A legislative package (H.R. 1) making its way through the U.S. House would streamline permitting of energy projects, increase domestic energy production, ensure reliable energy supplies and reduce emissions – all things that have been deemed critical on both sides of the aisle. Despite this, the Biden administration is already threatening to veto H.R. 1 and Senate Majority Leader Chuck Schumer (D-NY) has called it “dead on arrival.”
Permitting Reform Is Critical For Domestic Energy Production
Both parties agree that permitting reform is necessary to bring more energy resources onto the grid. As Rep. Garret Graves (R-La.) explained about H.R.1:
“Dems need this more than the Republicans do. You look at the mandates that are in place for emissions reduction for the deployment of renewables in their [Inflation Reduction Act]. This is math and science. You cannot meet the critical minimal volumes that are needed in order to meet the targets that they’ve established.
“Dems may come to the table because they need it for their renewable energy, they need it for their transmission. Republicans may come to the table because they need it for their pipelines or whatever else. But there is no reason why this should not be a bipartisan effort.”
And it’s not just in the halls of Congress where there’s consensus on the need to reform an outdated permitting system. A broad and diverse group of trade associations across the country – the Chamber of Commerce, Independent Petroleum Association of America, and American Petroleum Institute join others like the American Council on Renewable Energy, American Hotel and Lodging Association, American Trucking Association, Electric Power Supply Association and more – wrote to Congress this week, explaining:
“Today, the single biggest obstacle to building the infrastructure of the future is a broken permitting system…Public and private sector infrastructure projects will improve our economy and the lives of millions of Americans. Investing in highways, bridges, transit systems, and ports will move people and goods more quickly and efficiently. Building new energy production, transmission, and distribution projects promises to improve energy reliability and reduce emissions. Expanding access to broadband can close the digital divide, and rebuilding failing water systems will ensure safe drinking water. And we can strengthen our national security by expanding domestic production of critical technologies and the raw materials they require. But America cannot accomplish any of this if the outdated, inefficient, and unpredictable permitting process is not improved.
“We are pleased to see support for modernizing our permitting process from across the ideological spectrum, and a recognition that the current system is broken.” (emphasis added)
A failure to address permitting reform will tie hundreds of gigawatts (GW) of energy up in a complex review process, probable litigation, and stymie regional climate plans and emission reductions. PJM’s recent report identified a total of 290 GW – enough to power over 200 million homes – as tied up in the interconnection queue with a historically low completion rate of 5 percent. Their territory alone covers 65 million people across 13 states, impacting congressional districts of every size and party affiliation.
As policymakers incentivize large-scale renewables, more projects flood the interconnection queue, meaning longer wait times to bring projects online as states and cities race to meet their climate goals. According to the New York Times, “more than 8,100 energy projects — the vast majority of them wind, solar and batteries — were waiting for permission to connect to electric grids at the end of 2021, up from 5,600 the year before.”
Without permitting reform, the interconnection queue will balloon, emission reduction deadlines will pass, and prices will soar.
H.R. 1 Includes Permitting Reform
H.R. 1 is a package of bills that would work to address the issue. IPAA and 24 other oil and natural gas associations have voiced our support for its contents, which include:
- Restore certainty in federal on- and offshore production to restore regularity in leasing and permitting processes and ensure that federal production resumes at appropriate levels
- Remove barricades to vital infrastructure development including pipelines, transmission lines, roads, and bridges
- Provide sustainable climate change solutions through increased natural gas use for electricity generation, which supports renewable integration with firm power resources, and encourages allies abroad to do the same through increased LNG exports
- Restore energy security and lower prices by removing the barriers that have hindered industry from producing up to three million barrels of oil a day and represents the very energy sources that meet 80 percent of American’s energy needs
Bottomline: Permitting reform is critical not only for domestic oil and gas development, but across the energy spectrum. It will be needed to efficiently deploy renewable technologies, ensure grid reliability, and build the infrastructure needed to implement innovative technologies like hydrogen and carbon capture. The country needs to have realistic conversations on how to accomplish this and sidelining legislation before it has the opportunity to be properly discussed isn’t how we achieve that.
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