Right of Way Ep. 2: The Permitting Picture

Alongside your irregularly-scheduled Green Tape programming, we will also be posting Right of Way episodes and transcripts here. If you prefer to listen on Spotify or Apple Podcasts, click the links here or here.

In this episode, we discuss:

• How NEPA works (or doesn’t), and how reform efforts have shaped outcomes

• The role of the Clean Water Act in stalling major projects

• The politics and political tradeoffs in permitting reform

Right of Way Ep. 2: The Permitting Picture

w/ Richard Meyer and Peter Stahley

Thomas: Welcome to Right of Way, a podcast about energy policy, energy politics, and above all the upcoming permitting reform negotiations. I’m Thomas Hochman, director of infrastructure policy at the Foundation for American Innovation, and I’m joined by Pavan Venkatakrishnan, an infrastructure fellow at the Institute for Progress.

Pavan: Today we're going to dig into the details of permitting. We're going to get into how NEPA works and we'll discuss what other laws like the Clean Water Act may end up in a reform package. Lastly, we're going to talk about the interests that are implicated in these kinds of permitting reform packages from developers to utilities to environmental groups. Joining us today to help unpack all of this are Richard Meyer and Peter Stahley. Richard is the Vice President of Energy Markets Analysis and Standards at the American Gas Association, where he works with over 200 local energy companies delivering natural gas resources across the US. His work focuses on advancing understanding of natural gas utilities' role in an affordable, reliable, and competitive energy economy. I would also note that Richard has one of the strongest graph games on all of energy Twitter.

Thomas: Peter is Senior Vice President at the government relations firm Cassidy and Associates. He also has one of the coolest CVs in the city, having worked for a decade as a civil engineer in Alaska with the National Park Service before coming to DC and joining the Senate Energy and Natural Resources Committee. As a professional staff member on Senate ENR, Peter is responsible for major provisions of both the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, including key IRA tax credits. Given some of the conversations I've had with Peter over the last few weeks, I can also tell you he is a true expert when it comes to NEPA. Richard and Peter, welcome to Right of Way.

Peter: Thanks for having us.

Richard: Thank you.

Thomas: Peter, starting with you, just give us an overview of NEPA. What is it? What sets it off? How long does it take? What are the biggest problems?

Peter: Sure. So first, I guess we get to start like all government conversations with the acronym. Everyone throws around the word NEPA. Some people who live in this world are very familiar with the National Environmental Policy Act (A lot of people throw in protection, but that’s not accurate). And it's a process statute, right? It basically says, hey, government, look before you leap. When you're going to make a decision, make sure you look at all the environmental consequences and look at alternatives. That’s super high level, and I think frankly, when the law was put together, that's sort of what the authors were thinking. And then if you look ahead to where we are now – what are we about 40 years in, give or take? The process has changed dramatically, I think, as a result of case law and a bunch of other things I think we're gonna dig into. So, you have a federal action – let's say that's approving a right of way across federal lands for a natural gas pipeline. Let's say it's a record of decision for a big mining project, you know, most of which are on federal land out west. Maybe it's an offshore wind project. Maybe it's a solar farm. And also, I guess more on the power sector, right? Maybe it's some kind of FERC decision.

Generally speaking, and we can get into the nitty-gritty, that's a major federal action. The government's gonna have to look at it and apply the NEPA process. And without bogging down too much: You sort of have three levels of review, we'll call it. You've got an EIS, the Environmental Impact Statement. That's supposed to be for those projects, those decisions, that have a major impact or potential for major impact on the environment. Those are the big long ones that you usually hear about, that unfortunately are usually several thousand pages, notwithstanding page limits in current law. And those, by statute, are supposed to take two years or less to complete. Maybe we'll get a little bit into whether that's actually happening or not, and if there are any consequences if you don't hit that [deadline].

Then for smaller decisions, there's something called an EA, or environmental assessment. And actually, what an EA is supposed to do is be the review that helps you decide whether you need an EIS or not. But I think some would argue it's turned into a much bigger sort of parallel study.

Then, if you get to the end of your EA and we say we don't need an EIS, you'll hear people throw out the term FONSI, which is not a Jim Henson character – it's a finding of no significant impact, which is basically the legal step that lets you say we're not doing any EIS.

