Advanced Training on Clean Energy Permitting Reform
What is permitting?
‘Permitting’ is a term that means an official authorization to build something. Just as someone would need a building permit to expand their home, developers of big energy projects must get written approval from local, state, and/or federal authorities to start construction. Permitting rules are important to protect communities, workers, and natural environments from undue harm. However, they necessarily add time and expense to projects of all kinds.
To meet our climate targets, we must build clean energy faster. Permitting reform will speed up our ability to build and connect new energy projects, getting good projects up and running quickly, while protecting vulnerable communities.
Why do we need clean energy permitting reform?
America has an abundance of clean energy resources, but we need to expand infrastructure, such as the electric transmission grid, to take full advantage of those resources. Thanks to the policies passed in the Inflation Reduction Act (IRA), we expect to see a rapid boom in solar and wind farm construction. But those facilities will mostly be built in rural areas where land is available and affordable, distant from the homes and businesses that most need the clean electricity. We need electric transmission lines to connect the two, and right now it takes over a decade on average to build a new transmission line in the U.S.
We need to quickly increase our clean electricity transmission capacity. In the past decade, the U.S. has expanded our electricity transmission infrastructure at a pace of just 1% per year. We have to speed that up. Ultimately, our current capacity to transmit clean electricity must be tripled by 2050 in order to meet America’s Paris commitments.
Our country also needs to speed up the pace with which we build new clean energy projects, but our current permitting process makes that tough. For example, it takes an average of 4.5 years for federal agencies to complete NEPA environmental impact statements that are needed to permit some major energy projects.
Who issues permits, and why?
Permits for large projects must generally be obtained from local, state, and federal authorities. Depending on the geography, permission may also be required from tribal governments. According to Brookings, federal permitting seeks to control the impacts of a project based on concerns of national importance, such as wildlife, water resources, land usage and rights, air and water pollution, resilience to natural disasters like floods, and encroachment on infrastructure such as airports and military installations. State permitting rules often mirror federal environmental regulations, although they may vary in stringency. Potential impacts on state infrastructure like highways are also likely to play a role. Local permits are linked to zoning and planning ordinances of the city or county government in which the project is located, mostly focusing on land use.
Given that CCL lobbies the U.S. Congress, what more should we know about permitting at the federal level?
At the federal level, any one of 10 departments or agencies may be involved. A 2021 inventory of federal environmental permits lists 64 permit categories. The EPA stands out because it oversees the Clean Air Act (CAA) and Clean Water Act (CWA), either on its own authority or through authority delegated to state agencies. The Federal Energy Regulatory Commission (FERC) issues permits for hydropower projects and interstate gas pipelines. About half of the remaining permits come from the Interior Department and its various agencies, such as the Bureau of Land Management, and apply only to federal lands. Other departments such as Defense, Homeland Security, Energy and Transportation control certain permits pertaining to their facilities or responsibilities.
The relevant laws behind these permits, beside the CAA and CWA, include the Endangered Species Act (ESA) and related wildlife protection statutes; the 2005 Energy Policy Act (EPACT) and 2007 Energy Independence and Security Act (EISA) that were enacted to boost alternative energy; and various laws to protect Indigenous American sites, historical sites, national parks and other resources.
What is NEPA and what does it have to do with permitting?
The National Environmental Policy Act (NEPA) is a 1969 law mandating a process to ensure that federal agencies assess environmental impacts before moving forward on a project, including the issuance of permits. When a developer either applies for a federal permit or receives federal funds, the responsible agency will initiate a NEPA review and will, if necessary, bring other agencies into the process to ensure compliance with the latest laws and rules established by the Council of Environmental Quality (CEQ).
NEPA requires major projects to go through a review process if they (a) need federal funding or approval, and (b) may significantly affect the environment. The initial decision may be a Categorical Exclusion (CE), meaning that the proposed project is of a type for which environmental impact has been deemed to be insignificant, and thus does not require further review. If further evaluation is needed to avoid violating environmental law, an Environmental Assessment (EA) will be required. The EA determines whether or not a federal action has the potential to cause “significant environmental effects.”
Each federal agency has adopted its own NEPA procedures for the preparation of EAs. If they conclude upon completing the EA that the impact will be minor, the agency will issue what is called a Finding of No Significant Impact (FONSI). But if the EA determines that the environmental impacts will be significant, an Environmental Impact Statement (EIS) must be prepared. Completing the full EIS review process for a major energy project currently takes an average of 4.5 years and can cost developers many millions of dollars. Permits cannot be issued until the EIS is done and the CEQ gives its stamp of approval.
