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Climate activists take part in a protest on Capitol Hill against the deal struck between Sen. Joe Manchin and Senate Majority Leader Chuck Schumer on a bill to streamline permitting for energy projects, September 8, 2022.
The permitting reform deal between Sens. Joe Manchin (D-WV) and Chuck Schumer (D-NY) keeps running into trouble with the other 533 elected representatives in Washington. House Natural Resources Committee chair Rep. Raúl Grijalva (D-AZ) managed to get 72 House Democrats (nearly one-third of the caucus), including ten committee chairs and several New Democrats, to oppose what they called “the API plan,” a reference to the American Petroleum Institute, whose watermark was seen on draft legislation.
Summary language floating around Capitol Hill says that the deal would limit timelines for energy project environmental reviews and legal filings; instruct a lead agency to coordinate reviews; assemble a list of 25 “strategically important” energy projects that would still go through the review process, but would be prioritized in some way; grant the Federal Energy Regulatory Commission (FERC) more siting authority over electric transmission lines; and allow for the completion of the Mountain Valley Pipeline, which would deliver natural gas from Manchin’s home state of West Virginia. (Locals from the Appalachians oppose the pipeline, but Manchin’s donors support it.)
Grijalva and his colleagues want to sever the permitting deal from must-pass legislation to fund the federal government by September 30. Schumer has said that would be the vehicle for the deal. While asking to split the deal from the funding bill isn’t quite a promise to oppose it—only a couple, including Sen. Bernie Sanders (I-VT) and Rep. Ro Khanna (D-CA), have taken that step—it does present a headache for Schumer and Speaker Nancy Pelosi (D-CA) as they strategize on how to keep the promise they made to Manchin. That promise, incidentally, was for a vote, not a successful one.
In theory, votes from pro-deregulation Republicans could replace those of Democratic opponents. In practice, Senate Republicans voted unanimously last month (along with Manchin) to reject a Biden administration rule making climate change a top consideration for energy project reviews. To get the 11 or more Senate Republicans needed to pass a permitting deal, they are likely to request something similar.
In fact, Sens. James Inhofe (R-OK) and Shelley Moore Capito (R-WV) authored an amendment to the Inflation Reduction Act that includes a lot of the features of the permitting deal, but also prohibits using the “social cost of carbon” in regulatory matters; institutes a Trump rule gutting the Clean Water Act; allows states to unilaterally create energy development rules (including fracking rules) on federal land; and prevents retroactive vetoes of permits, like those approved by a prior Republican administration. Those are the types of provisions to watch out for in the deal.
Democratic proponents of the deal say that clean-energy projects must be accelerated to reach climate and emissions goals. Democratic opponents say that permitting reform is unrelated to funding the federal government. But opponents are wrong; the two are actually very related. And proponents are also neglecting the fact that slow permitting for energy projects is as much caused by the appallingly inadequate federal budget as it is by environmental law rules.
You could argue that the authorities themselves need to be worked out first and the money can come later. But that’s never how it works in America.
Consider that the Biden administration could select an agency lead, prioritize important projects, and mandate accelerated timelines on its own authority. In fact, it already has, in a May document called the Permitting Action Plan. One of the five key elements of that plan was “adequately resourcing agencies.” Yet those budgets have been locked in since March, and a continuing resolution to fund the government would simply plug in the same numbers for the indefinite future. (It appears that this continuing resolution would last until December, at which point the two parties hope for a longer-term agreement.)
FERC is actually a good case study. In fiscal year 2021, FERC received an appropriation of $404.35 million. In fiscal year 2022, the first year of the Biden administration, FERC asked for $463.9 million, but thanks to a continuing resolution for the first half of the year, it didn’t get this request until half the fiscal year was over. This year, FERC asked for $508.4 million. A continuing resolution would mean the agency will once again have to wait until there are new appropriations approved.
Keep in mind that none of that FY2023 budget request includes funding for the significant new siting authorities that could be bestowed upon FERC in the permitting deal. That would all come out of the existing budget request. Giving coherence to grid and transmission projects would certainly be a good thing, probably the most important thing being discussed in the deal. But the agency simply couldn’t do it with its current budget without cannibalizing other functions.
What’s particularly noteworthy here is that FERC requests don’t cost the government any money. FERC recovers all costs from its operations through charging fees to the industries that it regulates. But it must ask for an appropriation first and set a budget before it can get industries to pay for it. Therefore, if that number needs to be much higher to allow for new siting authorities, it’s in real terms not a government expense. (I should also mention that $500 million is a tiny speck of the overall $6 trillion federal budget, and $0, the actual cost to the government from FERC, is even less.)
Because no language has been released on the permitting deal, it’s unclear whether this question of resources is included. But adequate funding certainly could be the ask from Democratic opponents, if they are unsuccessful in severing it from the rest of the budget. The only way that project review is going to actually accelerate in America is if it’s prioritized with enough money. If you starve the agencies, you get the government you deserve.
Joe Manchin is not a “fully fund the agencies” guy. He’s a guy that gets a readout of the national debt every day. You could argue that the authorities themselves need to be worked out first and the money can come later. But that’s never how it works in America, where more and more responsibilities get heaped on federal agencies without new appropriations. The Commodity Futures Trading Commission, which was handed regulatory responsibility for the multitrillion-dollar derivatives market and no extra funds to achieve that, is a good example.
Some Democrats have a philosophical opposition to weakening bedrock environmental laws, and facilitating the burning of more fossil fuels. The bright-side thinking on this is that clean energy and transmission reviews will also speed up in ways that are absolutely necessary. But you can’t run tomorrow’s green transition on yesterday’s budget. The most important part of the government funding bill, for permitting or anything else the government does, is the government funding. Those who want to see clean energy deployed rapidly must set that as a top priority.