Outside of that, you've got what people call CatExs, categorical exclusions. These are a wide variety of actions that, again, are categorically excluded, meaning you don't really have to run the process. Some of this is super simple administrative stuff, right? Like you can make an argument that a budget affects the environment, but those are excluded. A lot of administrative actions are excluded. Where it gets a little tricky is there are both congressional and regulatory categorical exclusions that say for these types of actions, “we're pretty sure there's not a major impact unless there's special, extraordinary circumstances,” to use the correct legal term. We can do this much quicker. There's a bunch of oil and gas ones having to do with using an existing right of way. Similarly, there's some new exciting geothermal ones about getting some drilling projects going faster. But I will say there: There are also times when the decision to use a CATEX itself can take years. I've got a couple clients running through that right now.

So, long answer there. And then: how long does it take? We talked about it a little bit. Two years by statute on an EIS, one for an EA. The recently enacted One Big Beautiful Bill Act, which is a mouthful, also has a provision where a developer can pay, I think it's 125 % of the estimated cost, and actually cut those timelines in half (how that's going to be implemented, still a little bit up in the air).

But that's how it should work in, we'll say, the ideal world. In practice, I don't know that we've seen those statutory timelines really been fully adhered to yet. So you will still hear stories of four, five, six years. The average is varied – a little bit by industry, a little bit by agency on the big EISs. An EA – sometimes they're six months and it goes great. Other times, year, two years, three years. And again, I'm aware of a couple of categorical exclusions where they're still waiting on permission to use the categorical exclusion a couple of years in. So, long answer, but trying to encapsulate it there.

Thomas: Yeah, from our last guest on the first episode, we learned that all the cool kids are saying OB3 now, by the way. So you don't have to say OB-B-B-A anymore. But yeah – to add a few stats here, we know that the most recent statistics are that EISs take a median of three and a half years, and an average of four and a half years, across agencies. I think upwards of 600 pages, too. But to your point, it sort of also varies across project type – and how you measure those things, it really, really varies as well.

Peter: And if I could add really quick, you asked what are the biggest problems, right? So we just talked now about how you do NEPA, so to speak. Once you're done, most, not most, but a lot of projects go to litigation. And I think we're gonna spend a lot of time unpacking that. But, from my client's perspective, and my experience in the permitting reform fight, I think there's a good argument that the biggest problem is, in fact, once you slog through all of this, you go to the litigation doom loop. Recommend your all's work, and stuff like James Coleman, others, Nick Bagley, on the procedural fetish, where you can end up in court for literally an indefinite amount of time, up to and including needing Congress to act, like with the Mountain Valley pipeline.

Thomas: So Richard, how does this play out in practice, especially for the gas industry? What does this do to costs? What does this do to certainty? What does this do to maybe even the decision to build the project?

Richard: Well, first, gentlemen, it's a pleasure to be talking with you all today. My role at AGA is really to look at energy markets and some of the policy analysis. I am surrounded here by permitting reform experts, so I'll do my best to catch up. I'll reaffirm what Peter started with, is that NEPA was intended to inform agency decisions. It's a process rule. But in recent years, this has been used as more of a roadblock to paralyze vital infrastructure projects. The recent actions by Congress, the Supreme Court, this administration have helped bring NEPA… steering that back to its original statutory intent. Even when NEPA functions as intended, or rather, I should say when NEPA functions as intended, we can get back on track here. We can get the projects built in a timely way. We can meet this demand growth. We can address affordability.

One thing I will say is that the costs are very real. The delays have material implications in terms of lack of energy to the market. That leads to higher costs for consumers. That leads to lower economic output. That leads to fewer jobs. I mean, we're talking billions of dollars of lost GDP. Thousands, if not tens of thousands of jobs in terms of lower employment in the economy. There was a major pipeline CEO in March that talked about the need for permitting reform here, NEPA, and really across the board, and he said today the cost of permitting a pipeline that they’re building is twice the cost of the actual pipe itself. So these [are] some real issues here.

Maybe just a couple of stats here. Litigation on NEPA and across the board on both conventional fuel and clean energy projects, that leads to delays of these projects by almost four years. I think there's 3.9 years on average. So again, this is affecting not just natural gas pipelines, which of course we're focused on, but all energy projects. And that's just not sustainable, especially in the moment we're in in terms of demand growth and so forth. I work with colleagues that are up on Capitol Hill, working with folks like you all to drive a productive conversation on Capitol Hill. We're working with the administration as we do all administrations to course correct within the regulatory processes and open rulemakings that are currently underway, and we'll unpack this some more. We're definitely focused on NEPA reform and some sensible changes there as well as some other statutes that need to be addressed that are of particular concern to the natural gas utility industry and the natural gas industry more broadly.

