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Cosmetic reforms in Manchin permitting bill aren’t enough to improve US energy woes

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Amid spiraling energy prices, it was hoped that Sen. Joe Manchin’s (D-W.Va.) “permitting reform” bill would address the gauntlet of permitting hurdles blocking energy production and delivery. Instead, the bill omits the most important reforms to accelerate delivery of affordable energy projects and locks-in years of continued delays and high prices.

Rather than propose systemic reform including substantive changes to environmental review laws to benefit all forms of energy development, Manchin’s bill is a swag bag of low-value procedural changes for carbon-based and nuclear projects, coupled with far-reaching systemic improvements and potentially massive subsidies for high-cost renewable transmission.

And while it would ensure completion of the Mountain Valley Pipeline (MVP), a long-delayed natural gas pipeline originating in Manchin’s home state, the bill effectively pulls up the ladder on future similar infrastructure — likely harming continued efforts to lower emissions through coal-to-gas switching.

One measure of the bill is whether it would have changed the fate of recently abandoned projects —Keystone XL and the Atlantic Coast Pipeline — that have become synonymous with energy and supply chain gridlock. The telling answer: not in the slightest. In fact, the bill’s “reforms” would not improve the prospects for the MVP itself — hence the need for the rare congressional authorization of the 300-mile project connecting low-cost natural gas producers in Appalachia to high demand centers in the southeast.

Recent history also illustrates why the bill’s changes to law will have marginal impact. For starters, agencies can circumvent statutorily imposed deadlines on environmental reviews by delaying the date they deem the permit applications complete — as they did in response to similar Trump-era procedural reforms of the National Environmental Policy Act (NEPA). This risks transforming the often-productive pre-application interactions between project sponsors and agencies into a trip to the DMV: come back later with more paperwork.

Likewise, a shortened statute of limitations for permit lawsuits creates an arms race with litigious environmental activists, who may be well prepared for escalation based on the billions allocated to non-profits by the Inflation Reduction Act. The saga of the Atlantic Coast Pipeline, whose permit was upheld 7-2 by the Supreme Court but was nonetheless abandoned after years of delay and financial strain, reminds us that abusive lawsuits remain an especially potent weapon to turn the economics of affordable energy projects on their head.

Finally, inviting the president to create a special list of high priority projects mistakenly assumes that projects of the scale needed to ensure access to affordable energy can be completed in a few years. The Keystone XL, which would have brought Canadian oil to the lower 48, had the official backing of both countries’ leaders — a rare point of agreement between President Trump and Canadian Prime Minister Justin Trudeau. Yet, it was abandoned after President Biden withdrew its presidential permit on his first day in office.

A presidential list is unlikely to be more durable unless courts recognize reliance interests in the permits granted to listed projects — an economic reality that already applies yet does not stop courts from routinely voiding agency permits over small discrepancies in environmental reviews.

As currently interpreted and implemented by agencies and courts, laws like NEPA task agencies with boiling the ocean. Right sizing NEPA’s scope of analysis would lighten the burden on overstretched agencies and bring focus and context to their understanding of an individual project’s unique environmental impacts. These more focused analyses would result in higher quality decisions and better facilitate tradeoffs, where deemed necessary, between alternative project designs. More focused environmental reviews would also present smaller targets for abusive litigation. NEPA provides the best opportunity here because, as the most litigated environmental statute on the books, it is almost certainly the most obstructive.

Further, those who weaponize NEPA have been playing a dangerous game for years — and not simply due to skyrocketing energy prices’ contribution to stagflation. Most of NEPA’s mischief comes not from the text of the statute itself but the accretion of judge made law issued by inferior courts which interpret implementing regulations written by the Council on Environmental Quality.

One federal appeals court judge has already noted that this small office in the White House lacks a clear statutory mandate to issue regulations. With a judiciary newly focused on whether clear congressional statements justify our economy’s most onerous regulatory burdens, Congress may need to right-size NEPA to head off a far less predictable judicial intervention.  

Marc Marie is a regulatory policy fellow at Americans for Prosperity.

Tags Joe Manchin keystone pipeline NEPA permitting reform

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