DOE) to grant or deny LNG export applications following environmental reviews, with applications deemed approved if DOE fails to meet that deadline. The hope is to ensure “fact-based decision-making” by requiring DOE to base LNG exports decisions on existing economic and emissions studies, unless and until new studies are completed. The bill subjects any new study to peer review, notice and public comment, and other requirements.
Electric transmission. The bill would reform the backstop siting authority for interstate electric transmission lines and requires interregional transmission planning. These provisions provide two pathways for power transmission development that include clear standards for cost allocation among customers that benefit from a project. Specifically, the bill calls for an “interregional planning requirement” to ensure that regions jointly address needs; and a process that allows individual applicants to propose national-interest electric power projects.
The legislation also includes guardrails that protect consumers, benefit communities and respect state authorities, including:
- requiring transmission projects to improve electric reliability
- allocating costs only to customers that benefit using a minimum specified list of electric reliability and affordability benefits
- allowing FERC to approve utility compensation to communities hosting transmission facilities
- preserving current law that allows states to have at least one year to respond to applications before applicants may go to FERC
- applying equally to all electric generation resources and to onshore and offshore facilities
- prioritizing use of existing rights-of-way and modern technology to lower impacts and costs
- including mechanisms to resolve disagreements and noncompliance
Hydropower. The bill would allow FERC to extend start-construction deadlines for certain existing hydropower licenses.
Strong and immediate response
Upon introduction, Sens. Manchin and Barrasso issued a joint statement in support of the new permit reform bill, reflecting a rare glimpse of cooperation and bipartisanship in a political environment that most Washington insiders consider “toxic.” Both senators were clear in their messaging: the legislation will strengthen American energy security by accelerating the permitting process for critical energy and mineral projects of all types across the country.
“The United States of America is blessed with abundant natural resources that have powered our nation to greatness and allow us to help our friends and allies around the world. Unfortunately, today our outdated permitting system is stifling our economic growth, geopolitical strength, and ability to reduce emissions,” said chairman Manchin. “Ranking Member Barrasso and I have put together a commonsense, bipartisan piece of legislation that will speed up permitting and provide more certainty for all types of energy and mineral projects without bypassing important protections for our environment and impacted communities.”
Barrasso agrees. “For far too long, Washington’s disastrous permitting system has shackled American energy production and punished families in Wyoming and across our country. Congress must step in and fix this process,” the senator said. “Our bipartisan bill secures future access to oil and gas resources on federal lands and waters. We permanently end President Biden’s reckless ban on natural gas exports. And we ensure we can strengthen our electric grid while protecting customers.”
The latest permit reform bill was not met with universal support. The Sierra Club issued a statement discussing the Act which stated that “[while] the Bill includes provisions that may accelerate the deployment of clean energy and the transmission infrastructure that is needed to support it… the Biden-Harris Administration has already put forward comprehensive policies to unleash clean energy, improve the resilience of the power grid, and improve affordability for consumers.”
Déjà vu all over again?
The truth is, Congress has been down this road before. Previous proposals, most recently in 2023, reform proposed by Sen. Manchin unraveled because of the overwhelmingly different opinions about which projects should be considered “priority,” and concerns among left-leaning groups that the legislation would do more harm than good.
The energy industry is now focusing on improvements to the NEPA process. In a letter to the White House’s Council on Environmental Quality signed by scores of energy groups and the business community in general, the need for reform was again underscored.
The fossil fuel business group sent a letter this month, criticizing the Biden administration’s push to take into account greenhouse gas emissions as part of reviews for federal permits for pipelines and other energy projects under the National Environmental Policy Act (NEPA). The bedrock environmental law enacted more than 50 years ago, has evolved in a way that has empowered opponents of projects to an unreasonable extent.
“The entire energy industry – from oil and natural gas to renewables – needs consistency and durability in the application of NEPA across the long-time horizons to develop, construct and operate projects that last longer than presidential administrations,” the letter said.
The Trump administration significantly narrowed NEPA application in the federal permitting process, but the Biden Administration reversed the former president’s action. In 2023, Republicans negotiated minor reforms to NEPA as a part of the debt ceiling package, although many considered the deal a mere “downpayment” on the significant reforms to the process that remain. As the final months of the 2024 Congress approach, industry is looking at a variety of legislative and regulatory venues to overturn President Biden’s latest NEPA policies.
The Manchin-Barrasso bill is the latest product following years of hearings and bipartisan negotiations. The compromise legislation includes provisions that will benefit both fossil fuel and clean energy projects. Politically speaking, it’s important to recognize that Sen. Manchin formally left the Democratic Party earlier this year, and the fossil fuel-related provisions he negotiated are not popular with some members of his former party and their allies in the environmental community.
Meanwhile, certain Republican members of Congress maintain that the bill does not go far enough. With the election approaching, the bill’s path to the president’s desk is long, while time is short. Either way, introduction of the current bill is an important milestone, and shows progress on addressing a serious challenge that continues to hinder the nation’s energy security and climate goals.
The responses to introduction of the Energy Permitting Reform Act of 2024 reflect how even the appearance of finding common ground can prove to be a thin layer of support over major differences. Even if this bill fails to cross the finish line this year, it could serve as “strawman” legislation when the 119th Congress convenes in 2025 and America swears in a new president.
Comments