Pavan: So Richard, kind of follow-up there. You know, gas is going to be really important in meeting this demand from next-generation data centers. Are those impacts already manifesting? Like, we're a little early into building out this infrastructure, but are you already getting an idea of those implications? And how does a law like NEPA interact with meeting data center demand?

Richard: Well, Peter did mention the initial reforms that were passed under the Fiscal Responsibility Act of 2023, setting some timelines on NEPA. I think we're not yet at that two-year period—or we're coming right up against it—where we might start to see some of these environmental impact statements coming out. We're hitting the shot clock here. Let's see what those reforms mean in practice.

Meanwhile, we've got this massive change out there and two key trends. One, this demand growth—and it's being driven by AI and data centers and other strategic manufacturing centers and reshoring of manufacturing back here at home. That's driving more energy demand. Plus all the other organic growth. We're still building homes. We're still constructing new places to do business. And those require energy as well. So we're growing here.

That requires more natural gas, requires more energy, requires more electricity. Is it holding up our ability to build? Almost certainly it is. I can't quantify that for you just yet. But I think we see a lot of market behavior that's looking for the fastest route to scale energy and do it very quickly. One thing I'll say is that in some cases, to get a natural gas connection might be faster than some other pathways. So despite the delays, it may be building an interstate pipeline. If you have gas access in a local area, oftentimes these large facilities are asking for gas service because it's easier than to get an interconnection, for example, for electricity—for a grid connection. So maybe that's a separate issue. But all this is to say, we're really gonna hamstring ourselves if we don't get out of our own way and make a collective choice as a society that we need to build, and we need to do that in a way that, again, ensures transparency of the process, engages the public and relevant stakeholders, but we don't just set up roadblocks and create processes that allow certain groups, select groups, a tactical veto over projects that are in the national interest.

Pavan: Right. Peter, we have a lot of environmental laws in the US. Why is it that NEPA is the one that people like to talk about the most? We have the Clean Water Act, the Clean Air Act, but we hear NEPA over and over and over again, especially in the context of congressional conversations.

Peter: I think part of it is it makes sense from a—it's sort of an umbrella statute, as people call it, right? It's the procedure, and for good reason, a lot of these other statutes kind of get wrapped up in the study because, having been on the agency side, if you have to look at the impacts of—I'll use a non-energy example here—but a wastewater treatment plant, which is a real thing I worked on for the National Park Service trying to get built, it makes sense to roll up your, say, National Historic Preservation Act review into that same process. Do it all at once. Endangered Species Act, the Clean Water Act, Clean Air Act, and then a host of other smaller, lesser-known provisions. And then I’ll say once you're touching federal land, not only do you have these substantive environmental statutes like the Clean Water Act saying, “don't put XYZ pollutants in water,” which I think everyone can get behind, but on the federal land front, each and every agency, for good reason—again, the Park Service is different than the BLM, is different than the Forest Service, is different than the Army Corps, or say a military base—that landlord, so to speak, just like in the private sector, has their own sort of goals, incentives, and importantly here, statutory guidance for what they can and can't do.

So I think we end up looking at NEPA because it rolls it in. And frankly, that's where the litigation goes. Even if we're really talking about—using Clean Water Act examples—where a lot of times that Clean Water Act analysis is rolled into the NEPA process. And so when you get sued—technically under the Administrative Procedure Act—but for not doing your NEPA analysis correctly, they may be saying, “There's a stream study that didn't happen right as part of your Clean Water Act.” It all kind of rolls together.

And I think the thing to say there too is, like, I'll be optimistic here and say when we do more permitting reform, these substantive statutes I think will pop up whack-a-mole style as our focus necessarily shifts and people say, “We fixed NEPA—why are we still having problems?” Not to say there wouldn’t be massive improvement, even for a purely NEPA-focused approach—but again, each of these statutes just sort of rides under that umbrella, and I think a lot of people don’t look underneath.

Thomas: Yeah, totally. I say this to people quite a bit when they say, well, it seems like we’re only going to have one chance at permitting reform, and so we have to go for everything at the same time. I think the political economy right now of Endangered Species Act, Section 7 consultation reform, for example, is not exactly awesome. But that's in part because of the way that NEPA functions as an umbrella statute. So often there's litigation that's really tied to the Endangered Species Act, but it seems like it's filed or applied on NEPA grounds. But with real and meaningful NEPA reform, all of a sudden, you start to see the way that these statutes that sit under the NEPA umbrella function in practice. So yeah, definitely makes sense.

