Here’s how the debt ceiling bill would change the US energy permitting process

In a major win for the fossil fuel industry and pro-industry lawmakers like Sen. Joe Manchin (D-W.Va.), the debt ceiling deal lawmakers are racing to pass and send to President Biden’s desk for a signature overhauls the federal permitting process for major energy projects.

The bill, which the House advanced Wednesday night and the Senate is set to vote on ahead of a Monday default date for the U.S. government, would narrow the environmental reviews for new energy projects under the National Environmental Policy Act (NEPA).

The change to the decades-old law would mean that agencies would be required to focus specifically on “reasonably foreseeable environmental effects” in their reviews of projects, rather than more abstract or downstream impacts.

It would also cap the time for most reviews at a year, with two years for projects that may have larger environmental impacts.

A change to long-standing precedent

NEPA, passed in 1970, requires federal agencies to analyze the potential impacts of major actions that could affect the environment.

Proponents point to the law’s importance in ensuring that major infrastructure projects don’t harm the environment or surrounding communities.

Republicans and some centrist Democrats, however, have attacked its regulatory requirements as overly burdensome and frequently targeted it as part of larger broadsides against the regulatory state.

The reforms included in the current bill would represent the biggest changes to the landmark law in roughly four decades.

While a permitting overhaul is a Republican priority — Speaker Kevin McCarthy (R-Calif.) has hailed the deal’s changes — it’s also been a key focus of Manchin, a centrist Democrat who faces an uphill reelection bid next year.

Tensions among Democrats

Manchin, who backed Democrats’ 2022 Inflation Reduction Act after Senate Majority Leader Chuck Schumer (D-N.Y.) assured him a permitting-reform bill would be brought to the Senate floor, has pushed hard for the changes included in the debt ceiling bill.

In addition to permitting reform, the legislation would also fast-track another key Manchin priority — the Mountain Valley Pipeline, a 300-mile project that would transport gas between West Virginia and southern Virginia.

Sen. Tim Kaine (D-Va.), who has said legislation should not be used to approve or reject individual energy projects, has filed an amendment to remove that provision from the Senate version of the debt ceiling bill, but it remains unclear whether the Virginia Democrat will vote against the overall bill if the amendment fails.

Meanwhile, at least one Senate Democrat has committed to voting against the deal over its permitting provisions.

“I will not support a deal to fast-track dirty fossil fuel projects at the expense of environmental justice. I will not give polluters a Get Out of Jail Free card. I will vote NO on the default deal,” Sen. Ed Markey (D-Mass.) tweeted Wednesday night. 

What was left out of the bill

While several Democrats have criticized certain energy-related provisions of the debt ceiling bill, the final deal negotiated between McCarthy and Biden does not contain a similar provision on expediting electrical transmission — a major wish-list item for Democrats.

Instead, the bill requires a two-year study on building out transmission lines.

White House Director of Management and Budget Shalanda Young, one of the primary Biden administration negotiators, has called the deal “a starting point.”

“We are going to make sure that we can get clean energy expanded by working on transmission in the future,” she said.

Criticism of permitting overhaul

Environmental organizations have sharply criticized the bill’s permitting provisions, blasting it as a giveaway to the fossil fuel industry that weakens vital regulatory safeguards.

“Biden has allowed Sen. Manchin and Republicans to hold the government hostage to ram through the climate-killing Mountain Valley Pipeline, dramatically roll back bedrock environmental laws that give voice to frontline communities and sabotage agencies whose job is to protect the environment and working families,” Jean Su, energy justice program director at the Center for Biological Diversity, said in a statement earlier this week. 

Manchin and other permitting-reform advocates have argued streamlining the process is not inherently pro-fossil fuel, as it would expedite the process for renewable energy as well. However, opponents warn that weakening NEPA regulations would create more environmental problems than it solves.

“The reforms we actually need are fully staffed permitting offices, transmission project reforms, and strong early engagement that prevents conflicts down the road — this bill’s slicing and dicing NEPA won’t do any of that,” Rep. Raúl Grijalva (Ariz.), the top Democrat on the House Natural Resources Committee, said in a statement.

Grijalva was one of 46 House Democrats to vote against the bill Wednesday night.