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Permitting reform can cut consumer energy costs and emissions

FILE – Tourists ride horses near Wind turbines on the grassland in Zhangbei county, in north China’s Hebei province on Aug. 15, 2022. The wind power industry on Monday, March 27, 2023, projected growth to rapidly accelerate this year, with incentives and policy changes in key nations helping to overcome factors that led to a…

America could have cleaner, cheaper energy if only we could agree to get out of our own way. The obstacle we have created is a thicket of federal and state regulations requiring energy projects to undergo lengthy, expensive, one-by-one government studies, in theory, to determine their environmental impact. But as Earth Day approaches, it’s time we align these regulations with the need to rapidly build clean energy infrastructure to both address the climate crisis and reduce consumer energy costs.

This regulatory process is termed “permitting” because of more than 60 types of federal government permits that can be required for projects, and it stems primarily from the 1969 National Environmental Policy Act (NEPA). Initially conceived as a quick and simple examination for most routine projects, the combination of project siting, NEPA review and issuing permits has morphed into a many-years-long process rife with opportunities for narrow interests to block projects even where they demonstrably serve consumer and public interests and cut emissions. Perversely, clean energy projects, especially low-cost solar power, are most often the projects facing the longest delays.

Fortunately for consumers and our climate, reforms that maintain protections for the natural environment while speeding up the review process now have a chance to become law, even in the current divided Congress. But reforms must be extensive to make a real difference in siting projects and saving consumers money. House Republicans recently passed a bill, HR1, that contains a mix of unhelpful changes to substantive environmental laws with process reforms that will not effectively address permitting delays on their own. A better deal in the Senate will need to incorporate ideas from both sides of the aisle to maximize effectiveness, achieve broader political buy-in, as well as provide more certainty for communities, consumers, energy project developers and other stakeholders that the new approaches will meet their needs in the long run.

One step that can speed up approvals is studying whole geographic areas and types of clean energy technology at a systematic scale, rather than individual projects. This can be accomplished if federal agencies and their field offices have enough resources and expertise to conduct more systemic analysis. Roughly $700 million has just been made available for agency reviews through recent legislation, and further funding would be repaid many times over in lower costs to energy project developers and consumers.

Another part of the solution is simply to grant automatic or time-limited approvals to well-understood clean projects in previously built-up or well-studied areas, and to ensure that tools like “categorical exclusions,” a quicker type of review for known low-impact projects, are shared across different agencies. The Permitting Council, an agency that helps coordinate and publicize information about permits for complex and large projects, could be extended to mid-sized energy projects like utility-scale solar and wind farms. Many of these tools are already in use for transportation infrastructure and various one-off projects; they should become the standard.

More broadly, permitting reform reflects bipartisan agreement about embracing collaboration between public incentives and private sector investment to deploy new energy technologies to spur growth, reduce reliability risks and make energy cheaper for households and businesses while reducing emissions. Yet, right now, slow reviews and permitting processes — and the resulting massive delays in investment — impose staggering costs. The difficulty of estimating these costs compounds the problem because the opacity of energy system costs and infrastructure benefits to households makes it harder to quantify and sense. It shows up implicitly in our electricity bills and natural gas costs, and in general in the foregone economic activity in all sectors that could have happened with slightly cheaper energy that translates into higher wages and better investments.

These costs are obvious in New England, where permitting issues have prevented not only new natural gas pipelines but also clean and affordable electricity from Quebec hydropower and domestic offshore wind. These problems are compounded by the century-old Jones Act, which bans foreign-made ships even in cases of hyper-specialized Wind Turbine Installation Vessels and liquefied natural gas (LNG) tankers. So, instead of connecting the region with abundant, low-methane gas supplies from nearby Pennsylvania or zero-carbon hydro and wind power, New England households pay high prices for electricity, fuel oil and even LNG tanked in from abroad.

These problems are not limited to any one region of the country, however. California has faced a near-annual risk of blackouts as wildfires intensify and disrupt the energy grid, but the state is still struggling to develop new transmission lines. The Grain Belt Express — a proposed high-voltage transmission line running from Kansas through Missouri and southern Illinois to Indiana that would unlock cheap new wind resources and bring energy to consumers all along its route — has languished for over a decade in siting and permitting disputes. Every region and state contains similar examples.

But the widespread geography and impacts of permitting problems could actually serve as motivation for a widespread, bipartisan political agreement in Congress to break us out of gridlock. Both parties know that our competitors are acting. Since 2014, just 7 gigawatts (GW) of large-scale interregional transmission power lines have been built in North America, compared to 44 GW in Europe and a whopping 260 GW in China.

Even as we approach Earth Day and our recent environmental accomplishments, we must recognize that the large investments in clean energy in the bipartisan infrastructure bill and Inflation Reduction Act passed in the last Congress will not meet our cost reduction and climate goals if we cannot build new projects more quickly and efficiently. Widespread reforms and an updated process that accounts for new technologies and streamlines duplicative reviews can make American energy much cheaper and much cleaner. It’s time to help America build.

Elan Sykes is energy policy analyst at the Progress Policy Institute (PPI).

Paul Bledsoe is PPI’s strategic adviser.

Tags Energy Inflation Reduction Act permitting reform transmission

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