With all of that said, over the last couple of months, as I've talked to folks in various industries, I've heard quite a bit about the Clean Water Act, and in particular, Clean Water Act Section 401. I’ve heard this not just from folks in the pipeline space, but also really recently from folks in the hydropower space for whom this is really quite a concern. It's a major issue. Richard, can you speak to this a little bit? How does this law work? How does it play into energy permitting more broadly?

Richard: Sure, well you guys probably have explained it even better than I can. Clean Water Act Section 401—this is related to state certification on discharges from permitted activities. What this has meant in practice, however, is that some states with the ability and requirement to issue their permits—and again, let me say 401, as I understand it (again, I'm just playing a lawyer on TV here) is that kind of federalism approach where you've got certain obligations under sections of the Clean Water Act, but then this allows states to also play a part in that process and then sync up with their own state and local laws. What this has meant in practice, however—back to the point—is that certain states can just sit on their permits.

And that has stopped some major infrastructure projects. And really, what this has meant is that what should be a permit based on the merits of the project itself is—that statute is now being used to implement state policy, where you have expansive definitions that go beyond just the point sources and issues at play here. And really, it's meant to stop major infrastructure projects like natural gas pipelines.

We've got a set of issues that we're kind of working through on 401 and ways to kind of constrain what it is that you're looking at. Again, setting shot clocks for the states, other potential criteria that you need to adhere to. And really, this is not meant to circumvent this process, but rather make it work more efficiently and make it work well and make it work with the intent of the original statute.

Thomas: When I talk to people about Clean Water Act 401, I describe it as sort of like a bolt-on layer of review, right? So you already have a federal permit that's being issued by a federal agency—FERC, for example. And then states also have to issue their own certification. And that certification, as of right now, can be based on all sorts of things. It's not just the direct discharge of the project in question, but also upstream and downstream stuff. Sometimes they request a lot of information around endangered species, et cetera.

And then, unlike a lot of permitting processes, 401 allows for an up-or-down vote. You can just veto the project completely. And so you see these situations where a pipeline, let’s say, is built across several states, and one state has this veto power to block the whole project from moving forward. So it's quite interesting.

Richard: And can I just make a general point? We've got a century of experience in building pipelines here—both liquid and gas pipelines—across this country and into other countries as well. We have the same level of experience with more local distribution lines, too. And let me just put a finer point on this: there’s 2.9 million miles of paved road in this country. There's 2.8 million miles of natural gas pipelines. So we know how to do this. We know how to do this well.

Let's get the permitting process fixed so that we can continue to do this as we always have—in an environmentally responsible way, with a transparent and stakeholder-engaged process. So there's no reason that we need to keep the status quo here when it's clearly failing. The intent is to enable environmental review of responsible infrastructure projects.

Can I say one more thing since you asked about the Clean Water Act? There's also Section 404. This is federal permitting for similar issues. And here we have a process that allows nationwide permits. Of particular interest to the oil and gas industry and gas utilities is Nationwide Permit 12. Again, this is like—if you adhere to certain criteria, you can get a permit. And it works really well. There's a rulemaking process right now at the Army Corps of Engineers to update that. We’re engaged and hopeful that that gets reissued so that these projects under that Section 404 of the Clean Water Act can continue. So just want to make sure I mentioned that as well.

Thomas: Yeah, no, absolutely. Okay, so let's talk about solutions here—or what the solution set looks like. And I’ll open it up to either Peter or Richard—but on NEPA first: what should we do? What works, what doesn’t? There’ve been several iterations of attempts at NEPA reform—some successful ones, lots of unsuccessful ones—that have taken several different tacks, right? There’s been everything from judicial review reform to creating page limits and time limits, et cetera, et cetera. So what sorts of things will move the needle, and where should we be heading over the next year?

Peter: It’s easy to think about the politics first. Putting that aside for a second, I think you’re exactly right. I have a lot of scars from Senator Manchin’s efforts trying to meaningfully advance NEPA and just broader permitting reform.

So, I think litigation reform has to be part of the solution here. We need people to be able to rely on decisions that are made, right? By a federal agency, by ideally skilled regulators. And I think it's worth just bringing up the Marin County decision—the D.C. Circuit—that took away, or said that CEQ didn’t have statutory authority to issue regulations, and now followed by Seven County at the Supreme Court, putting a finer point on what even goes into a NEPA review.

