States Brace for Flood of Environmental Permits as Funding Flows

A growing number of states are trying to take the pain out of environmental permitting, steeling themselves for the billions of dollars of new construction made possible by the infrastructure and climate bills.

The new efforts don’t get as much attention as Sen. Joe Manchin’s (D-W.Va.) unsuccessful bid last year to change the federal rules. But builders say permitting bottlenecks at the state level are just as vexing as federal rules, and just as capable of delaying infrastructure projects like roads, bridges, and renewable energy facilities.

State agencies issue far more environmental permits than their federal counterparts, and their workload will skyrocket as more federal funds are released. But neither the $1.2 trillion infrastructure bill (Public Law 117-58) nor the $500 billion climate law (Public Law 117-169) provides extra funding for states to do permitting work—an oversight that “could lead to permit backlogs and broken promises,” said Ben Grumbles, former head of Maryland’s Department of the Environment.

State Dashboards

In the absence of more money, some states are trying to avoid backlogs by simply getting better at making quick permitting decisions.

Connecticut, Virginia, and Michigan have all recently borrowed an idea from the federal government, launching online portals that let the public keep track of permitting deadlines and important decisions.

Aaron Proctor, a spokesman at the Virginia Department of Environmental Quality, said the idea is to help state officials “promptly respond to bottlenecks by sharing workload or assigning specialists to help when a stumbling block is encountered,” and to alert agencies and project sponsors when deadlines are coming near or have already passed, “to avoid dropping the ball.”

The new dashboards mirror the Federal Permitting Improvement Steering Council’s portal at the federal level. FPISC also brings agencies together at the start of the permitting process for very large projects, an idea that was included in Michigan Gov. Gretchen Whitmer’s recent permitting executive order.

What those states are doing “is super beneficial,” especially in big states that have big bureaucracies and diverse geographies, Christine Harada, FPISC’s executive director, said in an interview.

She also said officials from California, Louisiana, and Maine have shown interest in adopting some of FPISC’s practices of early engagement, tighter coordination, and transparency. In the meantime, the office has started working with the National Association of Counties to spread best practices at that level of government.

“My emphasis is on trying to set the right example—to say, ‘These are the kinds of things that we can drive, these are the kinds of conversations that we can have, and you guys can do that too,’” Harada said.

Hiring Surge

Other states are trying to bulk up their staff to deal with the expected uptick in work. Last summer, for example, the Vermont legislature approved a request from the state’s Agency of Natural Resources for 31 short-term positions to help with infrastructure-related projects.

“The federal funding, cheerleading, and support are all encouraging, but here’s the missing ingredient: state capacity building. It’s what will turn many of the great hopes and detailed dreams into permitted and built projects,” said Grumbles, now executive director of the Environmental Council of the States, a nonprofit group that works to improve the capacity of state environmental agencies.

State environmental agencies rely largely on federal funding, permit fees, and state general funding to run their operations. But over the last 20 years, federal funding support to states through categorical grants has only barely risen, from $1.15 billion in fiscal 2003 to $1.16 billion today, according to Grumbles.

“State efforts to improve permitting efficiencies can help, but will not alleviate underinvestments entirely,” he said. “Doing less with less is a struggle for many state environmental agency managers.”

Many states took steps to get better at permitting during the 2009 stimulus bill that poured $787 billion into the economy. But the emphasis back then was on building “shovel-ready” projects, meaning ones that were fully permitted, Grumbles said. Now it’s more on “shovel-worthy” projects, referring to ones that will help reach a policy goal, regardless of where they stand in the permitting process.

Those projects take longer to build because they have so much further to go in permitting, Grumbles said.

Multiple States

Permitting gets even trickier when multiple states are involved, according to Alex Herrgott, the former head of FPISC.

To illustrate, he pointed to the Ten West Link, a 125-mile transmission line that broke ground in mid-January. The line will connect Southern California to southwestern Arizona, meaning both states, as well as federal regulators, had to be involved in permitting.

“Ten West was spinning nine plates at the same time, working with about 12 regulators,” said Herrgott, now president of the Permitting Institute, a pro-development organization. “They put a tremendous amount of capital at risk to fight permitting battles on 10 different fronts. If any one failed, it would have been an existential risk to the project.”

Even in states that are trying to speed up permitting, the most successful projects are the ones whose sponsors take matters into their own hands, Herrgott said.

“Best practices are all well and good, but in deployment it’s incumbent on the company to recognize the unique regulatory landscape of each state and try to get as many of those decision makers involved in the process on the front end,” he said.