Why is permitting modernization a hot topic?
The need for permitting reform is a discussion that has closely followed discussions around the need to modernize our infrastructure. Energy industry executives, government officials, and even renewable energy producers agree that infrastructure is critical to unleash American energy – and we need to reform and modernize our permitting regime in order to make that happen.
A legislative push last year to streamline federal permitting approvals, led by Senator Joe Manchin (D-WV), was part of the Senate’s consideration of the Inflation Reduction Act (IRA). While it fell short, it proved genuine political will in Congress to revise the process.
There are also encouraging reports recently that the Chairman of the House Natural Resources Committee, Bruce Westerman (R-AR), and both West Virginia senators, Democrat Joe Manchin and Republican Shelley More Capito, are coordinating a renewed bipartisan effort to enact permitting reforms. Cathy McMorris Rodgers, the chair of the House Energy & Commerce Committee has also made permitting reform a top priority.
Why is permitting reform important for economic and energy security?
American families are still grappling with persistent inflation and our allies abroad are just now calculating the tremendous cost of geopolitical chaos driven by a prolonged energy crisis. Both the easing of domestic inflation and America’s ability to address global security concerns would be greatly improved by the quicker and freer movement of US based energy sources within our borders.
According to the government’s own data, infrastructure projects take years just to secure approval of an Environmental Impact Statement, a document that runs an average of 600 pages. This is just one step in the federal environmental review process.
Such long delays can discourage investment and open worthy projects to frivolous litigation, which also increases the time it takes to get a project underway.
Modernizing federal rules and requirements to obtain environmental or other construction permits means quicker approvals, increased levels of confidence among financial backers, all resulting in the faster movement of energy where it is needed most. This will even benefit allies overseas as the US has become the world’s leading LNG exporter and American producers supplied half of Europe’s liquefied natural gas in 2022 to help alleviate the cut off of Russian oil and gas.
What specific solutions does AXPC support?
Meaningful permitting reforms that support expanded American oil and gas development means Congress must clarify provisions in multiple statutes, including the National Environmental Policy Act (NEPA), the Energy Policy Act of 2005, as well as the Mineral Leasing Act, the Clean Water Act, and the Endangered Species Act. AXPC supports changes to these laws so America’s abundance can be unleashed and speedily moved wherever it is needed.
AXPC’s recommendations are intended to provide specific suggestions to streamline and clarify the permitting process so that companies can understand what is expected of them, and when.
For instance, NEPA must be modernized to ensure Congress’s intent in previously passed laws is acted upon by agencies and that environmental review for drilling projects be conducted at the leasing stage to prevent trivial delays further in the process. The NEPA review process should make it easier to obtain Authorizations for Permits to Drill (APDs) and should not be misused as a basis for endless litigation.
Congress should also make clear that the Mineral Leasing Act cannot be used as a cudgel to defer oil and gas lease sales, and should ensure agencies are conducting regular, quarterly sales as prescribed by law. Permits for APDs, as well as for private projects intermingled with the federal mineral estate, should be streamlined to ensure quicker approval. Congress must ensure that consultations under the Endangered Species Act and Section 401 of the Clean Water Act are applied fairly and not used as regulatory roadblocks.
Why does progress depend on bipartisan cooperation?
Not only are the House and Senate controlled by the differing parties, control within each chamber is also very tight. Democrats control the Senate 51-49 and Republicans control the House 222-213, a close single-digit vote margin. Any successful legislation in the current Congress requires bipartisan cooperation.
The split 47-47 Senate vote on Sen. Machin’s permitting reform bill shows there is a revised effort could succeed this year, if a version is created with enough changes to garner support for passage. The new GOP majority in the House has already voted to lift restrictions on oil and gas, so moving legislation to open up the construction of energy infrastructure through meaningful permitting reform could face smoother sailing.
Interestingly, a California Democrat, Rep. Scott Peters, has signaled strong support for significant changes to how energy projects are approved by federal regulators. “He is fast to rattle off facts and figures,” reports E&E, “the number of years it took to build the last tranche of miles of transmission line, and the urgency with which the United States must complete the next.” Many House Democrats will be eager to advance permitting reform to speed approval of renewable energy projects.
Why is permitting reform something President Biden should support?
The recently enacted Inflation Reduction Act ties the success of renewable energy projects directly to the issuance of federal leases for oil and gas projects. President Biden has hailed the new law as a historic win on climate policy. But since 2021, his administration has promulgated numerous regulatory actions and proposals guaranteed to discourage production of domestic American energy – and not just oil and gas. These include overly-aggressive interpretations of how to apply NEPA, proposed changes to Methane rules, onerous SEC climate disclosure rules, restrictive Waste Prevention Rule changes, and harmful changes to FERC’s pipeline certification process.
Between his administration’s new regulatory restrictions, his promises to Europe’s leaders to increase US LNG flows, and the endless chest-thumping about IRA, something has to give.
Hopefully, the President and his energy advisors are wise enough to come to the same conclusion Members of Congress on both sides of the aisle already have: Streamlining the permitting process is the best way to build the energy infrastructure our country needs.
AXPC’s Call-to-Action: It’s time for Washington to back commonsense permitting reform.
Improvements to federal permitting will increase energy supplies and decrease energy prices. They can also ensure the administration can move forward in implementing desired energy policies. The IRA was written to generously fund renewable projects, but if you cannot get the permits to construct them or connect and upgrade the electrical grid, those subsidies will be for naught.
Washington policymakers across the ideological spectrum see that more efficient permitting will reduce costs and encourage investments in a range of energy projects. The current system causes delays in the deployment of technologies and resources necessary to reduce emissions and address risks to the climate. Many oil and gas producers back the development of hydrogen, carbon capture, and other projects as a transition from using coal. Reducing regulatory burdens and cutting layers of red tape will benefit all energy infrastructure creation.
As part of a broader energy mix, American oil and natural gas production is an essential part of any successful long-term strategy to meet our security and energy needs. And, bipartisan solutions are essential, and more durable, to addressing our nation’s toughest challenges – including permitting reform.