And I think that sort of changed, actually, what one might want to put in a statutory reform—for the better, frankly. I think it makes Congress’s job a little bit easier in that they can point to some precedent rather than having this be the kind of thing you’re fighting over in a conference room over in the Capitol.

So litigation—there. Page limits, time limits—I think, helpful. And if you think down to like the practitioner level—someone at some agency doing review—those are helpful, but obviously they don’t solve the problem, or we wouldn’t be having this conversation right now.

Chairman Westerman, Jared Golden just released a bill that does some work in this space. Still early, and I’ll admit, myself and my firm and clients haven’t really dug into it fully yet. There’s some limits to what should an agency be looking at, how should they be going about it. There’s questions of what downstream impacts are—and this gets a little nerdy, so apologies…

Thomas: This is a podcast that's all about permitting reform.

Peter: Yeah, I mean, so here we are. Seven County, at a really simplified level, is actually about a rail line extension. And really, really short-circuiting the summary: basically the kind of unanimous holding there is—the Supreme Court said, “Surface Transportation Review Board, you do train stuff—only look at train stuff.” You don’t have to go all the way downstream and figure out, will this make more refining emissions happen in the Gulf, and yada yada yada. They said, look at the thing.

Which is a big deal, right? I think some of the conservative justices, in one of the opinions, went a bit further and talked about cabining things. I think one of the reforms that maybe makes sense—and again, would help everyone, though—is: it didn’t really speak to what happens when an agency is supposed to be, or is, in charge of [downstream effects]. If you’re the BLM, you’re BOEM, you are actually responsible for something that directly, in that case as a fossil fuel project—or if we’re talking transmission, crossing 18 different federal parcels—that the agency really is directly responsible for, and is something that’s arguably tied to the downstream impacts. And I think that’s somewhere—and I think Chairman Westerman’s bill tries to get at this—where there’s some room for reform.

And then public input is a really tricky space here—both politically and in terms of what the right solution is there. And I’d say, opinions differ greatly about what the right answer is. But I think, yet again, that’s another spot that does matter. In the end, everyone just wants to know that responsible agencies took a hard look at the project, actually considered sort of the totality, and then made a decision.

So again, I always come back to litigation reform. You talk to clients across pretty much any sector you can imagine, and they want to be able to rely on the decision. And frankly, getting a fast no would be preferable to two years of NEPA followed by four years of litigation—and you lose. That capital can go elsewhere. I mean, we want it to be building infrastructure, mines, everything. But that’s sort of the north star, I think, for permitting reform, and NEPA in particular: how do we get to that reliable decision in a timely and predictable manner?

Thomas: Yeah, that makes a lot of sense. Richard, anything you'd add on the Clean Water Act front?

Richard: Well, just on NEPA real quick, I’d just reaffirm that the Seven County decision, I think, does clarify some of the need for Congress to step in and address some of these issues. And I can’t emphasize this enough—the administration’s taken several actions, and we’re moving in the right direction, but we can’t get to where we need to go without Congress here.

And making sure that when it comes to NEPA, we are constraining the scope appropriately to reasonably foreseeable outcomes. That, again, we’re not looking at things that might happen across time and space that are outside of really the intended scope of review here. In other words, we’ve got to have a close causal relationship to the project and the potential environmental impacts.

And Peter also touched on this in the end—I just want to reemphasize how important it is that this regulatory certainty is in place… that it can’t be removed by an administration—just any administration—at any time, including a new one on day one. That lack of certainty leads to a higher cost of capital, project delays… and it’s just going to make this buildout—any buildout that you need—that much harder, that much more costly. That has real impact to consumers, and that has real impact to the economy.

On the Clean Water Act, I’ll just emphasize that we’re looking for. One, on that nationwide permitting that I mentioned, it’s imperative that the Army Corps of Engineers moves quickly to finalize that renewal of the NWP program and ensures that there’s no lapse in the availability of that important program. So that’s one issue.

EPA—kind of going back to the administration and processes there—EPA has opened a public docket seeking stakeholder feedback on the current Section 401 process. We’re hopeful that EPA will take the appropriate steps to reinstate some common-sense reforms there. But again—just a broken record here—we’ve got to have Congress act on several of these fronts.

