PERMITTING REFORM

America builds. That’s been the message from the Trump administration, and many early administrative actions have supported this ethos. But executive orders are not long term solutions — they are vulnerable to reversal under future administrations and almost always face a barrage of lawsuits that further delay projects. To provide the certainty that will encourage more building, Congress needs to step in and codify permitting reforms into law.

The Natural Resources committee reconciliation bill takes a MAJOR step in that direction. Specifically, the bill would allow builders to pay a fee in order to receive a streamlined review under the National Environmental Policy Act, better known as “NEPA”. 

Here are some items in the bill to advance America’s energy resources. More from our source (italicized and in quotations) below:

Nuts and Bolts

• This bill was worked on in consultation with the Senate, White House, and leadership in the House. Should the permitting reform provisions withstand scrutiny from the parliamentarian (more on that below), it should see little legislative changes.

• The permitting reform affects all projects — oil and gas, renewable energy, transmission lines, and every other infrastructure project that faces NEPA review.

• Permitting reform is bipartisan. Bureaucracy and litigation have slowed projects ranging from fossil fuels to renewable energy — frustrating lawmakers on both sides of the aisle. But given the legislative vehicle (reconciliation) this will likely be a party-line vote.

How the Permitting Reform Works:

• “If you have an environmental impact statement that can cost hundreds of thousands of dollars — you pay 125 percent of whatever that cost is, and you pay that into the Treasury, and then when you pay that fee, you get a couple things out of it.”

• “One, you get an EIS (environment impact statement) in one year or less, and an Environmental Assessment in six months. [This timeline significantly cuts down from the current 4 year average.]

• “And then the most important piece of it is the judicial prohibition. There's no litigation associated if you pay that fee. So you get your EIS, you can't be subject to frivolous environmental litigation.”

The Impact

• “Litigation when it comes to permitting reform is the whole ball game. And to the extent that you can keep people out of court and keep these frivolous environmental lawsuits from these groups — if you can prevent those from happening in first instance — that's gonna be the vast bulk of your problem is from those lawsuits.”

• “This [reconciliation bill] would be one of the most significant wins from a permitting reform perspective in probably a few decades, maybe longer.”

What’s Next

• “That's the tricky part of this — you're going to have to put this in front of the parliamentarian in the Senate. … Now, again, the Byrd test is that the budgetary impact can't be merely incidental to the policy you're trying to advance. So just because you have a budgetary impact doesn't get you all the way. So she [Senate Parliamentarian Elizabeth MacDonough] could look at it like, ‘Okay, well, you're paying a fee, but you guys have all this policy here. It looks to me like you're trying to advance a policy. And so maybe I'll just take this judicial review piece out of it.’”

AMERICAN ENERGY DEVELOPMENT

One of the most important policy verticals ALFA has written about is energy policy. From our very first essay, we’ve articulated how access to energy is the foundation to America’s technological success. Here are some items in the bill to advance America’s energy resources. More from our source below:

• “They are requiring more lease sales (four per year in at least nine states), onshore and offshore, for oil and gas”.

• “Lowering the royalty rate increases that were passed as part of the Inflation Reduction Act — which is effectively a tax, by raising the cost of producing on federal lands. And so they're reducing that hopefully to again stimulate production on federal land.”

GEOTHERMAL’S RISE

What stuck out to us what the specific inclusion of geothermal in this bill — receiving its own section. So we asked about that significance …

• “The technology has come a long way, and to the point where you think about geothermal, it's basically just steam heat coming from the Earth's crust, and the technology is such that it can harness that steam on a continuous basis. And so you can set up a situation where geothermal can actually provide you with a base load power source.”

• “It's a tremendous asset. Now you're seeing a lot of developers lining up and making really big investments.

• “Senator Mike Lee is a strong supporter of geothermal for the reasons we just talked about. And he's got a bill with Senator Heinrich — those guys are pretty much on opposite ends on the bookshelf, and they've got a bill that they're trying to push through to advance geothermal.”

CRITICAL MINERALS

The bill supports more production of critical minerals — specifically by approving the Twin Metals Mine that was put on ice by the Biden administration.

This project supports nickel, cooper, and cobalt production — all valuable components to the technology supply chain.

• The Twin Metals project is situated within a region that holds about 95% of the nation's nickel reserves.

• The Duluth Complex contains approximately one-third of the nation's copper reserves.

While approving specific projects that are vital to America’s technological security will bolster our resilience, we should be undertaking wholesale reforms to the permitting of mineral projects so that it doesn’t take an act of Congress to approve particular projects.