Two fossil energy state senators, Joe Manchin (D-West Virginia) and John Barrasso (R-Wyoming) recently introduced the Energy Permitting Reform Act of 2024. According to the Bipartisan Policy Center, the bill considers energy affordability, clean energy supply chains, emissions reductions, and enhances project certainty. The bill includes provisions for judicial review, leasing on federal land, renewable energy on federal land, mining, LNG, transmission, geothermal, hydropower, and drilling permits. I will summarize below.
Judicial Review
Current law
allows lawsuits to be filed for up to six years after an agency gives final
approval for a project. The new bill would shorten this period to 150 days, or
about 5 months. The goal is to shorten the ‘legal limbo’ period. Currently, transportation
projects have a 2-year window for lawsuits. A 2023 GOP bill proposed a 90-day window.
This provision would shorten that legal limbo window and the regulatory uncertainty
that accompanies it by about 93%.
Another judicial
review provision in the bill is the ‘Deadline on Agency Remand,’ which sets a
deadline for a remand, which is when a court sends a decision back to an agency
for further consideration or when a judge vacates a permit, not to exceed 180
days (six months). Currently, there is no deadline for this at all. A third
judicial review provision is ‘Expedited Review.’ Which requires courts to
prioritize cases involving energy or mineral permitting. These provisions are
expected to modestly shorten permitting times.
Leasing on Federal Land
Changes for onshore
oil & gas leasing, coal leasing, and offshore oil and gas leasing are
included in the bill. For onshore leasing, the bill requires:
“…that before
the secretary of the interior approves wind or solar development on federal
land, at least 50% of the chosen acreage nominated for leasing (or at least 2
million acres, whichever is less) must have been offered for oil and gas
leasing in the previous year. This provision is meant to ensure that DOI does
not favor one resource over others.”
The bill would also speed up permit application reviews
for coal leases and would require a final decision to be made within 90 days of
the completion of an environmental review. Then the DOI would have “30 days
after the issuance of the record of decision to determine the fair market value
of the coal proposed to be leased.”
The provision
for offshore oil & gas would require an oil and gas lease sale of at least
60 million acres in the Gulf of Mexico every year between through 2028. Current
lease sales are scheduled every two years and the Biden administration has arguably
slow-walked and delayed the sales that were already scheduled.
Renewable Energy on Federal Land
There are four
provisions for renewable energy on federal land. The first simply raises the
goal of renewable energy capacity on federal lands from 25 GW (achieved in 2024)
to 50 GW. This number acknowledges that solar is set to continue booming while
onshore and offshore wind limp along as well. The goal did not stipulate a date
but did stipulate that is be no later than 2030.
The second renewable
energy provision sets application timelines for renewable projects requiring a
right-of-way on federal land. These include timelines to determine whether an
application is complete (presumably this is so courts can’t long-delay a
decision and then say your application was not complete so you must change and
resubmit), to issue a notice of intent (NOI) for projects that require an
environmental impact statement, to issue a cost recovery agreement, and to
issue a right-of-way.
The third
provision requires geothermal lease sales on federal lands annually instead of
every two years. The fourth provision requires offshore wind leases of at least
400,000 acres, annually instead of every two years.
Mining
There is one
mining provision in the bill. This involves a 2023 decision that disallowed
ancillary mining activities such as waste disposal, storage, and processing at
mining claim sites regardless of whether minerals were discovered there or not.
According to the Bipartisan Policy Center:
“Mill Site Claim (Section 210): Modifies the
requirements for a “mill site” so that mining projects can use them for
ancillary activities on federal mineral and nonmineral lands. Currently, mill
sites are allowed only on nonmineral lands. This fix will allow mining projects
to incorporate mill sites into their plans in a way that is economical for
projects and does not require them to cart away rubble long distances from
mining sites. Federal revenues from mill sites would be deposited in the
Hardrock Mining Reclamation Fund.”
Liquified Natural Gas (LNG)
The LNG
provision relates to the current Biden administration pause that was un-paused
by a court recently. I believe the pause was based on considering bad science
in terms of upstream methane emissions and LNG life cycle emissions. Again, the Bipartisan Policy Center explains:
“LNG Application Decision Deadlines (Section 601):
Requires the secretary of energy to make a yes or no decision on whether LNG
export applications are in the public interest within 90 days of the
publication by FERC of final environmental review documents. This same timeline
applies to re-exports of pipeline natural gas as LNG from Canada or Mexico. The
extension of previously approved LNG export or re-export authorizations would
also be subject to a 90-day decision timeline, in this case from the time of
application. If the secretary fails to either approve or reject an application
within 90 days, the application will automatically be approved. This sort of
“deemed approval” process has historically been controversial in cases
involving environmental review documents for projects that can take time to
analyze and prepare. Under this legislation, however, the timeline starts only
after the completion of a full environmental review for the project.”