Peter: And if I could add one more I missed—we’re talking about NEPA. There is a murky thing that some of us call “pre-NEPA,” which is—we have statutory time clocks now, but if you can’t start the clock for any number of reasons, that could be lack of resourcing at the agency who has to physically process it. Or maybe they said your application is complete, but we don’t want to do the public announcement yet because it will start the clock.

And that was sort of a back-and-forth issue I worked on while I was in the Senate—to no avail—but some certainty on how you even start these time clocks, I think, is also important and needs to be part of that reform conversation.

Richard: And we see that—I mentioned Clean Water Act—but that’s another area where states have a lot of discretion. And that can lead to potential abuse of the process, where you’ve got a year to act, but I wait until day 360 to say, “Hey, we’re actually going to need some more feedback on these issues.” And that resets the clock. And now we’re back to square one, where we should have had a decision already by that point.

So I think the shot clock issue—how you define and constrain that—I’ll leave the nuances to other, smarter folks, but I think that’s a critical issue for us and for a lot of different stakeholders and industries.

Thomas: Yeah, a friend of the pod, Aidan Mackenzie, calls this “squeezing the balloon” with the timelines and page limits, right? It’s like, if you don’t actually make the law easier to comply with, it’s really, really tricky to reduce the time overall. And so you see this moving toward pre-NEPA and sitting on paperwork for a year or two years—or I’ve seen four or five years—before actually issuing that notice of intent and officially starting the clock.

Let’s pivot to the politics of this a little bit here. You know, Peter, you were in the Senate for the Fiscal Responsibility Act—the FRA—as well as some of Senator Manchin’s other early permitting reform efforts. I want to frame this in what is perhaps a provocative but I think useful way: If we see a major permitting reform package pass in the next year, will it be because political consensus has meaningfully shifted? Or will it be because we have a better sense of what each side can and can’t stomach, just because we’ve done this enough times, right?

So, like, will this be a victory of the “abundance movement”—right, of supply-side liberalism—or, on the other side, the realignment and growing comfort with industrial policy on the right? Or is it just us having tried and failed a bunch of times and sort of figured out what’s a go and what isn’t?

Peter: So I’m going to be really annoying and say both. I think that’s the overdetermined phenomena situation here.

I will say, there is some political consensus shifting. And I do think, frankly, a lot of the work Senator Manchin did—my old boss—to champion permitting reform helped move the needle, even on where Democrats are on this.

And then part of this also was the reality of COVID, Ukraine, not being able to get things on time—even seeing Governor Shapiro in Pennsylvania fix a highway using emergency powers in like 10 days. Normally people are used to it taking years. And I think there is some of this “abundance liberalism” of just, “Hey, we need to be able to do things faster.” And I think part of that’s even seeing Inflation Reduction Act deployment go way slower than people had thought. I would argue because they didn’t really tackle—or seriously tackle—this question of: how do you get permission to build the thing?

On the other hand, though, I do think some of this is going to be figuring out what each side can and can’t stomach. Part of that will be OB3—to use the cool kid term—took off the table a lot of the things that were sweeteners, for lack of a better word, for Republicans. Oil and gas leasing mandates, sort of building on what we put in the IRA to the next level, some other fossil provisions—those are law now. So, right, that’s not going to help balance the scale.

So I think the tricky part on the “what each side can and can’t stomach” is: the big question will be, where does Senate Energy and Natural Resources Chairman Mike Lee go with Ranking Member Heinrich? House Energy and Commerce, who I think it’s fair to say have not really been as involved in the transmission question—and that remains, I think, the big ask. How do we deploy transmission?

Sort of broadly on the left, and how much of that—going back to this tension of federalism, right—you sort of have the pipeline model over here under the Natural Gas Act. And then you look at the Federal Power Act, and transmission is not really parallel there. And I think that’s, at a very high level, where some people would like to see it. And just—the question to me will be: is there enough that both sides can stomach that moves the needle on transmission?

And there is one other part I think worth mentioning: yesterday—or the day before—some additional executive branch action on offshore wind. What is this, July 30th we’re recording this? Last day or two. And I think that’s going to be a real question for Democrats—is politically, this only works if it’s a tech-neutral thing that lifts the tides of renewable projects as well, right? Because that matters to them and their constituencies.

So then you have to kind of ask yourself—is, interestingly, they’re kind of seeing the flip side of the coin, where you could argue some of the tactics used against pipelines and other things with executive levers are now being mobilized against renewable projects. And is there a solution that kind of makes everyone take a step back?

