The U.S. needs technology innovation, upgrades to and expansion of existing energy infrastructure, and supply chain investment to drive down domestic and global emissions, increase U.S. energy security and keep energy prices affordable for U.S. consumers. However, a convoluted regulatory regime and permitting process is hampering the U.S.’s ability to meet these concurrent goals.
The Problem and Need for Reform
The common threat to technology innovation and infrastructure expansion is uncertainty. The existing scheme of federal, delegated, and state reviews and consultations is time-consuming, legally complex, costly, and unpredictable. Uncertainty and the related risk jeopardizes capital access and project economics. As a result, deployment of technologies and infrastructure is delayed, innovation stalls, consumers pay more for their energy, and natural resources necessary to reduce global emissions and abate climate change are difficult to access.
Challenges with the US permitting regime statutory authorities and implementation can be grouped into several categories, each contributing to the uncertainty stifling U.S. clean energy development.
- Lack of coordination across agencies and commitment to deadlines leads to inefficiencies, conflicts and delay, increasing project costs and delaying development.
- Overly broad interpretation of statutory language and resulting application of requirements creates confusion for developers and inefficient use of agency resources.
- Insufficient or conflicting statutory authority prevents efficient regulatory process.
- Lack of specificity in statutory authority.
- Shifting regulatory requirements create uncertainty for project developers.
- Lack of enforcement mechanisms to require states to complete permit reviews in a timely fashion.
- Protracted litigation that results in retroactive claw back or review of permits, and injunctions and stop work orders.
- Lack of transparency in regulatory review process undermines accountability for review deadlines and process.
While the descriptions below serve as general areas for improvement, each can be improved upon through various modifications of statutory and regulatory mechanisms. Issues and proposed solutions are grouped below with respect to their governing statutes and do not serve as an exhaustive list.
CRES supports the all-of-the-above approach to technological deployment that is needed to reduce global greenhouse gas emissions. The permitting process should serve all energy infrastructure developers and, ultimately, consumers rather than provide an opportunity to delay particular technologies while giving others a leg up. Unfortunately, political risk and legal uncertainty have come to characterize the permitting process. Instead, the process should be transparent and provide developers with certainty throughout review. Therefore, a holistic approach to reform is needed to overcome barriers to timely reviews and permitting. Simply imposing time restrictions or page limits for review does not address the complexity of the underlying issues. Opportunities to improve the permitting process and remove barriers to cleaner energy extend across.
Specific Opportunities for Improvement
National Environmental Policy Act
NEPA reforms needed to assure clean energy is built and increasingly relies upon domestic resources.
- Clarify statutory intention. Clarify that a major federal action is limited to those which are “subject to Federal control and responsibility,” and that federal financial assistance alone does not connote either. If only a small part of a project is on public lands, the federal agency’s NEPA review should be limited to that piece of the project and not its entirety.
- Focus on reasonably foreseeable impacts instead of cumulative effects, compare to reasonable alternatives. Both “indirect” and “cumulative” effect analysis should be replaced with an analysis of reasonably foreseeable environmental impacts with a reasonably close causal relationship to the proposed action while the alternatives weighed should meet the purpose and need of a developer’s proposed action.
- Provide developers with insight into the review process. Upon submitting an application, developers await the issuance of a notice of intent to conduct the environmental review to indicate their application has made it to the top of the pile. Agencies should issue a notice within 30 days of receipt to provide developers with clarity on the sufficiency of their filings and ability to move forward in planning.
- Use preexisting data and analysis. Allow agencies to utilize previously conducted Environmental Assessments (EAs) or Environmental Impact Statements (EISs) so long as the projects are similar and have similar impacts.
- Categorical exclusions. Expand the list of categorical exclusions to include the replacement of equipment and facilities with functionally equivalent equipment and allow agencies to share and use one another’s categorical exclusions for energy projects under NEPA.
- Document preparation. Permit a developer to assist agencies in conducting environmental reviews to help speed up the process and to resolve issues without taking control or authority away from the lead agency.
Reducing regulatory risk driven by unclear standards and political opposition
Clean Water Act
- Define scope. Provide developers with clarity by establishing a clear definition of “waters of the United States” while reducing state administrations’ ability to block energy projects based on political preference under Section 401 and ensuring that Nationwide Permits issued in 2021 continue to streamline Section 404 permitting for the development of critical energy projects.