Transmission
There are five
transmission provisions in the bill. Since approval for multi-state
transmission projects can take more than 10 years, there is clearly a need to
speed up approvals. The bill simplifies FERC’s ability to issue transmission permits
that are considered to be in the public interest and changes the way public
interest is determined. This provision alone could shorten permit approval
times by two to five years. Large projects that reduce congestion and improve
reliability should be prioritized by being rewarded with a less cumbersome regulatory
process. This seems realistic to me as some of these wait times are over a
decade and that does not include the time it takes to build them.
The Interregional
Transmission Planning provision requires neighboring transmission planning
regions to coordinate on planning. This is something that should already have already
been implemented. They would have to submit plans every four years with FERC
resolving disputes and assuring compliance. The goal is to better optimize
power use efficiency in those marginal areas.
The Cost Allocation
provision seeks to fairly allocate costs for customers on the basis of a single
standard. Currently, different transmission authorities use different
definitions of transmission benefits in their cost-benefit evaluation. The use
of a single ‘transmission benefits standard,’ should make things fairer according
to the bill. The Bipartisan Policy Center explains what is included as the transmission
benefits:
“The bill requires the following minimum list of
transmission benefits: improved reliability, reduced congestion, reduced power
losses, greater carrying capacity, reduced operating reserve requirements, and
improved access to lower-cost electricity generation. These are the widely
agreed upon core economic and reliability benefits and do not include the
climate-related benefits that often cause disagreements across regions, such as
reduced cost, to achieve a state’s renewable portfolio standard.”
The Lead
Agency provision makes FERC the lead agency to conduct environmental reviews of
transmission projects that are subject to the National Environmental Policy Act
(NEPA). This is a practical provision. FERC sites these projects and is considered less political than the DOE since it is composed of a bipartisan group
of commissioners.
The Categorical
Exclusions for Certain Transmission Activities provision is concerned with excluding
certain transmission projects. Projects under DOE currently have such
categorical exclusions but those under DOI and USDA do not. This provision would
extend those exclusions to the DOI and USDA which are more often in need of
them. This is another practical common-sense provision. The Bipartisan Policy
Center recommended sharing relevant categorical exclusions across agencies in a
recent report.
The last transmission
provision is the Reliability Assessments provision
“Reliability Assessments (Section 501):
Requires the North American Electric Reliability Corporation to evaluate and
report on the impact of federal agency proposals on grid reliability if FERC
identifies that an agency’s proposed rule would potentially violate reliability
standards. The report must identify adverse effects, suggest mitigation
strategies, and include input from transmission organizations. It must also be
published and submitted to FERC and the proposing agency’s public docket.”
Geothermal
There are two geothermal provisions. Since
most geothermal projects are on federal lands in the Western U.S., they have
always been subjected to long NEPA reviews. The goal of the provisions here is
to adopt some categorical exclusions to speed up the process. The Geothermal
Categorical Exclusions provision directs DOI and USDA to create these categorical
exclusions. One goal of this provision is to add parity to oil and gas categorical
exclusions.
The Streamlined
Geothermal Permitting Process calls for the DOI to “establish a streamlined
permitting process for the simultaneous consideration of several phases of
geothermal projects, including surface exploration, geophysical exploration,
drilling, and the construction of power plants. To ensure an agency possesses the
staff resources needed to complete reviews, the legislation directs DOI to
establish a process by which applicants cover the costs associated with the
geothermal permitting process.”
Hydropower
The Construction
Timeline Extension provision is the only hydropower provision. It permits FERC
to approve requests from licensees to extend for four years the period
during which construction must commence for certain hydroelectric projects. Currently,
they have 8 years to start construction after a license is issued.
Drilling Permits
There are two
drilling permit provisions in the bill that pertain to oil, gas, and geothermal
drilling. The first, the Removes Requirement for Federal Oil and Gas Drill
Permits on Nonfederal Land provision does just that for land that is less than
50% owned by the federal government. This is meant to clarify whether a state or
federal permit is required. State permits generally take less time and have
fewer stipulations.
