Analysis: US debt deal's energy permitting reforms leave thorniest issues for later

Equitrans Midstream

30/05/2023 22:00

By Valerie Volcovici and Timothy Gardner
       WASHINGTON, May 30 (Reuters) - The bipartisan U.S. debt
deal's provisions to speed up energy infrastructure permitting
will make it easier to build fossil fuel and clean energy
projects but failed to tackle the mammoth issue of building
transmission and pipelines needed to get their production to
consumers.
    The Biden administration said the deal, announced over the
weekend, would for the first time in years update the National
Energy Policy Act, the decades-old law that guides the
environmental permitting of major projects, to ensure its impact
studies do not exceed two years.
    That news cheered energy industry representatives that have
long complained that NEPA studies are a huge headwind to fossil
fuel and clean energy developments alike, often taking more than
five years to complete.
    Jason Grumet, president of American Clean Power, a renewable
energy lobby group, said the debt ceiling agreement is an
“important down payment on much-needed reforms to improve the
efficiency of the permitting process.” 
    Fossil fuel industry groups like the Interstate Natural Gas
Association of America and American Exploration and Production
Council also called the deal a good first step toward reforming
energy permitting.
    "This bill sets the stage for more comprehensive permitting
reform and is a positive step toward modernizing our permitting
system and streamlining the bureaucratic process, which has been
holding back America’s ability to build energy infrastructure
for decades," said Anne Bradbury, CEO of AXPC. 
    The debt deal, however, left out some proposals that some
energy groups had hoped for, including a measure that would have
addressed electric transmission woes by requiring U.S. regions
to have the capacity to transfer at least 30% of their peak
electricity demand between each other.
    Expanding power transmission is seen as crucial to President
Joe Biden’s climate change agenda because it would allow far
flung solar and wind energy projects, recently turbocharged by
major legislation, to link their power to the grid. 
    Meanwhile, oil and gas companies and representatives of
fossil fuel producing states, want their pipeline and other
infrastructure projects to move more swiftly through the permit
process instead of facing lengthy reviews and numerous legal
challenges.
    Building transmission lines and pipelines is also hard
because local communities often do not want the projects, and
federal and state authorities lack the power to easily overcome
that opposition. 
    Instead, the deal orders a study by  the North American
Electric Reliability Corporation to assess how much transfer
capacity is needed to strengthen grid reliability, something
that would likely take two and a half years to get to Congress.
    The deal also left some other thorny issues for future
discussions, such as unlocking barriers to the siting and
construction of new transmission projects that can enable fast
deployment of renewable energy and judicial reform to prevent
projects from being stalled during litigation. 
    Grumet said such reforms were crucial to build out the $150
billion investment in new clean energy projects announced over
the last nine months since the passage of the Inflation
Reduction Act, Biden’s landmark climate law.
    “I think both sides want to come back to the table. I think
it's one of those cases where cases where there are ways to get
what you want and give the other side something that is not
something you totally hate,” said Xan Fishman, energy policy and
carbon management director at the Bipartisan Policy Center.  
    House Speaker Kevin McCarthy said on Tuesday that
Republicans will continue to work with Democrats to pursue
broader permitting reform - including pipelines and
transmission.
    "We will continue working with (the White House) and with
Democrats across the way because we need energy — all forms of
energy, especially for our grid to double in the next future,"
he said. 

    PIPELINE CONTROVERSY
    The energy industry also welcomed the surprise inclusion of
expediting permitting of the controversial Mountain Valley
Pipeline, a pipeline that would carry gas produced in the
Appalachian region championed by Democratic West Virginia
Senator Joe Manchin, whose vote is often needed since the
Democrats hold a thin majority in the Senate. 
    But it has angered environmentalists and some Democrats. 
    Virginia Senator Tim Kaine, for example, whose state it
would run through, is floating amendments to remove it from the
final bill and green groups are planning protests around it.
    Some other Democrats were more broadly upset by the debt
deal’s energy provisions.
    “Moving forward, I urge my colleagues to see Republicans’
never-ending attack on NEPA for what it is — a decades-old,
industry-funded partisan attack that hurts all of us, but
especially poor people and people of color. Once again, polluter
profit is the point,” said Raul Grijalva, the top Democrat on
the House natural resources committee. 
    ClearView Energy Partners, a nonpartisan research group,
said that Democrats could push for more concrete measures on
transmission reform in future legislation, but said it could be
hard without a catalyst, such as a major infrastructure failure
that regulators traced to permitting delays.

 (Reporting by Valerie Volcovici and Timothy Gardner
Editing by Marguerita Choy)
 ((valerie.volcovici@thomsonreuters.com;))