August 29, 2022
With the Inflation Reduction Act (IRA) now signed into law, attention is shifting to the next potential area for energy reform: permitting. Senator Manchin has outlined his priorities for energy permitting reform legislation, which could be voted on by the end of September.
Although the text of the proposed bill has not been revealed yet, Senator Manchin released a list of “Energy Permitting Provisions” (Permitting Reforms) that he thinks should be revised to speed up the process for construction and development of both clean and conventional energy projects.
The purpose of the Permitting Reforms is to accelerate approval of energy infrastructure projects suffering from delays due to burdensome approval processes and legal challenges. The Permitting Reform aims to provide certainty with regards to decision timelines and facilitate investment in these projects.
Unlike the IRA, which was passed as part of the budget reconciliation and required only 50 votes for approval, the permitting reform bill would require a full 60 votes in the Senate since it does not impact the budget.
The Permitting Reforms call for the President to designate 25 high-priority energy infrastructure projects and to prioritize permitting for these projects. The list of projects comprises both clean energy projects (including nuclear, hydrogen, renewables, as well critical minerals, carbon capture and sequestration) as well as fossil fuel-based energy projects. The criteria for the selection of these high-priority projects include energy reliability, consumer costs, decarbonization potential and energy trade with allies of the U.S.
The Permitting Reforms aim to limit significant project delays caused by litigation establishing a statute of limitations for court challenges. Additionally, the Permitting Reforms require that if a federal court remands or vacates a permit for energy infrastructure, the court must set and enforce a reasonable schedule and deadline, not to exceed 180 days, for the agency to act on remand.
The Permitting Reforms seeks to clarify certain requirements under Clean Water Act (CWA) and limit delays from environmental impact assessments (EIAs) under the National Environmental Policy Act (NEPA).
The Permitting Reforms would revise NEPA by setting a two-year limit for permitting processes for major infrastructure projects and one-year limit for lower impact projects. Additionally, it would require a single inter-agency environmental review document and concurrent agency review processes.
The reforms would further require that a final decision (grant, grant with conditions, deny or waive certification) under section 401 of the Clean Water Act be issued within one year of a certification request, call for States and Tribes to publish definitive requirements for water quality certification requests, and prohibit State and Tribal agencies from withdrawing their applications to stop, pause or restart the certification clock.
The Proposed Reform seeks to replace the Department of Energy’s national interest electric transmission corridor process with a national interest determination by the Secretary of Energy pursuant to which the U.S. Federal Energy Regulatory Commission (FERC) could issue a construction permit for transmission facilities. The Permitting Reforms also seek to enhance the permitting authority of the Federal Government for interstate electric transmission facilities that have been determined by the Secretary of Energy to be in the national interest.
Moreover, the Permitting Reform seeks to clarify FERC jurisdiction to regulate hydrogen pipelines, energy storage and import and export facilities.
On a project specific item, the Permitting Reforms would direct the relevant governmental agencies to take all necessary actions to permit the construction and operation of the 303-mile natural gas Mountain Valley Pipeline and give the DC Circuit courts jurisdiction over any further litigation.
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