New O&G Pipeline Approvals Dropped 50% Under Biden-Harris
A web of red tape and environmentalist lawfare in the courts have derailed six of the last seven proposed interstate pipeline projects that could have delivered Appalachian natural gas to the US
Here’s a sobering fact:A web of red tape and environmentalist lawfare in the courts have derailed six of the last seven proposed interstate pipeline projects that could have delivered Appalachian natural gas to New England, the Southeast, and other regions of critical demand . The only pipeline to survive was the Mountain Valley Pipeline, and it took a literal Act of Congress to get it across the finish line. Here’s another sobering fact: Oil and gas pipeline approvals have dropped by 50% during the Biden-Harris administration(compared to the last three presidents before Biden). The precipitous drop was on purpose.
Dave Callahan, President of the Pennsylvania-based Marcellus Shale Coalition (MSC), Charlie Burd, President of the Gas and Oil Association of West Virginia (GO-WV), and Rob Brundrett, President of the Ohio Oil and Gas Association (OOGA), penned an op-ed appearing in a number of newspapers making a plea for more reliable permitting of infrastructure projects, including oil and gas pipelines.
The following column makes some great points, including those we opened this post with.
Appalachia is an American energy powerhouse, supplying the natural gas that underpins U.S. energy security, national security and our nation’s leading role in reducing carbon emissions. These are truths widely recognized and fiercely defended by residents in Pennsylvania, Ohio and West Virginia, so much so that candidate Harris’ campaign walked back her opposition of the industry to appeal to voters in the area.
Although the debate over “fracking bans” has dominated headlines, it’s a red herring in the broader battle for U.S. energy leadership and environmental progress. Make no mistake, banning domestic energy development would wreak havoc on global stability, but the real crisis at hand lies in the cumbersome, outdated approval processes that stymie energy infrastructure projects.
Think about it: We can produce all the energy in the world, but that means nothing if we can’t transport it to where it’s needed.
Nowhere in the country are these infrastructure frustrations more prevalent than the Appalachian region. The Marcellus and Utica Shale formations that lie below are the most prolific in the nation and the resources are produced under the strictest environmental standards. However, with pipelines at maximum capacity, output from the region is restricted, unnecessarily limiting access to clean, abundant energy.
A web of red tape and environmental activism in the courts have derailed six of the last seven proposed interstate pipeline projects that could have delivered Appalachian natural gas to New England, the Southeast and other regions of critical demand. These were considered a “win” for the environmentalist movement, but the biggest losers were energy consumers, like New England residents paying ~31% more for natural gas than the U.S. average.
The lone project to survive this onslaught is the Mountain Valley Pipeline, which went through a grueling 10-year battle and eventually required an act of Congress to come online this summer. Despite clear demand for affordable, clean energy in mid-Atlantic states, environmental activists weaponized the regulatory and judicial process in hopes investors would eventually walk away.
While the Supreme Court and Congress intervened to prevent the project’s demise, the potential of costly delays and legal challenges continues to loom large and may act as a deterrent on future investments in the region.
The Biden-Harris administration’s track record reinforces a dire need for permitting reform in this country. Average pipeline approvals have declined by more than 50% under them compared to the last three occupying the White House. In addition, activists continue to use the legal system to slow down if not stop infrastructure development. Consider the recent federal appeals court decision threatening an existing pipeline’s expansion to serve 3 million new customers.
Indeed, these are the back-door bans truly holding our country back from its full energy potential, not to mention climate progress. They pose significant reliability and security risks as power demand continues to climb at unprecedented levels. With our nation and modern societal needs continuing to grow and evolve, so too must our infrastructure.
Sens. Joe Manchin and John Barrasso’s bipartisan Energy Permitting Reform Act (EPRA), introduced this summer, offers a glimmer of hope. If adopted, EPRA has the potential to create workable timelines to secure investment, provide surety to developers, and fast-track infrastructure key to bringing more Appalachian energy to users across the globe.
Moving forward, let us remember that our goal is not only to build pipelines, transmission lines or LNG terminals but to build a stronger, more resilient energy system that serves all Americans. By reforming our outdated permitting processes, we can unlock the full potential of our energy resources, ensuring a brighter, more prosperous future for the nation. (1)
The permitting process for energy projects can drag on for years, resulting in multiple state and federal hurdles, environmental studies and judicial reviews. This is true not only of traditional energy projects involving oil and gas but also renewables like wind and solar and long-distance transmission, which are seen as key elements of the energy transition. Legislation proposed by a pair of influential senators aims to help move these projects along every step of the way but getting Congress to agree on anything — especially during an election year — figures to be a formidable challenge. In today’s RBN blog we examine the Energy Permitting Reform Act of 2024.
