Commentary

Evslin: Manchin backed ‘Inflation Reduction’ in exchange for fed permit reform

Huge opportunity for bipartisan environmental, energy, and economic progress

by Tom Evslin

Senator Joe Manchin agreed to support the Inflation Reduction Act (IRA) on condition of a promise from President Biden, Majority Leader Schumer, and Speaker Pelosi “to pass comprehensive permitting reform legislation before the end of this fiscal year [September 30]”. These permitting reforms, if they become law, will do more for the environment than all the subsidies in the IRA. If the reforms don’t pass, the subsidies like those for electric vehicles will accomplish almost nothing since it will take more than 20 years to rebuild the electric grid and add energy sources sufficient to charge significantly more EVs.

The plan agreed on by Schumer is to make these reforms part of a “must pass” bill. The most likely candidate is the continuing resolution needed in September to keep the government funded through the upcoming election. We’re going to hear a lot about these reforms this month.

Regulatory reform is needed as much for a transition to carbon-free energy sources as to keep the lights on during the transition. Not reforming US permitting means leaving Russia, Saudi Arabia, and Iran supplying critical energy to Europe and exacting an increasing political as well as economic price.

Manchin’s reforms (see here for a draft outline) don’t weaken environmental requirements; but they set time limits on the process for granting (or denying) permits and, most important, on the time during which permits can be appealed.

Federal agencies will have one or two years, depending on the complexity of the project, to rule; and a lead agency must take responsibility to avoid consecutive trips through many agencies. States and tribes, which have authority over water-quality permits, must act expeditiously according to clear rules and base their decisions solely on the projects’ effects on water quality. NY State under Cuomo infamously used spurious denial of water quality permits to halt two federally approved pipeline projects which should be bringing Marcellus gas to New England by now. New England may very well pay a very high price this winter both for electricity generated from natural gas and for gas used in heating. New England greenhouse gas emissions will include the very high emissions from coal which will be burned instead of the missing gas.

Critically important, the reforms call for a statute of limitations on court challenges to approved projects. Although permitting itself can now take five years or more, major projects are often delayed an additional fifteen or twenty years by after-the-permit court challenges. America has literally tied itself in knots. We cannot build anything significant within the time frame that planning can reasonably foresee. Projects which do get done are always obsolete (as well as way over budget) when they are completed.

The Manchin reforms are intentionally an “all-of-the-above” approach. The President is directed to designate and update a list of 25 high-priority energy projects and expedite their permitting. In the language of the draft released by Manchin’s office this must be “a balanced list of project types, including: critical minerals, nuclear, hydrogen, fossil fuels, electric transmission, renewables, and carbon capture, sequestration, storage, and removal. Criteria for selecting designated projects includes: reducing consumer energy costs, improving energy reliability, decarbonization potential, and promoting energy trade with our allies.”

So who could be against these common sense reforms?

  1. Progressives who call themselves environmentalists who’d rather see renewable projects and the rebuild of the electric grid delayed indefinitely than allow even well designed nuclear and natural gas projects to go ahead. According to The Hill:

House Natural Resources Chairman Raúl Grijalva (D-Ariz.) is circulating a letter asking leadership to separate the Manchin deal out from a continuing resolution that would temporarily avert a government shutdown. 

“’Don’t attach it to a budget, to a CR, must-pass legislation and therefore take this essential Republican agenda and have Democrats pass it,’ he told The Hill earlier this month.”

  1. Partisan Republicans who don’t think the permitting reform goes far enough and, like the Progressives, would rather have nothing than give an inch or allow the Biden administration to get any credit. Again, according to The Hill:

“Republican Conference Chairman and top GOP senator on the Energy and Natural Resources Committee John Barrasso (Wyo.) signaled that there could be another barrier to Manchin’s deal: The permitting language, which may not be strong enough to win GOP support. 

“’This narrow proposal does not go nearly far enough. It will not prevent the Biden administration from continuing its war on American energy,’ he said.”

Passing the Permitting Reforms is a huge bipartisan opportunity

It will not get 100% of Democratic votes so it can’t be forced through the legislature. Realistically, for partisan reasons, it won’t get a majority of Republican votes. Nevertheless, there is an opportunity for reasonable Republicans in both the House and the Senate to create a coalition around these reforms with reasonable Democrats and pass this must-pass legislation without either the votes of Progressives or the most partisan Republicans.

Permitting reform is not nearly as polarizing as the issues around abortion. On the other hand, it doesn’t show up on the list of things that are on the top of voters’ minds. It is the job of media (which it may well not do) to explain that permitting reform means clean and affordable energy and saving Europe from Russian energy blackmail.

We the people have a lot at stake.

The author, an author, entrepreneur, former Vermont state cabinet officer, lives in Stowe. He founded NG Advantage, a natural gas truck delivery company. This commentary is republished with permission from his blog, Fractals of Change.

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