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Faster energy permitting gains traction in US debt-limit talks

President Joe Biden and House Speaker Kevin McCarthy are scheduled to meet with other congressional leaders on Friday.

President Joe Biden and House Speaker Kevin McCarthy are scheduled to meet with other congressional leaders on Friday.

12th May 2023

By: Bloomberg

  

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An agreement on speeding permits for energy projects is emerging as a key potential component in any deal to avert a US default, lawmakers and officials familiar with talks on the debt limit impasse say.

Aides working behind the scenes to identify potential areas of compromise already have zeroed in on changes to permitting rules that would expedite production of fossil fuels, a priority for Republicans and some Democrats, and clean energy, a progressive priority.

President Joe Biden and House Speaker Kevin McCarthy are scheduled to meet again with other congressional leaders Friday, with a threat of default looming as soon as June 1.

Republican Representative Garret Graves, a key adviser to McCarthy in the negotiations, said chances are “better than 50/50” that a deal will include some agreement on an energy permitting overhaul.

The staff talks are also focusing on clawing back unspent Covid-19 funds and capping spending in the upcoming federal fiscal year beginning October 1, the Louisiana lawmaker said. The White House wants a short-term caps deal, while Republicans want to cap discretionary spending for 10 years, he added.

Meanwhile, the White House so far has indicated it isn’t willing to consider repealing clean energy subsides and tax enforcement increases from last year’s Inflation Reduction Act.

Republicans and Democrats have put forward competing proposals for changes to permitting rules, but there is overlap between them and a strong push from business lobbyists, led by the US Chamber of Commerce.

Graves, one of the architects of the House debt ceiling bill, said a Republican plan on energy permitting was included in the bill in the hopes that it would be a catalyst for forging compromise. He cited comments Biden Climate Envoy John Kerry made last year about the need to speed clean energy projects.

“I do think permitting reform is more likely than a number of things that Joe Biden will have to accept,” said South Dakota Republican Dusty Johnson, another architect of the bill said.

The White House is also sending out signals it wants to do a deal. On Wednesday John Podesta, Biden’s senior advisor for clean energy said the permitting processhas been “plagued by delays and bottlenecks.”

“We’ve got to fix this problem now,” Podesta added, noting that the White House supports a proposal with West Virginia Democrat Joe Manchin “with additional reforms.” He also cited areas of common ground with GOP proposals.

Still, Podesta cautioned that the administration opposed tying the debt ceiling to permitting reform, and with Republicans and Democrats far apart so far a deal could remain elusive. The White House has said all budget talks should be technically “separate” from debt ceiling.

Last year Manchin tried to attach a version of permitting reform to a must-pass spending bill, only to face opposition from some progressives and Republicans who wanted more done.

A person familiar with the debt talks said Republicans have a list of objections to the Manchin proposal. They include a lack of clear time lines to issue permits, lack of litigation criteria, and the fact the streamlined process for just 25 projects along with Equitrans Midstream’s Mountain Valley Pipeline is not extended more broadly.

While Republican permitting proposals focus on expediting oil, gas, coal and other fossil fuel projects, Democratic plans seek to hasten approvals for clean energy projects and the build-out of high voltage transmission lines needed to carry the power they produce. There is agreement between the two parties about the need to reduce the overall time it takes projects to clear environmental reviews and other bureaucratic hurdles. In addition, the White House’s proposal seeks to expedite some mining projects through reform of a 150-year-old mining law.

Among the toughest pills to swallow for Democrats would be a weakening of the National Environmental Policy Act, a decades-old environmental law considered sacrosanct by environmentalists.

Many Republicans, meanwhile, have voiced reservations about electricity transmission line reforms they said would give too much power to the independent Federal Energy Regulatory Commission. That includes changes to how the agency allocates the costs of the multi-billion dollar power lines.

Edited by Bloomberg

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