- Timelines for states. States should be obligated to participate in delegated review in a timely fashion and not allowed to introduce concerns beyond those directly related to actual water quality affected by specific water discharge.
Clean Air Act
- New Source Review. Reform the New Source Review program to allow industry to make upgrades to existing facilities to improve efficiency and reduce emissions by providing greater regulatory certainty about when facility upgrades require a permit.
Endangered Species Act
- Reduce timeframes for Endangered Species Act consultations. Reform the Section 7 consultation process under the Endangered Species Act (ESA) by shortening consultation timelines. When a species cannot be identified by survey in an area considered its habitat by agency documentation, consideration of impact on the species should not be part of the consultation process. Prevent agency identified deficiencies in the application to delay start of the clock by establishing that consultation begins upon the developer’s initial request.
Migratory Bird Treaty Act
- Clarify the definition of accidental take to prevent further punishment by way of fines for industry for operating permitted facilities.
National Historic Preservation Act
- Limit the properties in the area that may be affected to those that are already listed, rather than including those that are “eligible” for listing.
Remove roadblocks that consistently extend review time while failing to improve environmental outcomes.
Natural Gas Act
- Reduce impediments to export of domestic resources. Congress should afford LNG equal treatment with crude oil by removing any export permitting requirement and Congress should amend Section 3 to remove the need for DOE approval to export to Free-Trade Agreement countries.
- Honor Certificates of Public Convenience and Necessity. The Federal Energy Regulatory Commission’s issuance of a Certificate of Public Convenience and Necessity and the developer’s resulting ability to exercise eminent domain should be honored by state and federal agencies that failed to complete their review within the federally allotted time.
- Clarify federal government permitting authority for interstate electric transmission facilities. Determine certain activities within existing rights of way are not major federal actions, including activities such as geotechnical investigations, off-road vehicle use in existing rights-of-way, meteorological towers, geothermal exploratory wells, repairs or upgrades to existing transmission infrastructure, vegetation management, and constructions or repair of roads to incentivize developers to operate within a limited footprint and reduce environmental impact.
- Require the Nuclear Regulatory Commission to develop and implement a unique review process for the permitting of advanced reactor technologies.
Class VI Geologic Sequestration Well Permitting
- Amend the Safe Drinking Water Act to clarify the requisite timeline for deciding on the approval or disapproval of a state underground injection control program is no more than 90 days. If an underground injection control program application is not evaluated by the EPA in 90 days, it would be considered approved.
Tech-Neutral Approach to Offshore Energy
- Consistent processes. Offshore development, whether it be leasing to renewable or traditional resource developers, should be subject to comparable processes. Clarify that the congressional intent to ensure “expeditious and orderly development” applies to offshore wind in addition to offshore oil and gas.
- Consistent support. Create a reciprocal obligation on the part of all federal agencies to support the Secretary in implementing the objectives of “expeditious and orderly development” of offshore renewable energy.
Mining Reforms Needed to Secure Critical Minerals for the Clean Energy Economy
- Timely reviews in mineral supply chain. Designates a lead federal agency to coordinate the mine permitting process to maximize efficiency and minimize delays for mining projects on federal land. Authorizes a memorandum of agreement between the lead agency and the project sponsor or state or tribal government to carry out permitting activities. Sets time limits for key steps in the federal permitting process.
- Congressional approval. Prohibits moratoria on leases, claims, or permits for mining on federal lands without an act of Congress. Prohibits the reversal of existing leases, permits, or claims for critical mineral or aggregate development without an act of Congress.
Statute of limitations
- Judicial review. Require meaningful participation in the review process before filing suit and provide a reasonable timeline to file those lawsuits and reduce litigation risk by reducing the timing of judicial challenges to project approvals by reducing the statute of limitations.
- No retroactive permit vetoes. Clarify existing law to promote timely and thorough consideration of Clean Water Act Section 404 permits and eliminate unfair and confusing permitting actions by states in order to support domestic energy production.
- Parity in judicial review. Create parity in judicial review of offshore wind and offshore oil and gas projects by amending the U.S. Code to require U.S. courts of appeals to have original jurisdiction over approvals of offshore wind plans.
Eliminate Gaps in Transparency Through Comprehensive Inventory
- Fully capture all interactions between developers and federal permitting gatekeepers will allow Congress to close the loopholes, while incorporating existing oversight resources and reporting mechanisms passed in the FAST Act (2015) and IIJA (2021).