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Federal Permitting Set for Billion-Dollar Boost in Climate Bill

Aug. 12, 2022, 9:29 AM

Permitting resources at several federal agencies would expand under Democrats’ climate-and-tax bill as part of an effort to smooth out the deployment of large clean-energy and infrastructure projects.

But the money in the Inflation Reduction Act (H.R. 5376)—which the House is expected to take up Friday—would fall short of the broader regulatory overhaul needed to meet climate goals and upgrade the US energy system, according to some who follow permitting.

To improve permitting, the bill would give $40 million to the Environmental Protection Agency, $150 million to the Interior Department, $125 million to the Energy Department, and $100 million each to the Federal Energy Regulatory Commission, Agriculture Department, and Transportation Department.

The bill also would deliver $30 million to the White House Council on Environmental Quality and $20 million to the National Oceanic and Atmospheric Administration.

Those line items—which are available through 2026 at the earliest—are meant to support activities such as hiring more permitting staff, developing programmatic environmental documents, and buying new equipment for environmental analysis.

Another provision would deliver $350 million to the Federal Permitting Improvement Steering Council to hire reinforcements who could be deployed to agencies in the field that have a sudden need for permitting staff. The council brings agencies together early in the permitting process to coordinate their work.

That funding could come into play, for example, “when suddenly the Nevada office of the Bureau of Land Management is hit with a tsunami of solar project applications and they only have 20 guys on staff and they’re overwhelmed already,” said Mario Loyola, CEQ’s associate director for regulatory reform under the Trump administration.

Better, Faster Reviews

To Stephen Schima, senior legislative counsel at Earthjustice, the funding represents a serious effort to move infrastructure projects through the pipeline under the rules that are already in place.

“We’ve long contended that you cannot streamline your way out of a lack of funding for projects and lack of resources or funding for the agencies charged with review and permitting,” he said.

The money will lead to “more meaningful engagement with communities, better reviews, better outcomes, and save taxpayer dollars in the long run,” Schima said.

To Loyola, however, what’s needed to reach President Joe Biden’s decarbonization goals is a structural reform of permitting law under the National Environmental Policy Act instead of more workers.

Congressional Republicans are trying to do that. The Senate recently approved a resolution of disapproval (S.J. Res. 55) that would claw back the Biden administration’s changes to the NEPA regulations, including language that requires agencies to take climate change impacts into account when assessing proposed projects.

Meanwhile, Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) have reached an agreement to move a separate bill later this year that would make permitting move faster by removing some of the procedural roadblocks.

“This problem isn’t going to get fixed by throwing money at it,” said Loyola, now a senior fellow at the Competitive Enterprise Institute. “The problem is structural. It’s not that we don’t have enough people, it’s that the permitting process is insane. This little potpourri of odds and ends and these little baskets of money is way too little, way too late.”

Not All Problems Solved

Lisa McDonald, a senior associate at consulting firm Abt Associates, said both Schima and Loyola make fair points.

“Will this help? Yes,” she said, referring to the additional money. “Does it solve all the problems? No.”

Several agencies have fallen behind on their permit work, and staffing reinforcements would help get applications moving through the system, according to McDonald.

At the same time, the sheer volume of renewable power that has to be brought online to meet Biden’s climate goals is “tremendous, and I don’t know how we’re going to get through all of that” without systemic changes to the permitting rules, McDonald said.

She also said agencies may struggle to hire qualified permit staff, which are in limited supply across the nation. Abt Associates is itself trying to hire people with the same types of skills, and some of those job offers have been open for months, McDonald said.

Spending money on a problem can also create new problems, she said. For example, the $350 million for FPISC is a 3,400% increase, albeit spread out over five years.

But agencies that suddenly take on a massive influx of money, with a mandate to rapidly staff up and take on new activities, often struggle with logistical challenges such as human resources and basic organizational management, McDonald said.

“When you throw money at a problem, it doesn’t always work the way you expect it to,” she said.

Range of Solutions

Staffing and resources was just one of 23 policy recommendations to speed clean infrastructure identified by a Bipartisan Policy Center report last year. Suggestions to “really move the needle,” the report said, included a mass pre-approval of project sites, competitive net-zero grants to states, and federal energy corridors.

The bill’s funding for environmental review staff is “absolutely necessary—but not sufficient,” said Xan Fishman, the center’s director of energy policy and carbon management. “It is true that I think the agencies are understaffed and under-resourced for reviewing permitting, but that’s not the only thing holding them back.”

The money for permitting marks a major shift from the American Recovery and Reinvestment Act of 2009, the stimulus plan that poured money into short-term “shovel-ready” projects during the Obama administration, said Ted Boling, a partner at Perkins Coie LLP who worked on environmental reviews and permitting at CEQ and Interior.

“Really, the challenge of the federal government writ large is to reconstitute the expertise and the management and the leadership necessary to get to big things done,” Boling said. “You can’t just throw a lot of money out there and say, ‘Get me a NEPA [review],’ and expect that can be done with efficiency.”

To contact the reporters on this story: Stephen Lee in Washington at stephenlee@bloombergindustry.com; Daniel Moore in Washington at dmoore1@bloombergindustry.com

To contact the editor responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com