WORKWEEK

Passing the Inflation Reduction Act is one of the Biden admin’s seminal legislative achievements. And it’s one of the biggest stories in climate and climate tech this year. 

Its passage also required concessions to key senators, like Manchin (West Virginia) and Sinema (Arizona). Now, some of those concessions required for the bill’s passage are taking center stage. This week, analysts expect Schumer and Manchin to release the draft text of new permitting reform legislation. By exploring debates surrounding their ‘side deal’, we’ll get to explore what’s holding up energy projects of all sources & sizes from breaking ground. 

Side deal, no longer on the sidelines

Passing the Inflation Reduction Act, which, together with the CHIPS Act, amounts to $450B in spending on climate, energy, and climate technologies, was such a critical legislative priorities that some crucial considerations were mortgaged for future months. One such example is a ‘side deal’ that Schumer and Manchin struck, acknowledging that the Senate would revisit legislation to streamline environmental reviews and permitting for energy infrastructure projects once the bill had passed. The implicit acknowledgment and cost of Manchin’s support were that he’d get his way with this permitting reform. 

Building clean energy infrastructure in the U.S. is hard. Per Robinson Meyer: 

Since 2009, China has built more than 18,000 miles of ultrahigh-voltage transmission lines. The U.S. has built zero.

Part of the problem is that, unlike the CCP, no single entity has the authority to say ‘yes’ to new transmission lines or other energy infrastructure projects in the U.S. That requires alignment across patchworks of regulators at federal, state, and local levels, all of whom have a say but none have final say.

New permitting legislation will ideally make it easier to plan and execute on national energy infrastructure projects, like high-voltage transmission lines. Beyond transmission, there are all kinds of projects in permitting and environmental review. Some, including oil & gas infrastructure, are stuck because they raise serious environmental concerns. 

On the surface, others look like wins for climate and climate tech but still get stuck in permitting processes and approvals. More than 90% of utility-scale electricity projects ‘in the queue’ are zero-emission projects. Fast-tracking those = decarbonize the grid more quickly. 

Digging a bit deeper, almost 200 hydropower projects, totaling nearly 1 GW, are stuck in permitting, which proceeds in stages from preliminarily permitting to licensing to construction. Only two have recently made it to construction. 

As a result, there’s solid bipartisan agreement that permitting needs to change. It’s time to build! 

Permitting perspectives

…Just one more roadblock. Permitting reform itself won’t be that easy. There’s a lot of disagreement around what that should look like. 

Sources familiar with the deal suggest the text includes more than reform to streamline permitting and reduce the process’s time. It also includes a list of 25 projects (likely friendly to Manchin’s oil & gas lobby) that will get special attention. The Mountain Valley Pipeline, a highly contentious project (more on that in a sec) is also purportedly getting a dedicated section of the new legislation, the clearest giveaway to Manchin’s interest. 

Even considering its concessions, plenty of people think permitting reform is a win for climate tech + clean energy. As Ezra Klein writes in the New York Times:

… streamlined permitting will do more to accelerate clean energy than it will to encourage the use of fossil fuels. New clean energy infrastructure will be built far faster, and at far larger scale, than new fossil fuel infrastructure, so a simpler, swifter path to construction means more for the clean energy side of the ledger.

Hopefully, that’s true. For others, even those ends wouldn’t justify the means. As I recently discussed on an episode of the Keep Cool Show with Molly Morabito, a climate organizer and activist with People vs. Fossil Fuels, staunch opposition to and concern about the permitting deal exists for a few reasons:

• There’s a reason some projects the deal may greenlight haven’t been built in the past. They’re among the most controversial. Is the side deal simply a way to railroad through projects that wouldn’t exist otherwise?
• New fossil fuel infrastructure often disproportionately affects disadvantaged communities. For instance, the Mountain Valley Pipeline will cut through Appalachian forests and communities in West Virginia, presenting a material risk to their wellbeing.
• If permitting processes shift in developers’ favor, stakeholders may find it impossible to oppose projects, regardless of justified concerns.

Also note that we haven’t even waded into the waters of what a better process looks like. I certainly don’t claim the expertise to have ideas on that front. Faster reviews is critical, for one. Another area to watch is NEPA (“National Environmental Policy Act”), which enshrines communities’ right to request formal analyses of projects’ potential climate and environmental impact. Under NEPA, entities can push for a robust review for any proposed project. This doesn’t mean that, even if the findings are stark, a project won’t proceed, however.

Still, these analyses can take a long time, and groups can co-op NEPA review to stall projects, whether fossil fuel or renewable. And that’s just one example from the process.

We have yet to see draft legislation as to what policy and lawmakers deem a better path forward to deploy earmarked capital and develop projects.

The net-net

There’s a lot to balance here. The U.S. needs permitting reforms. Not to build more fossil fuel pipelines. But to unleash a flood of renewable energy development crawling through current permitting pipelines. 

That said, folks should also pause and save some energy to read the actual text of the proposed legislation before throwing their weight in favor of or against it. In the same breath, I can say that and sympathize with groups in Appalachia or elsewhere who know their interests will be overlooked and new natural gas pipelines will cut through their backyard.  

As permitting reform evolves in the U.S., it shouldn’t excessively weaken mechanisms for communities and other interest groups to make their opinion on projects known. Permitting hasn’t always been an equitable affair. And more feedback should equal better projects over time. At the same time, a solid dose of pragmatism and deference to some authority is required in service of a swift energy transition; there’ll almost always be groups who object to new infrastructure or energy projects. So two things are true at once:

1. 100% alignment across stakeholders with interests ranging from home values to habitats for endangered birds is untenable.
2. Hearing people out isn’t.

Final food for thought. When infrastructure development comes to your neighborhood or county there’s a call to be made for individual climate action. Prepare to consider sacrificing some of your own self-interest if a project comes to town. Don’t be these people. And talk to others about doing the same.