Congress should expand the use of categorical exclusions

Last month, the Biden administration announced that the Department of Transportation would be adopting categorical exclusions for electric vehicle charging projects. The goal, per the Council on Environmental Quality, is to “unlock faster reviews” for charging stations as part of the administration’s efforts to deploy electric vehicle infrastructure. 

It’s a commendable move, and one that signals that the Biden administration is more serious about speeding up infrastructure deployment than past Democratic administrations. This should not come as a surprise, as the success of Biden’s marquee policies—the Inflation Reduction Act, the CHIPS Act, and the Infrastructure Investment and Jobs Act—all hinge on significantly reducing regulatory barriers. Categorical exclusions are a powerful tool in this regard, offering a tool by which infrastructure projects can be “excluded” from review under the National Environmental Protection Act (NEPA). In the absence of categorical exclusions, NEPA requires federal agencies to complete environmental assessments for federal actions that often take years of paperwork—and millions of dollars—to complete. 

While its intentions are laudable, the recent policy does not go far enough. If the goal is to afford equal regulatory treatment to all energy infrastructure, categorical exclusions ought to be extended to cover a number of additional energy sources. 

Chief amongst these sources is geothermal energy. A relatively new technology, geothermal energy relies on areas of hot rock deep in the earth, drawing up heated fluid to drive turbines and generate electricity. Recent innovations inspired by the fracking boom have produced breakthroughs in the geothermal sector, allowing for cheaper drilling and higher levels of production. 

Beyond zero emissions, geothermal has two key benefits over traditional renewables — its reliability and its land footprint. First, geothermal is a source of “firm power.” That is, geothermal is capable of constantly supplying electricity to the grid, rather than only producing power when the wind is blowing or the sun is shining. Second, compared to wind or solar, geothermal facilities have a very small land footprint, taking up a sixth of the space of solar energy per unit of energy produced.

But for all its benefits, it is extraordinarily hard to develop geothermal energy in the United States. The average geothermal project built on public land must undergo up to four years of permitting before any actual work is done. In contrast, the time it takes to review oil and gas project permits on public land is only 94 days. 

Central to this disparity is the use of categorical exclusions. The Energy Policy Act of 2005 created a set of categorical exclusions for oil and gas projects built on public land that make it much easier to develop these types of projects. These categorical exclusions were expanded during the Trump administration by executive order. And as it would happen, the original draft of the legislation also included categorical exclusions for geothermal, but dropped them in the final bill.

As it stands, geothermal projects may trigger the NEPA review process up to six times throughout the development process. If the United States is to capitalize on its 530 gigawatts of geothermal potential, this cannot be allowed to continue. 

As recognition of the problem grows, interest in geothermal permitting reform has received growing attention on Capitol Hill. Rep. Russ Fulcher (R-Idaho) has introduced legislation on several occasions that would grant geothermal projects more categorical exclusions, allowing geothermal developers to focus less on paperwork and more on building. Rep. Mike Levin (D-Calif.) introduced a bill earlier this year that aims to streamline the permitting process for geothermal projects on public land. These are promising early signs of things to come. 

Still, Congress can and should introduce legislation that goes further in encouraging geothermal development here in the United States. Most crucially, Congress should issue categorical exclusions to geothermal that mirror those afforded to oil and gas. This includes exclusions covering exploration wells, development wells, infill wells, and minor maintenance, all of which can help cut the geothermal development timeline in half. Furthermore, Congress or the Bureau of Land Management could issue categorical exclusions for advanced geothermal pilot projects in an effort to speed up the pace of geothermal innovation. 

Both Republicans and Democrats should be able to get behind the effort to secure energy abundance through significantly reduced permitting barriers. It’s an encouraging sign that the Biden administration is taking advantage of a powerful tool in categorical exclusions. Congress should build on this momentum and work to achieve permitting reform across the energy industry.

Thomas Hochman is a research associate at the Foundation for American Innovation. Lars Erik Schönander is a policy technologist at the Foundation for American Innovation.