These assessments are important, but we need them to move faster. The Institute for Progress provided an excellent deep dive into NEPA in September 2022.
What is FERC and how does it relate to permitting?
The Federal Energy Regulatory Commission (FERC) is part of the Department of Energy and was formed in 1973 to impose some order on interstate electricity transmission, oil pipelines, and the natural gas industry. Over time, its responsibilities have been expanded. In 2005, FERC was given new authority over electricity and natural gas reliability as well as wholesale prices, raising ire among states’ rights conservatives. Now some lawmakers are trying to expand FERC’s authority in the power sector to get clean electricity moving around the country. FERC already has the authority to overrule states with respect to natural gas pipelines, storage and export terminals, and new proposals seek to similarly strengthen FERC jurisdiction over interstate electricity transmission lines.
What clean energy technologies are most affected by permitting?
The most complex permitting challenges are faced by technologies that cover large land areas and those that cross jurisdictional lines (county, state, tribal). At the top of the list are electric transmission lines, followed by wind energy projects. These projects would generally benefit the most from legislation that would streamline permitting rules. Solar farms can cover large land areas, but their lower profile mitigates some permitting hurdles such as those related to air traffic, impacts on birds, and even some aesthetic objections.
Non-fossil energy projects with smaller land footprints, such as geothermal and nuclear plants, are less burdened by land requirements, but a federal database lists 11 special permit requirements that apply solely to geothermal facilities and two that apply to nuclear plants. Pipelines to transport CO2 from industrial sources to sequestration sites also face multitiered permitting challenges, in contrast to natural gas pipelines, which enjoy a particularly expedited position in federal law. Finally, clean energy projects such as offshore wind that involve marine environments face special challenges that even offshore oil and gas extraction do not.
How will permitting reform affect fossil fuel projects?
Some types of fossil fuel projects already enjoy streamlined permitting advantages over more climate-friendly energy, so they would not gain any further advantage from generalized reform. For example, natural gas pipelines can be sited via a FERC standard called “public convenience and necessity,” which is not available for electric transmission lines, CO2 pipelines or hydrogen pipelines. Offshore oil and gas exploration routinely enjoys NEPA Categorical Exclusions that are not available to geothermal exploration.
Another key consideration is that fossil fuel companies have to be wary about building too much infrastructure that could become stranded assets as the demand for their products declines. As one example, oil companies have resisted increasing production even as gasoline prices have soared. Easing the already relatively easy fossil fuel permitting process may not incentivize companies to build much more infrastructure if the demand isn’t there.
On that point, the International Energy Agency (IEA) has concluded that, based just on current policies, we’re already near peak global fossil fuel demand. In a major 2022 report, the IEA projected, “Coal demand peaks in the next few years, natural gas demand reaches a plateau by the end of the decade, and oil demand reaches a high point in the mid-2030s before falling slightly.” Reports from the U.S. Energy Information Administration find that in each of the past three years, 84% of new energy capacity was clean energy. More than 95% of new energy projects currently awaiting permits are solar and wind and battery storage, and less than 5% are natural gas.
Every gigawatt of clean energy installed represents a gigawatt of fossil energy that could be shut down or never built in the first place. Indeed, faster permitting of renewable energy projects could lead to abandonment of some competing fossil energy projects before they complete their own permitting review. Easing permitting rules would thus benefit clean energy far more than fossil fuel projects, as long as care is taken to protect vulnerable communities from unintended consequences related to other projects.
How can reforming clean energy permitting benefit health, economic, and environmental justice?
An improved permitting process should allow local communities to give real input on energy projects and choose good projects over bad ones. Good projects should be approved faster, and harmful projects should be rejected faster. While it is impossible to build more clean energy projects without impact, new projects should safeguard the lives and health of people living near them.
Expanding clean energy can aid environmental and climate justice in several ways. Increased transmission capacity will allow the replacement of power from older polluting power plants, often located in economically disadvantaged communities, with cleaner energy sources. By the same token, increased electrification of cars and trucks will slash vehicle emissions that currently harm human health in densely populated urban communities.
Air pollution causes about 250,000 deaths per year in the U.S. and nearly 9 million per year globally. Failing to capitalize on the pollution reductions from the IRA could thus result in thousands of needless premature deaths, concentrated predominantly in disadvantaged communities.
