The promise and possibility of progress today are too often stymied by high costs, long waits and other obstacles erected by a labyrinthian permitting system.
Because the tradeoffs from permitting requirements are so high, a reevaluation of the wisdom of barriers they erect is always a good idea. Across the board, Congress, states and administrative officials should prioritize comprehensive, common-sense permitting reforms.
There’s a lot of work to be done before the system makes sense. One targeted bright light in this regard, however, is the Energy Permitting Reform Act of 2024. The Senate Energy Committee advanced the act, which was introduced by Sens. Joe Manchin (I-W.Va.) and John Barrasso (R-Wyo.), by a 15-4 vote at the end of July.
The sponsors tout it as designed to “strengthen American energy security by accelerating the permitting process for critical energy and mineral projects of all types in the United States.”
Champions of the pervasive and paternalistic permitting umbrella that hangs over us claim it is necessary for the public’s protection. The “ask first” imposition is seen as a precautionary measure to ensure that certain actions go through a clearance process to prevent harm.
But even those who believe this can recognize that there are tradeoffs. Permitting hurdles impede moving forward with approvals for infrastructure projects, Green New Deal-like initiatives, and alternative energy facilities siting.
The excessive blanket of permitting requirements does not just block commercial-based development. It serves as a significant impediment to adopting innovative new ways to solve societal problems like climate change and other issues that can benefit from approving new technologies and new projects at a faster rate.
Sen. Martin Heinrich (D-N.M.) opined on the bill with precisely this message.
“We’re not going to solve climate change if America can’t build big things,” he said. He called energy permitting and transmission “one of the biggest friction points for being able to decarbonize the economy,” but said, “If we can get this bill passed there will be a much clearer pathway for that.”
Sometimes the gauntlet is too much. Long delays and high costs disincentivize activities that require permits. Progress is slowed when innovations cannot begin development, or critical products cannot reach markets. American producers lose out to foreign competitors when high costs raise prices causing a competitive advantage to foreign firms not faced with those costs.
Long delays also leave room for foreign competitors to win key market races because they are not bogged down by unnecessary regulation. These comparative outcomes also make investors less willing to bet on American companies, especially when they can place their funding with companies operating under less costly and more certain regimes in other countries.
Meanwhile, while waiting for permits to be approved, there is not only just the social loss of what must be spent to get the permit but also the social loss of the absence of the social welfare enhancing project that could have started long ago but for unreasonable hurdles.
Perhaps we are finally at a moment where there can be bipartisan agreement that the permitting process is broken. The Manchin-Barrasso bill is a good place to start.
The legislation is a way to speed approvals for projects of all types, including coal, oil and gas development, which are critical to energy independence, energy security and consumer welfare.
But it will also streamline approval processes for renewable energy, transmission lines that need to be built to make wind and solar viable alternative energy sources and mining projects that extract the minerals and metals needed for manufacturing electric vehicles, consumer electronics and construction materials.
As just one example of the problems the bill can address, right now it takes nearly 29 years to build a new mine in the U.S., including the new critical minerals mines we need for a green energy future, according to a July report by S&P Global. That’s the second-slowest approval time in the world — at least we beat Zambia.
This lag and uncertainty, along with the litigation tools that many permitting statutes provide to allow opponents to further delay development projects, puts us at a serious competitive disadvantage and causes the U.S. to increasingly rely on foreign sources. That is not a sustainable way to build a secure and environmentally healthy future.
The consequences of delays in getting critical minerals and materials to market are not a theoretical or abstract problem.
For example, a recent Wall Street Journal editorial noted that Idaho-based Perpetua Resources is within reach of opening up a mine to produce antimony, a critical mineral in 300 national defense-related munitions and semiconductors. Yet this strategically and environmentally beneficial project has been stuck in the National Environmental Policy Act permitting process since 2016.
It is also still awaiting another 50 or so additional permits from federal, state and local agencies before development can begin. Consequently, the U.S. has been forced to depend on China for antimony instead.
Or consider Minnesota-based NewRange Copper Nickel, a company that could produce enough nickel resources domestically to build over 20 million electric vehicles. Unfortunately, the U.S. Army Corps of Engineers reversed its Clean Water Act permit approval last year, thus delaying this mine’s development and projecting uncertainty to investors, signaling that even permits already obtained are not necessarily reliable.
Further, the speed at which new environmental technologies are being developed that could solve some of the environmental problems that we face today risks outpacing the capacity of the system to provide approvals to deploy such technology.
In other words, by the time a facility is finally approved, necessities such as critical minerals are accessible and transmission lines are built, technology may have advanced to the point where it no longer makes sense to approve what might have made sense when the permitting process started.
The permitting process needs to be able to keep up with a fast-changing world and technologies. We need a sensible system that allows us to harness those technologies, deploy new facilities to take advantage of those technologies and rapidly adapt as we learn new things — before that knowledge becomes stale and the benefits of that potential adaptation are lost.
We need much more than just the current proposed Manchin-Barrasso bill, but it is a good beginning and a great vehicle for a bipartisan embrace of the need to adapt our permitting system to fit a changing world.
Donald J. Kochan is a professor of Law and the executive director of the Law and Economics Center at George Mason University’s Antonin Scalia Law School in Arlington, Virginia.