Almost everyone acknowledges the benefit of having interested parties and stakeholders weigh in on significant proposals to build or expand infrastructure, whether it be a new highway, an airport runway extension or an interstate oil or gas pipeline. Additionally, credible regulations and appropriate safeguards (such as the Clean Water Act’s focus on protecting the nation’s water supplies) are essential to the process. Still, the often-byzantine permitting process (see Figure 1 below) for some projects can drag on for years. Given those hurdles, horror stories abound — a decade or more to build an electric transmission line or to get a mining permit — and the reality is that some large, complicated projects can be constructed in far less time than it takes to secure required permits and work through the legal challenges. The issues are well-documented in numerous RBN blogs, including our Don’t Pass Me By blog series and Easier Said Than Done Down Report.
Figure 1. Illustration of Review Process Under National Environmental Policy Act. (Source: Federal Railroad Association)
Last month, Senators Joe Manchin (a longtime Democrat but now an Independent from West Virginia who will retire this year) and John Barrasso (a Republican from Wyoming) unveiled a bipartisan bill — the Energy Permitting Reform Act of 2024 — with the aim of minimizing regulatory and legal logjams. We should note that it was Manchin’s approval that secured passage of the Inflation Reduction Act in 2022 (see Name Game), the Biden administration’s most significant energy-related legislation. As part of securing the IRA’s passage, Democratic leaders promised a vote on a separate measure — which subsequently failed — to speed up the permitting process, including reforms to the National Environmental Policy Act (NEPA) and measures to ensure completion of the long-delayed Mountain Valley Pipeline (MVP) project. (The final approvals for MVP later became part of 2023’s debt-ceiling bill, which also included some NEPA reforms; for more, see Rescue Me.)
The Manchin-Barrasso measure was approved by the Senate Committee on Energy and Natural Resources on a bipartisan 15-4 vote on August 2. Still, like with anything in Congress, it faces an uncertain path forward. Today, we’ll outline the bill’s highlights and dive into the politics of making it a reality.
Judicial Review
Judicial review is a formal process where individuals and groups can legally challenge federal actions, such as agency decisions on permits. Under federal law, entities can file lawsuits for up to six years after an agency makes final permit decisions on energy projects. This can result in long periods of legal limbo for projects, raise costs and delay startup. The proposal would shorten from six years to 150 days the deadline to file lawsuits against an agency action approving or denying a permit for an energy project. It also would direct courts to set a 180-day time limit for an agency to act on a remand, which is when a court sends a decision back to an agency for further consideration. Currently, federal agencies face no deadline to act. Further, the legislation would require courts to prioritize cases reviewing an agency permitting decision for an energy or mineral project.
Federal Onshore Energy Leasing and Permitting
The bill would increase oil, gas, coal and other energy resource leases and require the Secretary of the Interior to review lease applications within 90 days of submission. It also calls for the secretaries of the Interior and Agriculture to issue regulations to increase renewable energy projects on federal land. (The federal government owns about 28% of the country’s land, or about 640 million acres.) The bill adds that the Secretary of the Interior should approve wind or solar development on federal land for at least 50% of the chosen acreage nominated for leasing. This must be at least 2 million acres and must have been offered for oil and gas leasing the previous year. The goal is to ensure that the DOI doesn’t favor one resource over another.
The legislation’s goal is to authorize 50 gigawatts (GW) of renewable energy on federal land, up from the goal of 25 GW by 2030. (As of June 1, 17.4 GW of installed renewables generating capacity was on federal land.) The bill would also set new application timelines for renewable projects that require rights-of-way on federal land; call for periodic revisions of the national goal for renewable energy production on federal land; add energy storage paired with wind, solar, or geothermal to the definition of eligible projects; and clarify that the Secretary of Interior may accept donations from renewable energy companies to improve community engagement in the permitting process.
Federal Offshore Leases and Permitting
The bill would require at least one offshore oil and gas lease sale annually in the Gulf of Mexico from 2025-29. It would restrict those sales to areas currently open to leasing in the Gulf of Mexico, while preserving the existing leasing moratorium in the Eastern Planning Area, which stretches 125 miles from Florida’s Gulf coast. (The Gulf of Mexico Energy Security Act of 2006 imposed a moratorium on oil and gas leasing in the area through 2022. It was effectively extended to 2032 by President Trump in September 2020 when he removed the area from leasing consideration until that time.) The legislation would also set the lease terms and conditions, including a minimum of 60 million acres offered in each sale, and codify longstanding procedures to determine the adequacy of received bids.
In regard to offshore wind, the legislation would require the Secretary of the Interior to hold at least one offshore wind lease sale per year over the five-year period from 2025-29, with at least 400,000 acres offered each year. It would establish a national goal of 30 GW of offshore wind energy production and set a target date to achieve it, with periodic revisions. It would also allow the Secretary of the Interior to authorize rights-of-way in a National Marine Sanctuary for the transmission of electricity generated by or produced from renewable energy but would not remove other agency permitting authorities.