Wind and solar farms projects will also bring economic benefits and jobs to the rural areas in which they will tend to be built. But realizing those benefits requires loosening the bottlenecks that slow the siting of clean energy projects and the electric transmission lines needed to connect them to population centers.
What are the main concerns climate and environmental justice groups raised about the Manchin-Schumer bill?
The principal objections to the Manchin-Schumer permitting deal floated in September 2022 were against shorter timelines for completing NEPA reviews, a shorter time period after a project is approved to file legal challenges in court, and green-lighting the Mountain Valley Pipeline (MVP) – a natural gas line running through West Virginia. Nothing in the bill removes environmental standards that exist under current law. With the exception of the MVP project specifically, the objections appear to be not so much against specific types of fossil fuel activities or even the question of greenhouse gas emissions writ large. Instead, they largely involved the broader question of whether communities or groups representing communities may not be able to marshall the resources to influence big infrastructure projects within the allotted time. They don’t want to end up being frozen out of the review process simply because they can’t compete with big national organizations, trade groups, and corporations with deeper pockets.
The range of concerns about potential pollution sources are varied and not always centered on climate. Among the top concerns, according to various groups:
- Coal-fired power plants, which emit particulates, smog-forming gases and harmful metals like mercury and lead in or near frontline communities. Because coal is already on the decline, it’s very unlikely that expedited permitting would be an issue here. Rather, the imperative is to accelerate the closure of existing plants, which would be facilitated by the deployment of more clean energy to fill the gap.
- Chemical plants that can emit a wide range of toxic substances into the air and water. These may or may not be linked to fossil fuels but could be affected by changes to permitting rules because of the diversity and complexity of the chemicals and production methods involved.
- Contaminated drinking water from aging infrastructure and polluted groundwater from industrial or waste disposal facilities. As with chemical plants, these are generally not related to fossil fuel extraction, but care must be taken that community influence will not become a casualty of permitting reform.
- Truck, ship, and rail terminals emit both air and water pollutants that disproportionately affect frontline communities. These pollutants should gradually decline along with electrification of vehicles, but permitting rules must take into account these exposures now, not years from now.
- Oil and gas pipelines that mainly affect rural and indigenous communities, with the possibility of leakage and disruption of natural ecosystems, could be directly affected by permitting reform, although as stated earlier they already enjoy special treatment under current permitting regulations.
- Oil and gas drilling, and hydraulic fracturing (fracking) in particular, may be the most directly affected by any changes to permitting procedures. A 2020 compendium by Physicians for Social Responsibility delves into this issue and states that fracking creates “detrimental impacts on water, air, climate stability, public health, farming, property values, and economic vitality.” Justice groups are likely to oppose permitting changes that shorten the time for them to build a case against fracking projects near vulnerable communities.
This list of concerns is not exhaustive, but it shows that some are directly related to fossil fuel extraction and others are not. The concerns are highly dependent on local conditions. Regardless, if a general rollback of permitting rules for energy infrastructure would also weaken restrictions on things like landfills, truck terminals, or even highways, such changes would likely elicit strong objections from justice organizations. This is another reason to pay careful attention to legislative text, reinforced by effective citizen lobbying.
(0:00) Intro & Agenda
(2:18) Why is this important and what is permitting?
(6:01) What’s the challenge?
(9:31) Potential environmental benefits from fixing it
(20:05) What solutions does CCL support?
Q&A Discussion (https://vimeo.com/772672127)
- Dana Nuccitelli
- Tony Sirna
- (0:00) Intro & Agenda
- (2:18) Why is this important and what is permitting?
- (6:01) What’s the challenge?
- (9:31) Potential environmental benefits from fixing it
- (20:05) What solutions does CCL support?
- Q&A Discussion (https://vimeo.com/772672127)
- Dana Nuccitelli
- Tony Sirna
- U.S. House Sustainable Energy and Environment Coalition (SEEC): November 2022 Policy Memo
- Brookings: How does permitting for clean energy infrastructure work?
- Yale Climate Connections: Permitting: America’s next big climate conundrum
- Institute for Progress: How to Stop Environmental Review from Harming the Environment
- Princeton: Electricity Transmission is Key to Unlock the Full Potential of the Inflation Reduction Act
- Tool: Federal Environmental Review and Authorization Inventory | Permitting Dashboard
- EarthJustice: Comments on the Manchin-Schumer permitting reform package
- Sierra Club: Yes, We Need to Build a Lot More Renewable Energy a Lot Faster. But Scrapping Environmental Laws Isn’t the Way to Do That