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A Deal on Permitting Reform Is Still Possible

National Review

December 23, 2023

Senator Joe Manchin (D., W.Va.) has failed in his pursuit of a final approval of the Mountain Valley pipeline from northwestern West Virginia to southern Virginia, as the Senate refused even to give majority support for his effort to attach his “permitting reform” bill to the defense budget authorization. The environmentalist Left and many congressional Democrats have no interest in Mountain Valley or permitting reform for fossil projects because of their ideological opposition to fossil fuels and ancillary capital investment.

Nevertheless, because the opponents of fossil fuels are desperate for an “energy transition” to wind and solar energy in particular, a potential deal on permitting reform on these sorts of lines still (sooner or later) ought to be possible because state and local opposition to wind and solar projects is growing rapidly. Robert Bryce reports at least 375 such rejections since 2015.

This means that permitting reform next year might appeal to both sides for almost diametrically opposed reasons. This is the case for Republicans because of the possible easing of restrictions on fossil fuel projects, and also because — let’s be honest — there are several Republican senators from wind states. For opponents of fossil fuels, permitting reform might ease the path for wind and solar projects, and such reform might be necessary for the vast expansion of the transmission system needed to make unconventional power feasible even in theory.

An earlier permitting-reform bill put forward by Manchin would not have yielded any appreciable easing of the permitting process that has evolved under the National Environmental Policy Act, except for an approval carve-out for the Mountain Valley pipeline. There was no reform of the litigation game which entangles energy projects in lawsuits for years or decades. It would have allowed the Federal Energy Regulatory Commission to socialize the power grid by spreading the costs of the long-distance transmission expansion needed for ever-more wind and solar electricity across all power consumers. It would have overridden local and state authority on specific transmission projects deemed “necessary in the national interest,” increasing the degree to which such decisions would be politicized. And it would have changed the Clean Water Act to allow states to block projects for reasons independent of the discharge of effluents into navigable waters.

His newer proposal (the one that has just failed) was no better, and arguably worse. The earlier proposed changes in the Clean Water Act were deleted, but the socialization of the power grid remained, except for some minor changes in FERC’s authority to overrule state decisions on permits. And the perversities of the litigation game obstructing projects were strengthened: “Nothing in this section . . . supersedes or modifies any applicable requirement, authority, or agency responsibility provided under the National Environmental Policy Act of 1969 . . . or any other provision of law.”

Nonetheless, the basic outline of a permitting compromise continues to be visible. For opponents of fossil fuels, permitting reform that expands the possibility of exploiting them would normally be anathema, but the need to overcome local political opposition to wind and solar projects could provide the reason for agreeing to accept it.

For supporters of fossil energy, the incentive to support real permitting reform is more straightforward, especially if the lawsuit problem is ameliorated. Over the long term, the superior economics of fossil energy over wind and solar power are likely to become more obvious through demonstration. (For demonstrations of what can happen when governments take the opposite approach, see California and Europe.) But so convinced are the supporters of unconventional energy that wind and solar power is cheaper than fossil electricity, and so intense is their desire for an energy “transition,” that it is possible that they might swallow hard and accept a permitting compromise.

But it is a long distance from here to there. Supporters of fossil energy will not support a permitting reform that fails to address the litigation problem, and they are likely to harbor deep reservations about the nationalization of the power grid and the socialization of its costs. Opponents of fossil fuels would be deeply divided over such a reform package, such is the extent to which fossil fuels have become taboo.

And so, the outlook is murky. It may be the case that a permitting reform will have to be attached to some other must-pass legislation next year. The negotiation process promises to be a slog, in particular because the Democrats will enjoy only a 51-seat majority (including newly independent Arizona senator Kyrsten Sinema) in the Senate. Congressional horse-trading may not be a contact sport, but injuries are certain nonetheless.