Permitting Reform in Reconciliation

First reactions

House Natural Resources just revealed their portion of the reconciliation package, and as expected, they’re going to make a play at NEPA reform. They went big.

For starters, HNR should be commended for sticking with its permitting reform effort while many other committees have thrown in the towel. Reconciliation is tricky, to be sure, and several staffers have expressed to me their concern that the parliamentarian will strike down any permitting effort as “merely incidental”. I don’t want to suggest that this outcome isn’t a real possibility, of course – but there are ways to draft reform structures that are very similar to those that sailed through reconciliation in 2022.

HNR’s proposed reform is what I’ve been referring to as “pay-to-play.” It’s the structure that many of us have been expecting since as far back as December, when President Trump promised expedited permitting for energy projects investing more than $1 billion.

The version that emerged from committee, not surprisingly, sets a significantly lower threshold for expedited permitting: to get access to a streamlined permitting track, project sponsors must pay 125% of the anticipated cost of the NEPA environmental review. It’s still somewhat TBD what that exact number ends up being for different projects, but I’d conservatively place it somewhere in the ~$3-5 million range for environmental impact statements (EISs).

(Data on NEPA costs are sparse, but I’m basing this on DOE’s reported median EIS cost from 2003-2012: $1.4 million, or $2 million in 2025 when adjusted for inflation. 125% * $2 million = $2.5 million, and then throw in an extra bit for the ever-growing costs of NEPA and you get in the general ballpark.)

The cost for expedited environmental assessments (EAs), meanwhile, would likely be around $100-300 thousand.

The important question, of course, is what fee-payers get in return. The answer, as far as I can tell, is quite a lot.

First, there’s the simple timeline reductions that you almost always see in these NEPA reform bills. In this case, EISs must now be completed in a year, and EAs must be completed in six months. These provisions have rarely done much on their own (see: the Fiscal Responsibility Act), because they haven’t come paired with the necessary limitations on litigation.

But this bill does just that, suspending judicial review on NEPA grounds for anyone who pays the upfront fee. To be clear: This bill doesn’t just shorten the statute of limitations. It doesn’t put a time limit on injunctions. It gets rid of NEPA-based litigation entirely.

This limitation does not cover lawsuits brought under other statutes (Endangered Species Act, Clean Water Act, etc), of course – and it doesn’t appear to cover APA claims that don’t turn on NEPA. The language here is a little weird and circuitous, but it appears to be written this way to cover NEPA-based objections but leave other environmental objections intact.

Regardless, if this bill makes it through reconciliation, it would represent by far the largest permitting reform ever passed in the US. $5 million is peanuts for the vast majority of projects that trigger an EIS – almost every private developer would pay it. The same can be said for most EAs.

Now, it’s not a perfect bill. I don’t understand why the fee has to be pegged to 125% of NEPA costs and then determined by another arm of government, for example – why not just set a flat $5 million fee for EISs, and save the added complexity? But nevertheless, it’s a damn good effort.

Now… we wait. The Senate has to be willing to play ball, the parliamentarian has to make the right decision, and Congress has to get itself organized enough to pass the whole package. None of these outcomes are guaranteed. But there’s a path, and that’s a very big deal.