Authorizing reform bill gives leverage to progressives

It took a few weeks for The Biden-era narrative to go from a failed presidency to a consistent restorer of political ambition. Although they contain about one-ninth of the national spending originally envisioned in the Build Back Better Bill, the Cut Inflation Act’s $369 billion investment in power generation, mitigation and advanced manufacturing, as well as the extension of US bailout affordability measures for 12 million Affordable Care Act Exchange customers and the beginnings of potentially significant prescription drug pricing reforms for seniors, were enough to rewrite the script.

But there is still one bill on the table, the result of a side deal between Sen. Joe Manchin (D-WV) and the Democratic leadership. Softly known as “permit reform”, this initiative (which could not enter the IRA because it is not budgetary in nature and therefore not eligible for reconciliation) would accelerate, according to its supporters, nationwide energy project timelines by effectively shortening the time for reviews. It is expected to get a vote in the House and Senate by the end of September.

It’s an interesting reversal of a dynamic we saw last year. When Build Back Better was split between infrastructure spending and social spending, progressives helped push the infrastructure bill through on a promise of a later vote on the spending package. What they finally got took almost a year and was pretty watered down. Now it is Manchin who is advancing the spending bill, on the back of a promise to secure permit reform.

More David Dayen

With the IRA done in the Senate and set to end this week in the House, progressive members have no reason to stick with Manchin’s deal and are free to assess whether allowing reform makes sense on the bottom. It’s not. If Manchin wants another victory for his favorite fossil fuel industries, he should either convince the Republicans he just stabbed in the back to do it, or give the Democrats something more in return.

Some progressive observers have were talking to each other in the idea that permit reform is necessary to accelerate renewable energy projects. Such a mindset reflects a fundamental tenet of supply-side progressivism – the idea that the overzealous enforcement of laws designed to restrict construction needs to be recalibrated.

This is a compelling but misleading theory. Authorizing is really about power, and if the entity wanting to build has had enough, they can cut red tape with little resistance. Less than ten years ago, there was no American oil export industry. Today, the United States is the world’s largest producer of oil and gas, the sixth largest oil exporter and the second largest exporter of natural gas. The entire architecture of this transformation had to be designed, authorized, approved and built – and it was, at rapid speed, including thousands of wells, transportation infrastructure such as roads and pipelines, terminals for export of liquefied natural gas, and much more.

In fact, the sector has overbuilt tremendously over this decade, with investors losing so much money during the pandemic crash that they simply refuse to produce today, even with the current high prices. There are a lot of problems with the investor-driven oil and gas model, but licensing is not one of them; the industry has literally done too much.

In other words, if there is money to be made, and especially if you frame it as a national security imperative, permit issues have a way of melting away. Ultimately, this is the likely path for renewables: the IRA creates a massive market for the deployment of solar and wind power and other innovations, and environmental reviews are unlikely to derail this fast moving train. Moreover, the idea that the National Environmental Policy Act will unfairly impede the green transition is simply massively exaggerated as a problem beyond random anecdotes. Only one in 450 NEPA reviews is challenged in court, and federal agencies win about the same as in other environmental cases.

In the case of a few pipelines, it is true that the residents directly affected in disastrous and toxic ways have managed to get the justice system to accept that their lives were not worth sacrificing for the oncoming pipelines. That includes the Mountain Valley Pipeline, a Manchin priority that would deliver 2 billion cubic feet of fractured gas per day from West Virginia to Virginia, equivalent to 25 new coal-fired plants. Residents of Appalachia fiercely oppose the project, sometimes physically blocking the path of the pipeline.

The Permissions Reform Bill, of which we know little except for a one-page summary courtesy of The Washington Post, could also be called the “Complete the Mountain Valley Pipeline” bill. In fact, it’s an entire section of the one-page document, which requires immediate action by federal regulators to approve the project and removes future legal jurisdiction from the Fourth Circuit Court of Appeals, which has consistently blocked the pipeline due to impacts on endangered wildlife, rainforest and human health – and transferred it to the DC circuit, which often sided with federal agencies in these areas.

Even that does not guarantee Mountain Valley’s completion, as it would not exempt the project from environmental laws. But shopping for locations for a friendly short circuit should take care of those challenges. And Manchin’s special pleading for Mountain Valley reinforces how clearance isn’t an issue as long as you have powerful friends.

Elsewhere, the one-page document cuts the time allotted for National Environmental Policy Act (NEPA) reviews to between one and two years, streamlines Clean Water Act reviews and certification, coordinates inter-agency reviews with a project manager, requires the president to draw up a list of 25 “high priority” infrastructure projects of all types according to various criteria (reduction of energy costs, expansion of energy trade and potential for decarbonization) , and requires agencies to act quickly on legal challenges.

The deal gives Democrats who aren’t inclined to dump the permissions process some leverage.

All of these things could be done tomorrow without legislation, and would surely be done (virtually all jurisdictions talk about faster project approvals) if the resources were made available. “If you want to improve permitting, don’t weaken the laws,” writes Erik Schlenker-Goodrich, executive director of the Western Environmental Law Center. “To scale with agility, strengthen the agency culture to enable creative and agile decision-making and equip agency staff with the resources to act.”

Instead, this bill creates a countdown to allow for revisions that probably cannot be done. Although there is some funding for NEPA implementation in the IRA, crashing the timelines would increase the monetary need to a level that is not being provided. Depending on the wording of the licensing reforms, either the timelines will remain exactly the same due to lack of state capacity, or the timelines will simply halt reviews before they are properly completed, force corners to be cut and will increase the possibility of errors or omissions. This will be exploited, at least initially, by fossil fuel interests. And once this infrastructure is built, it will be extremely difficult to dislodge it in the years to come, which will weaken the climate benefits by lengthening the timetable for the green transition.

This is part of what satisfies the oil and gas interests of the IRA and its companion. But Green groups, who have been enthusiastic about the IRA, are not on board with allowing the reforms. The Sierra Club, which has fought to shut down coal plants for years, trashed the deal, as did Earthjustice.

In addition to the one-page document, there is no invoice text for something that needs to be done in the short time Congress returns in September. Schumer wants to tie it to an ongoing resolution to fund government, to shove it down the throats of Democrats who may not agree with deregulation, but don’t want to see government shut down.

That’s smart, but it also gives Democrats who aren’t inclined to get rid of the permitting process some leverage. If authorization is to be accelerated, it should be fully funded, by definition. We must insist on this. Or maybe the progressives have something else in mind to serve as a prize for their vote. Without concessions, there is no need to break environmental laws and threaten communities.

Republicans would presumably be interested in deregulation and could provide enough votes to push it through (it would take 60 votes in the Senate anyway, so Republicans will be key to the outcome). But having spent a week throwing a tantrum over Manchin’s alleged betrayal of the IRA, they may not be in the mood to forgive. Either way, we know what they want: Last week, Senate Republicans convinced Manchin to rescind a rule requiring climate change to be considered in NEPA rulemaking. This rule change won’t pass the House on its own, but to get Republican votes to authorize the reform, something similar is likely to be asked.

The Progressives were typically kicked into the Build Back Better process, and they were always going to be kicked in, due to the need for that Manchin (and Kyrsten Sinema) 50th final vote. The dynamics of the licensing bill are different. He may pass anyway in a deal between Democrats and Republicans backed by the oil industry. But since they were not parties to the agreement, there is no reason for progressives to participate in this process. And there are good reasons for them to wait for better conditions. The Democratic leadership made the deal, so they could find the votes for it.