Chairman Westerman said some great things on this front—of, like, to Richard’s point, that we need certainty. We can’t have a pendulum swing here. So I think the “can and can’t stomach” question is: is there something that threads the needle, that lets everybody say, “Okay, we know how this process works”? And it’s tricky.

Pavan: Yeah, I mention this all the time in relation to the administration’s actions recently. EPRA included that lift of the LNG pause. It’s not unheard of for a permitting reform package to reckon with what’s going on in the executive. But Richard, I’m curious here—you observe, you read environmental groups. They like to pick and choose which parts of permitting reform they like, right? If it deploys the technologies they’re in favor of, they’re okay with it. But there’s been this mentality—and I think it’s changing, particularly in the context of data center demand—that we can meet all of our energy demand through renewables. We don’t need to engage in tech-neutral permitting reform because we can just do it that way.

I think that’s changing. Are you reading that same kind of mentality change? And do you think it kind of drives action toward tech-neutral permitting reform in the next couple of months?

Richard: These are good questions. I like to think about this in terms of what hasn’t changed and what has changed, just in terms of the political and energy and market landscape.

What hasn’t changed is there are still a lot of groups that are reflexively opposed to certain types of energy projects. And that’s a nonpartisan statement, right? There are certain groups that are kind of against one set of projects, and there are other groups that are against another set. And so this concept of fuel neutrality—and getting the rules right for everyone—is really important.

Certainly, from the natural gas pipeline perspective, there are groups that are not interested in seeing any more natural gas pipelines. But you could say that’s probably true for other types of infrastructure as well. So permitting reform, I think, needs to address that—maybe even rise above that—and just get the rules of the road right for everyone, adhering to some of the principles that I’ve mentioned and Peter’s also talked about.

Here’s what has changed. Over the past few years, affordability of energy has become a pretty vital issue. It’s always been a vital issue for a lot of folks, and I think it’s an increasingly salient one. I don’t think that’s going away this year—I think it’s going to be a major issue for quite a while. And that’s probably a separate podcast to talk about the drivers there. But one of those drivers is the inability to build new things—and new infrastructure, energy infrastructure in particular.

I think the load growth conversation is happening in parallel. Load growth might be part of that affordability question, but it’s not necessarily always the key driver. And so—how are we going to build and do so in a way that protects affordability and actually benefits consumers?

One way to do that is reduce the cost and time to build things. And permitting reform is essential there.

So does that shift the conversation? The other aspect that I think is shifting right now is maybe more geopolitical—recognizing that the U.S. possesses an abundance of energy resources. I could tell you all about the abundance of natural gas resources, but we have a lot of other resources as well.

How do we take advantage of that? And how does that enable our ability to reshore our supply chains, reshore manufacturing? How does that affect our defense and readiness posture? So our defense industrial base—and enabling that to work as efficiently as possible. If you run a throughline—we’ve got to be able to build the infrastructure in order to have that readiness from a defense posture as well. I think that’s a shifting conversation. So the national security angle is also maybe part of the conversation and may influence a sensible permitting reform package.

Thomas: Yeah, I think one of the questions we’re interested in is, what does everybody need to get excited enough to fight for this, right? It seems like there’s often an inertia problem, or like a balancing-of-the-equities problem, where maybe the package just doesn’t do enough—or isn’t viewed as moving the needle enough—for certain constituents or stakeholders to show up and fight for the thing.

Maybe in other cases, there’s a concern that if you vote for this thing, the other thing that we want will never be folded into a package that will get 60 votes in the Senate.

So I think this could be a question for either of you, Peter and Richard, but—what is it that folks will want on permitting—whether it be the renewables folks, the mining folks, the oil and gas folks—that will be enough to be genuinely exciting?

Richard: I gotta defer to Peter. He’s talked to more stakeholders. I’m one of those, as you kind of think through the challenges and the balances here.

Peter: Well, I’ll say part of it would be Richard, AGA, folks like them on the fossil side, right? Having this Clean Water Act certainty, some of the other things that we’ve talked about—I think would be part of that.

Mining’s a good example—critical minerals. We have a huge bipartisan push right now. To the extent we can domestically solve some of this… I’ll say, from my work in that space, the litigation part really is truly exciting. There are some narrow provisions having to do with the mining law, which—I think every industry could probably find three or four very niche things that they are focused on. There, I would say judicial is really, really like the thing that makes this worthwhile.

