I was recently interviewed by Politico for this news story about the current push for a bipartisan permitting deal. My main point was that strong permitting reform is in both Republicans’ and Democrats’ interests more than many of them realize.
As often happens, the vast, vast majority of what I said couldn’t make it into the story. But I thought it would be valuable for my readers (many of whom are in government) to get the full picture.
Why reform of Clean Water Act in addition to NEPA is in Republicans’ and Democrats’ interest
I think that there are some pretty common misunderstandings or areas of ignorance that exist in both parties that make them insufficiently realize how many policies there are that they should both agree upon, given their particular objectives and preferences. So I can explain that.
If you look at the three biggest areas of focus—not the only ones, but the three biggest—are NEPA, Clean Water Act, and transmission. And let’s just say permitting certainty, let’s say there’s four.
If we leave aside transmission for a second—which I’m going to argue is also bipartisan—but if you take NEPA, Clean Water Act, and permitting certainty, all three of those are essential to the vast majority of projects that both Republicans and Democrats care about.
Now, the clearest area of consensus here is with NEPA, where Democrats have an increasing recognition that NEPA is impeding them in all sorts of ways, and Republicans have it. So you have that, so that’s the most straightforward.
But with Clean Water Act, there is a hugely underappreciated sense in which it is bipartisan. So the most appreciated sense in the Clean Water Act is that it is used as a tool, in its current state, it’s used as a tool for states to stop interstate natural gas pipelines for reasons that have literally 0.0% to do with any water impact that could possibly threaten human health.
So one thing is most Republicans, let alone Democrats, do not understand that. So when they hear “water quality,” they think, “Oh, the water is going to be contaminated. We’re going to have trouble drinking it.” It’s like, no, operating natural gas pipelines doesn’t get gas in the water. That can’t physically work for any amount of time. And the impacts involved are things like “turbidity,” making the water muddier.
It’s basically just different ways of moving around soil and rocks in different waterways in ways that are usually smaller than what nature does, and then affecting fish, which is on a tiny scale compared to, A) what nature does, and B) what we do by killing billions of fish annually, including hundreds of millions, arguably, recreationally. We kill probably a billion fish recreationally, and then a couple of billion commercially.
So, A) people don’t understand, with natural gas pipelines and most infrastructural buildings, how there is no threat to human health whatsoever that’s related to the water, so they don’t get that.
But they also don’t get that if NEPA is improved and transmission policy makes it easier to build transmission—so particularly the FERC “backstop” issue, which we can talk about—the Clean Water Act can easily be used to stop transmission in the exact same way NEPA can be used or state veto can be used.
So anyone who cares about solar and wind transmission lines should be incredibly afraid of what anti-solar-and-wind Republican AGs have up their sleeves, if you get transmission reform plus NEPA reform and no Clean Water Act reform. And I would say that what I just said is not known by 90% of the politicians involved in this process.
Why strong reform of NEPA and Clean Water Act is in Republicans’ and Democrats’ interest
The standard directional reforms proposed for NEPA, proposed for Clean Water Act, and proposed for permitting certainty, those are the things where both parties benefit from them, and in general, both parties benefit from the most “extreme” proposals.
So I support generally the most “extreme” proposals, so-called, the biggest reforms, and in fact, I would hope for bigger reforms, but in terms of if you take—we could go through them. But NEPA in terms of the SPEED Act, or stronger than the SPEED Act. And then, on water quality, Hudson’s thing even versus the PERMIT Act.
And then, the permitting certainty, something like the FREEDOM Act, so that is another thing where both parties have an incredible amount to gain in any sort of long-term sense, because pulling project permits is absolutely toxic to investment in any technology.
So in terms of anyone’s long-term concern about any type of project, there is, I think, an irrefutable argument that both parties should want strong NEPA reform, strong Clean Water Act reform, and strong permitting certainty—and all of those are tech-neutral reforms.
Why transmission permitting reform is in Republicans’ and Democrats’ interest
Transmission is the hardest case to make that there’s overlapping interests, but there actually are overlapping interests in transmission.
Now, they’re not totally overlapping, because some people want transmission permitting policy to change in such a way that it is easier to force consumers to pay for wasteful transmission projects that primarily service solar and wind generators.
Republicans are generally concerned, and I share this concern, about the illegitimate building of wasteful transmission that ratepayers are forced to pay for. That is a problem now. It’s a problem that relates to solar and wind, and it’s also a problem that just relates to utility exploitation of various loopholes, which we could talk about.
But one important point for Republicans who are concerned about this issue is that the current law is very bad in terms of the potential for the federal government to authorize a lot of ratepayer-coerced financing of wasteful pipelines.
So the Republicans need to understand the status quo is very bad in terms of what an antagonistic administration can do, because what it can do is it can basically authorize certain corridors. The DOE can basically authorize any corridor it wants, and then it can give FERC this “backstop” authority to forcibly permit things over state objections. And the current criteria involved are utilities, there’s scenarios in which utilities will be able to run wild with consumer coercively-financed transmission.
So one thing that’s important is the status quo isn’t good, and in quite a few ways, EPRA was better than the status quo. Now, EPRA is not what I would advocate. I’m advocating significant modifications of EPRA. But nevertheless, the current state of affairs is not good for Republicans.
So I think what can be advocated here, I mean, I’ve put out a bit of my policy ideas already. But the general thing, I think most reasonable people should agree to, that it should be easier to permit transmission that genuinely lowers costs for consumers and increases reliability, and it should be harder to force consumers to pay for transmission that doesn’t. And I think that there is some agreement.
