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Here’s how to improve Manchin’s permitting proposal — to help more energy projects

Sen. Joe Manchin (D-W.Va.)
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Sen. Joe Manchin (D-W.Va.) addresses reporters during a news conference on Sept. 20, 2022 to discus energy permitting reform and preventing a government shutdown.

While Sen. Joe Manchin (D-W.Va.) has withdrawn his own permitting bill, it is expected to surface again as Congress turns to permitting reforms to make it easier to build the necessary infrastructure for the energy systems of the future — especially after authorizing $370 billion in funding for new, cleaner-energy sources. All the money in the world will not help projects without building permissions, but Manchin’s proposal is not well-designed to speed up construction of infrastructure for new energy sources. The bill could be salvaged, though, by making a few strategic changes to transform it into a much better vehicle for speeding up permitting and securing cleaner, more reliable, and affordable energy for America.

Many of the projects that we most need for a clean-energy transition face particular permitting difficulties because they require permits from multiple states or communities and the federal government. Our traditional energy commodities, oil and coal, are less dependent on building long-distance infrastructure because they can rely on existing railroads and pipelines, and they are easier to ship by rail, road or waterways. By contrast, products such as renewable electricity, natural gas and hydrogen can be shipped only through new, long-distance infrastructure. So, to clean up our energy system we must speed up permitting reform to be able to build the infrastructure.

There are two big legal permitting challenges:

  • First, in the same way that a land owner might block an unsightly power line, however necessary, states and communities often seek to block nationally important projects. I document these growing roadblocks for energy construction in an American Enterprise Institute report.
  • Second, federal government permits are being held up by longer and longer environmental reviews. Even when a review is completed, projects can be held up for years by courts that stop construction while they ask the government to do more review.

Federal and state permitting challenges are linked because the most common proposal to speed permitting is to replace state approval processes with federal approval. Manchin’s bill leans heavily on this method of speeding up permitting by giving the federal government more power over permitting for new infrastructure such as power lines and hydrogen pipelines.

The reality, though, is that this is not an improvement at all when federally approved projects also face Kafkaesque permitting challenges. For example, while interstate natural gas pipelines already receive federal approval, they are routinely stopped by local and court objections. Two high-profile recent projects — the Atlantic Coast Pipeline and the PennEast Pipeline — were eventually canceled after years of expense and struggle, even though the federal government repeatedly backed both pipelines and U.S. Supreme Court decisions supported both pipelines.

If the Manchin bill passes as is, the gas pipeline industry can welcome the power line and hydrogen industries to the national regulation club with this reality: Even if the federal government backs you on every permit, and even if the Supreme Court backs you in every decision, no matter how long you wait, or how much you spend, states and lower courts may make life so difficult that your project will never be built.

The only project that might be helped by Manchin’s bill is the Mountain Valley Pipeline, which would run from northwestern West Virginia to southern Virginia. The bill makes special provision for this project, directing that all actions “necessary for the construction and initial operation at full capacity of the Mountain Valley Pipeline shall not be subject to judicial review.”

The Manchin bill does almost nothing to help other energy projects stop endless local objections and court demands for further environmental review. For example, the bill sets soft limits on how long the federal government reviews projects, but does not establish limits on how long a court can delay nationally approved projects.

As the Institute for Progress explains, “The time limit that would likely have a major impact is restricting the ability of the courts to issue injunctions against projects that have undergone extensive environmental review under the National Environmental Policy Act. This change would provide developers the certainty they need to invest in large-scale … solar, wind, transmission and other clean energy infrastructure.”

As it stands, the Manchin proposal is a costly lost opportunity to speed up permitting of new energy projects. The focus on federalizing review of clean energy projects is particularly unhelpful when the proposal doesn’t address the problems that are making federal reviews so slow for energy project developers. The good news is that the Manchin proposal could be improved relatively simply if it added limits on federal court and state delays on nationally approved projects. Doing so would accelerate construction of the infrastructure America needs to build a better energy future.

James W. Coleman is a nonresident fellow at the American Enterprise Institute and a professor of law at Southern Methodist University.

Tags Energy development Infrastructure permitting Joe Manchin permitting reform pipelines

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