September 12, 2022 By Devlyn Tedesco
Categories: FERC , Inflation Reduction Act
In order to pass the Inflation Reduction Act (“Act”) last month, a deal was struck with Sen. Joe Manchin (D-WV) to create separate legislation to reform federal energy project permitting. Now that the Act has been signed into law, Senate Democrats are making good on their promise but, as might be expected, not all parties are supportive.
The reforms (and funding necessary to effectuate them) are proposed to be included as part of a Continuing Resolution that must be passed to prevent a government shutdown beginning October 1. The language hasn't been released yet, but according to information posted on Sen. Manchin's website, the reforms would include:
If enacted, these reforms could have a mixed result. On one hand, the NEPA changes could help offshore wind projects in particular move through the federal permitting process much more quickly (recent offshore wind projects have spent approximately four and a half years in the BOEM environmental review phase). Similarly, the CWA reforms would standardize the 401 permit process across the states and provide much needed timeline certainty for developers. However, the reforms will apply equally to fossil fuel projects, essentially giving oil and gas project developers a fast track.
This is causing significant criticism among many Democrats and environmentalists. The NRDC recently tweeted encouraging people to attend a protest of the reforms being hosted by People vs. Fossil Fuels. The Sierra Club has taken a more moderate approach, noting; “The Sierra Club supports the Inflation Reduction Act but recognizes the concerns of communities most impacted by the oil and gas industry. . . [t]he organization plans to be vigilant throughout the act's rollout and stay involved at the federal and state level.”
There is an effort underway to decouple the reforms from the Continuing Resolution, but Democrats like Sen. Chuck Schumer (D-NY), who struck the deal with Manchin, seem intent to include it as part of the Continuing Resolution.
What's Next?
The House is reportedly set to consider the Continuing Resolution the week of September 12, 2022. It remains to be seen if the permitting reform will be included, handled separately or how it might be amended from its initially proposed components.