Lame-Duck Look Ahead: Energy Infrastructure Permitting Reform

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In early August, it was announced that Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-WV) had reached a deal with Congressional leaders to take up energy infrastructure permitting reform legislation in exchange for his support of the climate change and clean energy reconciliation package known as the Inflation Reduction Act.  An outline of the proposal included several provisions to streamline permitting and environmental review processes for a wide array of energy infrastructure projects.  This included a maximum 2 year timeline for environmental reviews for energy projects, a limitation on court challenges, enhanced permitting authority for transmission infrastructure, and approval of a new 300 mile natural gas pipeline running through West Virginia which had been previously blocked in court over environmental concerns.  The Inflation Reduction Act was signed into law on August 16th, and it was expected that Congress would take up permitting reform after returning from the August recess, following through on the deal struck between Manchin and leadership.

On September 21st, Manchin released the text of a comprehensive permitting reform bill what that would be known as the Energy Independence and Security Act of 2022.  The text of the legislation was expected to be included in a continuing resolution (CR) to extend government funding through the start of the 2023 fiscal year.  Manchin unveiled the bill noting his belief that the existing permitting process for energy projects “takes too long and drives up costs.” The Energy Independence and Security Act is largely consistent with the outline that had been released in August.  Provisions include a two-year timetable for environmental reviews of major projects under the National Environmental Policy Act (NEPA), a 150-day statute of limitations for court challenges to project authorization decisions, and requirements that a single environmental document prepared by a designated lead agency be utilized for project reviews and authorizations.  The bill also seeks to further boost energy infrastructure projects by requiring the President to designate 25 projects of national importance on a rolling basis, and providing the Federal Energy Regulatory Commission with permitting authority for electric transmission projects.

The Energy Independence and Security Act was met with resistance and criticism from both sides of the aisle.  Progressive Democrats raised concerns over the shortened periods for environmental review and reduced window for legal challenges.  Progressives also raised concerns over increased fossil fuel development, including authorization of the Mountain Valley natural gas pipeline in West Virginia.  Senate Republicans voiced opposition to the bill for what many felt were political reasons stemming from Manchin’s support for the Inflation Reduction Act, which passed under budget reconciliation procedures with only Democrats voting in favor.  While Manchin’s Republican colleague from West Virginia Senator Shelley Moore Capito did express her support for the bill, Capito also introduced her own permitting reform legislation makes significant changes to environmental review and regulatory processes, and seeks to codify controversial Trump era environmental regulations, including changes to NEPA and the Navigable Waters Protection Rule defining Waters of the United States.

Ultimately, the Energy Independence and Security Act was pulled from the CR over concerns it would threaten passage of the bill.  This cleared the way for the CR to pass, preventing a government shutdown, and raising speculation about whether permitting reform would be considered during the lame-duck session of 117th Congress.  Despite the setback for the bill, Senate Majority Leader Chuck Schumer (D-NY) expressed his hope to “ensure responsible permitting reform is passed before the end of the year.”

While the path forward for permitting reform remains unclear, there are options for moving at least portions of the Manchin bill.  One potential option would be an expected omnibus spending bill to fund the government through FY 2023.  Historically, these year-end bills have served as a vehicle to pass last minute legislative items before the end the Congressional session.  In 2020, for example, the Water Resources Development Act was included in the omnibus prior to the close of the 116th Congress.  However, as with the CR, including contentious provisions to a must-pass bill could derail passage, ultimately leading to a government shutdown.  The looming midterm elections may also impact passage of an omnibus, as Congressional Republicans could defer passing an omnibus until after the new year should they win majorities in the House and Senate.   A second option may be the National Defense Authorization Act (NDAA), the annual national security bill which establishes budget levels and other authorities for the military and Department of Defense.   NDAA is historically passed on a bipartisan basis after several months of often contentious negotiations between the House and Senate.  Congress has without fail passed NDAA each of the past 61 years.  This option, however, proposes its own set of challenges.  While the operation of the federal government does not hinge on its passage, NDAA is a sweeping national security bill which determines funding levels for the Armed Forces- including pay for servicemembers-, support for the defense industrial base which supports manufacturing jobs nationwide, and other key defense and foreign policy priorities.   It is not uncommon for negotiations to stall over one or two contentious provisions.  This often results in NDAA’s passage coming as one of the final actions taken by Congress at year’s end.

ASCE supports reasonable approaches to the permitting process in order to build 21st century infrastructure systems.  This includes a balanced approach to the NEPA process which streamlines permitting and approval processes, but not at the expense of science-based evaluation and determination of environmental impacts.  ASCE will be closely following the debate surrounding permitting reform during the lame-duck, and into the 118th Congress.

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