In the news recently is the House Republican led bill HR1, whose passage included a few of their Democratic colleagues. This bill is a major effort to reestablish the prior administration’s so-called policy of energy dominance, while at the same time focusing on mineral development and permitting reform. The overall theme of this bill is an attempt at ensuring that Americans have a reliable – and domestic – supply of energy to fuel their homes and transportation. Some of the laws it touches upon would simply address the supply of fossil fuels through importation or to maintain access to domestic fossil fuels by maintaining processes like fracking. And the House Republicans also would express disapproval of President Biden’s revocation of the Keystone XL Pipeline’s permit.
HR1 is well-intentioned and will be good for Americans if the House Republicans can convince the Biden administration and the Senate to pass it into law. But there are additional foundational changes that could be taken to deliver world-class infrastructure – regardless of your preferred energy source – in an efficient and environmentally-friendly way.
For example, for the permitting process, for both traditional and innovative energy projects, simply being approved to build is onerous and time consuming. After all, it is not uncommon for government agencies to sit on applications for 4-6 years, or more, just to begin breaking ground. An oil well or wind turbines alike could take a decade or more from conception to completion. And this is lightning fast compared to building nuclear plants! The result to the American people is higher production costs and decreased supply, which means more expensive energy prices. These inefficiencies are a problem and must be addressed in order for Americans to have access to affordable energy now, not years in the future.
There is already an appetite from both sides of the political aisle to make permitting for energy production quicker and more efficient. Both Democratic Senator Joe Manchin and Republican Congressman Garrett Graves have proposed laws in recent years that would attempt to streamline the permitting process that many energy companies must endure to build. Even progressive outlets such as Vox recognized the need for reform. This bipartisan opportunity should be seized upon.
Streamlining the process to produce energy should not be confused with compromising environmental protections and standards. Protecting the environment is a given and the environmental impacts of a project should be considered before buildings are built, oil wells drilled, etc. Meaningful reform can occur without sacrificing high environmental standards. The idea is to make it quicker and less expensive to obtain a permit to build while ensuring compliance with existing rules.
Simple and commonsense solutions exist to streamline these processes. One such solution would be to switch to a system of general permitting or “permit by rule.” Under either approach, Congress would set certain standards to be met for a project to be approved. Once an applicant is able to establish that all standards are met, the application would be approved, unless the government proactively demonstrates noncompliance. This would create certainty as to exactly what an applicant must do to have their project approved. It would also prevent bureaucrats from sitting on applications for indefinite periods of time. Such a system would benefit both project developers as well as advocates for strong public health, safety and environmental standards. This is because expedited approval of a permit would come with expedited enforcement by regulators, heightening the permittee’s incentive to comply.
Another solution would be to allow applicants to pay for an expedited review. For high dollar projects, each year of waiting for a permit to be approved costs significant amounts of money. Each year of delay causes production costs to increase, and many times could result in the project being shelved altogether. A system of paying for expedited review would be beneficial for the company because it could begin its project quickly. The government would have revenue to pay for its review processes. This idea could be mutually beneficial.
Bottom line, Americans can have it all – a strong environment and an improved permitting system that delivers a strong economy. In this context, energy reform does not have to be a zero-sum game. Fossil fuel producers and green energy can both benefit from streamlining federal permitting laws. And this effort can be done with simple policies that could receive bipartisan support. It’s time to think differently when it comes to permitting reform.