Why the Permitting Reform Debate Isn’t Going Away Anytime Soon

When it comes to revamping environmental permitting for infrastructure projects, the focus in Washington right now is largely on a proposal Sen. Joe Manchin wants to see attached to a must-pass spending bill. The plan is proving so divisive among Democrats it could lead to a government shutdown.

But regardless of how that stalemate turns out, it will not end the debate over federal permitting, the top Republican on the Senate’s environment committee said in an interview. Even if Manchin, a Democrat, gets the changes he wants, including a two-year limit for the federal government to issue permits for energy projects, Republicans say they will seek even more sweeping changes and will press for them if they win control of Congress in this fall’s elections.

“I’d like to see something more,” Sen. Shelley Moore Capito, who is in line to chair the Environment and Public Works Committee if Republicans capture the Senate, told Route Fifty when asked about Manchin’s proposals.

Despite the opposition the draft of Manchin’s proposal is getting from progressive Democrats and environmental groups, it would only affect projects related to the production and distribution of energy, such as pipelines that carry natural gas.

The final details of the proposal, which Democratic Senate Majority Leader Chuck Schumer said will be included in a temporary spending bill needed to keep the government running past Sept. 30, will not be made public until Wednesday. 

But according to a draft, Manchin’s plan would not include priorities Republicans and the building industry say are needed to remove barriers to building infrastructure. 

Capito, supported by 46 of the Senate’s 50 Republicans, last week put forward a broader proposal for an environmental permitting overhaul. But it has no chance of passing a Democratic Congress. It would undo Biden administration policies and restore how key environmental regulations were enforced under the Trump administration.

For instance, Capito’s proposal would reverse the Biden administration’s expansion of the National Environmental Policy Act, or NEPA, to consider the “indirect” and “cumulative” environmental impacts of projects, not just the “direct” impacts assessed under Trump. Republicans also want to thwart a proposal by the Biden administration to undo a Trump administration policy restricting the ability of states to block projects under the Clean Water Act.

“I would like to see permitting reform. Something that has teeth in it,” said Capito, who like Manchin represents West Virginia, where coal and natural gas are economic linchpins. 

“We can’t get our projects done. We’re supposed to be building but we can’t build,” she added.

For the moment, Manchin’s proposal is at the center of attention because it poses an obstacle to Congress preventing a government shutdown at the end of next week.

Under a deal he struck with Manchin to get his support for the massive climate, tax and health care law Democrats recently passed, Schumer pledged to include the West Virginia senator’s proposal in a pending “continuing resolution.” Congress must pass that funding measure to keep the government running until it takes up the next fiscal year’s budget in December.

However, it’s unclear whether enough senators will support it to avoid a government shutdown. 

Progressive House Democrats are pushing for the proposed changes to be removed from the spending bill, as are some Senate Democrats, like Ed Markey of Massachusetts, as well as Vermont Independent Bernie Sanders. Environmental groups are particularly opposed to a proposal in Manchin’s draft that would require the government to fast-track approval of the controversial Mountain Valley Pipeline in West Virginia and Virginia.

Even if all Senate Democrats get on board, Manchin would need at least 10 Republicans to go along with the proposal. But several Senate Republicans have said they oppose the permitting package because they are still angry that Manchin cast the deciding vote for the climate, health care and tax package, known as the Inflation Reduction Act. 

Manchin on Tuesday decried “revenge politics” at a press conference. “This is the type of politics that makes me sick and makes the American public sick,” he told reporters.

He also defended his plan. “What's doing damage to the environment right now is the dirty fuel that’s being produced around the world with no oversight at all. The more we can put out in a cleaner fashion that’s ever been done in the world, and we do it better than anyplace in the world, that’s what replaces the dirty fuel.”

Comparing his proposal to Capito’s, Manchin said the Republican bill would reduce environmental reviews while his would only accelerate them.

Capito, during a call with West Virginia reporters last week, said that she could be open to supporting Manchin’s changes if it would help the Mountain Valley Pipeline. “I think if it has the Mountain Valley Pipeline in it, I think I could look favorably on it. But I haven't seen exactly what’s in there,” she said. “I want permitting reform and I want to keep the government open.”

