Permitting Reform to Put New Energy Funding To Use
On Sunday, August 7, the U.S. passed new legislation that provides $370 billion dollars for a wide variety of technologies in the energy and climate sector, including renewable energy, carbon capture, and electric vehicles. The House of Representatives is expected to pass this legislation tomorrow, Friday, August 12, so it may soon be enacted into law.
The strange thing about this huge spending on new energy sources is that high energy prices already promise financial rewards to anyone who can build the new energy infrastructure America needs for more reliable, affordable, and secure energy supplies. Unfortunately, these power-lines, pipelines, and clean energy projects are being held up by our sluggish permitting system. To put its new spending to good use, Congress must adopt permitting reforms that will make it easier to build America’s future energy system.
Our energy infrastructure is aging because it is simply too difficult to build new energy projects. More than half of American crude oil pipelines were built before the National Environmental Policy Act, which mandates lengthy environmental reviews was adopted in 1970; they are more than 50 years old. The nation’s largest grid manager, PJM, recently requested a two-year pause before adding any new solar projects because of how far behind it is in updating its grid to accommodate new energy sources. Opponents of new energy sources are finding more and more ways to ensure that new projects cannot get built.
Much of the massive new funding for energy will be in vain if projects cannot get the approval they need to begin construction. In the run up to the legislation, lawmakers and the media often cited models showing the bill would reduce U.S. emissions 40% by 2030. But although studies find that the average new transmission project takes over ten years to complete, these models “assume many of these projects will be built” in the next seven years to bring more renewable energy to the grid.
The good news is that, in return for supporting the energy spending bill, Senator Manchin reportedly received a commitment from Senator Schumer and Speaker Pelosi to support a bill to speed permitting for energy projects. The bad news is that the outline of the permitting bill released by Senator Manchin’s office does not yet specify serious steps to speed permitting. For example, it would “set maximum timelines for permitting reviews, including two years for National Environmental Policy Act reviews for major projects.” If accomplished, this would be a huge improvement over the current system where, as I explain in this video, National Environmental Policy Act average over five years.
The problem is that simply telling the federal government it has a two year deadline for its review will not accomplish much because the federal government routinely misses such deadlines. And courts could still strike down the review if they believed it was rushed or incomplete.
The key to watch is whether an emerging compromise imposes hard limits on courts and states’ ability to slow down federally-approved energy projects. In the past, I have proposed that if the federal government has approved a project, and more than five or six years have passed since the government began considering it, the courts should no longer be able to prevent the project from beginning construction. (Proposal is at pp. 304-305.) I defended that position in the Congressional testimony below. (My five-minute testimony starts at 49:28.)
If Senator Manchin’s permitting bill doesn’t take real steps to speed up permitting, it will be an important missed opportunity to build a better energy future.