Low-Energy Fridays: Permitting Reform is a Clean Energy Issue
These days, both Republicans and Democrats seem interested in permitting reform—so much so that we may see bipartisan action on the issue soon. Both parties are recognizing that permitting timelines are slowing down their energy and infrastructure agendas. However, each party’s doubts about the motivations of the other is the likeliest barrier to any such reform, so it’s worth asking a simple question: who benefits from permitting reform?
Last year we took a glance at the federal permitting dashboard, which showcases the permitting of select major projects. The dashboard showed that 65 percent of the energy projects were for clean energy, 16 percent for transmission and only 19 percent for fossil fuels. There are similar trends seen in permitting energy projects on public lands, which fall under the Bureau of Land Management (BLM). For projects requiring the highest level of environmental review, an Environmental Impact Statement, there are more than three times as many renewable projects as there are oil and gas ones. Clearly, clean energy projects are heavily impacted by permitting and would likely benefit the most from reform.
Those opposed to permitting reform argue that it will ease the buildout of fossil fuel infrastructure. But the evidence shows that fossil fuels benefit more from the status quo. When looking at the BLM’s oil and gas projects last year, 31 percent of them received a categorical exclusion (CX) under the National Environmental Policy Act, while only 21 percent of renewable projects received CXs.
Some of the largest oil and gas projects happening today are liquefied natural gas (LNG) exports (which research has shown to lower global emissions by displacing foreign coal), but most of these projects have already been approved. In 2014, there were 13 LNG export terminals proposed to the Federal Energy Regulatory Commission and only one project had been approved and was under construction. As of February 2023, those figures are flipped, with eight LNG export terminals either proposed or in pre-filing, and 16 LNG export terminals approved, five of which are already under construction. This 16 does not count the eight that have already been built since 2014.
In short, the data is increasingly showing that long permitting timelines are a significant issue for clean energy and potentially even more than for fossil fuels. Without reform, this dynamic will only get worse, as most of the new electricity projects being built in the United States are clean energy, and investment trends are shifting in favor of clean energy.
In the past, environmental risks were the biggest reason to oppose permitting reform. But these days, environmentalism is now one of the biggest reasons to pursue permitting reform, as pursuing no reform in this space would entrench incumbent, mostly fossil fuel, energy providers. If Congress is serious about protecting the environment, it’s going to have to pursue policies that improve the status quo. Given that the last major permitting reform passed in 2015 under a Democrat-controlled Senate and presidency but Republican-controlled House of Representatives, the current political environment is ripe for action.