Why Congress Should Reject Manchin’s Permitting Bill and Enact Genuine Reform in 2023

Both major political parties agree that America needs permitting reform. Not all reform proposals are helpful, though.

Sen. Joe Manchin, D-W.Va., has proposed a permitting reform bill that is a prime example of what not to do. Instead of focusing on permitting reform, Manchin’s bill proposes to nationalize the electricity grid.

The Manchin bill proposes cosmetic changes that give the impression of reform yet would do little to address numerous obstacles created by the National Environmental Policy Act, which became law in 1970. The bill also would make permitting projects more difficult by expanding some aspects of the Clean Water Act.

Let’s start with how the Manchin bill would nationalize the electricity grid.

The bill would empower the Department of Energy and the Federal Energy Regulatory Commission to designate and approve transmission line projects as “necessary in the national interest,” and to socialize costs in electricity rates across a region—regardless of whether a state uses the electricity. Unsurprisingly, the criteria for a “national interest” designation are so broad that any project enjoying political support could qualify.

It’s a clever, back-door approach allowing the Energy Department and Federal Energy Regulatory Commission to bypass states. By controlling transmission line projects, they could force utility customers to pay for more wind and solar power.

Spending on transmission systems has increased from $9 billion in 2000 to $40 billion in 2019—with major, multibillion dollar investments to accommodate wind and solar energy (which require an outsize amount of transmission infrastructure) and certain states’ mandates for renewable electricity. Households pay many of these costs.

Here as elsewhere in the Manchin bill, the subtle but clear message is that the best way to get a project across the permitting finish line is to have political favor.

The bill also contains so-called reforms to the National Environmental Policy Act. NEPA, which requires environmental reviews for federal permitting actions, is the primary obstacle to infrastructure permitting. This procedural law has been exploited to delay, or end, all kinds of projects, including upgrades and improvements to highways, the electricity grid, and water systems.

Yet Manchin’s legislation limits its “reforms” only to energy projects and expressly states that it doesn’t amend NEPA.

Instead, the legislation is filled with toothless language, such as “good cause” exceptions that would give agencies easy ways to get out of any of the bill’s illusory requirements. If an agency fails to meet the environmental review process schedule, then the agency merely would have to notify the Office of Management and Budget and the applicable agency’s leader of this failure.

When it comes to the Clean Water Act, the Manchin bill would make federal permitting more difficult in many respects.

The Clean Water Act requires permits for discharges of pollutants from point sources (i.e. discrete  sources of pollution, such as pipes) into navigable waters. Under the statute, and specifically Section 401, Congress gave states a role in the permitting process to help protect water quality. A permit may be issued only upon a state’s issuing (or waiving) a Section 401 water quality certification.  

The bill would amend the Clean Water Act, codifying a policy in the Biden administration’s proposed Section 401 rule, to allow states to use the certification process to block projects based on issues totally unrelated to discharges of pollutants.

Further, the bill likely would help provide support for the Biden administration’s effort to expand these Section 401 certification reviews to cover water quality effects that are unrelated to navigable waters or point sources.

Lawmakers should reject Manchin’s bill and certainly not consider it, or any permitting bill, in the lame-duck session before the new Congress convenes Jan. 3. Policy reforms of such importance shouldn’t be rushed, especially when legislators are least accountable to voters.

The new Congress certainly should address permitting reform to lower costs rather than raise them. Any reform, at a minimum, should amend relevant statutes, including the National Environmental Policy Act, to reduce obstacles and expedite approval of projects across the board, not just those limited to politically preferred energy projects.

West Virginia’s other senator, Republican Shelley Moore Capito, has introduced legislation that provides a good starting point to achieve these objectives.

Commonsense reforms still would address environmental concerns, but firmly reject efforts to use permitting as a pretext to push an anti-development agenda at the expense of human well-being.

This commentary was modified Dec. 13, 2022, to specify increased spending on wind and solar energy projects from 2000 to 2019.

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