Some people just throw out EPRA wholesale, but there is reason for this to be a federal issue, by the way, in the same way that the permitting of interstate pipelines should be a federal issue, in my view. So I do think there’s a real compromise.
I think even with transmission, even if it wasn’t part of a separate permitting bill, there is a valid compromise that you could pass standalone if the people involved had full knowledge of the status quo versus what’s potential.
So I think the four key areas of fighting are actually ones where both parties benefit from a dramatic change to the status quo, and that’s really what I’m trying to advise on, and I’ll have something public soon. I have previous versions, but I have some better stuff coming out. You can look at my previous versions. I’ve been advocating, “Hey, you guys have way more in common than you think.”
And so, one of the problems with this negotiation mindset is people are acting like things that actually benefit them, they don’t care about. Because people would advise, “Oh, tell the administration we don’t care about permitting certainty. We don’t even like it because it limits our current power.” Versus, no, this administration, given energy dominance, should absolutely want permitting certainty.
By the same token, the Democrats should not act like they don’t validly benefit from very strong NEPA and Clean Water Act reform. They absolutely do. And again, if they do not get it, if they get a weak NEPA reform—which some advocate, some want a weak NEPA reform—and they want no Clean Water Act reform, and they want this transmission deal, then all their transmission is going to get killed by Clean Water Act.
So let’s just all be adults here and recognize that the state of permitting in America is a completely existential threat to our country, and we will not have a grid, and arguably an economy, if we cannot actually build things and our adversaries can, and then the age of AI makes this even higher stakes.
How the cut-off of new solar/wind subsidy streams affects transmission permitting
I would say the biggest change with the availability of new subsidies is that the worst case scenario of transmission is probably better than it was before. That, plus demand. Because the demand is very focused on dispatchability.
Even two years ago, even last year to some extent, but definitely two years ago, everyone was pretending that they didn’t need reliable electricity, and now you see that we have shortages of gas turbines, and we’re turning to other forms of turbines, and this kind of thing.
So I think on the demand side, there’s more of a stress on reliability, and on the supply side, we’ve cut a major source of preferences for unreliability. We definitely haven’t cut all of them. There are a lot of market rules that still favor solar and wind.
So I do think that from the perspective of unreliable electricity being promoted by transmission, the worst case scenario is less than it used to be. So that’s my main thing.
Why the administration should restore permits for blocked projects regardless of negotiations
Just as a straight policy thing, absent negotiation, I would tell any administration that it should be incredibly, incredibly rare that you pull the permit of an approved project, and you better have something really existential that you could really easily prove, and that’s not going to deter people into thinking that it’s politically motivated.
I was on the record, I was considered by many to be the most influential person outside the government in cutting solar and wind subsidies. And I was publicly against any deal that involved the administration cracking down on solar and wind in any way outside the law.
I said, once you made the law—I’m in favor of taking away the subsidies, but if the subsidies are legally there, you should absolutely not discriminate against those projects. And I told this to people privately and I told this to people publicly. So I’ve totally been against any sort of technology-related crackdown of any kind by any administration. I’m already very against that publicly and privately.
Now, I’m not an expert on every single project, but in general, yes, the volume of projects that have had permits pulled or stalled, I don’t think there’s any real argument. You can’t make any real argument that that is a good thing. So I think those should be restored no matter what, regardless of negotiations. I mean, obviously nobody’s following me on that, but that’s the policy.
So in terms of negotiations, sure, I hope that the negotiations lead to the restoration of any projects that are illegitimately being delayed. The negotiation thing though is, ultimately, I’m trying to get all the pro-freedom carrots out there. So insofar as the administration can use permitting certainty, both supporting law that does it and changing its administrative policies, okay, that’s fine.
I mean, again, I want the administrative policy to be the right policy, regardless of negotiation. That’s my position. But I’m not anyone’s negotiator. I’m mostly just telling them what’s good policy. But what I’m telling them as far as negotiation is, “You guys have way more interests in common than you think you do.”
The importance of bipartisan permitting reform being technology-neutral
I’m always trying to be technology-neutral in what I’m thinking of. So I’m not thinking in terms of, “Oh, I want fossil fuels to benefit,” or something like that. But what I do want is I want reliable electricity to benefit, and solar and wind by themselves are not reliable, and that needs to be factored into thinking about the grid and developments.
But in any case, yeah, I would advise everyone just to think about, you need tech-neutral permitting reform, don’t think of it in a technology-specific way. But even if you think of it in a technology-specific way, recognize that your technology of preference is going to need reforms across permitting certainty, and NEPA, and Clean Water Act.
And we could also add in NHPA and ESA, you also need to think about those bottlenecks, because these things are so elastic, that if you get rid of one of the blockers, you still have the other blockers. So you basically need to get rid of all of these things’ ability to illegitimately delay and destroy projects.
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Permitting is a problem of entire Western world regardless of the political party :)
Great piece, Alex. You make an excellent case for why comprehensive, tech-neutral permitting reform is a bipartisan necessity to keep America competitive.
That said, fixing NEPA and the Clean Water Act is only half the battle. To truly achieve energy abundance, any real reform must also address the massive bottlenecks on the ground… specifically Clean Air Act permitting for natural gas pipeline compressor stations, FERC administrative backlogs, and Section 7 consultations under the Endangered Species Act. Without tackling those, projects will just keep getting bottlenecked elsewhere.