Unveiling Permitting Reform: The Hidden Energy Solution in Debt Talks
Understanding Energy Permitting Reform and its Role in the Debt Ceiling Deal
Energy permitting reform, which aims to cut down the time it takes for new projects to get approved, could be one of the few bipartisan measures to emerge from a debt limit deal. Or it could be left on the cutting room floor. Here’s what you need to know.
What is energy permitting?
Energy permitting may sound dry, but it’s an important and necessary step for any plan that intends to bring new sources of energy to our homes and businesses. It’s the shorthand term for all the environmental and technical approvals needed for a major energy project like a wind farm, massive solar array, electrical transmission line, or gas pipeline.
Essentially, it’s the key hurdle to getting new energy projects built in the United States. In the US, this process is particularly complex because there are multiple layers of government that project developers need to answer to: federal, state, and local. For the federal government alone, there are multiple agencies that need to sign off on big energy projects — creating multiple hurdles and dragging out the time before a project can be constructed.
Why is energy permitting reform needed?
Long wait times are the major problem permitting reform aims to solve. This isn’t a new problem, but it’s becoming more acute because of the major climate and energy law Congress passed last summer. The Democrats’ Inflation Reduction Act contained billions of dollars in tax credits designed to turbocharge energy — especially clean energy — in the US. However, while there’s a ton of money for these projects, it still takes them a long time to get built.
Why is permitting reform part of the debt ceiling talks?
Permitting reform came up for a vote last year that failed in the Senate. Now, some lawmakers are hoping to stick it into must-pass legislation on raising the debt limit, since permitting is a complex and somewhat controversial issue. Both parties agree that it takes far too long in the US to build new energy infrastructure, with a 5-year average wait time for projects to get all their necessary approvals and permits. However, they disagree on which projects should be prioritized: Republicans want more gas pipelines and fossil fuel projects, while Democrats and the Biden administration are focused on clean energy and electrical transmission needed to spur the country’s clean energy transition.
What’s being proposed?
There are many different energy permitting bills floating around Congress. House Republicans recently passed a massive permitting package known as “HR1” that would significantly change the current federal environmental review process that major projects have to go through, increase federal oil and gas offshore leasing, and loosen mining laws for critical minerals. On the Senate side, Senator Joe Manchin has proposed a bill that would cap the amount of time the federal government can review and permit energy projects at two years. It would create one government body to review projects and set a statute of limitations in courts to cut down on wait times. Other Democratic lawmakers have put forth bills to reform centuries-old mining laws without gutting environmental review laws.
What are the environmental concerns?
Keeping the National Environmental Policy Act (NEPA) intact emerged as a top concern for many Democrats, who are afraid Republicans will seize permitting reform as an opportunity to gut the federal government’s cornerstone environmental review process. NEPA is a law that requires federal agencies to quantify the environmental impact of their actions and consider options that would be less damaging. Clawing it back could mean less oversight for projects that can pollute waterways or air — whether they are related to fossil fuels or the byproducts of mining for critical minerals for electric vehicles.
What are the limits of permitting reform?
A federal permitting bill — if it is passed — won’t touch state and local power to change or halt a project. And that could still stymie big energy buildout. At a recent offshore wind conference, one executive said that state and local authorities can still present the biggest challenge to big renewable wind projects. Most federal delays come from a lack of staffing, but on the whole, federal agencies “tend to be very professional and very good at what they do.” The biggest challenges facing offshore wind tend to be the state and local approvals necessary for landing cables and connecting to the grid, which can lead to delays or even kill projects.