Debt-Ceiling Bill Alters U.S. Environmental Law, in Boost to Energy Projects

The bill, which next goes to President Biden’s desk, tightens the scope of environmental reviews required under the National Environmental Policy Act of 1970 and allows more projects to win approval without having to undergo the most complex types of reviews. It also sets time limits of no more than two years to complete the studies.

And in a concession to the fossil-fuel industry, it expedites the permitting for the Mountain Valley Pipeline, a 303-mile natural gas pipeline in West Virginia and Virginia that has been tied up in litigation by opponents. The pipeline has been a top priority of Sen. Joe Manchin (D., W.Va.), a pivotal vote in the Senate who has also been an outspoken proponent of broader permitting changes.

But the bill doesn’t make it easier to build and pay for the transmission lines to get wind and solar power produced in remote areas to urban markets, which Democrats have called for. It also doesn’t restrict opponents’ ability to sue to delay projects, a priority for Republicans. Lawmakers of both parties say they plan to continue working on permitting legislation.

“This was a starting point, and we are going to make sure that we can get clean energy expanded by working on transmission in the future," said Shalanda Young, director of the Office of Management and Budget who helped negotiate the agreement on behalf of the White House.

“This is all about unlocking America’s resources," said Rep. Garret Graves (R., La.), a top Republican negotiator. Graves, who authored a previous permitting bill that the deal drew from, said negotiators decided not to include a transmission provision in the bill because lawmakers had little previous experience with the issue.

Industry groups say bureaucratic tie-ups in the review process can impose yearslong delays on energy projects, making them unfeasible. The most rigorous type of review takes an average of 4½ years to complete, according to the White House.

Overhauling the permitting process has been a priority for Republicans, especially those representing oil- and gas-producing states. Democrats have been wary of making big changes, fearful that they would weaken environmental protections.

Last year’s passage of the Inflation Reduction Act, one of Biden’s signature policy accomplishments, changed that dynamic. The act included new tax incentives for renewable energy investments, already one of the fastest-growing types of projects. But the IRA stopped short of overhauling the federal government’s permitting process. A side deal on permitting championed by Manchin went nowhere, but lawmakers continued to discuss possible paths forward in recent months.

Wind and solar generating projects accounted for roughly 90% of all power-generating projects waiting to join electric grids in 2022, according to the Lawrence Berkeley National Laboratory.

“We see an enormous amount of demand for new clean energy projects that are being held up," said Sasha Mackler, who directs the energy program at the Bipartisan Policy Center. “That reality has brought Republicans and Democrats together here."

Some environmentalists worry the changes will also allow the most polluting projects to get off the ground with minimal oversight.

Raúl García, vice president of policy and legislation at Earthjustice, said that while it is important to encourage renewable energy projects, “this isn’t the way to do it."

The dispute over the permitting language underscores a rift between wind and solar energy backers and environmental groups committed to protecting natural resources. The split is apparent within the Democratic caucus.

Rep. Scott Peters (D., Calif.), a clean-energy advocate, said he supports the permitting provisions. The 1970 law “was designed to stop bad things," he argued. “We can’t let it slow down the transition to a clean economy, which is what it threatens to do."

But Rep. Raúl Grijalva (D., Ariz.), the top Democrat on the House Natural Resources Committee, said the bill “gives polluters a shield, inevitably worsening an already unacceptable status quo."

Environmentalists are particularly concerned about the inclusion of the Mountain Valley Pipeline in the bill. So is Sen. Tim Kaine (D., Va.), who unsuccessfully sought to pass an amendment to strip the pipeline from the measure when it came up in the Senate.

“It’s taking people’s land in the poorest part of my state," he said.

West Virginia’s senators, Manchin and Republican Shelley Moore Capito, have pushed to complete the pipeline for years, and both supported the bill. “I am proud to have fought for this critical project," Manchin said.

Jason Grumet, chief executive of the American Clean Power Association, called the bill a good start, adding that upgrading electrical grids remains unfinished business. Mike Sommers, chief executive of the American Petroleum Institute, which represents U.S. oil producers, said the group wants to “build on this progress."

Currently, environmental reviews take a broad, long-term look at a project’s impact. The bill would restrict the studies to a project’s “reasonably foreseeable" impacts. And it allows project developers to prepare their own reviews, although it doesn’t cede the federal government’s power over final approval.

It also includes ways to streamline the process. For instance, each project would have one designated federal agency responsible for ensuring reviews are completed on time. Right now, multiple agencies undertake their own reviews for the same project, often with little coordination. It would also allow projects to piggyback on existing reviews for similar projects rather than starting from scratch.