Permitting Reform And The Green Agenda
The debt ceiling agreement recently signed by President Joe Biden as the Fiscal Responsibility Act (FRA) included significant reforms to the system of federal permits needed to approve projects under the National Environmental Policy Act of 1969 (NEPA).
Last September, the Bipartisan Policy Center, founded in 2007 by former Senate majority leaders Howard Baker, Tom Daschle, Bob Dole and George J. Mitchell, wrote, “Due to the amount of time, effort and interagency coordination involved in the creation of an Environmental Impact Statement (EIS), or even a briefer Environmental Assessment (EA), NEPA reviews can significantly delay project delivery and increase the costs of infrastructure projects even when an agency ultimately concludes that a project will have no significant environmental impact. … With the urgent challenge of achieving net-zero emissions by 2050 in mind, we must prioritize building the clean infrastructure required to achieve that goal as quickly as possible and without sacrificing any environmental standards.”
Faster approval of big infrastructure projects is necessary for President Biden’s green energy agenda. The White House wants to speed up permitting for critical electric transmission infrastructure. The electric grid needs a rapid and significant build-out to serve the number of electric vehicles Biden says he wants on the road by 2030. Offshore wind projects, another part of Biden’s green infrastructure agenda, also need faster permitting.
The White House wants to encourage states to speed up their own permitting processes of federal projects; accelerate development of hydrogen and carbon dioxide infrastructure; and protect clean-energy developers who want to use old brownfield sites from claims resulting from prior use.
A key part of the FRA specifies that within 18 months, the North American Electric Reliability Corporation (NERC, responsible for ensuring the reliability of the electric grid), regional grid operators and transmission utilities must conduct studies of transfer capacity between different regions. Those studies are supposed to lead to a recommendation to Congress from the Federal Energy Regulatory Commission on ways to encourage building out interregional transmission links. That could take a couple of years, at least.
This falls far short of what energy producers wanted—a measure that would have required U.S. electricity regions to have the capacity to transfer at least 30 percent of their peak electricity demand between each other. The grid industry also wanted fewer barriers to siting new transmission projects and “judicial reform” to lessen the chances of those projects being challenged in court.
Anne Bradbury, CEO of the American Exploration and Production Council, an energy producer group, welcomed the permit reform measures but said, “This bill sets the stage for more comprehensive permitting reform and is a positive step toward modernizing our permitting system and streamlining the bureaucratic process, which has been holding back America’s ability to build energy infrastructure for decades.”
Permitting reform has been pursued by manufacturers and the energy industry for decades. As usually happens with compromises, the measures in FRA didn’t make either side completely satisfied. But it’s significant that they happened at all.
Green energy proponents have realized that the same kinds of bureaucratic slow-walking and lengthy permit reviews that are useful in stopping or delaying fossil fuel projects can also keep green infrastructure from happening. That realization has apparently led to a quiet convergence of interests in speeding up environmental permitting between two groups that are usually at loggerheads. That may be the real story here.
