While conversations on the Hill this fall have largely focused on averting a government shutdown, installing a new Speaker of the House, and other must-pass legislation, there is still an appetite from both the policy world and industry to pass bipartisan legislation focused on energy permitting reform.
In the United States, the current energy permitting process is adding years and millions of additional costs to projects we need to bring online in order to fight climate change. Nearly every major energy project with a federal review requires an Environmental Impact Statement (EIS), the most comprehensive type of National Environmental Policy Act (NEPA) review, which as of 2020, takes 4.5 years to complete on average.
Studies also show that the Inflation Reduction Act (IRA) could potentially cut U.S. greenhouse gas emissions by roughly one billion tons per year in 2030 and reduce our cumulative greenhouse gas emissions by 6.3 billion tons of CO2-equivalent over the next decade. This reduction is dependent upon our ability to more than double the historical pace of electricity transmission build-out and connect new clean energy while meeting growing demand from electrification. More than 80% of the potential emissions reductions that could be produced by the IRA in 2030 are lost if transmission buildout is limited to the historical pace.
In March, the House passed the Lower Energy Costs Act, which did include some permitting reform components. The problem: it was passed largely through a party-line vote and was deemed “dead on arrival” by Senate Majority Leader Chuck Schumer. In May, the Fiscal Responsibility Act, otherwise known as the deal successfully made to raise the national debt ceiling, included some reforms to the federal permitting and environmental review process. In particular, it further clarified the scope of NEPA, set stricter review timelines and document page limits, and included mechanisms for streamlining energy storage permitting.
Our country is in the midst of an energy transition, and there are billions of dollars for technology deployment made available through the Infrastructure Investments and Jobs Act (IIJA) and the IRA. The question is no longer whether we need to reform the energy infrastructure and transmission deployment processes – it is how we do so effectively while benefiting the economy and not leaving anyone behind.
Although Republicans and Democrats may not have identical priorities for permitting reform, it is clear that both parties recognize something must be done. More importantly, they have already proven that it can be done during the 118th Congress. Since the passage of the debt ceiling, both parties have had the opportunity to refine their legislative goals related to this topic, and there are now clear bargaining chips each side can bring to the table to craft bipartisan solutions. Both parties recognize that the conversation includes renewables, traditional energy sources, transmission, NEPA, and judicial review. In addition, we are starting to see legislative proposals focused on these pieces of the permitting and transmission conversation come from both sides of the aisle, and from House and Senate members.
Republicans have long championed the “all of the above” approach to energy policy. Because of this, they believe that the red tape that exists for energy permitting impacts all energy sources negatively, including carbon-emitting sources that are still a majority of our energy mix. Democrats have championed aggressive climate action to reach net-zero goals through emissions-free energy. Ultimately, regulatory barriers are currently holding back the deployment of all energy sources, which puts us at risk of missing the mark on climate goals, efficiently spending funds from the IIJA and IRA, decreasing reliability and affordability, and making the U.S. a place where energy companies are hesitant to bring their projects.
Republicans believe that the scope of NEPA, and other environmental protection laws, must be reevaluated to ensure they are balancing the benefits of energy deployment and conservation. They also hope to reform the judicial review process to maintain individual rights while reducing delays from meritless lawsuits and providing certainty that the processes will conclude in a reasonable amount of time.
NEPA and judicial challenges create barriers for both renewables and transmission buildout, both key Democratic priorities. In fact, renewable energy projects are consistently faced with higher litigation rates. According to a recent study, solar energy projects experience the highest rate, with nearly two-thirds facing a claimed NEPA violation – making judicial review a clear bipartisan matter. The bottom line is that transmission and pipeline buildout are needed to keep the lights on and ensure we can reliably get energy resources from point A to point B, and reducing existing barriers to that infrastructure buildout is an area where both parties can find common ground.
During a time when not much is certain on Capitol Hill, it is abundantly clear that bipartisan action is needed to improve energy infrastructure permitting in the U.S. in order to fight climate change and strengthen our economy.
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