President Joe Biden said the Inflation Reduction Act, which contains about $370 billion in climate spending, represents the most sweeping government investment in clean energy “ever, ever, ever.” To make sure the investment is worth it, he needs an overhaul of federal rules and regulations that are equally unprecedented. Congress should make such reforms a priority.
Building anything in the US requires navigating a rainforest of red tape. The main obstacle is the National Environmental Policy Act, which requires federally funded projects to undergo a rigorous environmental review process. Mandatory impact studies can run hundreds of pages, cost millions of dollars and take years to complete. Faced with such an expensive job, many projects have not gone down. Others have endured endless legal challenges.
The green-energy project is like no other. Wind, hydroelectric, geothermal, solar, nuclear: However desirable such endeavors may be – even to the government itself – they are not suitable for the sheer obstructive power of the state and federal rule books. Permiting now takes almost three years on average for renewable projects, while the preparation time for the impact statement rose by more than 50% between 2000 and 2018. The inherent uncertainty for this process imposes untold additional costs.
Without change, this system could thwart Biden’s climate goals. By one estimate, the funds in last year’s IRA and infrastructure bill should be enough to reduce US emissions to 42% below 2005 levels, close to the president’s goal of a 50% reduction by 2030. But green energy companies argue – persuasively – that this goal is impossible without permission to reform. As one example: High-voltage transmission capacity must increase by around 60% by 2030. Under current rules, such development could take twice as long.
Give credit to West Virginia Senator Joe Manchin, then, for making permitting reform a priority. Last summer, as the bargaining over the IRA was getting worse, Manchin offered Democratic leaders a deal: He would vote for big spending in exchange for a promise to revisit the issue of allowing the street. The two parties agreed and Manchin actually offered his proposal as part of a continuing resolution in September.
Among other things, the plan would impose deadlines on environmental assessments, create a list of projects of “strategic national importance” for priority review, and give the federal government more power to permit transmission lines. (Not incidentally: It would also speed up approval of a natural gas pipeline crossing West Virginia.) After a showdown with Senate Republicans, the package quickly died.
Even so, Biden and Republican leaders say that reform measures that allow some sort remain a priority. By fixing some of the flaws in Manchin’s proposal, they should be able to make a deal.
As a start, any such deal should scrap the idea of time limit; perversely, truncated reviews can actually lead to worse delays by encouraging more lawsuits. Instead, Congress should make it harder to integrate projects with questionable legal processes. In particular, it should shorten the statute of limitations for such suits, increase the requirements for standing in litigation, and limit the ability of courts to issue injunctions on projects that have undergone significant environmental review.
Furthermore, the clean-energy economy will rely heavily on transmission capacity. But new power lines are all easily blocked by parish conditions and local interests. The best bet is for Congress to pass some version of the SITES Act, which would empower a single federal regulator to oversee large interstate transmission projects in the national interest.
All federal agencies, finally, new efforts are needed to maximize exemptions, review speed and otherwise prioritize clean-energy projects, an act that is above all leadership demands. Elected officials are quick to call climate change an “existential threat.” They should show a little more urgency.