Energy permitting reform, which aims to cut down the time it takes for new projects to get approved, is one of the few bipartisan measures to emerge from a debt limit deal. But it is not without controversy.
Here’s what 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 is 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.
But while there’s a ton of money for these projects, it still takes them a long time to get built.
“We’ve seen, over the last 10 to 20 years in this country, the regime that we used to permit projects has shifted to a point where it is simply unworkable to build infrastructure – whether it be offshore wind, clean energy technologies or other infrastructure necessary just to make our economy work,” RWE Renewables America executive Sam Eaton, who focuses on offshore wind, said at a recent industry conference.
Why is permitting reform part of the debt ceiling deal?
Permitting reform came up for a vote last year that failed in the Senate. Lawmakers and White House officials aimed 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.
But where they disagree is what kind of projects need to 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.
Some Democrats and environmental groups are wary of streamlining the current process, because Republicans could leverage easier permitting to gut a bedrock environmental law.
What’s being proposed?
The proposed debt ceiling deal would impose certain timelines for federal agencies to review and approve new major energy projects. It would require agencies to complete environmental reviews in one year for simpler energy projects, or two years maximum for more environmentally complex projects.
It would also streamline communication between federal agencies by setting up a single agency to take the lead on a more streamlined environmental review process.
The deal would also help greenlight the Mountain Valley Pipeline – a natural gas pipeline that would run through parts of West Virginia and Virginia. The pipeline has been championed by West Virginia Sen. Joe Manchin, a Democrat, and has been heavily opposed by environmental groups and some congressional Democrats.
What was left out of the deal?
Republicans were not able to make good on their promise to repeal the Democrats’ major climate law, passed last year, as part of the debt ceiling deal.
However, Democrats also fell short in negotiations. Democrats and the White House wanted provisions that would make it easier to build out electrical transmission lines, which will be necessary to deliver new clean energy to homes and businesses. That effort was whittled down into a provision to study putting in more transmission lines, along with assurances from Republicans that they would work on the issue in the future.
What are the environmental concerns?
Keeping the National Environmental Policy Act intact has been a top concern for many Democrats, who are afraid Republicans will seize the more streamlined process as an opportunity to gut the federal government’s cornerstone environmental review law.
NEPA is a law that requires federal agencies to quantify the environmental impact of their actions and consider options that would be less damaging. It applies whenever a project crosses federal lands or could impact air or water quality regulated by the Clean Air Act.
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.
“I’m concerned that we’re going to give a bunch of big giveaways to the fossil fuel industry and take major bites out of bedrock environmental laws that will have long-term negative consequences,” Rep. Jared Huffman of California, a Democrat, told CNN. “There’s reason for grave concern if you care about climate and the environment.”
What are the limits of permitting reform?
Federal permitting reform 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.
Clint Plummer, the CEO of New York-based offshore wind company Rise and Light Power, said most federal delays come from lack of staffing. But on the whole, federal agencies “tend to be very professional and very good at what they do.”
“My experience has been the biggest challenges facing offshore wind are not the federal permitting challenges,” Plummer said. “[They] tend to be the state and local approvals necessary for landing cables and connecting to the grid.”
Plummer added most offshore wind projects have either faced significant delays or mounting costs to obtain these approvals for cable connections or transmission rights and said wind companies must work hard to be engaged in the local communities that have “a lot of power to delay, or in some cases, kill projects.”