Today’s Key Takeaway: “The current reliance on obstructionism empowers wealthy NIMBYists, the politically connected, and lawyers rather than marginalized communities. This is an opportune moment for a policy realignment around energy abundance and climate progress that focuses on building rather than blocking.”
Time for Big Tent Permitting Reform
Nick Loris, C3, October 5, 2022
When hurricane Fiona ravaged Puerto Rico and knocked out power, the island was in desperate need of fuel to power generators for critical infrastructure like hospitals. A ship with 308,000 gallons of diesel idled close by, ready to offload the fuel. But there was one big problem. The ship did not have the legal authority to dock. The vessel was sailing under the flag of the Marshall Islands, and a law that dates back more than a century says that any good shipped between two U.S. ports must be done by a ship that is built in America, sailing under the American flag, and operated by Americans.
Fortunately, the Biden administration granted a Jones Act waiver, albeit a few days late. Nevertheless, the Jones Act represents a much broader systemic problem facing the United States that harms consumers, innovators, and the environment. Getting permission is hard to come by.
In the energy sector, companies have been stymied trying to secure permits to build transmission lines, pipelines, small modular nuclear reactors, wind farms and much more. Recognizing that antiquated processes are obstructing energy supplies and environmental progress, a broader coalition is coalescing around the need for comprehensive permitting reform. Policy voices on the left and the right have stressed the need for change. In fact, both the Center for New Liberalism and The Heritage Foundation have made the case for abolishing the National Environmental Policy Act (NEPA).
The current reliance on obstructionism empowers wealthy NIMBYists, the politically connected, and lawyers rather than marginalized communities. This is an opportune moment for a policy realignment around energy abundance and climate progress that focuses on building rather than blocking.
What, then, should comprehensive permitting reform look like? Despite permitting reform being Senator Joe Manchin’s top priority, his legislation failed on both process and substance. Politics and policy got in the way. When policymakers go back to the drawing board, the process should be inclusive, and the policy must be comprehensive. Should a Jones Act repeal be part of the discussion? Absolutely. The Jones Act prohibits the delivery of cleaner natural gas to Boston, complicates offshore wind installation, and increases congestion on the roads, causing higher emissions.
Earlier this year, the running joke was that everything was infrastructure, even if it wasn’t infrastructure in the traditional sense. That’s why many businesses and special interests wanted a slice of the spending pie. Permitting reformists should borrow a page from that playbook. Everything should be permitting reform because there are many antiquated laws and regulations that require modernization.
There’s no shortage of good ideas to make our economy function better. Even the Manchin bill had several provisions that would move the needle in the right direction. Alec Stapp, co-founder of the Institute for Progress, listed several notable improvements including time limits for environmental impact statements and environmental assessments (and making them easier to amend), better data collection and putting hydrogen on equal footing with natural gas.
Perhaps the biggest flaw of the bill is what’s not in it. The legislation failed to fix litigious activists from holding up projects for years in courts. True permitting reform should focus on environmental protection and outcomes rather than vague, subjective processes that are often left to the courts. Senator Shelley Moore Capito’s (R-WV) Simplify Timelines and Assure Regulatory Transparency (START) Act would address the judicial review problem and make many other necessary improvements.
Comprehensive permitting reform should expedite liquified natural gas (LNG) exports so that American energy producers can ship cleaner LNG to our European allies and displace dirtier Russian natural gas. It should make it easier to reduce wildfire risk and promote healthier forests. It should make it easier to clean up and reclaim abandoned hard rock mines. Geothermal permits should be streamlined. Congress should repeal the Jones Act and Foreign Dredge Act. Our Climate and Freedom Agenda includes a laundry list of policy fixes to make, many of which have bipartisan support.
A Christmas tree approach to permitting reform risks the chance that one provision causes a member to drop off because he or she is beholden to a constituency that benefits from the status quo (even at the expense of taxpayers and consumers). Conversely, marginal improvements to permitting reform may be a step in the right direction but a tremendously big, missed opportunity. Alec Stapp said at the end of his Twitter thread on the Manchin bill, “My worry is that policymakers will say this bill ‘fixed permitting’ & then we don’t get any more reform for years.”
I share that concern. It’s time for policymakers to be bold and thorough so that innovators, investors, and the private sector can meet consumers’ needs with better environmental outcomes.