Permitting reform has become the top priority for energy and climate stakeholders across the political spectrum. Republicans have long complained it takes too long and costs too much to build in America. Democrats have realized that the same red tape conveniently slowing the progress of conventional energy projects stands in the way of the rapid deployment of renewables.
Both views are true. And thus the table should be set for comprehensive energy permitting reform, perhaps the most important pillar of energy and climate legislation remaining to be accomplished in this remarkably productive congressional run.
It started with President Trump’s Energy Act of 2020 and includes the Bipartisan Infrastructure Law of 2021, the CHIPS and Science Act and the energy tax credits in the Inflation Reduction Act of 2022, culminating most recently with the passage of targeted permitting modifications passed in the Fiscal Responsibility Act last year.
In the beginning of the 118th Congress, House Republicans passed a comprehensive permitting reform bill, H.R. 1, the Lower Energy Costs Act, as a starting point for discussion with the Senate. Now Senate leaders from both parties, retiring chairman of the Energy and Natural Resources Committee, Sen. Joe Manchin (I-W.Va.) and ranking member John Barrasso (R-Wyo.) have indicated they are working on a deal that could be completed this Congress.
Despite the enormous potential for a political breakthrough, Senate Majority Leader Chuck Schumer (D-N.Y.) recently made headlines by saying he believed permitting reform was unlikely to become law this year. Very quickly, however, leading reform advocates from both parties expressed their continuing commitment to negotiating a far-reaching bill by the end of this year.
What should we think is possible?
Despite the spin, Schumer noted his interest in securing a permitting deal and also expressed his frustration that some Republicans seemed uninterested in making compromises he believed were needed to gain a bipartisan deal.
“I think it’s going to be very hard to get anything done legislatively on transmission at this point given the composition of the House with a Republican majority and so few Republicans eager to do any kind of regional transmission,” Schumer said.
Ironically, GOP leaders have said much the same about Democrats’ recalcitrance toward negotiations on issues like needed judicial reform and authorization of additional pipelines. This suggests the table is set for a major agreement if both sides will bargain in good faith, and the pathway to a reform deal is still viable given the huge economic and political benefits up for grabs.
Recent constructive actions by the Federal Energy Regulatory Commission to help clarify and accelerate the buildout of power transmission infrastructure demonstrate how Congress will need to act for real benefits of permitting reform to reach consumers and businesses through lower costs, greater reliability and massively reduced emissions.
FERC established new requirements for long-term infrastructure planning and how the costs of building high-voltage power lines should be allocated within regions. But this is a “yes, and” situation, not a substitute for congressional action. Indeed, Sen. John Hickenlooper (D-Colo.), a leading advocate of greater regional transmission, has called the FERC action just “a Band-Aid on Congress’ inaction.”
Although the lone Republican FERC appointee voted against the measure, FERC’s actions gained support from leading Republicans. Former FERC chair Neil Chatterjee noted that with growing energy demand “we’ll be able to just get more energy onto the grid at a time that we need it,” and said he would have voted for the rule.
While this FERC action combined with the recent legislation from Congress are important planks in a modernized national energy policy, the need to unlock capital and build infrastructure requires new laws, and new thinking, on permitting. As a nation, in addition to transmission, we must deal with the key issues of judicial reform and pipeline permitting frameworks for natural gas, carbon dioxide and hydrogen.
Notably, the economic and consumer costs of the current energy permitting paralysis are invoked by advocates on the left and right as an urgent reason for action, including the costs of complying with the National Environmental Policy Act requirements, which routinely takes many years. Recent Biden administration actions could lead to some wide application of categorical exclusions to speed NEPA compliance, but have proved highly controversial with Republicans and Manchin, and will not resolve more fundamental problems, as judicial review would.
In some ways, the current state of affairs is not dissimilar to the period in 2021 when cynics insisted that passing a bipartisan infrastructure bill was impossible in such a divided Congress. At the time, the Bipartisan Policy Center noted a deal was possible, and we see the same possibilities again today.
Against the odds — and conventional wisdom — Congress ultimately passed a bipartisan infrastructure deal that has benefitted the economy and consumers while producing tens of thousands of jobs and then followed it with the CHIPS and Science Act on a bipartisan basis.
We largely have a bipartisan agreement on substance. There is also a compelling argument to act quickly while there is strong interest from key leaders in Congress and the administration.
Republicans can say they accomplished a reform goal they have advocated for decades: cutting long-term energy prices and business costs. Democrats can note that union jobs will be created, greenhouse gas emissions will be reduced and clean energy opportunities will increase. And with a potentially complex political environment looming in 2025, both sides should seize the opportunity now.
Conventional wisdom in Washington today holds that the prospects for an agreement are better after the next presidential term begins. But recent history does not necessarily support this thinking. No matter the election outcome, thin margins in Congress are likely and partisanship against even a freshly elected president remains high. And remember that the Energy Act of 2020 was signed during the most recent lame-duck session.
There is still time to produce a bipartisan energy permitting reform deal to cut costs for consumers, enable the next wave of clean projects to proceed smoothly and boost the economy. The time is right, and so are the politics.
Sasha Mackler is the executive director of the Energy Program at the Bipartisan Policy Center.