November 09, 2022

Permitting Reform after Inflation Reduction Act?

Posted on November 9, 2022 by Bill Brownell

U.S. Capital building exterior

On October 12th, the Biden Administration announced an “Action Plan” to accelerate infrastructure development following enactment of the Inflation Reduction Act (IRA) [New Action Plan].  This followed extensive discussion of a permitting reform proposal drafted by Senator Manchin in connection with IRA, in order to accelerate the permitting process for infrastructure projects. And it came a day after an October 11th letter that Senator Manchin sent to the White House regarding steps to address backlogs in permitting and approvals for energy projects [October 11, 2022 Manchin Letter].

Transition away from fossil fuels to a “new energy economy” requires building new and updating existing infrastructure. This new infrastructure will include new transmission lines, energy storage facilities, pipelines for energy resilience, and renewable generation.  The Inflation Reduction Act, of course, allocates significant resources to encourage the development of such facilities.  However, money alone is not enough to promote this energy transition.  Permitting reform is needed to accelerate the implementation of these projects.  The exact shape and content of any such reform, however, remains contentious.

The Biden Administration’s action plan highlights “lack of data, lack of technology, and a need for greater capacity” as key road blocks to accelerating the development of needed infrastructure.  In an attempt to side-step controversy associated with permitting reform, however, the action plan simply catalogues guidance and training activities that are or could be taken by the federal government, states and the private sector, including technical guidance, project tracking and workforce development. Description of status quo activity and possible guidance and training activities is not a recipe for progress.

By contrast, Senator Manchin’s draft permitting reform bill would tackle politically sensitive topics related to the scope and pace of permitting activities. These topics include setting deadlines for NEPA reviews and environmental assessments for major energy and natural resource projects, coordination of project review among agencies, a dispute resolution mechanism for project disagreements, and time limits for judicial challenges.  In his October 11th letter to the White House, Senator Manchin emphasized that permitting agencies must be appropriately staffed and that clarifying the scope of Clean Water Act review will be needed.

The permitting reform discussions to date suggest certain shared interests that could provide a starting point for further discussions. For example, there is little disagreement that permitting agencies should be appropriately staffed, that agencies coordinate environmental reviews, and that the permitting process be completed within a reasonable time frame.  While other, more controversial issues–such as the scope of Clean Water Act jurisdiction and substantive NEPA review–must be addressed if real progress is to be made, the fact that the Manchin permitting reform text had not only opposition but also support from elements of both political parties gives reason for hope. Perhaps there is a message here: permitting reform will not be easy, but compromise may be possible. With a new Congress being seated in the coming year, one can only hope there will be opportunities to explore consensus.