Onshore Oil and Gas Leasing
The legislation would clarify that the Secretary of the Interior is required to offer for lease at least 50% of the acreage actually nominated for oil and gas leasing, or at least 2 million acres (whichever is less), in the year prior to the date on which the secretary issues any right-of-way for wind or solar development on federal land. This is intended to ensure that the leasing requirement is met based on acreage for which expressions of interest have been submitted for lease sales.
Grid Reliability: Transmission Projects
We’ve written about the permitting challenges facing long-distance transmission that take up a huge amount of geography and cross multiple state lines, such as TransWest Express (see Figure 2 below), which had an 18-year path to final approval and is now under construction. The new proposal attempts to speed up this process by, among other things, eliminating the requirement for the Department of Energy (DOE) to designate National Interest Electric Transmission Corridors (NIETCs) based on needs studies included in the approval process, which can add two to five years to the permitting timeline. (NIETCs are geographic areas designated by the DOE to address critical transmission congestion issues and facilitate the development of transmission infrastructure.) Instead, the process for transmission projects of 100 kilovolts (kV) or more would start at the state level. The project developer would be required to get the necessary permits from each state along the proposed path of the project. If a state or states deny the project or if there is a delay beyond a year, the applicant could appeal to the Federal Energy Regulatory Commission (FERC) to step in and permit the line if it’s determined it would reduce transmission congestion in interstate commerce.
Figure 2. TransWest Express Transmission Project and Service Areas. (Source: TransWest)
The proposal also would require transmission planning across multiple regions. Further, there are goals within the bill for permitting 50 GW of renewable energy projects on federal land. And it would establish a standard definition of “transmission benefits” intended to make sure costs are allocated consistently across customer classes. Finally, the proposal directs FERC to create a rule on interregional transmission planning within 180 days.
Mining
The measure would allow mining projects — which often face the trickiest path to approval — on federal land to also include nearby “milling” operations, which involve waste disposal and the processing of iron ore. Milling had been allowed on federal land until a court decision related to the proposed Rosemond copper mine in Arizona. In 2022, the 9th U.S. Circuit Court of Appeals agreed with conservation groups determining that the federal government was wrong to assume the Rosemont Copper Company had the right to dump nearly 2 billion tons of waste rock on federal lands. The proposed change would eliminate the need to transport mined materials long distances from mining sites.
LNG
The Natural Gas Act requires the DOE to determine if exporting U.S.-sourced gas (including LNG) to a country that doesn’t have a free trade agreement (FTA) with the U.S. is in the “public interest.” In January, the DOE paused the review of LNG export applications (see Take Five) to give the department time to reassess what the public interests really means in this context. On July 1, a federal judge issued a stay on the DOE’s decision, ending the pause — at least for now.
A provision in the permitting bill would restrict the DOE from taking lengthy delays in approving or denying an LNG export facility. The proposal would require the Secretary of Energy to decide whether LNG export applications are in the public interest within 90 days of the publication of an environmental review. This timeline also applies to re-exports of pipeline natural gas as LNG from Canada or Mexico. If the DOE doesn’t approve or reject an application within 90 days, it would be automatically approved.
Geothermal Resources
The proposal would direct the Interior and Agriculture departments to write and implement regulations allowing for categorical exclusions for activities required to test, monitor, calibrate and explore whether geothermal resources should be developed on federal lands. (Most U.S. geothermal resources are on federal lands. A categorical exclusion is a class of actions that a federal agency has determined do not have a significant effect on the human environment and do not normally require an Environmental Assessment or an Environmental Impact Statement, easing the permitting process.) The proposal also would direct the Secretary of Interior to create rules to accelerate the process of geothermal leases, permits and authorizations.
What’s Next?
Now that we’ve addressed the bill, let’s discuss the real elephant in the room: How likely it will be to get passed by what has been a very divided Congress during an election year? As we said, this bill passed through committee on August 2 with bipartisan support, but it still has a long way to go before becoming law. It doesn’t have wholesale approval from Democrats or Republicans. Republicans have favored slashing the permitting process, and some say this proposal doesn’t go far enough. Many Democrats, in turn, are concerned that parts of the bill would streamline oil and gas development and — by encouraging LNG exports — slow the world’s shift to lower-carbon and renewable energy sources.
Manchin said he was happy that the bill passed the committee and was hopeful it will get voted on by legislators by the end of the year. Majority Leader Chuck Schumer, a Democrat from New York, has not said if he intends to hold a vote on the Senate floor — it would need 60 votes there to overcome a filibuster — and it would then have to pass the Republican-controlled House. More recently, White House adviser John Podesta said that real negotiations on the legislation aren’t likely to happen until after Election Day in November, meaning that it could come up for a vote during the “lame duck” session of Congress at the end of the year. In any case, the safest assumption is that this bill will only become law if both sides of the aisle are willing to compromise. (2)
Unfortunately, the Manchin/Barrasso bill doesn’t really stand a chance of passing this Congress, but maybe in the next.
