America Needs Permitting Reform — With No Gimmicks

America has forgotten how to build, courtesy of a Byzantine permitting process that delays projects for years and often kills them all together. A new bill could change that, though, and let the U.S. actually start building things again, including badly needed energy infrastructure that would reduce prices.

The current paralysis was made painfully evident this year when the Iran war disrupted tanker traffic through the Strait of Hormuz and oil jumped from about $70 a barrel to about $100 in a matter of weeks. Prices at the pump skyrocketed while costs for natural gas, fertilizer, electricity and more all rose as well.

America has weathered the supply shock better than most countries because of our shale production, but the cushion is much thinner than it should be.  Every stalled well, pipeline, port and power line is a shock absorber missing from U.S. infrastructure. Energy security is national security, and a country that cannot build cannot be secure.

The bipartisan American Affordability and Jobs Act, unveiled Sept. 30 by Senate committee leaders, aims to fix the permitting paralysis with purely commonsense reforms. It sets a one-year deadline for environmental assessments and two-year deadline for full impact statements. It gives opponents 150 days to sue, not six years.

It also narrows Section 401 of the Clean Water Act so states can no longer block pipelines on grounds that have nothing to do with water quality. It lets projects keep moving forward while agencies fix paperwork a court has flagged. And it protects issued permits from being yanked by a later administration. It’s the most serious permitting reform in a generation.

And it’s desperately needed. The Mountain Valley Pipeline, which carries natural gas 300 miles from West Virginia to southern Virginia, took nine years to permit. The National Environmental Policy Act has become the most litigated environmental law in the country, and Section 401 is regularly misused by some states as a veto on any interstate pipelines.

This is happening while electricity demand is projected to climb 25% by 2030 as new factories, data centers, and electric car chargers come online. While this latest bill goes a very long way in fixing the permitting process, it can be better still, and a great place to start is the section expanding the Federal Energy Regulatory Commission’s (FERC) power to site interstate transmission lines.

Today, states decide where most power lines go. FERC holds a narrow “backstop” authority that applies only inside corridors designated by the Energy Department, which has never designated one. The bill scraps that step and lets FERC permit lines of 230 kilovolts or more directly, so long as they meet public-interest, consumer-benefit and reliability tests.

Accelerating useful transmission line construction is a worthy goal but the issue here is who pays. The bill says costs of FERC-sited lines must be allocated to customers “roughly commensurate” with benefits they receive, and that customers getting no benefit, or only a trivial one, can’t be charged, which sounds perfectly reasonable.