The Geothermal
Drill Permits Application Deadlines provision requires a completed geothermal
permit to drill on federal land to be approved, denied, or deferred within 30
days of being submitted.
Yeas and Nays
The Bipartisan
Policy Center supports the bill:
“This bipartisan, all-of-the above energy permitting
reform legislation would be a meaningful step forward for the buildout of
energy infrastructure in America. The benefits from doing so are large.
American families, businesses, hospitals, and schools all need affordable and
reliable energy. At the same time, the nation must reduce greenhouse gas
emissions.”
From what I
can see, this bill helps speed up permitting for most types of energy projects,
both fossil energy and renewable energy projects. It should be widely popular, and
any backlash is likely to be from predictable detractors. These are mostly commonsense
provisions. Others disagree. Earthjustice referred to it as an “egregious
attempt to fulfill the wishlist of the fossil fuel industry, which is laid out
in the Heritage Foundation’s Project 2025, under the guise of promoting
renewable energy and developing transmission infrastructure.” From what I
can see I disagree with that assessment. A joint letter from 360 environmental
groups was concerned about it using outdated climate science and ignoring environmental
justice. I don’t think either of these is a good argument to dis such a
commonsense bipartisan bill. Nonetheless, they wrote in their letter:
“This legislation guts bedrock environmental
protections, endangers public health, opens up tens of millions of acres of
public lands and hundreds of millions of acres of offshore waters to further
oil and gas leasing, gives public lands to mining companies, and would defacto
rubberstamp gas export projects that harm frontline communities and perpetuate
the climate crisis.”
Another group said that it “silences community voices
by further eroding the National Environmental Policy Act.” Certainly, it
would shorten the timelines between proposing, permitting, and receiving
approval of projects. That is something environmental groups have opposed
directly with their goals of delay. Delay is not as good as deny but
nonetheless, it is a stated goal of many environmental groups and one reason why
projects take so long to get from proposal to in-service. It’s as if this
practical and seemingly fair bill to speed up permitting has ruffled some
feathers. Instead of praising the bill’s ability to speed up clean energy
projects it chooses to focus on opposing the bill’s similar speed up of fossil
fuel permitting. Timelines should be speeded up for all projects and
opportunities to slow down projects should be limited. Most of these projects
are clearly in the public interest and should have some prioritization. Thomas
Catenacci writes in an article for the Washington Free Beacon that green energy
industry associations such as the American Clean Power Association and American
Council on Renewable Energy have endorsed the legislation. Most Democrats
supported it in committee with a final vote of 15-4. One should perhaps ask why
these environmental groups strongly oppose something with popular bipartisan
support and wide green energy industry support. These environmental groups seem
more interested in using permitting to favor only green energy but
simultaneously punishing fossil fuels as well as making the rules different for
each energy source. Unnecessary delays are also caused by unnecessary redundant
permit requirements from different federal agencies. Catenacci notes that
nearly a dozen energy-permitting reform bills have failed in recent years. Will
this be the one to pass? I think it could. Catenacci notes that Thomas Hochman,
a policy manager at the Foundation for American Innovation, said in an
interview: "A lot of the environmental left, particularly the green
lobby, cares more about sticking it to Big Oil than it does about actually
driving global decarbonization." I agree and I think that being in problem-solving
mode is better and more useful than being in revenge mode.
References:
‘They
Basically Oppose Everything’: Green Lobby Takes Hard Stand Against Bill Fast-Tracking
Green Energy Projects. Thomas Catenacci. Washington Free Beacon. August 1,
2024. 'They
Basically Oppose Everything': Green Lobby Takes Hard Stand Against Bill
Fast-Tracking Green Energy Projects (freebeacon.com)
US
energy reform bill a ‘wishlist for the fossil industry’, say environmental
groups. The Guardian. July 31, 2024. US
energy reform bill a ‘wishlist for the fossil industry’, say environmental
groups | Fossil fuels | The Guardian
US
Energy Reform Bill Is a ‘Wishlist’ for Fossil Fuel Industry, Environmental
Groups Say (Maria). WhoWhatWhy Editors. WhoWhatWhy. August 1, 2024. US
Energy Reform Bill Is a ‘Wishlist’ for Fossil Fuel Industry (msn.com)
The
Energy Permitting Reform Act of 2024: What’s in the Bill. Xan Fishman, John
Jacobs, Daniel Elizalde, and Lori J. Pickford. Bipartisan Policy Center. July
30, 2024. The
Energy Permitting Reform Act of 2024: What’s in the Bill | Bipartisan Policy
Center
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