Streamline power line permitting to achieve IRA climate goals

One of the most important goals of the clean energy and climate bill, the Inflation Reduction Act (IRA), passed by Congress and signed into law by President Biden is the decarbonization of the electricity system. The core of this effort is the construction of long-distance transmission lines to deliver clean, affordable remote wind and solar power to consumers, replacing fossil fuels and cutting greenhouse gas emissions. But without significant permitting reforms that Senate Majority Leader Chuck Schumer (D-N.Y.) has indicated may be considered by Congress this fall, this crucial element of the clean energy transition will be left incomplete, taking far longer and costing consumer and businesses far more than it should, and in many cases, simply not happening, at all.

For example, many of America’s most affordable and abundant wind resources are in sparsely populated areas such as the Great Plains, where there is less demand. Long distance transmission is needed to deliver this clean power to areas of the country where demand is increasing, including from electric vehicles. The stark reality is that the current energy infrastructure siting and permitting process is not up to the task of permitting needed new clean energy infrastructure facilities on a timely basis. For example, environmental review of long-distance electric transmission lines under the federal National Environmental Policy Act (NEPA) and related permitting can take five to 10 years, or even longer. This is unacceptable in light of the urgent need to dramatically cut emissions.

This concern is heightened by the recent findings of leading climate scientists that the pace and severity of climate change, including extreme weather events, is already far worse than expected. Nevertheless, some interest groups reflexively oppose permitting reform on the incorrect grounds that it is a scheme to gut environmental protections, which is simply untrue.

Here’s why: If solar or wind projects and associated transmission lines are delayed or killed through litigation or other means, as routinely happens under current law, then it becomes that much more difficult to meet the challenge to transform the electricity system and meet climate goals on a timely basis. Therefore, expediting the permitting of clean energy infrastructure is beneficial to the climate.

As part of his agreement to support the Inflation Reduction Act, Sen. Joe Manchin (D-W.Va.) has been assured by Schumer that there will be a Senate vote on permitting reform this fall. While no permit streamlining proposal is pending before the Senate, draft language has been widely circulated that provides a good structure for discussion.

First, much of the language in the draft bill codifies existing NEPA law, regulations, guidance and practice, and therefore does not in any way represent a “dismantling” of environmental protections. For example, in the draft bill, as under current law, it is permissible to use a Single Environmental Document where there is a multi-agency NEPA process to simply simultaneously expedite reviews by agencies at the same time, not by-pass each agency’s authority.

Similarly, the draft bill authorizes the use of what are known as “categorical exclusions” which also is in current law. A categorical exclusion is a class of actions that a federal agency has determined do not have a significant effect on the environment. Therefore, an environmental assessment nor an environmental impact statement is required. The bill directs the Departments of Agriculture, Army, Commerce, Defense, Energy, Interior and Federal Energy Regulatory Commission (FERC) to determine if further categorical exclusions can be established that make the overall regulatory process efficient and timely.

Second, there are many provisions of the bill that seek to streamline and expedite the permitting process. This includes authority for the lead agency to establish a schedule for the completion of the environmental review process. In addition, if a proposal is deemed a “major project” the schedule setting process is more stringent than it would otherwise be, on average two years for NEPA review for a major project and one year for lower impact projects.

Third, new provisions include an “Accelerated Issue Resolution and Referral” process that gives participating agencies, the transmission project sponsor and the governor of the state in which the project is located the right to request accelerated issue resolution. If there is no resolution at that initial stage phase then the issue is elevated to agency heads, the project sponsor and the governor of the state where the project is located. If this does not achieve issue resolution the matter must be referred to the U.S. Council on Environmental Quality (CEQ). If the CEQ process does not lead to issue resolution the matter is referred to the president for decision.

Another significant proposal is that the statute of limitations for challenging an energy infrastructure project is 150 days from the final contested action. This is an important change that will expedite judicial review.

The draft text also provides for “Prioritizing Energy Projects of Strategic National Importance.” This would require that not later than 90 days after enactment the Departments of Energy, Interior, Environmental Protection Agency (EPA) and FERC would designate 25 energy projects for priority Federal review. In addition, the proposed legislation seeks to Empower the Federal Permitting Improvement Steering by providing for $200,000.000 in Mandatory Funding of $20 million a year. This essentially formalizes the process for focusing on the major projects that would typically occur more on an ad hoc basis in most administrations. This more systematic and transparent approach to identifying the 25 key projects could be very helpful across the entire administration.

Fourth, the draft bill language provides the secretary of the Department of Energy (DOE) authority to identify a national interest electric transmission corridor and authorizes FERC to improve a construction permit of such a proposal. This approach provides a sensible mechanism for DOE to identify key interstate transmission improvements and provide FERC authority to issuance a construction permit. It is a big improvement over the “backstop” transmission siting authority in the Energy Policy Act of 2005, which was so unworkable that not a single application to construct a transmission line was submitted during the 17-year period since its enactment.

Fifth, the bill provides that FERC has jurisdiction regarding the regulation of interstate hydrogen pipeline storage import and export facilities.

The draft proposal developed under the auspices of Schumer and Manchin is sound, and reflects a very serious effort to improve the environmental and climate change effectiveness of the U.S. clean energy transition while lowering consumer and business costs. Moreover, it may represent the best opportunity in many years for Congress and the administration to help remove the obstacles to permitting key clean energy and climate mitigation infrastructure.

Congress should seize the moment.

Daniel Adamson is president of Energy Reg Strategies. He has served at the Senate Energy Committee, Department of Energy, and Federal Energy Regulatory Commission, where he headed the Office of Energy Projects.

Paul Bledsoe is strategic adviser at the Progressive Policy Institute. He has served at the Senate Finance Committee, Department of the Interior and White House Climate Change Task Force under President Clinton.