SCHUBE: One Federal Law Has Obstructed Expanding American Energy. Here’s An Alternative

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Curtis Schube Contributor
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Now that the dust has settled on the so-called “Debt Ceiling Bill,” it is time to reflect upon the significance of the permitting reform provisions included in the bill. Much of the permitting reform discussion has focused on the disapproval of the revocation of the Keystone XL pipeline permit and the approval of the permit for the Mountain Valley Pipeline in West Virginia. 

Another focus has been reform to the National Environmental Policy Act (NEPA), which regulates the approval process by which federally-financed projects go through, significantly impacting the energy sector. These reforms, while not solving all of NEPA’s problems, are important because they recognize that NEPA is inefficient, slow, and costly. Each applicant, absent very limited circumstances where an applicant would be excluded from the process, must undergo an evaluation to assess the environmental impact of the project. Most of the focus has been on time and page limitations that the debt ceiling imposes upon federal agencies in this process. 

One less discussed provision in the bill, but one that has the potential to make a big impact, is Section 107(f). Section 107(f) in the legislative text requires the agency charged with overseeing the permitting process to “prescribe procedures to allow a project sponsor to prepare an environmental assessment or an environmental impact statement under the supervision of the agency.” “The lead agency shall independently evaluate the environmental document and shall take responsibility for the contents.” 

In simple terms, the party that is seeking a permit can now request to perform its own study that assesses the environmental impact of the project. The petitioned agency must “independently evaluate” this document and “shall take responsibility for it.” 

Previously, the agency itself, or in some limited circumstances, state government agencies, were the only parties who could conduct these studies. The result, as most government processes tend embody, was long delays, sometimes lasting up to a decade or more. Now, the applicants themselves can perform this study and dictate the length of the process while still ensuring it is thoroughly done. The time limits described above may not help this problem, as the agency is only required to “consult” with the applicant, should the deadline not be met. Section 107(f) gives an applicant more control over the timeline.

There could be fear among applicants of being the guinea pig. They may not want to invest resources and time into performing these evaluations without fully understanding the new process. Will agencies be doing their own study anyway? Will the government still go through the same slow and inefficient process, even if the applicant conducted a thorough study? As always, the implementation of a new law will be more telling than the drafting of legislative text. 

However, government and applicants alike should embrace it. The government agencies overseeing NEPA should cede that responsibility when companies request it. It would reduce the resources needed and would help reduce the backlog. From the applicant’s perspective, the projects can move forward quickly and efficiently. Having projects begin quickly should offset the cost of performing the studies.  

The idea is not novel. New York, for example, also allows the project sponsor (applicant) to produce the environmental impact statement. Many examples exist of project sponsors preparing these statements themselves in New York. Project sponsors at the federal level should not feel wary of doing this with federal agencies now that this option is available. 

The bottom line is that NEPA has become inefficient and unduly burdensome. Rethinking the process, as opposed to tweaking it, should be applauded. While creating time limitations and page limits to studies is a step in the right direction, they will not fix the problems with NEPA. The focus should be on fundamental changes, making the NEPA process more efficient moving forward.

Drawing upon the states to innovate federal permitting is a place where true improvements can be made. Other ideas used in the states, such as permit by rule, would also benefit federal permitting, for example. But there are many possibilities if Congress continues to think outside the NEPA box.

Curtis Schube is the Executive Director for Council to Modernize Governance, a think tank committed to making the administration of government more efficient, representative, and restrained. He is formerly a constitutional and administrative law attorney.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.