Wind and solar—I think, unfortunately, transmission has only been billed—and maybe that’s a messaging problem—as supporting wind and solar. I’ll say it is incredibly important for wind and solar developers. I think part of the problem is it has only been labeled as good for them, and I think it’s more broadly important.

As Richard talked about, there are good arguments that—both on an affordability and a reliability point of view—that interconnection of regions, all of that… and I am by no means an electricity expert, so would defer to others on the specifics. Interconnection queues and what the right way is to kind of get your project plugged in once it’s built. And again, that’s—you can say primarily wind and solar just because that’s most of what’s in queues right now—but it also affects gas, nuclear, other things that are trying to plug in.

And then I’d say one thing that—because of the dynamics of this permitting reform discussion, which is really energy focused, which is, in a good way, right?—has kind of brought Democrats along, thinking about the emissions side.

But we shouldn’t lose sight of the fact that the highway bill is going to be coming up. A lot of these other infrastructure questions are kind of what I’ll say is “normal stuff that normal people use.” They don’t think about their roads, their wastewater treatment plants, their water treatment plants. If it has a federal nexus, it almost certainly triggers NEPA, and it definitely triggers Clean Air Act, Clean Water Act, manufacturing.

So I think broadening the tent a bit and having some of those folks on board—and that may even just be education, right? National Association of Manufacturers obviously follows NEPA. Your average 100-person manufacturing firm in, say, small-town Pennsylvania—they’re not thinking about this. But having those people onside and actively kind of understanding that there are benefits, if they’re having a federal nexus, is a big deal as well.

Thomas: Okay, final question here. We’ve decided to make a habit out of asking guests at the end for a hot energy policy take. So this can be something you think most people are getting wrong, something you think is severely underrated—take it in any direction you want to. But we’ll start with you, Richard.

Richard: If you care about affordability, you need permitting reform. If you care about reliability—which is another one of those shifting issues that I should have mentioned—you need permitting reform. If you care about climate policy, you need permitting reform.

Blocking pipelines, for example, does not reduce demand. It raises costs on consumers. It increases our dependence on higher-cost and higher-emissions energy resources. And it actually makes it harder to have a reliable and stable grid that enables the growth of renewables.

Permitting reform will also affect other types of infrastructure that enable the types of new technologies and shifting technologies that are going to be required to improve affordability, reliability, and emissions.

Maybe, almost back to the last question—how do we create something where everyone wins? I think you can look at permitting reform through all of these lenses and recognize that there is a benefit, no matter which angle you’re coming at this from—from emissions, from reliability, or from affordability.

So I don’t know if that’s a hot take, but that’s my take.

Peter: The one quick thought that—I don’t know if it counts as a hot take—is just: the fact that you can’t see the projects that never, ever happen, or are sited specifically to avoid a federal nexus, is a massive drag. Hard to quantify.

So that’s one. And I have quite a few clients who wiggle around anything that touches anything federal. So I think that’s under-appreciated—and economy-wide—and huge in the energy sector.

And I think the other is: whatever permitting reform works—because we’re talking about certainty—it’s going to be uncomfortable for both the left and right, broadly speaking.

Because for a decision to stand, right—not only on the litigation side—it means we’re going to have to trust the bureaucrats. Which is not a popular thing, politically, for anyone to say.

Strangely, you sort of have on the right—that’s not the kind of thing your average member wants to say—but it’s going to be the truth, whether it’s a record decision for a mine plan or a natural gas pipeline permit. It means saying, “We actually have to—crazy as this is—trust the government that they did their analysis, and the permit stands.”

And then on the left—the people who you often think of as the party of government—a lot of these public comment processes, a lot of the stakeholder engagement stuff, has been built around the idea that you can’t trust the government. Which some find a little ironic. But similarly, if you don’t want the pendulum swing, you’re going to have to let, say, a Biden administration approval of the Willow oil and gas project stand, just as much as you’re going to have to let an offshore wind project stand.

And that’s going to mean trusting these bureaucratic decisions—the boring thousands of words no one really cares about when we’re up at the political level—but the alternative selection, the question of whether to use this kind of site or that site… and again, “Trust me, I’m from the government, I’m here to help,” is not a cool thing to go say, but it’s weirdly going to be part of the solution.

Thomas: I think it’s a good hot take. Peter and Richard, thanks so much for coming on the show.

Peter: Thanks for having us—and thanks for all the work you’re doing on this.

Richard: Thank you.