Analysis by Energy Workforce President Tim Tarpley
After the Strategic Petroleum Reserve (SPR) bill passed in the House last week largely along partisan lines, it appears that the next big energy push will be a (potentially) bipartisan effort on permitting reform. The SPR bill is expected to likely die in the Senate without sufficient Democrat support, as it will be unlikely to garner the 60 votes necessary for passage. Even with 60 votes in the Senate, President Biden would almost certainly choose to veto the legislation given that it significantly curtails his ability to order releases from the SPR. Permitting reform, however, may be a different ballgame. In a rare event in Washington, the stars may just well align to actually get the two parties to agree on a substantive package.
It has become increasingly clear that many of the incentives for new technologies like CCS, hydrogen, and even wind and solar will be limited in their effectiveness without permitting reform. For example, a true nationwide hydrogen or CCS network will require tens of thousands of new miles of pipelines. Currently, the average time to build a gas pipeline in the United States is approaching four years, a time that is longer than Canada or Australia. And this is infrastructure that has a solid regulatory framework in place.
New technologies like hydrogen or CCS takes even longer in many cases. Wind and solar projects are running into the same regulatory and permitting slowdowns across the country that traditional energy infrastructure is facing. This reality, along with the fact that traditional oil and gas infrastructure faces the same need, opens up the possibility of a bipartisan permitting reform package that could achieve bipartisan support.
Sen. Joe Manchin (D-WV) tried to cobble together this feat at the end of last session but was unable to make it happen. With the SPR deck cleared, we are increasingly hearing comments from energy leaders on both sides of the aisle that a package with the intent of easing permitting rules to expand energy production and mining critical minerals is lining up to come together in the next few months.
House Natural Resource Committee Chairman Bruce Westerman (R-AR-04) said last Friday that House Republicans hope to have legislation ready for a floor vote in March.
“We are going to be looking at much broader energy bills where we will not just focus on onshore and offshore oil and gas production, but also the other component that goes with renewable energy and with electrification and decarbonization, and that’s mining,” Westerman said.
This package will be partially based on a energy framework that was released by Republicans last summer that called for measures to stimulate oil and gas production, ease permitting regulations and reduce reliance on China and Russia for critical materials. The Energy Workforce 2023 DC Fly-In will be meeting with Chairman Westerman next week to discuss these developments, and a few spots are still available. If you would like to join, register here.
The prospects of a bipartisan deal are already being discussed. Chairman Westerman has said his team is in touch with Sen. Manchin and Rep. Raul Grijalva (D-AZ-07), the top Democrat of the Natural Resources Committee, who has indicated he’s open to working with Westerman on permitting after he led opposition to Manchin’s effort late last year.
Leaders on the Senate side also appear bullish. Republican Sen. Shelley Moore Capito (R-WV-02), the ranking Republican on the Environmental and Public Works committee and a top proponent of permitting reform, thinks that having a Republican controlled House will ultimately help balance the negotiations and help a compromise bill form.
Sen. John Barasso (R-WY), the top Republican of the Energy Committee and a close ally of Minority Leader Mitch McConnell, is also participating in the effort. Barasso sat out the effort with Sen. Manchin last Congress but has pledged to work on the effort this time around.
“We have a really fertile opportunity here — a much better opportunity — to do the kind of permitting we need for all sources of energy,” Barasso said last week.
One area of necessary compromise will be the thorny issue of making it easier to cite interstate transmission lines, which is a top priority for Democrats as they look to ensure clean energy projects can actually be built and tied to the power network. Republicans opposed this effort in the Manchin package from last Congress.
We can expect many more developments on this package in the coming weeks with proponents saying they expect floor action as soon as early March. Given that this package could be one of the biggest energy packages to pass this Congress (and likely be signed by the President) the implications to the energy sector as a whole would be significant.
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Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.