Even if Manchin gets his way, Capito noted during the call that her plan is much “broader.” And indeed environmental groups say that as much as they oppose Manchin’s proposal, they are even more against what Capito is backing.

John Reuter, the League of Conservation Voters’ vice president for state and local strategies noted in an interview that his group opposed Manchin’s proposal in part because it would make the “atrocious” pipeline more likely. Capito’s bill, he said though, “is much worse.”

Naadiya Hutchinson, government affairs manager for WE ACT for Environmental Justice, echoed that view. “I’m deeply concerned about Capito’s bill. It is even worse than [Manchin and Schumer’s] side deal,” Hutchinson said.

The building and energy industries have long complained that permitting regulations are too burdensome and slow projects from being built. The American Gas Association and the U.S. Chamber of Commerce have not yet endorsed Capito’s bill. But they have expressed support for elements of the measure in the past.

The U.S. Chamber of Commerce, for example, supported the passage of a Republican-backed bill in August to undo Biden’s NEPA changes. The measure, however, hasn’t been allowed to come up for a vote in the Democratic-controlled House.  

The American Gas Association also supported a Trump administration policy that reigned in the ability of states to block federal projects under Section 401 of the Clean Water Act. 

The association’s president and CEO, Karen Harbert, said in a statement at the time that the rule would “end the practice of states misusing Section 401, putting political ideology and the goal of blocking natural gas pipelines over the important task of protecting our nation’s water quality.”

A summary of Capito’s bill said returning to the Trump administration’s rule would “prevent state actions that unreasonably block energy projects.” 

U.S. Rep. David Rouzer, the top Republican on the House Water Resources and Environment subcommittee, said during a hearing Tuesday on the 50th anniversary of the Clean Water Act that there has been overreach by some states when using their Section 401 authority. 

“Some states have used this authority to block meaningful infrastructure projects they are politically opposed to for reasons well beyond Clean Water Act goals and water quality,” he said.

A gas association spokesman declined to comment on Capito’s proposal but pointed to Harbert’s statement calling for permitting changes when the IRA was passed.

“It is critical that the accompanying effort to address the unnecessary red tape that plagues our system for permitting energy infrastructure move forward,” the statement said.

Manchin’s proposal would also weaken Section 401,by requiring states to review Clean Water Act projects within a year, said Rep. Jared Huffman, a California Democrat, during the House Water Resources and Environment hearing this week.

Joaquin Esquivel, chairman of California’s State Water Resources Control Board, agreed during testimony at the House subcommittee meeting.

“Shortening the timeline, or placing a timeline at all, really is an arbitrary move and can complicate the review of these projects leading either to a denial where a project might otherwise have been approved, or an approval that falls short of protecting water quality standards,” he said. “It also places an unreasonable burden” on state agencies. 

The Environmental Protection Agency earlier this year proposed changing back the Section 401 regulations to allow a “holistic” evaluation of a project's effects on water. An EPA spokesman said in an email the agency is reviewing comments about its proposal and expects to issue a final rule next spring. Capito’s bill, however, would codify the Trump administration’s rule.

Capito’s bill would also cement the Trump administration’s narrowing of the Clean Water Act to exclude many wetlands and streams. The move undid the Obama administration’s Waters of the United States rule that had expanded the law. Biden’s EPA announced it would restore the Obama-era rule. Adding a twist here, the Supreme Court could end up limiting the agency’s ability to regulate wetlands in a case known as Sackett v. EPA, set to be heard on Oct. 3.

Hutchinson, with WE ACT, said she was also concerned about a provision in Capito’s bill that would give states sole authority over the oil and gas drilling process known as hydraulic fracturing or “fracking,” saying it would increase the practice in Republican states. 

Adam Carlesco, staff attorney for the environmental group Food & Water Watch said Capito’s proposals are “really problematic.” 

“They would codify everything that the Trump administration did,” Carlesco said. “We’ve seen what this would look like in the 1960s,” he added. “There was a reason a river in Cleveland was on fire.”