Congress Should Adopt Long Overdue Comprehensive Energy-Permitting Reform
Why America Needs Permitting Reform: American families are still grappling with persistently high consumer energy prices and our electrical grid is being strained by increasing power demand. The easing of domestic inflation, the reliability of our power grid, and America’s ability to address global security concerns would all be greatly improved by a more efficient and predictable build out of our energy infrastructure. According to the government’s own data, it takes energy projects over four years, and often much longer, to secure approval of an Environmental Impact Statement, a document that runs an average of 600 pages. Keep in mind, this environmental review is just one step in the federal permitting process. Such long delays discourage investment and open worthy projects to frivolous litigation, which also increases the time it takes to get a project underway. And this litigation slows down projects for an array of energy types, not just oil and natural gas. According to the Breakthrough Institute, “Litigation delayed fossil fuel and clean energy project implementation by 3.9 years on average, despite the fact that agencies won 71% of those challenges.”
Benefits of Reform: Comprehensive permitting reform would modernize federal rules and requirements to provide greater clarity and consistency for federal permits and approvals, and add greater resiliency against frivolous lawsuits that plague these projects with near endless opportunity for delay. These changes would serve to increase levels of confidence among financial backers needed to make these significant investments, all resulting in the faster movement of energy to where it is needed most. Predictable rules and continuous progress on energy projects contribute to low, stable prices in energy markets. This will even benefit our allies overseas as the US has become the world’s biggest LNG exporter.
House & Senate Legislative Solutions:
In the House, Natural Resources Committee Chairman Bruce Westerman (R-AR) released a discussion draft on reforms specific to the National Environmental Policy Act (NEPA); an important step in broader permitting reforms to be taken up by the chamber. NEPA generally governs the environmental review process for federal actions and, as a result, touches on an array of energy and infrastructure projects. Historically, the NEPA process has been abused by third-party litigants that use the courts to delay these critical projects for their political and philosophical aims — impacting oil and gas development, clean energy production, and transmission and pipeline infrastructure. The discussion draft outlines critical and substantive process improvements to address NEPA litigation challenges and would promote responsible energy project development and implementation across all sources in the U.S. These much-needed judicial reforms for NEPA challenges include a standard of review that tells courts how to assess challenges to agency decisions, standing requirements to ensure challengers actually participate in the regulatory process before litigating, and limits on vacating or stopping projects that have been supported by federal agencies unless there could be substantial environmental harm.
Two bipartisan members of the Senate are advancing legislation to modernize the permitting process for energy projects. On July 31, the Senate Energy & Natural Resources Committee reported out the Energy Permitting Reform Act of 2024 by a 15-4 vote. Chairman Joe Manchin (I-WV) and Ranking Member John Barrasso (R-WY), the bill’s lead sponsors, have secured bipartisan backing for provisions to also improve the permitting process for all energy sources and strengthen American energy security.
The Manchin-Barrasso bill will accelerate onshore leasing and permitting decisions, ensure lease sales include acreage for oil and gas development, and eliminate duplicative permit requirements for oil and gas production on non-federal surface land projects. It will speed up the siting of interstate electric transmission lines and require relevant agencies to ensure greater future reliability of power generation. The bill also sets a 90-day deadline for making a decision on LNG export applications, with projects deemed approved if no decision within 90 days.
Long Range Environmental Benefits: According to a review by the think tank Third Way, adoption of the Manchin-Barrasso bill would lead to a decrease in global greenhouse gas emissions. “Taken as a whole,” Third Way noted, “this analysis finds that [the bill] results in significant net emissions reductions, in both low and high range scenarios. Even under a ‘worst-case’ emissions scenario, whereas the highest estimates for fossil fuel-related net emissions increases are juxtaposed with the lowest estimates for transmission deployment, the bill still results in net emissions reductions by 2050.”
Tighter Review Timelines: On judicial review, both the Westerman discussion draft and the Manchin-Barrasso bill would shorten timelines before, during, and after litigation against energy projects. They would establish stricter statutes of limitation to seek judicial review of an agency action; expedite review of legal challenges; and sets similarly short deadlines for agencies to act on remanded authorizations. Together, the adjustments in both of these bills would provide greater clarity and accelerate project construction for all forms of energy and infrastructure. AXPC backs these reforms.
AXPC’s Call-to-Action: It’s time to back commonsense permitting reform.
Together, the Senate and House bills represent critical, comprehensive permitting reform, and Congress should work in a bipartisan way in the coming weeks to finalize and pass these important pieces of legislation.
AXPC support for the Senate provisions can be found HERE.
AXPC support for the House provisions can be found HERE.
Members of Congress 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 needed to reduce emissions. Many oil and gas producers view the development of hydrogen, carbon capture, and other projects as integral parts to powering America’s future. And as reliable sources for oil and gas will be needed for decades to come, cutting layers of red tape for American energy projects will support lower energy prices – and help our broader economy, national security, and environment.