Reconciliation bill could hobble bipartisan permitting talks

E&E News

16-05-2025

The Republicans' massive party-line tax and spending bill could upend protracted talks to overhaul the nation's permitting system.
Not only is the GOP looking to enact their own language to accelerate project approvals and limit ligation, but they are also repealing broad swaths of the Democrats' 2022 climate law.
Democrats had been increasingly willing to make concessions on the environment in order to accelerate renewable energy projects and get them onto the grid. Permitting reform was supposed to complement the Inflation Reduction Act. But those dynamics are changing.
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'The idea that we're going to go on and do permitting reform is fantasy,' said Sen. Brian Schatz (D-Hawaii), pointing to the GOP's drive to roll back the climate law. 'They need to not trash the IRA,' said Schatz.
Rep. Scott Peters (D-Calif.) — who has positioned himself as a dealmaker on permitting and willing to make big changes to the National Environmental Policy Act — said the Republicans' budget reconciliation package could indeed further imperil a bipartisan deal.
'But I don't know what else to do about the problem, though, because the problem will still be the same the day before and the day after [Republicans] go for that awful reconciliation bill,' he said.
Part of the problem, as Peters sees it, is too much red tape and litigation. That's where he coincides with the likes of House Natural Resources Chair Bruce Westerman (R-Ark.), who doesn't think the GOP bill should hurt bipartisan talks.
'No, I don't think so because I think everybody understands reconciliation is a partisan process and you can't fix permitting in reconciliation,' Westerman said.
'You can nibble around the edges on things that have a definite budget impact. But I think there's still a lot of interest and willingness on both sides of the aisle to do a more comprehensive permitting reform package.'
Permitting in reconciliation
A heat exchanger and transfer pipes at a Maryland liquefied natural gas terminal. LNG projects would benefit from the Republicans' party-line tax, energy and security spending bill. | Cliff Owen/AP
Republicans have long said they didn't expect many permitting provisions in their megabill because of the strict fiscal rules in the reconciliation process. Still, the changes the GOP is considering go too far for many Democrats.
The Natural Resources portion of the package would allow companies to pay a fee that's 125 percent the cost of an environmental impact statement. That would accelerate reviews and shield companies from certain litigation.
The Energy and Commerce portion of the budget reconciliation bill would let natural gas export companies pay $1 million to receive a positive Department of Energy national interest determination.
Another provision would allow gas project developers to get expedited permitting from the Federal Energy Regulatory Commission under the Natural Gas Act if they pay $10 million or 1 percent of the project's projected cost.
The bill envisions permitting being completed within one year and would exempt projects from certain legal challenges. A similar timeline and fee structure would apply to carbon dioxide, oil and hydrogen pipeline approvals.
The fees give Republicans the fiscal nexus they need to comply with budget reconciliation rules policed by the Senate parliamentarian. They also open the GOP to Democratic scorn.
'I think many Democrats will fairly mistrust Republicans even more on permitting if the permitting reforms in reconciliation go through,' said one House Democratic aide close to the permitting talks granted anonymity to speak freely. 'Similarly, I can imagine some Republicans will not see much of a point in further bipartisan talks if they get all their pay-to-play provisions.'
'They don't pay me to sit on my ass'
Senate Environment and Public Works ranking member Sheldon Whitehouse (D-R.I.), a staunch advocate of climate change, wasn't sure whether the Republican party-line bill would keep him from bipartisan permitting talks: 'I have not yet reached that conclusion.'
Whitehouse said he's meeting with EPW Chair Shelley Moore Capito (R-W.Va.), Energy and Natural Resources Chair Mike Lee (R-Utah) and ENR ranking member Martin Heinrich (D-N.M.).
'Yes, the four corners are still setting up the general legislative outline we're hoping to fill in,' he said. 'This is so far just trying to get our two key committees talking.'
Whitehouse also wondered what House GOP provisions would survive the 'Byrd rule' — the reconciliation guidelines tied to former Senate Majority Leader Robert Byrd of West Virginia. Reconciliation allows the congressional majority to bypass the Senate filibuster on fiscal matters.
Peters said it's been hard to meet with Republicans on bipartisan issues because of their focus on the reconciliation bill. 'So when reconciliation is over, we can hit the ground running,' he said.
'They don't pay me to sit on my ass and not do anything until only Democrats are in control, right? That's not why I'm here,' Peters said, pointing to the lingering need to address energy demand and climate change.
'Well, that didn't change. Physics and nature and chemistry didn't change, so this is less of a problem. So of course, I'm gonna try to work on it.'
Reporters Nico Portuondo and Garrett Downs contributed.