As we explored in the first piece of this series, Sen. Joe Manchin and Sen. John Barrasso have proposed new permitting reform legislation that recently passed through the Senate Energy and Natural Resources Committee. So, what exactly is in the Energy Permitting Reform Act of 2024? A lot of things, really.
In fact, Heatmap called it “an energy smorgasbord, and all sorts of fuels and resources are invited to the party.” While this article will not cover everything in detail, the full 75 pages of text are available here, and a section-by-section summary and one-pager have also been made publicly available.
Something For Everybody
Regarding onshore energy and minerals, the legislation aims to speed up leasing and permitting for all energy projects located on federal land by creating deadlines for decisions.
This time increase includes applications for renewables, with streamlined environmental reviews, doubled production targets for renewable energy permitting, and a goal of 50 gigawatts of renewable energy production on federal land by the end of the decade.
Modernized leasing and permitting processes for geothermal energy will also be beneficial to furthering the expansion of clean energy.
Easier extraction of fossil fuels is present, with ensured access to oil and natural gas resources on federal property, deadlines for processing applications to lease federal coal, longer permits for drilling on federal land, and the elimination of federal permit requirements for oil and gas production on private land (where the government owns less than half of the minerals or the drilling has to go through federally-owned minerals to source non-federal ones).
While access to domestic mineral resources has been championed, and The Inflation Reduction Act (IRA) includes incentives, many believe we need to take into consideration environmental impacts as we move forward. The current administration states that we must, “ensure new production meets strong environmental standards throughout the lifecycle of the project, ensure meaningful community consultation and consultation with Tribal nations, and reduce the time, cost, and risk of mine permitting.”
Photo Courtesy Glencore PLC
Turning to territory off the coasts, the Outer Continental Shelf Lands Act mandates that the Bureau of Ocean Energy Management develop offshore lease sales that “best meet the energy needs for the five-year period following.” The Energy Permitting Reform Act would require the Secretary of Interior to allow companies to bid once per year to build an offshore wind farm and once yearly for the opportunity to drill offshore annually from next year through 2029.
Only three potential oil and gas lease sales are currently scheduled in the Gulf of Mexico Program Area over that timeframe in 2025, 2027, and 2029. According to the Department of the Interior, when the schedule was published in 2023, it represented the “fewest oil and gas lease sales in history.”
Meanwhile, in April, the Bureau of Ocean Energy Management announced a schedule with the potential for 12 offshore wind lease sales over the same time period: four in 2024, one in 2025, one in 2026, two in 2027, and four in 2028.
Photo Courtesy GE Renewable Energy
Spanning onshore and offshore projects, the section on judicial review aims to shorten the timelines for every stage of litigation for energy and mineral projects. It also ensures courts speed up their review of legal challenges. A 150-day statute of limitations from the date of an agency’s issuance or denial of a permit and a 180-day deadline for federal agencies to act on remanded permits is a far cry from the six years of litigation currently allotted.
Lastly, we come to transmission. By setting deadlines for approving new power lines and, hopefully, enabling the country to build more of them, the bill aims to ensure that customers see tangible benefits from more reliable electricity. It introduces two pathways for this development.
There is a requirement for interregional planning, in which regions would need to collaborate on joint plans.
This effort would complement the Federal Energy Regulatory Commission’s (FERC) recently passed regional planning rule, Order No. 1920, which would work together to ensure grid reliability.
Next, there is a process through which transmission developers could ask FERC for approval of lines. This update changes FERC’s current backstop siting authority, under which the energy secretary has to make a special designation of a National Interest Electric Transmission Corridor for an area it deems to be harmed by a lack of transmission. It also makes the process more similar to how natural gas pipelines work. Such lines would still have to be in the national interest and improve electric reliability, in addition to some other requirements.
One requirement includes prioritizing existing rights-of-way and infrastructure, enhancing efficiency, and lowering the costs of building these projects. The legislation also includes categorical exclusions under the National Environmental Policy Act (NEPA) for transmission or distribution facilities — in addition to other renewable projects with low disturbance activities — like those traditionally offered to oil and gas.
The proposed process also addresses fears about the costs of transmission lines falling to citizens. According to the bill and in line with FERC’s normal practice, the organization must ensure that any future project “allocates costs only to customers that benefit using a minimum specified list of electric reliability and affordability benefits.” Only those who benefit from the lines would have to pay.
Photo Courtesy American Public Power Association
However, there is likely to be a pushback on the section that ends the current administration’s ban on liquefied natural gas (LNG) exports. The White House announced the temporary pause on exports to non-Free Trade Agreement countries in January, reasoning that the analysis underpinning authorizations, conducted five years ago, was no longer representative and would not impact our supplies of LNG to our European allies. The bill sets a 90-day deadline for the Secretary of Energy to decide whether to grant or deny LNG export applications after the completion of the environmental reviews, which would prevent those types of pauses from being repeated in the future.
On the other hand, as Kunro Irié, a visiting fellow at the Center for Strategic and International Studies, notes, “the bill does not restrict any studies or subsequent updates on the approval process, including any updates to the ‘public interest’ interpretation.”
Photo Courtesy Shell
In our third and final piece in this series, we will explore the prospects for this legislation.
