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Post-Climate Bill Permit Plan Aims to Fix ‘Hindering’ Process

July 29, 2022, 5:05 PM

Senate Democrats are eyeing a fall stopgap funding measure to carry provisions addressing federal permits for energy development—changes that could require setting permitting project timetables as well as smoothing out right-of-way conflicts on federal land, a person involved in the negotiations told Bloomberg Law.

Alex Herrgott, who provided technical assistance during the White House and congressional negotiations, said Sen. Joe Manchin (D-W.Va.) and Senate Majority Leader Chuck Schumer (D-N.Y.) have discussed a number of themes aimed at improving permitting. The senators’ agreement to seek to pass a provision to broaden the use of existing tools to sharpen the scope of federal permitting is separate from the deal announced Wednesday on a broad climate and tax package.

Manchin and Schumer agreed during their discussions on the usefulness of the Federal Permitting Improvement Steering Council (FPISC), which brings agencies together early in the permitting process to coordinate their work and avoid surprises that may crop up later, said Herrgott, who led the office under President Donald Trump and is now president of The Permitting Institute, a pro-development organization.

But FPISC’s services—which are voluntary—are generally only available to large projects that carry a price tag of at least $200 million and involve multiple agencies. Schumer and Manchin have discussed provisions that would require agencies to flag major infrastructure projects that may not qualify for FPISC and attach permitting timetables to them, similar to what FPISC now does, Herrgott said.

Agencies would also have to resolve disagreements due to regulatory overlap across agencies, carry out their reviews concurrently instead of sequentially, and publicly defend and explain their missed permit completion targets, he said.

Those types of principles are similar to the ones included in a Trump-era policy known as “one federal decision,” which holds agencies to fixed deadlines under the auspices of one lead agency. But that policy only applies to Department of Transportation projects, and Manchin and Schumer have discussed expanding it to all sectors, Herrgott said.

A Manchin spokeswoman didn’t confirm details of the conversations. Schumer’s office didn’t immediately respond to a request for comment.

Right-of-Way

Another theme of the discussions is language that addresses right-of-way conflicts for energy projects on federal lands, Herrgott said.

Several renewable energy transmission lines have been blocked by court decisions revoking their rights-of-way through wildlife refuges and other federal lands. Critics of the current permitting process said those moves have scared off investors and scuttled projects.

Manchin and Schumer also discussed prioritizing streamlining reforms for projects of national importance in the energy sector, Herrgott said. The program would seek ways of weeding out duplication across multiple agencies, prioritizing agency resources, and quickly resolving inter-agency disputes, he said.

Those projects will likely include ones that are worth more than $500 million, meaning big energy hubs, solar arrays, and offshore wind farms that are extremely complicated and require dozens of decisions to be made at the federal, state, and local levels, according to Herrgott.

Tracking Timing

The lawmakers have also discussed requiring FPISC and federal agencies to more accurately track permitting times. They would like to cut out ways in which regulators can currently game the system by, for example, only starting the clock after months of preliminary work has been done, or pausing projects at any time and blaming delays on the developer, Herrgott said.

Those kinds of tactics can create the illusion that agencies are more efficient than they actually are to “get around deadlines and overall decision accountability,” he said.

Another concept Manchin and Schumer have discussed is the creation of a corps of national program coordinators within every resource agency—including the Interior Department, the US Army Corps of Engineers, and the Department of Transportation—to iron out conflicts with regional field offices.

That element would be aimed at eliminating cases in which field offices prioritize projects that don’t reflect what developers can actually build, Herrgott said.

Counting on a CR

Schumer told reporters Thursday that the lawmakers, along with House Speaker Nancy Pelosi (D-Calif.), have agreed that “we would try to get” the permitting provision in a continuing resolution—a stopgap spending measure to fund the government if regular appropriations bills aren’t passed before the end of the fiscal year on Sept. 30.

The permitting provision “has a few good things in it, you know, there’s some kinds of permitting that get in the way of clean energy as well,” Schumer said. But he indicated there also may be “things that I wouldn’t like.”

At a separate news conference Thursday, Manchin declined to provide details, but said the permitting process “has been hindering us to produce energy we need to be self-reliant.” He said he hopes the Mountain Valley Pipeline—which would send natural gas from his state to Virginia—would be “top of the heap” for permitting approval.

The emergence of a separate agreement to deal with permitting troubled some Democrats and environmental groups. House Natural Resources Chair Raul Grijalva (D-Ariz.) said he was “concerned that the deal’s promise of ‘comprehensive permitting reform’ is just another euphemism for gutting our most foundational environmental and public health protections, like the National Environmental Policy Act.”

But Sean McGarvey, president of North America’s Building Trades Unions, said he was “extremely pleased to hear of the positive substantial conversations taking place in the permitting space.”

NABTU’s members “have repeatedly urged policymakers to streamline and bring predictability to this process, and efforts like those announced earlier this week bring hope that reform may become a reality,” McGarvey said.

Herrgott acknowledged that any attempt to overhaul the nation’s permitting rules in Congress is bound to encounter pushback. Nevertheless, he said, the ongoing tug-of-war over permitting from one administration to the next has left project builders and investors with little certainty about how to move forward.

“Developers are putting trillions of private capital and tax dollars at risk without any assurances that, when it’s time to construct six years into the process, their project will be able to comply with constantly-evolving legal requirements,” he said.

To contact the reporter on this story: Stephen Lee in Washington at stephenlee@bloombergindustry.com

To contact the editors responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com; Zachary Sherwood at zsherwood@bloombergindustry.com