Manchin introduces bill to jolt US Senate efforts to reform energy permitting

US Sen. Joe Manchin (D-W.Va.), a key player in infrastructure permitting reform efforts in Congress, has reintroduced a bill from 2022 to streamline federal review and approval of energy projects.

The proposal released May 2 will serve as a "starting point" for Senate negotiations, according to Manchin's office, and will likely undergo changes as the chamber crafts legislation that can get buy-in from the GOP-controlled House of Representatives.

"There is overwhelming bipartisan recognition that our current permitting processes aren't working, and equally bipartisan support for addressing it through comprehensive permitting reform legislation," Manchin, who chairs the Senate Energy and Natural Resources Committee, said in a May 2 statement. "I am confident that we will find a path forward, and [my bill], which has already enjoyed bipartisan support, will serve to kick off that process."

Manchin's bill, the Building American Energy Security Act, mirrors permitting language that the West Virginia lawmaker tried to attach to a must-pass defense authorization bill in 2022. The permitting package was excluded from the defense bill, however, with Republicans and some Democrats opposed to it.

The legislation would set maximum time frames for environmental reviews and litigation pertaining to US energy and mining projects subject to federal permitting. Reviews under the National Environmental Policy Act would be capped at two years for major projects and at one year for smaller projects. The bill would also establish a 150-day statute of limitations for court challenges and a 180-day limit for agencies to act after a federal court decision to remand or vacate a permit.

Manchin's bill would also require the president to periodically update a list of at least 25 energy infrastructure projects, including critical minerals extraction, that would receive priority permitting. Furthermore, the legislation seeks to aid the development of large transmission projects key to deploying more renewable energy.

The proposal would enhance the Federal Energy Regulatory Commission's ability to permit interstate transmission facilities if they are deemed to be in the "national interest." The bill maintains provisions in the bipartisan infrastructure law of 2021 that allow FERC to issue permits for national interest projects if a state has denied a permit or not made a determination within a year of the application being filed.

Under Manchin's bill, FERC could also issue permits for such transmission projects if a state does not have the authority to approve siting or is unable to consider the project's interstate or interregional benefits.

The legislation also seeks to ensure transmission project costs are allocated to customers that benefit from new lines and would allow FERC to approve utility payments to jurisdictions affected by transmission facilities.

Turning to pipelines, Manchin kept provisions in the previous bill to ease the development of Mountain Valley Pipeline LLC's natural gas transportation project spanning parts of West Virginia and Virginia. Manchin's bill called on federal agencies to reissue permits for the 304-mile, 2-Bcf/d pipeline. He also proposed to limit judicial review of agency decisions on the project, shifting further challenges away from the US Court of Appeals for the 4th Circuit, which has ruled against the pipeline on multiple occasions.

Potential changes going forward

The energy industry is likely to push for other policy support as well. For instance, a coalition of gas industry groups wrote to leaders of the Senate energy and environmental committees on May 1 to highlight desired legislative fixes on permitting.

The Natural Gas Council asked Congress to reform the Clean Water Act certification process to "properly scope" state water reviews and eliminate "inconsistent results" across agencies. Pipeline companies have backed ending states' ability to deny projects through their separate water quality process and instead want states to consult with FERC on pipeline reviews.

The council also sought to rein in timelines for National Environmental Policy Act reviews and limit those analyses to "reasonably foreseeable environmental effects causally related to the proposed project." The comments appear to reference debate over whether reviews should stretch to cover indirect upstream or downstream emissions potentially associated with a project.

Last, the group sought stricter timelines and a new standard for legal challenges of permitting decisions, as major gas projects have faced multiple legal battles. Before a court can vacate a water quality certificate, the groups would seek to require a clear connection between the project and effects on water quality and to ensure the state stayed within the scope of the review.

Both Republicans and Democrats may also seek changes to the transmission pieces of Manchin's bill.

GOP lawmakers have said those provisions would usurp state authority on siting and force some states to shoulder the cost of new transmission projects that might not give them many benefits. As a result, recent Republican permitting bills, including the Lower Energy Costs Act that the GOP-majority House passed in late March, have largely avoided transmission language.

Policy experts, however, say measures to ease transmission construction will be necessary to secure the Democrat-controlled Senate's support of more oil- and gas-friendly permitting policies.

Democrats have also sought additional policies to speed transmission development beyond what Manchin has proposed. They include an investment tax credit for long-distance transmission projects and giving the federal government unified siting and permitting authority over high-capacity, regionally significant transmission lines above a certain threshold.

"Permitting and siting continue to be among the biggest obstacles to getting critically needed transmission built," said Larry Gasteiger, executive director for WIRES, a group advocating for North American transmission planning and investment. "WIRES welcomes the attention that the Building American Energy Security Act of 2023 can bring to the challenges of getting important infrastructure built in a time frame that matches the urgency of our transmission needs."

S&P Global Commodity Insights reporter Maya Weber produces content for Platts Dimensions Pro. S&P Global Commodity Insights is owned by S&P Global Inc.

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