Permitting and Renewable Energy in the US
Overview
With the recent passage of the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), the United States has emerged as a world leader in the clean energy transition. However, electrification projects with the potential to reduce our carbon emissions have experienced myriad delays as a result of slow-moving permitting frameworks across multiple agencies, both at the federal and state level. Meeting ambitious goals for emission reduction also requires the construction of new transmission lines, which have their own permitting challenges. Shifting from fossil fuels to renewable sources is being slowed, with convoluted permitting processes serving as one of the primary culprits. To realize the potential of the IRA and the IIJA, domestic permitting requires substantial reform.
Drawbacks of the Current Permitting System
Agencies like the Federal Energy Regulatory Commission, the Department of Energy, and the Environmental Protection Agency often have very lengthy permitting timelines. Coupled with additional requirements from state and local entities, reviews can last several years. As a result, the deployment of clean energy has suffered. For example, there are multiple wind, solar, and pipeline projects that remain stuck in permitting limbo. Only about 21% of planned projects are in the construction phase, with many transmission line projects still on the back burner.
Before entering the construction phase, the current permitting process requires that all projects obtain the green light from three different levels of oversight: local, state, and federal. Projects spanning across multiple states also require interstate approval. While federal and state permits typically have clear processes to follow, the granting of local permits is based primarily on how the construction of the project will affect the local community. Local permits also depend on local zoning laws and restrictions. To obtain a state permit, projects must be approved by the relevant agencies and comply with all state laws. Given that not all states have the same laws regarding environmental protection or infrastructure, interstate permitting can become complex. Interstate permitting is particularly challenging for transmission projects and clean energy projects involving regional power grids. Specifically, a project that involves power generation requires an additional permit to access the grid, with permit requests being reviewed based on the order in which they are received. Transmission project timelines have proven to be more lengthy than gas pipeline projects with median construction times of seven and three years, respectively.
When projects are large enough, they can require several federal permits, rather than just one general federal permit. While there may be multiple agencies involved, one specific agency takes on the “case,” providing guidance to the other agencies. Federal law and statutes can be grouped into three main categories of permitting: wildlife protection and conservation, air and water quality, and usage of federally protected land. These three categories are general and are deemed the most applicable to clean energy projects.
Currently, no one level of oversight is responsible for the most delays in permitting. The stall in permitting is a result of delays on multiple levels, whether it be communities protesting new projects, state agencies using poorly structured “queue” systems, or federal agencies requesting additional permits. In recent years, many solar and wind power projects have been canceled or delayed because of permitting. While it is undoubtedly important to consider environmental protection and conservation, there is broad agreement that agencies need to become more efficient in their permitting process. Additionally, many of the federal statutes for permitting have not been modified since their implementation, with some dating back as far as the 1960s. These outdated regulations may be contributing to a stalling permitting process.
The US has advanced significantly in clean energy development and deployment, but lengthy permitting processes remain a barrier. Fortunately, there is potential for reform, especially as the renewable energy industry expands to meet our modern energy needs.
Permitting Reform – Inflation Reduction Act & Infrastructure Investment and Jobs Act
While permitting has been a major obstacle standing in the way of clean energy advancement, both Democrats and Republicans recognize the need to reform the permitting system. Two major pieces of legislation, the Inflation Reduction Act and the Infrastructure Investment and Jobs Act, contain efforts to improve permitting. Senators Joe Manchin (D-WV) and Shelley Moore Capito (R-WV) proposed competing permitting reform bills, suggesting a growing Congressional appetite for legislation.
The Inflation Reduction Act, with its goal of accelerating the construction of clean energy infrastructure, includes provisions for making the permitting process more efficient on multiple levels. The IRA will invest $350 million into the Federal Permitting Improvement Steering Council (Permitting Council) through 2031 to provide the Council with more resources for expediting slow permitting processes. The IRA will also grant $3 billion to the Environmental Protection Agency for a program to reduce air pollution, with $750 million being allocated to areas that are not meeting current standards; some of these funds will be used to improve planning and permitting for projects that fall into this category. The IIJA granted permanent authority to the Permitting Council, improving FAST-41 requirements and imposing a mandatory quarterly review to promote transparency.
The Biden Administration appears eager to accelerate clean infrastructure as we approach the midway point of the first term. In May of 2022, the Administration released a plan to accelerate permitting in order to complete the proposed infrastructure project goals of the IIJA in time. The “Biden-Harris Permitting Action Plan,” seeks to accelerate the permitting process while still ensuring that the permitting process is thorough, guided by science, and responsive to local communities, tribal governments, and other levels of government. The plan provides five aspects to make improvements to the permitting process: promoting inter-agency coordination on permitting approval early in the process; implementing explicit timeline goals to ensure productivity; conducting outreach to all entities at stake in projects such as tribal governments, local governments, and state governments; promoting agency responsiveness and functionality; and funding agencies properly to ensure that they are not lacking in resources. In the first 90 days after the plan’s release, two federal agencies, the Office of Management and Budget and the Council on Environmental Quality coordinated to ensure that agencies were able to implement the plan’s guidelines.
More recently, the Biden-Harris Administration released another action plan, the “Accelerating Infrastructure” Plan in October 2022. Similar to the Permitting Action Plan, this plan focuses on fixing roadblocks that stand in the way of delivering on the infrastructure goals of the Bipartisan Infrastructure Law. The plan includes three main priorities for infrastructure, with smaller, more specific goals contained within these categories. The three main goals are: delivering projects on time, delivering projects on task, and delivering projects on budget. To deliver projects on time, the plan emphasizes pushing funding to underserved rural communities to speed up their planning processes. It also promotes the oversight of energy projects by the DOE’s new Office of Clean Energy Demonstrations. To deliver projects on task, the plan establishes a Project Delivery Center of Excellence at the Department of Transportation, promoting efficient workforce training and increasing permitting capacity within federal agencies. Finally, to deliver projects on budget, the plan aims to conduct thorough budget analysis for projects, promoting coordination between the Office of Management and Budget and other project leaders, as well as using alternative delivery approaches when funding is constrained.
Senator Joe Manchin released his “Energy Independence and Security Act of 2022” in September of this year. Frustrated by permitting delays in projects in West Virginia, Manchin secured approval from majority leader Chuck Schumer, Speaker of the House Nancy Pelosi, and President Joe Biden to pass this permitting package. The bill includes provisions that seek to make the permitting process more efficient by streamlining the authorization and review processes for energy projects, prioritizing national energy projects that would significantly benefit the American public, investing in the Federal Permitting Improvement Steering Council to improve reviewing capabilities, and modernizing permit laws to comply with updated standards derived from the Clean Water Act and the Clean Air Act. While portions of Manchin’s bill could successfully contribute to reforming the permitting process, there are concerns among both Democrats and Republicans, making passage challenging. Democrats especially are worried about the bill’s approval of the Mountain Valley Pipeline and expediting fossil fuel projects. Republicans have their own reform bill, and some will withhold support because of Manchin’s support of the IRA.
Conclusion
Advancing renewable energy projects is a vital step towards combating the climate crisis and working towards a new era of energy. As one of the largest contributors to global emissions, decarbonizing the American power grid is essential to mitigating the climate crisis. Even with legislation for advancing renewable energy projects, the permitting process continues to inhibit timely construction of these projects. However, if the initiatives of the Inflation Reduction Act and the Infrastructure Investment and Jobs Act are properly implemented - along with the Biden Administration’s action plans - there’s the possibility for further progress.